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Considering a Gold’s Gym Franchise? Don’t Overlook These 25 Important Franchise Fees

by Franchise Chatter on March 9, 2017

in Fitness Franchises, Franchise Fees



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

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If you are considering a Gold’s Gym franchise, don’t get blindsided by these 25 important franchise fees (from the initial franchise fee, to the royalty fee, to 23 other fees found in Items 5 and 6 of Gold’s Gym’s 2016 FDD).

1.  Initial Franchise Fee:  $20,000 to $40,000



  • If you sign the Franchise Agreement for a new Gold’s Gym Facility (including a Conversion Facility), then unless you qualify for the VetFran Program (described below), you will pay Gold’s Gym a $40,000 initial franchise fee in a lump sum when you sign that Agreement.
  • If you operate an existing Gold’s Gym Facility under a Franchise Agreement that is about to expire, and are signing the Franchise Agreement and Renewal Addendum to renew your rights to operate that Gold’s Gym Facility, then you will pay Gold’s Gym a $20,000 initial franchise fee in a lump sum when you sign that Agreement and Addendum.
  • The initial franchise fee is not refundable under any circumstances. Gold’s Gym might pay a portion of your initial franchise fee to a referral source.
  • Gold’s Gym is a member of the International Franchise Association (“IFA”) and it participates in IFA programs such as the “VetFran Program,” which encourages companies to provide special financial incentives to qualified veterans.
  • Gold’s Gym currently offers new franchisees who qualify as a Veteran (as defined below) a 20% discount (the “Veteran Discount”) on the initial franchise fee. If you qualify for the Veteran Discount, your initial franchise fee is $32,000.
  • This Veteran Discount only applies to qualified Veterans signing their first Franchise Agreement with Gold’s Gym. This Veteran Discount does not apply to any future Franchise Agreement that a Veteran might sign with Gold’s Gym, nor does Gold’s Gym offer the Veteran Discount to its existing Gold’s Gym Facility franchisees. In addition, this Veteran Discount does not apply to any renewals, conversions (from another form of Gold’s Gym Franchise Agreement), or extensions of the Franchise Agreement.
  • A “Veteran” is defined as any person who served in the Army, Navy, Air Force, Marine Corps, Coast Guard, or National Guard and obtained an honorable discharge or release. If the new franchisee is a corporation, limited liability company, or other entity, then the Veteran Discount applies if one or more Veterans owns more than 50% of the new franchisee.

2.  Extension Fee:  $2,500 for each month (or portion of a month) for which Gold’s Gym extends the Opening Deadline

  • You must develop and open the Facility for member workouts on or before the Opening Deadline (defined in Item 11). You may request an extension of that deadline by giving Gold’s Gym written notice at least 15 days before the Opening Deadline.
  • Gold’s Gym will inform you of the length of the extension if and when Gold’s Gym grants it. If Gold’s Gym grants it, you must pay Gold’s Gym a non-refundable extension fee equal to $2,500 for each month (or portion of a month) for which Gold’s Gym extends the Opening Deadline.

3.  Additional Training Programs:  $500 per person per session

  • Gold’s Gym will provide initial training for your Facility’s personnel at no additional charge.
  • If Gold’s Gym determines that you or any of your personnel cannot complete the initial training programs to its satisfaction, then it may require you or your personnel to attend additional training programs at your expense. Gold’s Gym currently charges $500 per person per session for this additional training, and this fee is not refundable.

4.  Development Fee Under the Development Rights Agreement:  $10,000 multiplied by the number of Gold’s Gym Facilities you agree to develop in the Development Area

  • You must pay Gold’s Gym a lump sum development fee when you sign the Development Rights Agreement. Your development fee is $10,000 multiplied by the number of Gold’s Gym Facilities you agree to develop in the Development Area. Gold’s Gym will insert this fee in the Development Rights Agreement before signing it.
  • The development fee is not refundable under any circumstances, and Gold’s Gym does not apply the development fee toward any initial franchise fees for the Gold’s Gym Facilities you develop.
  • Gold’s Gym does not collect any payments from you on behalf of third party suppliers before you open your Facility.

5.  Royalty:  greater of 5% of Facility’s Gross Revenue each month or $2,000 per month

  • Due Date:  On the day of each month Gold’s Gym periodically specifies (“Payment Day”), currently the 15th.
  • First Royalty payment is greater of $2,000 or 5% of Facility’s Gross Revenue beginning when first Gross Revenue was recognized (including presale) through end of previous month.

