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 Franchise Opportunity Terminology
 

  • Royalty fees:  Payments are made to the corporate entity as long as you are a franchise.  These are a fixed rate or a percentage of earnings.  Sometimes there is a cap placed on the earnings percentages you have to pay against. Most fitness franchises are a fixed amount, except for Ladies Workout Express, which charges 5% if higher than $500. Curves, Contours, It Figures and others just charge a fixed fee. 
     

  • Total initial investment:  Costs of starting a franchise such as working capital, the franchise fee, advertising...etc.
     

  • Rent for your fitness franchise

  • Construction, remodeling or redecorating costs.

  • Maintenance fees for common areas, such as parking lot.
     

  • Advertising fees: 
    Advertising for the franchise is often done via a pool.  Curves Franchises charge such a fee.  This money is supposedly to help build the national brand awareness, operate the website, and other important activities that would benefit all franchisees.
     

  • Franchise Fee
    A one-time payment that assures you the right to use the trademark/service mark and get started.  The franchise comparison chart gives this information.  There is a wide variation in what this covers.  Franchise fees should be studied carefully and broken down into components.
     
  • Franchisor
    The parent company that grants, for a fee and other considerations, the right to use its name and system of business operations.  For example, if you purchased a Ladies Workout Express, you would be allowed to use that name in all of your marketing.
     
  • Franchise Agreement
    A written contract detailing the mutual responsibilities of franchisors and franchisees. It is usually for a several-year term, and when the term is up, the contract expires and must be renewed. Some state laws require the contract to be renewable at the franchisee's option. Usually a franchise agreement may not be sold, transferred, or otherwise assigned without the franchisor's permission.  There is more information about the franchise UFOC.
     
  • Franchise Fee
    An up-front entry fee, usually payable upon the signing of the contract (franchise agreement) for the right to use the franchisor's name, logo, and business system. Often, the franchise fee is also the consideration paid for initial training, site selection, operations manuals, and other help given by the franchisor before the opening of the business.  Learn more about the franchise fees.
     
  • Royalty
    A continuing payment to the franchisor that is payable on a periodic basis (usually weekly, biweekly, or monthly) throughout the term of the franchise agreement.
     
  • Estimated Initial Investment
    A detailed listing of fees you can expect in starting your business. This listing represents the amount you would need to pay, including fees paid to the franchisor; furniture; fixtures and equipment; real estate costs; insurance, etc.  Another page about franchise fees is available.
     
  • Uniform Franchise Offering Circular (UFOC)
    The Federal Trade Commission enacted a Rule in 1979 requiring the franchisor to give a written prospectus to prospective franchisees. The prospectus prescribed by the FTC is called the Uniform Franchise Offering Circular or UFOC. The UFOC contains information such as background; important provisions of the franchise agreement; amount and terms of the franchise fee (Item 5) and royalty and advertising-fund fee (Item 6); estimated start-up costs (Item 7); details on existing franchisees; the franchisor/franchisee relationship; audited financial statements for the last three fiscal years; and copies of all contracts that will be used.
     
  • 10-day and 5-day Rules
    If you meet with a franchisor (or a representative of the franchisor) at a sales or other meeting related to buying a franchise, the franchisor must give you a complete copy of their UFOC.

    If you don't meet, they still must give you a complete copy of their UFOC at least 10 business days before any contract is signed (the 10-day Rule). And you must be given a separate contract, with all blanks or negotiated parts completed (except signatures) at least five business days before any contract is signed or any money changes hands (the 5-day Rule).
     

 

 
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Disclaimer: The ladies fitness related opportunities advertised on this website are not to be taken as a purchase recommendation of any kind. Ladiesfitnessfranchise is an information and advertising service. Please seek the advice of an attorney and financial advisor before purchasing any franchise, business opportunity, or business for sale. Please see our full disclaimer for more information.  Terms of Use | Privacy  Franchise offers are only made through a Uniform Franchise Offering Circular (UFOC). Nothing on this website shall constitute a franchise offer.  All Franchise Names are trademarks of the respective Corporate Entity.   Always ask franchise for latest information!!!
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