Detailed Estimates of UFC Gym Franchise Costs Based on Item 7 (Estimated Initial Investment) of UFC Gym’s 2019 Franchise Disclosure Document
Class UFC Gym
- Class UFC Gym facilities are boutique fitness studios focusing on class-based sales and programming with no octagon, limited fitness equipment, a bag rack, and a functional fitness space.
- Class UFC Gym facilities are typically between 2,500 to 3,500 square feet in size and will generally offer class-based physical fitness consisting of boxing and high intensity interval training and will typically utilize a bag rack, turf, functional training equipment, rowers, and bikes.
1. Initial Franchise Fee: $30,000
- The Initial Franchise Fee is deemed fully earned and non-refundable under any circumstance upon payment.
2. Miscellaneous Supplies: $500 to $1,500
- The supplies include housekeeping, janitorial disinfectants, and other miscellaneous supplies.
3. Opening Inventory: $12,500
- The inventory does not fluctuate as a function of seasonal sales.
- The typical for-sale items held in opening inventory are boxing gloves, accessories, heart rate monitors, and Class UFC Gym apparel.
- This will cover all inventory needs for pre-sale, Grand Opening, and the first three months of operation.
4. Insurance: $4,500 to $7,500
- You must carry certain specified insurance. You will need to purchase and maintain at all times during the term of the Franchise Agreement, a policy or policies of insurance, naming the franchisor and its affiliates as additionally insureds.
- The franchisor’s best estimate for insurance is approximately $18,000 to $30,000 per year, paid at the rate of $1,500 to $2,500 per month.
5. Printing Signage and Graphics: $5,000 to $10,000
- The franchisor will specify the signs and graphics and only those it approves will be used.
- You, at your own expense, must prepare, construct, and erect the signs and graphics in accordance with approval from governmental authority and the landlord.
6. Office Equipment/POS System: $1,000 to $3,500
- You will be required to purchase several computer systems, monitors, tablets, hardware, software, and office supplies in order to open your Gym.
7. Rent/Security Deposit: $0 to $11,000
- The franchisor expects that you will lease rather than own real estate and construct a building.
- Lease costs will vary based upon variances in: (i) size in square feet to be leased (the franchisor anticipates that your Gym location will be within the range of 2,500 to 3,500 square feet); (ii) cost per square foot; (iii) common area maintenance costs; and (iv) any initial term rent abatement offered by the landlord.
- The franchisor assumes that you will receive rent abatement during construction as well as your first three months of operation.
8. Initial Advertising (Pre-Sale to Grand Opening): $12,000 to $20,000
- Initial advertising takes place from the Pre-Sale Date through your Grand Opening (typically about a 3- to 4-month period) and may include mailings, Internet advertising, billboards, radio and/or television spots, and personal appearances.
- The franchisor believes that $15,000 is sufficient to create initial awareness using a multi-media advertising program.
9. Leasehold Improvements: $0 to $53,500
- The range presented above is based on obtaining an “empty box,” ready to be fit out, landlord assistance, and does not include the installation of a locker room, which the franchisor does not require or recommend for a Class UFC Gym location.
- Without assistance from the landlord, the franchisor estimates that the total leasehold improvements, including floor covering, wall treatment, ceilings, painting, electrical, carpentry, and similar work, can range from $15 to $22 per square foot for a 2,500 to 3,500 square foot UFC Gym, depending upon the improvements your landlord agrees to install for you and any compatible improvements that already exist at the location.
- All leasehold improvements are directly related to conforming the Premises to the franchisor’s then-current standards for layout (i.e. rubber flooring, mirrors, and paint), traffic flow, and other specifications.
- These costs are paid to suppliers, when incurred, before beginning business and are usually not refundable.
- Your leasehold improvement costs may be less if, for example, your landlord provides you with a tenant improvement allowance. There is no guarantee that you will receive any tenant improvement allowance at all.
- Additionally, the previous tenant or landlord may have installed leasehold improvements that are very compatible, thereby reducing costs.
