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Considering a Barre Code Franchise? Don’t Overlook These 28 Important Franchise Fees

by Franchise Chatter on July 12, 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 Barre Code franchise, don’t get blindsided by these 28 important franchise fees (from the initial franchise fee, to the royalty fee, to 26 other fees found in Items 5 and 6 of The Barre Code’s 2017 FDD).

1.  Application Fee:  $150

  • If you have been invited to apply to The Barre Code’s franchising program, there is an application fee of $150. You must pay this fee upon delivery of your application and instructing assessment. The application fee is not refundable in whole or in part under any circumstances.

2.  Initial Franchise Fee:  $39,500 to $49,500

  • The initial franchise fee for your Studio is $39,500 if your Studio will have 1 Classroom or $49,500 if your Studio will have 2 Classrooms. You must pay The Barre Code the initial franchise fee in a lump sum when you sign the Franchise Agreement. The initial franchise fee is not refundable in whole or in part under any circumstances.

3.  Royalty:  6% of your Studio’s Gross Sales; a monthly Minimum Royalty of $500 will be assessed at the end of each month

  • Due Date:  Weekly.
  • You must pay The Barre Code a Royalty in the manner it prescribes. Currently, The Barre Code has retained OnePoint BPO (“OnePoint”) as its outsourced Royalty collection service. You will be expected to provide OnePoint with your business checking information when you sign your Franchise Agreement.
  • A monthly minimum royalty (“Minimum Royalty”) of $500 will be assessed at the end of every month if franchisee fails to meet the minimum from their own Gross Sales.

4.  Marketing Fund Contributions:  1% of your Studio’s Gross Sales for the first 24 weeks; thereafter, the greater of 1% of your Studio’s weekly Gross Sales or $40 per week (for a one-Classroom Studio) or $80 per week (for a two-Classroom Studio)

  • Due Date:  Weekly.

5.  Weekly Fees:  $46.40/week

  • Due Date:  Weekly.
  • The MindBody point-of-sale system, email account subscription, IT services and maintenance, and the Core portal, which houses routines, playlists, and pre-opening materials, will be provided to you for a weekly subscription fee.

6.  Grand Opening Expenditure:  $3,500 to $7,000

  • Due Date:  As incurred.
  • The Franchise Agreement requires you to spend a minimum of $3,500 as your Grand Opening Expenditure during the Grand Opening Period.
  • You must also conduct an advertising program The Barre Code approves before you begin offering or selling Memberships prior to opening your Studio (“Pre-Opening Membership Sales”).
  • The Barre Code estimates that you may, depending on the mediums chosen by you, spend up to $7,000 on advertising prior to opening your Studio, which amounts count towards your Grand Opening Expenditure.

7.  Local Advertising Cooperative:  percentage of your Studio’s Gross Sales as determined at time Local Advertising Cooperative is established

  • Due Date:  Weekly.

8.  Local Advertising Expenditure:  the greater of $500 or 1% of your Studio’s Gross Sales

  • Due Date:  Monthly.
  • As discussed in more detail in Item 11, you are required to spend the greater of $500 or 1% of your Studio’s Gross Sales each month on local advertising (“Local Advertising Expenditure”).
  • However, The Barre Code may, upon 60 days notice, issue you a notice that all or part of such amount be paid to The Barre Code or its designee. If The Barre Code exercises this option, it will contribute the collected amount to the Marketing Fund.

9.  Additional Training Fee:  then-current charge, currently $500 per day (8-hour day) or $150 per hour, plus expenses

  • Due Date:  As incurred.
  • You will pay The Barre Code an Additional Training Fee (1) if The Barre Code determines that you (or your Operating Partner), your Master Trainer (MT), or, if required by The Barre Code, any employees or instructors need additional training or assistance, or (2) you (or your Operating Partner) or your MT request additional assistance.
  • Additional travel fees are not included and will be assessed accordingly.

10.  Instructor Certification Review Fee:  $200 per instructor for up to 2 class formats; $50 for each additional submission

  • Due Date:  As incurred.
  • If The Barre Code permits you to offer certification programs at your Studio to train your prospective instructors, you must submit video recordings of the instructor’s participation in these programs to The Barre Code and it will charge a fee to review the videos for each attendee each time they participate in the program.
  • For new instructors, The Barre Code charges a fee of $200 per instructor to review videos of the instructor’s attendance in up to 2 certification programs, if the instructor enrolls in these 2 certification programs simultaneously.
  • If any new instructor enrolls in more than 2 certification programs simultaneously, or if any instructor enrolls in any certification program after the initial enrollment, The Barre Code will charge an additional fee of $50 per instructor submission for each additional certification.

11.  Certification Compliance Fee:  $500 per incidence

  • Due Date:  As incurred per incident.
  • If there is an uncertified instructor on your class schedule, you will be charged a fee of $500 per incident. Additionally, you will also be charged a fee of $500 should it be noted that any of your instructors are teaching any materials other than the approved Curriculum.

12.  Renewal Franchise Fee:  $5,000

  • Due Date:  As incurred.
  • If you renew your Franchise Agreement for one 5-year term after the expiration of the Franchise Agreement, your right to renew your Franchise Agreement is subject to other terms and conditions.

