Considering a GymGuyz Franchise? Don’t Overlook These 29 Important Franchise Fees

Updated December 2, 2019.

If you are considering a GymGuyz franchise, don’t get blindsided by these 29 important franchise fees (from the initial franchise fee, to the royalty fee, to 27 other fees found in Items 5 and 6 of GymGuyz’ 2019 FDD).

1.  Initial Franchise Fee:  $35,000 to $44,999.80

• You must pay GymGuyz an initial franchise fee of $35,000, which is due in a lump sum when you sign the Franchise Agreement for a protected territory that has a population of 100,000 people. The initial franchise fee will increase in increments of $0.20 per person for a population between 100,001 and 149,999 (resulting in a maximum initial franchise fee of $44,999.80).

• If the population will exceed 149,999, GymGuyz reserves the right to require you to purchase an additional territory and execute a separate Franchise Agreement for that Territory.

• If you execute a Multi-Unit Development Agreement (see below) for the purchase of three franchises, GymGuyz will discount the initial franchise fee by $5,000.

• If you are a qualified United States veteran, GymGuyz will discount the initial franchise fee for a single franchise by $5,000.

• Discounts cannot be combined and do not apply if you choose to purchase a larger exclusive territory.

2.  Launch Fund Fee:  $2,500

• You must pay GymGuyz a non-refundable Launch Fund Fee of $2,500 for one day of additional on-site training and for services related to the opening of your Franchised Business. The additional on-site training will occur 4-6 weeks after you complete the Initial Training program.

3.  Initial Purchases:  initial inventory of GymGuyz apparel ($1,572), basic equipment package for single van ($5,700), and initial marketing kit ($4,411)

• The above initial purchases must be paid in a lump sum when you sign the Franchise Agreement. However, the above initial purchases are optional if you have previously executed a GymGuyz Franchise Agreement. These amounts are not refundable

4.  Reservation Fee:  $30,000 multiplied by the number of Franchised Businesses you are developing

• If you sign a Multi-Unit Development Agreement, you must pay to GymGuyz a reservation fee equal to $30,000 multiplied by the number of Franchised Businesses you are developing, which is payable in a lump sum when you sign the Agreement.

• The reservation fee is fully earned by GymGuyz when received and is not refundable. The reservation fee will be credited against any initial franchise fees you must pay to GymGuyz.

• You must develop a minimum of three Franchised Businesses.

• The reservation fee will increase in increments of $0.20 per person in any Territory where there is a population between 100,001 and 149,999 (resulting in a maximum reservation fee of $39,999.80 per Territory).

5.  Royalty Fee:  6% of Gross Sales or $300 per two weeks, whichever amount is greater, subject to an initial 150-day grace period for a single territory or the first territory of a multi-unit development deal

• Due Date:  Payable on every other Wednesday for the previous two-week period ending the prior Sunday (or the next day if Wednesday is not a business day).

• Amounts due will be withdrawn by EFT from your designated bank account.

6.  Brand Development Fee:  2% of weekly Gross Sales or $40 per two-week period, whichever is greater, subject to an initial 4-week grace period for a single territory or the first territory of a multi-unit development deal

• Due Date:  Payable at the same time and in the same manner as the Royalty Fee.

• You must pay this fee when GymGuyz establishes the Brand Development Fund.

• With 30 days’ prior notice to you, GymGuyz may increase the Brand Development Fee.

7.  Technology Fee:  $50 per two-week period, if you operate a single unit, $70 per two-week period if you operate a total of two units (aggregated for all units), $90 per two-week period if you operate a total of three or more units (aggregated for all units). Subject to annual increases, and subject to an initial 4-week grace period.

• Due Date:  Payable at the same time and in the same manner as the Royalty Fee.

• This fee includes website hosting, updates, and basic website maintenance (subject to annual increases).

• Fees are aggregate amounts based on number of units.

8.  Initial Training (for New or Replacement Manager):  GymGuyz’ then-current per person training fee, plus expenses. Current per person training fee = $1,000.

• Due Date:  Before training.

• Training for the first two people is provided at no additional charge. If you request that GymGuyz provide its initial training program to any additional employees, or to the new or replacement manager during the term of your Franchise Agreement, you must pay GymGuyz’ training fee as well as the trainees’ expenses, including travel, lodging, meals, and wages.

9.  Additional On-Site Training:  GymGuyz’ then-current per diem rate per trainer, plus expenses. Current per diem rate = $1,000, plus GymGuyz’ costs

• Due Date:  When billed.

• If you request that GymGuyz provide additional training at your GymGuyz Business or if GymGuyz determines that you need remedial training or assistance, you must pay its daily fee for each trainer it sends to your GymGuyz Business, and you must reimburse each trainer’s expenses, including travel, lodging, and meals.

10.  Interest:  1.5% per month or the highest rate allowed by applicable law, whichever is less

• Due Date:  On demand.

• Interest may be charged on all overdue amounts. Interest accrues from the original due date until the amount is paid in full.

11.  Audit Fee:  cost of audit (estimated to be between $1,000 and $5,000)

• Due Date:  When billed.

