D1 Training Franchise Costs: Estimated Initial Investment (Item 7, 2022 FDD)

• All fees payable to D1 Training or its affiliates are not refundable. Whether any of the other payments are refundable will depend on the arrangement between you and the supplier.

1.  Initial Franchise Fee:  $19,000 to $59,500

2.  Opening Support Fee:  $29,500

3.  Initial Marketing Spend:  $10,000 to $20,000

• You must conduct an initial marketing campaign that D1 Training approves, with a minimum cost between $10,000 and $20,000 as determined by D1 Training.

4.  Leasehold Improvements:  $0 to $257,568

• D1 Training anticipates that the average franchised D1 Training Facility will typically be located in commercially-zoned retail areas and be between approximately 4,000 and 5,000 square feet, with the prototype location size being approximately 4,300 square feet.

• The typical size of a D1 Training Facility must accommodate a minimum of 7 racks.

• Item 7 contemplates a 4,300 square foot premises. In the event that you obtain a smaller or larger location, your costs may decrease or increase as well.

• D1 Training has reflected an adjustment of $26.66 per square foot for the average tenant improvement allowance received this past year with it being noted that in some instances D1 Training franchisees have received no tenant improvement allowance and as high as $65 per square foot.

• Moreover, the total high-end amount contemplates the project management fee of 8% of the total build-out cost paid to Sports Med Properties, D1 Training’s exclusive construction project manager.

• The low end of the leasehold improvements reflects D1 Training’s affiliates and some franchisees’ negotiation of tenant improvement allowances from landlords.

• A landlord’s willingness to provide tenant improvement allowance varies and may be based on factors such as condition of premises, the financial being of the tenant, and the term of the contemplated lease.

• To avoid excessive construction costs, D1 Training recommends that you pick contractors carefully by obtaining several competitive bids beforehand.

• In D1 Training’s affiliates’ experience, landlords may require a security deposit or personal guaranty for the premises. The amount above does not include a security deposit.

5.  Real Estate Services:  $5,000 to $6,500

• On signing the Franchise Agreement, you must pay D1 Training’s designated vendor, in a lump sum, $5,000 for real estate services.

• D1 Training’s designated real estate vendor’s services include, without limitation: attending an initial kickoff call with your representative, introducing you to a local real estate broker, conducting a market tour with you to review potential sites, pre-screening of sites for conformity to D1 Training’s site criteria, submit sites to D1 Training for initial review, and pre-approval and monitoring the lease negotiation process.

• You may also be required to reimburse D1 Training’s designated real estate vendor for its costs associated with conducting the walk-through (including travel, meals, and lodging), which D1 Training estimates to be $1,000 to $1,500.

6.  Furniture and Fixtures:  $7,500 to $15,000

7.  Equipment:  $0 to $85,000

8.  Cardio Equipment:  $0 to 34,782

• Includes strength/exercise equipment, install, and taxes.

• If you finance the cardio equipment, your payment may be $0.00 prior to opening. If you purchase the required cardio equipment directly from third-party suppliers, D1 Training estimates that the cost is $34,782.

• D1 Training has not reflected within this range the cost of shipping which varies and which may be based on several factors such as the location of your facility and its distance from the suppliers.

9.  Opening Inventory and Supplies:  $2,500

• For D1-branded apparel for resale to members.

10.  Computer Equipment and Software:  $5,000 to $6,000

• This includes the computer equipment and software, and the required televisions.

11.  Signage:  $10,000 to $18,000

• For both interior and exterior signage.

12.  Training Expenses:  $250 to $1,600

• You will need to arrange transportation and pay any other expenses, wages, and benefits incurred by or owed to any of your designees attending the training program. The amount expended will depend on a variety of factors, including the distance those persons must travel.

13.  Three Months’ Rent:  $0 to $35,462

• Your monthly rent expense may vary from D1 Training’s estimate based on numerous factors such as the location of the premises, the visibility of the premises, access to major streets, the age and type of structure in which the premises are located, any lease arrangements negotiated with your landlord, real estate taxes, common area maintenance charges, and the like.

• In some cases, D1 Training’s affiliates have been able to negotiate a lease without a security deposit or personal guarantee.

14.  Professional Fees, Permits, and Licenses:  $2,000 to $4,000

• D1 Training recommends that you consult with an attorney, accountant, or other advisor prior to purchasing a franchise. You must obtain state and local licenses and business licenses. You may have to post bonds in order to obtain certain governmental permits.

15.  Insurance Premium:  $2,000 to $4,000

• You must, at your own expense, keep in force insurance policies for your D1 Training Facility. You will likely have to prepay for a portion of the first year’s premiums for insurance.

16.  Additional Funds (3 months):  $35,000 to $55,000

• D1 Training’s estimates of the amounts needed to cover your Business’s expenses for the start-up phase (i.e., 3 months from the date your Business opens for business) include: replenishing your inventory, initial advertising and promotional expenditures, payroll for managers and other employees, uniforms, utilities, and other variable costs.

• These amounts do not include any estimates for debt service on loans that you obtain to finance your Business.

17.  Total Estimated Initial Investment:  $127,450 to $634,868

• The initial investment range presented above is for the development of a D1 Training Facility with approximately 4,300 square feet. If you elect to develop a larger D1 Training Facility with more square footage, the total investment range would increase.

• The estimated initial investment figures shown above for setting up and opening each D1 Training Facility are based primarily on the costs incurred by or projected to be incurred by franchisees. Because these figures are only estimates, it is possible both to reduce and to exceed costs in any of the areas listed above.