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Considering a Bar Method Franchise? Don’t Overlook These 22 Important Franchise Fees

by Franchise Chatter on March 2, 2017

in Fitness Franchises, Franchise Fees



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Don't Invest in a Franchise Until You Check Out This List

If you are considering a Bar Method franchise, don’t get blindsided by these 22 important franchise fees (from the initial franchise fee, to the royalty fee, to 20 other fees found in Items 5 and 6 of Bar Method’s 2016 FDD).

1.  Initial Franchise Fee:  $37,500 to $50,000

  • You will pay Bar Method an initial franchise fee in a lump sum when you sign the Franchise Agreement.
  • In most cases, the initial franchise fee is $50,000. However, if you are an existing franchisee whose current Franchise Agreement provides for a discounted initial franchise fee for an additional franchise, then your initial franchise fee is $37,500.
  • The initial franchise fee is not refundable under any circumstances.

2.  Training Fees:  $1,600 to $4,000

  • Bar Method will provide New Owner Training for your Studio’s personnel at no additional charge.
  • If Bar Method determines that you or any of your personnel cannot complete the New Owner Training to its satisfaction, then it may require you or your personnel to attend additional training programs at your expense. Bar Method currently charges $75 per hour per person per session for this additional training.
  • You also must pay Bar Method a training fee ranging from $1,600 to $2,000 per instructor for each instructor that attempts to gain Certification before that training begins. “Certification” means the initial and ongoing training and other requirements that Bar Method periodically specifies to attain certification to be the primary instructor for any paid Classes.
  • Bar Method expects that the training fees you will pay to it before you open your Studio will range from $1,600 to $4,000. These training fees are not refundable.

3.  Initial Inventory:  $1,000 to $5,000



  • Before you open your Studio, you must buy an initial inventory of mat covers and stretching straps from BMM. You also may choose to buy an initial inventory of balls, socks, shirts, other logoed apparel, and/or videos from BMM.
  • Bar Method expects your payments to BMM for these items will range from $1,000 to $5,000, depending on the types and amounts of inventory you decide to buy.
  • These payments are not refundable.

4.  Development Fee:  $10,000 multiplied by the number of Bar Method Studios you agree to develop in the Development Area

  • You must pay Bar Method a lump sum development fee when you sign the Development Rights Agreement.
  • Your development fee is $10,000 multiplied by the number of Bar Method Studios you agree to develop in the Development Area.
  • The development fee is not refundable under any circumstances, but Bar Method will apply $10,000 of the development fee toward the initial franchise fee owed under each Franchise Agreement that the Development Rights Agreement covers.
  • Franchisees signing Franchise Agreements during 2015 paid Bar Method initial fees ranging from $32,500 to $49,500. Bar Method did not sign any Development Rights Agreements during 2015.

5.  Royalty:  6% of Studio’s Gross Revenue

  • Due Date:  On the day of each month Bar Method periodically specifies (“Payment Day”), currently the 10th.
  • “Gross Revenue” means all revenue that you receive or otherwise derive from operating the Studio, whether from cash, check, credit and debit card, barter, exchange, trade credit, or other credit transactions, and regardless of collection or when you actually provide the products or services in exchange for that revenue.
  • If you receive any proceeds from any business interruption insurance applicable to loss of revenue at the Studio, Bar Method will add to Gross Revenue an amount equal to the imputed gross revenue that the insurer used to calculate those proceeds.
  • However, “Gross Revenue” excludes (a) sales taxes, use taxes, and other similar taxes that you add to the sales price, collect from the customer and pay to the appropriate taxing authority; and (b) any bona fide refunds and credits you actually provide to customers.
  • The first Royalty payment and Marketing Fund contribution are due on the Payment Day of the month following the month during which the Studio’s opening date falls, based on the Gross Revenue during the period beginning when the first Gross Revenue was recognized (including Gross Revenue derived during presale) and ending on the last day of the previous month.

6.  Marketing Fund Contribution:  amount Bar Method periodically specifies, subject to the Marketing Spending Requirement, currently expected to be 2% of Studio’s Gross Revenue

  • Due Date:  On the Payment Day of each month, currently the 10th.
  • Bar Method may implement the Marketing Fund on 30 days’ notice to you.
  • The “Marketing Spending Requirement” is the maximum amount that Bar Method can require you to spend on Marketing Fund contributions and approved Local Marketing for the Studio during each calendar quarter, and is 5% of the Studio’s Gross Revenue during the calendar quarter.
  • Although Bar Method may not require you to spend more than the Marketing Spending Requirement on Marketing Fund contributions and approved Local Marketing for the Studio during any calendar quarter, you may choose to do so.
  • Bar Method will not count towards your Marketing Spending Requirement the cost of free or discounted Classes, coupons, special offers or price reductions that you provide as a promotion, signs, personnel salaries, administrative costs, employee incentive programs, or other amounts that Bar Method, in its reasonable judgment, deems inappropriate for meeting the Marketing Spending Requirement.
  • Bar Method may periodically review your books and records and require you to submit reports periodically to determine your Local Marketing expenses.