• Payable only if GymGuyz finds, after an audit, that you have understated any amount you owe to it, or Gross Sales, by 2% or more. You must also pay the understated amount plus interest.

12.  Insufficient Funds Fee:  $75 per occurrence

• Due Date:  On demand, if incurred.

• If GymGuyz is unable to process any payment due to it or its Affiliate due to insufficient funds in your bank account.

• If you incur three insufficient funds fees in any 12-month period, GymGuyz has the right to terminate your Franchise Agreement.

13.  Transfer Fee (Franchise Agreement):  50% of GymGuyz’ then-current initial franchise fee, plus 50% of its then-current additional territory fees if you have purchased a larger territory, but not less than $10,000

• Due Date:  Submitted with transfer application.

• No fee charged to an individual or partnership franchisee that transfers its rights, one time only, to a corporate entity controlled by the same interest holders.

14.  Transfer Fee (Multi-Unit Development Agreement):  50% of GymGuyz’ then-current initial franchise fee, but not less than $10,000

• Due Date:  Submitted with transfer application.

• No fee charged to an individual or partnership franchisee that transfers its rights, one time only, to a corporate entity controlled by the same interest holders.

15.  Renewal:  $10,000

• Due Date:  On renewal of the Franchise Agreement.

16.  Software Fees:  $100 (plus an additional $70 if you wish to access and/or use GymGuyz’ mobile application)

• Due Date:  Monthly.

• Payable to GymGuyz for required software. GymGuyz reserves the right to require access and/or use of its mobile application.

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

• Due Date:  On demand.

• If you default under your Agreement, you must reimburse GymGuyz for the expenses it incurs (such as attorneys’ fees) in enforcing or terminating your Agreement.

18.  Apparel:  will vary under circumstances

• Due Date:  As incurred.

• You must purchase GymGuyz apparel for yourself and your trainers from GymGuyz.

19.  Indemnification:  will vary under circumstances

• Due Date:  On demand.

• You must reimburse GymGuyz for the costs it incurs if it is sued or held liable for claims that arise from your operation of the Franchised Business or for costs associated with defending claims that you used the trademarks in an unauthorized manner.

20.  Insurance Premiums:   cost + 10% administrative fee

• Due Date:  Within 15 days after demand for payment.

• If you fail to maintain the required insurance coverage, GymGuyz may (but is not required to) obtain insurance on your behalf.

21.  Management Fee:  20% of Gross Sales, plus expenses

• Due Date:  If incurred.

• GymGuyz has the right to step in and manage your Franchised Business in certain situations, including your prolonged absence, death, or disability.

22.  Product or Supplier Evaluation:  $500, plus GymGyz’ costs

• Due Date:  With request for approval of product or supplier.

• If you request that GymGuyz evaluate a proposed new product or supplier for the System.

• If GymGuyz approves the product or supplier for the entire System, the evaluation fee will be reimbursed to you. If it does not approve the product or supplier, you will pay the additional costs related to its evaluation, in addition to the evaluation fee.

23.  Equipment:  will vary under circumstances

• Due Date:  Before opening and as incurred.

• You must purchase all fitness equipment from GymGuyz. All equipment purchased beyond the initial equipment package will be at GymGuyz’ then-current rates.

24.  Marketing Templates:  $75

• Due Date:  As incurred.

• All marketing templates containing the Proprietary Marks are prepared by GymGuyz.

• The initial template is provided at no cost. Additional templates are $75 each.

25.  Annual Franchisee Conference:  $650 for the franchisee and one additional attendee. Attendees beyond the initial two will be charged at a rate of $150 per person.

• Due Date: As incurred.

• You must pay a fee for attendance at GymGuyz’ Annual Franchisee Conference. The fee is payable to GymGuyz.

• GymGuyz reserves the right to adjust this fee on an annual basis.

26.  POS System Fee:  GymGuyz’ then-current fee (currently $125 per month)

• Due Date:  Payable at the same time and in the same manner as the first bi-weekly Royalty Fee.

• The POS System Fee is paid to GymGuyz for your monthly fee to use its designated POS System (currently Mindbody). GymGuyz currently collects the monthly service on behalf of Mindbody and pays those amounts over to Mindbody.

27.  Search Engine Optimization Fee:  $299 per month

• Due Date:  If payable to GymGuyz, payable at the same time and in the same manner as the first bi-weekly Royalty Fee.

• The Search Engine Optimization Fee is payable to a vendor GymGuyz designates.

• GymGuyz reserves the right to require you to pay all or a portion of the Search Engine Optimization Fee to it.

28.  VOIP Fee:  $150 per month

• Due Date:  Payable at the same time and in the same manner as the first bi-weekly Royalty Fee.

• The VOIP Fee is paid to GymGuyz for your monthly fee to use its designated phone system.

• GymGuyz currently collects the monthly fee and pays those amounts over to its designated vendor.

29.  Website Fee:  $150 per month

• Due Date:  Payable at the same time and in the same manner as the first bi-weekly Royalty Fee.

• This fee is payable to GymGuyz for your business’s microwebsite.

• GymGuyz reserves the right to increase this fee upon 30 days’ prior written notice to you.