13.  Transfer:  (i) $50,000 of The Barre Code’s then-current initial franchise fee if transfer is to new franchisee; or (ii) 25% of The Barre Code’s then-current initial franchise fee if transfer is to existing franchisee

  • Due Date:  Before transfer completed.
  • The Barre Code has the right of first refusal to purchase your Studio should you decide to sell.
  • Any transferee shall have to pay the transfer fee except that, in the event you (or your Operating Partner) or an owner with a controlling ownership interest in you (“Controlling Owner”), dies or is disabled, no transfer fee will be charged if transfer is to an immediate family member of yours (or your Operating Partner) or the Controlling Owner, as applicable.

14.  Annual Owner’s Conference:  $250 per franchise owner

  • Due Date:  Before conference.
  • The Barre Code will be hosting an annual owner’s conference at a location designated by it, at a time that is agreed upon by you and The Barre Code.
  • For all those in attendance, it will be $250 per person.
  • Owner’s convention is mandatory, as it will assist with the continued growth, support, and education of the business.

15.  Training Conference:  $100 for MT, $50 for any additional MT or trainer interested in attending

  • Due Date:  Due at the same time as the Annual Owner’s Conference Fee.
  • Training conference will be held at a location designated by The Barre Code. Attendance is required for all MTs. If any additional trainers would like to attend the conference, it will be $50 for each additional person beyond the first MT at $100.

16.  Relocation Fee:  30% of then-current initial franchise fee

  • Due Date:  Before relocation.
  • You may only relocate your Studio with The Barre Code’s approval.
  • If The Barre Code allows you to relocate your Studio, this relocation will be at your own expense and you must pay The Barre Code a fee for the services it provides.

17.  Audit:  amount of understated amounts due plus interest. If you fail to furnish required information or understate Gross Sales by more than 3%, amount of audit fees and related expenses.

  • Due Date:  Within 15 days after receiving the examination report.

18.  Interest:  lesser of 1.5% per month or highest commercial contract interest rate allowed by law

  • Due Date:  As incurred.
  • Due on all overdue amounts and accruing as of the original due date.

19.  Insufficient Funds:  $100

  • Due Date:  As incurred.
  • Due each time The Barre Code attempts to debit your business account and it receives a notice of insufficient funds.

20.  Additional or Modified Marketing Templates:  direct costs, including third-party service fees

  • Due Date:  As incurred.
  • Franchise Owners can request templates to be made for their specific studio needs. Any custom advertisements, graphics, or logos that are created per request will incur a $15 charge. Any Constant Contact editing or template modifications requested by you will incur a $10 charge.
  • These fees will be pulled along with your Royalties that are processed by OnePoint BPO on a weekly basis.
  • If a request made can be used for the whole franchise network, then your fee will be waived.

21.  Maintenance and Refurbishing of Studio:  you must reimburse The Barre Code’s expenses

  • Due Date:  As incurred.
  • If, after The Barre Code notifies you, you do not undertake efforts to correct deficiencies in your Studio’s appearance, then The Barre Code can undertake the repairs and you must reimburse its costs.

22.  Insurance:  you must reimburse The Barre Code’s costs, plus a reasonable fee for its time incurred

  • Due Date:  When billed.
  • If you fail to obtain insurance, The Barre Code may obtain insurance for you and you must reimburse it.

23.  Indemnification:  will vary under circumstances

  • Due Date:  As incurred.
  • You must reimburse The Barre Code and its affiliates if any of them are held liable for claims related to your Studio’s operations or the Franchise Agreement.

24.  Costs and Attorney’s Fees:  will vary under circumstances

  • Due Date:  As incurred.
  • If The Barre Code prevails in an action or proceeding, you must pay The Barre Code its costs.

25.  Management Fee:  $400 per day (plus costs and expenses)

  • Due Date:  As incurred.
  • Due when The Barre Code (or a third party) manages your Studio after your default or abandonment.

26.  Mystery Testing/Inspection:  will vary under the circumstances, but The Barre Code estimates the cost of each test or inspection to be approximately $250

  • Due Date:  As incurred.
  • The Barre Code may contract with third parties to conduct mystery shopper testing and other quality assurance inspections at your Studio.
  • You must pay the cost of the tests/inspections, but you will not be obligated to pay for more than 2 third-party contracted mystery shopper visits per calendar year.

27.  Daily Deal or Alternate Reservation System Fee:  6% of amount collected from Daily Deal or Alternative Reservation System vendor

  • You will pay The Barre Code 6% of the total amount you receive (and not the purchasing value) from daily deals such as Groupon or Gilt City and/or alternate reservation systems outside of The Barre Code’s point-of-sale system MindBody (such as Class Pass).

28.  Additional Remedies:  will vary under the circumstances

  • Due Date:  As incurred.
  • If your Franchise Agreement is terminated by you without cause or by The Barre Code, you will pay The Barre Code liquidated damages equal to the net present value of the balance of your Royalties and Marketing Fund Contributions from the date of termination until the scheduled expiration date of your Franchise Agreement.
  • These Royalties and Marketing Fund Contributions are to be based on the average monthly amounts during the preceding 12 calendar months times the number of months remaining in the term of the Agreement, or if you have been operating your Studio for less than 12 calendar months as of the termination date, to be based on the average monthly amounts during the months in which you were open multiplied by the number of months remaining in the term of the Agreement.

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