7.  Marketing Spending Requirement Shortfall:  difference between Marketing Spending Requirement and amount you spent

  • Due Date:  As incurred.
  • If you fail to spend (or prove that you spent) the Marketing Spending Requirement in any quarter, then in addition to Bar Method’s other rights, you must pay to it the shortfall as an additional Marketing Fund contribution or for it to spend on Local Marketing for the Studio.
  • There are no advertising or other cooperatives in the Bar Method Studio franchise network.

8.  Convention Registration Fees:  currently $125, but could increase if Bar Method’s costs increase

  • Due Date:  Approximately once per year.
  • You must pay the registration fees Bar Method periodically establishes for annual conventions. You also must pay travel and living expenses for you and your personnel.

9.  Ongoing Product Purchases:  currently $1,000 to $30,000 per year, depending on the products purchased, but could increase if costs increase

  • Due Date:  As incurred.
  • Covers products you currently must or may buy from BMM.

10.  Fee for Mobile Application:  currently $288 per year, but could increase if costs increase

  • Due Date:  Annually.
  • Bar Method collects this fee from franchisees and pays it to Bar Method’s IT vendor.

11.  Fee for Basic Instructor Certification:  currently $1,600 to $2,000 per instructor for new instructors and $180 per instructor to re-certify lapsed Certification, but could increase if Bar Method’s costs increase

  • Due Date:  As incurred.
  • Due if Bar Method trains any of the Studio’s instructors who are seeking Certification for basic Classes.

12.  Coaching Fees:  currently $75 per hour, but could increase if Bar Method’s costs increase

  • Due Date:  As incurred.
  • Due for ongoing coaching Bar Method provides during the Franchise Agreement’s term.

13.  Other Ongoing Training Fees:  currently $1,500 to $5,000 per year, but could increase if Bar Method’s costs increase



  • Due Date:  As incurred.
  • Covers annual instructor evaluations, fees for Bar Move instruction certifications, and site visits.

14.  Transfer Fee:  $2,500 for non-control transfer, and for control transfers, either (a) 50% of then current initial franchise fee (currently $25,000) if transferee is not a Bar Method franchisee and/or if new Operating Partner has not attained instructor Certification, or (b) 25% of then current initial franchise fee (currently $12,500) if transferee is a Bar Method franchisee and either Operating Partner does not change or has attained instructor Certification

  • Due Date:  Before transfer is completed.
  • Payable on proposed transfer of the Franchise Agreement, the Studio or its assets, or any direct or indirect ownership interest in you.

15.  Successor Franchise Fee:  $10,000

  • Due Date:  Upon signing successor Franchise Agreement.

16.  Management Fee:  3% of Gross Revenue, plus direct costs and expenses

  • Due Date:  As incurred.
  • Due only if Bar Method manages your Studio while it is considering whether to exercise purchase option.

17.  Costs and Attorneys’ Fees:  will vary under circumstances

  • Due Date:  As incurred.
  • Payable if Bar Method incurs costs as a result of your non-compliance with Franchise Agreement or Development Rights Agreement.

18.  Indemnification:  will vary under circumstances

  • Due Date:  As incurred.
  • You must reimburse Bar Method and its affiliates if it or they are held liable for claims arising from your Studio’s development or operation, or your breach of the Franchise Agreement or Development Rights Agreement.

19.  Interest:  1.5% per month or highest interest rate the law allows, whichever is less

  • Due Date:  As incurred.
  • Due on all overdue amounts and dishonored payments.

20.  Follow-Up Inspection Fee:  currently $300 per day, but could increase if Bar Method’s costs increase

  • Due Date:  When invoiced.
  • Payable only if Bar Method re-inspects the Studio to determine whether you have corrected deficiencies.

21.  Insurance Costs:  premiums, plus Bar Method’s costs and expenses

  • Due Date:  As incurred.
  • Due only if you fail to maintain (or prove you have) insurance and Bar Method, at its option, obtains insurance for you.

22.  Audit Expenses:  cost of audit

  • Due Date:  As incurred.
  • Due only if you fail to timely furnish reports or understate figures by 2% or more.


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