6.  Holding Fees Under Development Rights Agreement:  $5,000 per year for each Franchise Agreement for which you have not yet paid the initial franchise fee

  • Due Date:  On each anniversary of the Development Rights Agreement’s effective date.

7.  Marketing Contribution:  greater of 2% of Facility’s Gross Revenue each month or $1,000 per month



  • Due Date:  On the Payment Day of each month, currently the 15th.
  • Gold’s Gym may periodically increase Marketing Contribution by any amount if at least ⅔ of all U.S. Gold’s Gym Facility owners vote for increase, with each owner receiving 1 vote for each Facility they own.

8.  Cooperative Contributions:  amount that the Cooperative determines, up to 3% of Gross Revenue

  • Due Date:  As the Cooperative determines.

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

  • Due Date:  As incurred.
  • If you fail to meet the Marketing Spending Requirement, Gold’s Gym may require you to pay it the shortfall to use for marketing.

10.  Billing Services Fees:  currently 4.5% of Credit Card Billing Revenue and 2% of ACH Billing Revenue during the previous month under Standard Program, or 4.25% of Credit Card Billing Revenue and 2% of ACH Billing Revenue under Premium Program

  • Due Date:  Monthly.
  • This fee also covers some software and club support services that the designated vendor provides. The designated vendor collects this fee under the Billing Services Agreement and pays GGPP part of the fee to compensate GGPP for its billing-related services.

11.  Collections Services Fees:  varies depending on the services

  • Due Date:  As incurred.
  • At your option, you may ask to participate in Gold’s Gym’s affiliates’ agreements with collections services providers.

12.  Relocation Expenses:  actual out-of-pocket costs and expenses Gold’s Gym incurs inspecting the proposed new site

  • Due Date:  Promptly upon receipt of Gold’s Gym’s invoice.
  • Due only if you request to relocate the Facility.

13.  Convention Registration Fees:  currently under $500, but could increase if Gold’s Gym’s costs increase



  • Due Date:  Approximately once per year.
  • You must pay the registration fees Gold’s Gym periodically establishes for annual conventions. You also must pay travel and living expenses for you and your personnel.
  • If you (or a required attendee) fail to attend a mandatory annual convention, you will still be required to pay the full-price convention fee that Gold’s Gym assesses for other attendees.

14.  Fee for Ongoing Training:  currently $500 per person per session, but could increase if Gold’s Gym’s costs increase

  • Due Date:  As incurred.
  • Due only if Gold’s Gym trains any new manager or provides supplemental or refresher training during the Franchise Agreement’s term.

15.  Transfer Fee:  $2,500 for non-control transfer and $10,000 for control transfers

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

16.  Successor Franchise Fee:  50% of initial franchise fee Gold’s Gym then charges for new Gold’s Gym Facility franchises (currently would be $20,000)

  • Due Date:  Upon signing successor Franchise Agreement.

17.  Management Fee:  3% of Gross Revenue, plus direct out-of-pocket costs and expenses

  • Due Date:  As incurred.
  • Due only if Gold’s Gym manages your facility after your death, disability, or default, or while Gold’s Gym is considering whether to exercise purchase option.

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

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

19.  Indemnification:  will vary under circumstances

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

20.  Administrative Fee and Interest:  $100 administrative fee and interest at 1.5% per month or highest interest rate the law allows, whichever is less

  • Due Date:  As incurred.
  • Due on all overdue amounts not timely paid, and dishonored payments.

21.  Follow-up Inspection Fee:  approximately $300 to $500 per inspection, but could increase if Gold’s Gym’s costs increase

  • Due Date:  When invoiced.
  • Payable only if Gold’s Gym re-inspects the Facility to determine whether you have corrected deficiencies or you request evaluation.

22.  Supplier Testing Fees:  approximately $500 to $5,000

  • Due Date:  As incurred.
  • Covers Gold’s Gym’s out-of-pocket costs, including travel expenses and testing fees.

23.  Insurance Costs:  premiums, plus Gold’s Gym’s costs and expenses

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

24.  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.

25.  Liquidated Damages Upon Franchise Agreement Termination:  upon termination of Franchise Agreement before it expires

  • Due Date:  Payable only if Gold’s Gym terminates for cause or you terminate without cause.

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