10. Equipment: $113,500 to $138,500
- The Equipment includes the cardio equipment, free weights, functional fitness equipment, bag cage, and heavy punching bags. Additionally, pre-sale collateral table, cloth pop-up tent, and banner are included in this amount as well.
- These costs are paid to the franchisor and are an estimate based upon you purchasing your Equipment in a lump sum and include installation, shipping, and the franchisor’s installation consultation services.
11. Music Licensing: $1,000
- In order to play music during classes in your UFC Gym, you must purchase a music license through the franchisor’s master license program for all music licensing agencies, including but not limited to BMI, SESAC, and ASCAP.
- The initial music license fee pays for your first year in business and is paid at the time that you purchase your equipment. You will pay this fee annually to the franchisor to maintain your license.
12. Software Support Fee: $1,500
- You must purchase EFT, billing and collection systems and web-based gym management software programs from the franchisor’s approved supplier or the franchisor.
- The amount of the software support fee in the table above is for 3 months and is based on the current amount of the monthly fee. The amount of the monthly fee may change under the terms of the support agreement.
- This fee does not include your monthly processing fees, which are generally charged as a percentage of sales processed.
13. Utilities Deposits: $1,000 to $2,000
- You may incur certain deposits with local utilities, for example, electric, telephone, gas, water, etc. These will vary depending on the policies of the local utilities.
14. Licenses and Permits: $500 to $2,500
- Local, municipal, county, and state regulations vary on what licenses and permits are required to operate a UFC Gym Business. Classification of various types of fitness centers by local governments can cause the cost of licenses and bonds to vary.
15. Legal Review: $500 to $3,500
- The estimate includes attorneys’ fees, publication fees, filing fees, and other costs for incorporation, compliance with your state’s fictitious or assumed name statute, review of your membership agreements for compliance with state law, and review of the Franchise Disclosure Document, depending on the scope of legal services rendered.
16. Travel, Lodging, Meals, Etc. for Initial Training: $500 to $2,500
- You must bring no fewer than 4 people (owner, manager, instructor, and salesperson) to Initial Training, of whom at least one must be the operating partner. The typical costs of training that you must bear are the transportation, lodging, compensation, and meals.
- You must also pay for all out-of-pocket expenses, workers’ compensation insurance, and all employee compensation along with federal and state taxes for your trainees.
17. Additional Funds for 3-6 Months: $15,000 to $45,000
- You must have adequate additional funds as working capital before beginning operation of the Gym. The additional funds or working capital should be sufficient to keep the Gym in operation for 3-6 months and capable of covering the excess of expenses over cash flow from the Gym, covering independent contractor fees, employee salaries and taxes, inventory replenishment, insurance premiums, rent, utilities, and other normal expenses that are associated with the day-to-day business operation of the Gym.
- The estimated range does not include any payments to you during the start-up period.
- These figures are estimates and the franchisor does not guarantee that you will not have greater start-up expenses than these estimates, or that you will not need more operating funds than these estimates.
18. Total: $199,000 to $346,000
- The franchisor relied upon its management staff’s years of experience as owners and operators of boxing and fitness gyms, as well as its years of franchise operations, to compile these estimates.
UFC Gym Core
- UFC Gym Core facilities are mid-size fitness centers offering traditional fitness class programming, including boxing, kickboxing and D.U.T., mixed martial arts training, youth classes, private coaching, and Brazilian Jiu-Jitsu.
- UFC Gym Core facilities are typically between 6,000 to 10,000 square feet in size, utilizing a weight room, bag rack, octagon, turf traditional gym, and full-service locker rooms.
- Total Estimated Initial Investment: $368,500 to $1,062,500
UFC Gym Signature
- UFC Gym Signature facilities are big box fitness centers offering a complete line of fitness offerings that include the same offerings as UFC Gym Core, but also include a café, pro shop, sauna, kids club, and a group fitness room.
- UFC Gym Signature facilities are typically 18,000 to 40,000 square feet or larger.
- Total Estimated Initial Investment: $1,080,000 to $4,213,000