Considering an AKT (Anna Kaiser Technique) Franchise? Don’t Overlook These 26 Important Franchise Fees

Updated April 18, 2021.

If you are considering an AKT (Anna Kaiser Technique) franchise, don’t get blindsided by these 26 important franchise fees (from the initial franchise fee, to the royalty fee, to 24 other fees found in Items 5 and 6 of AKT’s 2020 FDD).

1.  Initial Franchise Fee:  $60,000

• You must pay to AKT a lump sum initial franchise fee of $60,000 (the “Initial Franchise Fee”) to establish a single Studio under a Franchise Agreement (whether a start-up or conversion). The Initial Franchise Fee is due upon the signing of the Franchise Agreement.

• The Initial Franchise Fee shall be fully earned by AKT upon payment and is not refundable, in whole or in part, under any circumstance.

2.  Opening Inventory – Retail:  $12,000

• Prior to opening your Studio, you must purchase opening inventory from AKT at a cost of approximately $12,000 (“Opening Retail Inventory”), which includes apparel and other merchandise that will be available for resale as part of your Approved Products, including items branded with the Proprietary Marks, and other t-shirts, towels, exercise clothing, and related accessories.

3.  Development Fee:  depends on the number of Franchised Businesses AKT grants you the right to open within the Development Area

• If AKT awards you the right to develop 3 or more Franchised Businesses within a given Development Area, you must pay AKT a one-time Development Fee upon execution of your Development Agreement.

• Your Development Fee will depend on the number of Franchised Businesses AKT grants you the right to open within the Development Area, and is calculated as follows: (i) $45,000 per Franchised Business if AKT awards you the right to develop between 3 and 5 Franchised Businesses; (ii) $40,000 per Franchised Business if AKT awards you the right to develop between 6 and 9 Franchised Businesses; and (iii) $35,000 per Franchised Business if AKT awards you the right to develop 10 or more Franchised Businesses.

• You will be required to enter into AKT’s then-current form of Franchise Agreement for each Franchised Business you wish to open under your Development Agreement, but you will not be required to pay an Initial Franchise Fee at the time you execute each of these Franchise Agreements.

4.  Royalty:  7% of Gross Sales generated by your Franchised Business

• Due Date:  Payable weekly based on the Gross Sales of your Franchised Business during the preceding business week.

5.  Brand Development Fund Contribution:  2% of the Gross Sales of your Franchised Business (the “Fund Contribution”)

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

• AKT has established a brand development fund (the “Fund”) and requires you to make a contribution to that Fund amounting to 2% of the Gross Sales of your Franchised Business (the “Fund Contribution”), and your obligation to contribute will commence once you have started operating your Franchised Business.

6.  AKT Certification Program Tuition:  then-current tuition fee; currently, $1,500 per trainee for the AKT Certification Program Module 1, required prior to opening. Within 6 months after opening, $1,000 per trainee for the AKT Certification Program Module 2.

• Due Date:  Prior to training.

• The AKT Certification Program Tuition Fee is payable to AKT prior to the training taking place at a corporate location. Currently, this fee is $1,500 per trainee for Module 1, prior to opening. After opening, $1,000 per trainee for Module 2.

7.  Training Fee(s), including Special Training and/or Event Participation:  then-current training and/or event-related fee (the “Training Fee”) charged in connection with the kind of training and/or event participation requested or required. Currently, these training fees are as follows: $500/day with 2-day minimum for training from a Master Trainer; $750/day for Master Trainer “events” (for popups and auditions); $1,500/day for training from a Director of Education (if requested); $750/day per trainer for any Master Trainer; and $3,000/day for training and/or an event involving AKT’s founder. All other training is currently $500/day.

• Due Date:  Prior to training.

• This fee is paid in connection with additional training/instruction that AKT may provide on an ongoing basis in connection with the overall operation and development of your Studio.

• In addition to AKT’s then-current training fee, you will always be responsible for the costs and expenses that are incurred in connection with you and your personnel attending training, or corporate issued personnel sent to conduct the training.

8.  Trainer Event Fee:  $750 per day per Master Trainer, plus the Master Trainer’s related travel expenses

• Due Date:  Prior to event.

• You will incur this in connection with events, pop-ups, or auditions in connection with the operation and development of your Studio, when you need to engage a Master Trainer.

9.  Authorized AKT Instructor Subscription Fee:  then-current Subscription Fee; currently, AKT has not yet established a subscription service but intends to do so

• Due Date:  Payable monthly.

• When AKT establishes an ongoing subscription service to provide Authorized AKT Instructors with new and updated choreography, workouts, techniques, and other content, you (or your Designated Operator) will have the option, but not be required, to pay the Authorized AKT Instructor Subscription Fee and receive direct access to these materials.

• All Authorized AKT Instructors must pay the Authorized AKT Instructor Subscription Fee, however you (or your Designated Operator) are not required to do so unless you are also serving as an Authorized AKT Instructor.

