The Little Gym Franchise Costs: Estimated Initial Investment (Item 7, 2021 FDD)

1.  Initial Franchise Fee:  $59,500

• The Little Gym does not refund any initial franchise fees or any portion of the fees, except as described in Item 5. The initial franchise fee is currently $59,500 for each location.

2.  Start-Up Equipment and Inventory Package:  $53,000 to $65,000

• The Start-Up Equipment and Inventory Package price includes shipping and a $7,175 to $9,000 technology package that includes the initial software license fee.

• The requirement to purchase the technology package may be waived in whole or in part for those prospective franchisees that purchase an existing location that is using a technology package that is not out-of-date. The Little Gym can confirm if a technology package is required upon your request.

3.  Signs and Fixtures:  $8,000 to $15,000

4.  Tenant Improvements:  $25,000 to $160,000

• You may choose to spend more for leasehold improvements.

• Typical fixed premise locations are located in strip centers, office and retail business parks, or other retail parks. Locations have approximately 2,800 to 3,600 square feet of space.

• Rent varies substantially based upon the size of the facility, its geographic location, and other factors.

• The Little Gym provides the necessary guidelines and criteria for you to consider when making a location decision. The Little Gym reserve the right to reject your site location. The lease negotiation and selection of the premises are your sole responsibility, and The Little Gym will not become involved in the negotiation of your lease or purchase.

• The Little Gym requires a number of mandatory provisions in your lease agreement, and you and your lessor must sign an Addendum to Lease.

• The amount required for equipment, fixtures, and improvements to the real estate premises will be determined principally by the size and type of premises.

• The figures given above represent the best information known to The Little Gym for lease costs, assuming the landlord pays for the basic build-out. The landlord is not obligated to pay for any leasehold improvements.

• The Little Gym estimates from $8,000 to $15,000 for interior and exterior signs and gym dress. The build-out cost, including improvements and fixtures, generally ranges between $25,000 and $160,000, but you might spend more.

• Upon an assignment, The Little Gym may require you to make leasehold and other improvements to the location and otherwise upgrade or renovate to the then-current standards, at a total cost to you not to exceed $50,000, in January 1, 2020 dollars, adjusted by U.S. Consumer Price Index, all consumers.

5.  Furnishings, Computer Systems, Security Surveillance System, Other Equipment & Supplies:  $8,400 to $22,500

• The amount shown for furnishings, computer systems, security surveillance system, other equipment, and supplies includes: the required computer systems of $2,000 to $6,000 that are not part of the Start-Up Equipment and Inventory Package; security surveillance system of $1,000 to $4,000; miscellaneous gym equipment of $700 to $1,000; lobby and multipurpose room furniture and supplies of $3,500 to $9,500; stationery and office supplies of $500 to $1,000; and initial pro-shop supplies of $700 to $1,000.

• These costs are approximations and may vary.

6.  Initial Sales Promotion:  $15,000 to $25,000

• Initial sales promotion costs include advertising, promotional, and related expenses for your initial opening.

7.  Security Deposits and Other Prepaid Expenses:  $8,000 to $25,000

8.  Training Related Expenses:  $5,000 to $10,000

9.  Insurance Premiums:  $2,500 to $3,500

• You must maintain insurance of the kinds and in the minimum amounts as The Little Gym specifies, including commercial general liability insurance for claims related to: premises and operations, auto, property, casualty, product, sport accident/participant accident, sexual harassment, abuse and molestation, employment practices (including unfair labor practices and joint employer), data breach, and errors and omissions, and in which The Little Gym is named as an additional named insured.

10.  Miscellaneous Payments and Expenses Before Beginning of Operations:  $4,000 to $11,000

• Other expenses you may have to pay include legal, accounting fees, and other professional fees. You will pay your own legal and other expenses in connection with the review and negotiation of your lease.

11.  Additional Funds for 3 Months:  $35,000 $70,000

• These amounts represent the amount required for initial operating expenses and working capital. These are estimates of your other initial three-month start-up expenses, less income earned, but not including your salary, finance costs, debt service, your personal expenses, or reimbursements or other payments to you.

• These figures are just estimates and The Little Gym cannot guarantee that you will not have higher costs. Competitive conditions described in the disclosure document affect these costs.

• This estimate does not include any provision for salaries. The Little Gym assumes you will manage the business.

• If you are not profitable or have low net cash flow (for example, because of low sales, high costs, or high debt service), you will need more additional funds.

12.  Total:  $223,400 to $466,500

• The amounts shown above are estimates only and specific amounts vary depending upon various local conditions that are outside of The Little Gym’s control.

• The Little Gym relied on its experience in this business to compile these estimates. You should review these figures carefully with the business advisor of your choosing before you purchase a franchise.

• The Little Gym does not refund any of these payments, except as stated in Item 5. The Little Gym does not offer direct or indirect financing to franchisees for any items.