If you are considering a Hotworx franchise, don’t get blindsided by these 25 important franchise fees (from the initial franchise fee, to the royalty fee, to 23 other fees found in Items 5 and 6 of Hotworx’s 2021 FDD).

1.  Franchise Fee:  $12,950 to $19,950

• You will pay an initial lump sum franchise fee of $19,950 for a single unit license. If you decide to purchase the right to operate an express studio, you will pay an initial lump sum franchise fee of $12,950.

• This fee is deemed fully earned and non-refundable at the time the Franchise Agreement is executed.

• Hotworx participates in the VetFran Program and qualified franchisees may receive a discount of $2,500 on the initial franchise fee.

2.  Area Development Fee:  the cost for 1 additional license for a traditional Hotworx studio, if granted, shall be for $15,000; the cost for any additional licenses of two or more for traditional Hotworx studios, if granted, shall be for $10,000 each; the cost for an additional license for an express Hotworx studio, if granted, shall be for $12,950 per each additional license

• Upon execution of a Franchise Agreement, Hotworx may elect to sign an Area Development Agreement with certain candidates. Franchisees with multiple options are required to adhere to a strict development schedule.

• The cost for 1 additional license for a traditional Hotworx studio, if granted, shall be for $15,000. Alternatively, the cost for any additional licenses of two or more for traditional Hotworx studios, if granted, shall be for $10,000 each.

• Moreover, if you purchase an express studio initially, you may only develop express locations thereafter under the Area Development Agreement. The cost for an additional license for an express Hotworx studio, if granted, shall be for $12,950 per each additional license regardless of how many additional licenses are purchased.

• This fee is deemed fully earned when paid and is non-refundable.

• To be eligible for this arrangement, you must purchase the additional licenses when you execute the first Single Unit Franchise Agreement.

• Please note that the purchase of additional licenses is not, in itself, a Franchise Agreement. If you exercise your right to open additional studios, you will be required to sign a separate Single Unit Franchise Agreement for each outlet prior to engaging a broker or initiating any form of lease negotiations.

3.  Equipment:  $84,650 to $133,600

• Before opening your studio, you must purchase from Hotworx or an affiliate, or lease through a third-party lender, all Hotworx studio equipment.

• Equipment costs are nonrefundable.

• The cost to buy this equipment ranges from $84,650 to $133,600 depending on the number of saunas located at your studio. This estimate does not include the cost of shipping, installation, and taxes.

4.  Wholesale Goods:  $20,000

• Before opening the studio, you must purchase wholesale goods from Hotworx or an affiliate. The cost for these wholesale goods is $20,000. These costs are nonrefundable.

5.  DMA or Development Area Transfer:  $5,000

• Before you transfer the franchise or transfer from one DMA or development area to another.

• There is no transfer fee when an individual transfers the franchise to his/her corporation or LLC. Should franchisee elect to transfer license to another DMA or development area, then a $5,000 transfer fee will be assessed.

6.  Resale/Transfer Fee:  $10,000 to $19,950

• Due Date:  Upon sale of existing location.

• There is a resale fee of $10,000 when selling your location to an existing franchisee. There is a resale fee of $19,950 when selling your location to a third-party entering into the franchise system.

7.  Monthly Royalty Fee:  $550 per month

• Due Date:  5th of every month for the preceding month.

• Payment will be made through Autodraft system.

8.  Annual Convention:  $590 to $790

• Due Date:  Fees that are unpaid 14 days prior to convention will be automatically drafted.

• Fee includes registration for 2 attendees. It does not include cost of travel, lodging, food, or entertainment.

9.  Credit Card Processing Fee:  3% of amount charged

• Due Date:  Any time you make payments to Hotworx or its affiliates by credit card.

• When franchisee uses a credit card for purchases from Hotworx or its affiliates, Hotworx or its affiliates will charge franchisee a credit card processing fee.

10.  Technology Fee:  $0 to $100 per month or $1,200 lump sum

• Due Date:  5th of every month for the preceding month, or lump sum.

• A fee may be imposed for additional technology upgrades but not to exceed $100 per month or $1,200 per year lump sum.

11.  POS Software Fee:  $129 per month

• Due Date:  5th of every month for the preceding month.

• Payment will be made directly to designated vendor.

12.  Virtual Instructor Software Fee:  $10 per sauna per month

• Due Date:  5th of every month for the preceding month.

13.  “SAIL” Customer Relations Management (CRM) Fee:  $125 per month per studio location

• Due Date:  5th of every month for the preceding month.

14.  Secret Shop Inspections:  $100 per shop inspection

• Due Date:  When incurred.

15.  Site Visit Fee:  $200 per day

• Due Date:  When incurred.

• This fee is applicable when franchisee requests Hotworx to provide additional on-site training. This fee does not include travel, hotel, and per diem expenses for which you are also responsible.

16.  Late Payment Fee:  $100 per week

• Due Date:  Whenever any of the above fees are late.

• Interest is also charged on any overdue amounts at 18% per annum or the maximum rate permitted by state law, whichever is less.

17.  Non-sufficient Funds (NSF) Fee:  $30 per transaction

• Due Date:  When there are insufficient funds to make payment.

• Payment will be made to Hotworx through the Autodraft System.

18.  Insurance Handling Fee:  $250

• Due Date:  Immediately after notice from Hotworx.

• You only pay this fee to Hotworx if you fail to obtain insurance, and Hotworx obtains insurance coverage for you. This fee does not include the insurance premiums, for which you must also reimburse Hotworx.

19.  Indemnification:  amount of judgment or claim

• Due Date:  When incurred.

• You must defend, indemnify, and hold Hotworx harmless from all fines, suits, proceedings, claims, demands, obligations, or actions of any kind arising in whole or in part from the operation of your Franchised Business.

20.  Enforcement Fees:  varies

• Due Date:  When incurred.

• If Hotworx prevails in any arbitration or lawsuit in which you are a party, you will be required to pay Hotworx’s fees for enforcing its contract with you. This includes Hotworx’s attorney’s fees, the costs of hiring a collection agency, court costs, costs of compiling records of your gross receipts, discovery costs, and costs of appeal, together with interest charges on all of the foregoing.

21.  Noncompliance Real Estate Penalty Fee:  $5,000

• Due Date:  Immediately after notice from Hotworx.

• Hotworx may impose this fee when franchisee fails to sign new, then-current Franchise Agreement before any lease negotiations for additional Hotworx locations or prior to engaging a broker for consideration of additional Hotworx locations.

22.  Accounting Noncompliance Penalty Fee:  $300 per month

• Due Date:  On the sixth day of each month.

• A fee may be imposed for when franchisee fails to timely submit monthly expense report.

23.  Customer Service Noncompliance Fee:  up to $1,000 per incident

• Due Date:  Immediately after notice from Hotworx.

• A fee may be imposed when franchisee fails to timely resolve customer service disputes after receiving notice of dispute such that Hotworx finds it necessary to intervene.

24.  Improper or Unauthorized Use of Trademark:  $1,000 per incident

• Due Date:  Immediately after notice from Hotworx.

• A fee may be imposed when franchisee improperly uses Hotworx’s trademarks.

25.  Non-compliance of Prohibition of Advertising on Daily Deal Sites:  $500 per day

• Due Date:  Immediately after notice from Hotworx.

• In addition to liability for any damages for which franchisee is legally liable, a daily fee will be assessed by Hotworx when franchisee posts promotions on daily deal sites, such as Groupon, Living Social, MindBody, GymPass, and/or other similar sites.

• This daily fee will be assessed until franchisee demonstrates promotion is completely removed, including from any internet search engines.