10.  Technology Fee:  then-current fee charged by AKT. Currently, $275 per open Studio.

• Due Date:  Payable monthly in the same manner as the Royalty.

11.  Studio Management Software:  then-current license/subscription fee charged by AKT’s Approved Supplier. Currently, $145/month.

• Due Date:  As agreed to with Approved Supplier.

12.  Renewal Fee:  $10,000

• Due Date:  At time of renewal.

• You must renovate and reimage the Studio at your expense at the time of Renewal to conform to AKT’s then-current standards and image.

13.  Transfer Fee Under Franchise Agreement:  $10,000

• Due Date:  Upon your application for AKT’s approval of any proposed transfer.

14.  Transfer Fee Under Development Agreement:  $10,000

• Due Date:  Upon your application for AKT’s approval of any proposed transfer.

• Instead of the standard transfer fee, AKT will only charge an administrative fee amounting to: (i) $500 if you are an individual franchisee and assigning your Franchise and/or Development Agreements rights to an entity that you fully own; or (ii) $1,500 if the assignment is from an existing System franchisee to another immediate family member.

15.  Relocation Fee:  $5,000

• Due Date:  Upon submission of a proposal to relocate.

• You will not be permitted to relocate your Studio without AKT’s prior written approval, which may be withheld in its discretion.

16.  Insurance Policies:  reimbursement or amount of unpaid premium and any associated costs AKT incurs to acquire and/or maintain any required insurance

• Due Date:  As agreed or obligated under the Franchise Agreement and prior to or upon securing real estate.

• Payable only if you fail to maintain required insurance coverage and AKT elects to obtain coverage for you.

17.  Audit Fees:  reimbursement of actual costs if audit reveals deficiency. Currently, AKT estimates these costs to be between $500 and $2,500.

• Due Date:  Within 15 calendar days after receipt of audit report.

• Payable only if audit shows an understatement of Gross Revenue for the audited or reviewed period of 2% or more.

18.  Mystery Shopper and Other Quality Control Programs:  currently, AKT does not require franchisees to contribute to these programs, but it reserves the right to do so in the future

• Due Date:  Within 30 days of demand.

• Payable only if AKT establishes a mystery shopper program or other quality control mechanism/program, in which case it reserves the right to require a franchisee to contribute up to $500/year to help defray the costs of such programs that are designed to preserve the goodwill and brand image.

19.  Late Fees:  the greater of the highest applicable legal rate for open account business credit, or 1.5% per month

• Due Date:  Upon demand.

• Applies to all amounts not paid when due, until paid in full.

• AKT may also require you to pay an administrative fee of $50 for each late payment or late report.

20.  Penalty Fee:  then-current fee charged by AKT; currently, $100 for each day of non-compliance

• Due Date:  Upon demand.

• Payable only in the event you fail to comply with your material obligations under your Franchise Agreement by (a) permitting any instructor at your Studio to provide any fitness instruction or other Approved Services before they complete the AKT Certification Program, or (b) offering or selling any unauthorized products or services at your Studio, including provision of the AKT Certification Program without an approved Master Trainer.

• The Penalty Fee will be incurred during each day of non-compliance.

21.  Cost of Enforcement or Defense:  all costs, including attorneys’ fees

• Due Date:  Upon settlement or conclusion of claim or action.

• You will reimburse AKT for all costs in enforcing your obligations concerning the Franchise Agreement if it prevails.

22.  Indemnification:  all costs, including attorneys’ fees

• Due Date:  Upon settlement or conclusion of claim or action.

• You will defend suits at your own cost and hold AKT harmless against suits involving damages resulting from your operation of the Studio (subject to applicable state law).

23.  Relocation Fee:  AKT reserves the right to charge you $5,000 in connection with your request to evaluate a relocation of your Franchised Business

• Due Date:  At time of request.

• In addition to the relocation fee, AKT has the right to seek reimbursement of the actual costs and expenses it incurs in connection with evaluating your relocation request, including the costs of travel, lodging, and meals associated with any prospective relocation site visit.

24.  Alternative Supplier Approval:  $500 per day for personnel engaged in evaluating a supplier

• Due Date:  At time of request.

• Additionally, you must reimburse AKT for any travel, accommodations, and meal expenses.

25.  Regional Cooperative:  as the Cooperative determines

• Due Date:  As the Cooperative determines.

• AKT may establish regional cooperatives comprised of Studios that are within a given geographical area (each, a “Cooperative”). If a Cooperative is established where your Studio is located, you will be required to participate in that Cooperative and contribute to that Cooperative in the amounts the Cooperative determines.

26.  Liquidated Damages:  $10,000

• Due Date:  As incurred.

• If you in any way compromise the secure access to the online version of the Manual, including, but not limited to, allowing unauthorized users access to the Manual and its confidential contents, you will be required to pay AKT liquidated damages in the amount of $10,000, to compensate it for the breach and related damage to the System.