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Gymboree Franchise Cost & Fees

Date of Incorporation: 1979
Franchising Since: 1979
Headquarters: San Francisco, California

Business Description: Gymboree Play & Music Centers offer non-therapeutic sensory-motor, child programs (with or without a parent), early childhood music and art programs, exercise programs, birthday parties, theme parties and story line parties for infants and children in specified ages, and programs for parents and parents-to-be, using specially designed equipment and program aids. Gymboree Metro Play Centers offer a limited selection of the above programming. Gymboree has also developed a mobile version of the programs, which brings a play program that includes components of the Gymboree System directly to certain preschools, day care centers and other child-oriented institutions.

Franchise Offer: There are two related franchise offerings for both single and multiple franchise operations: a Play & Music Center and a Metro Play Center. Both of these franchise offerings use the Proprietary Marks and operate under the Gymboree System. The primary distinctions between the two offerings are:

  1. A Metro Play Center is smaller in size (approximately 2,200 to 2,500 square feet) than a Play & Music Center (approximately 2,500 to 2,800 square feet).
  2. A Metro Play Center does not offer all of the programming available at a Play & Music Center.
  3. the programming available at a Metro Play Center is a modified version of Gymboree's play programming available at a Play & Music Center.
  4. The equipment used at a Metro Play Center is a modified version of the equipment used at a Play & Music Center.

Financial Assistance: Gymboree does not offer direct or indirect financing. Gymboree is unable to estimate whether the franchisee will be able to obtain financing for all or any part of the investment and, if the franchisee is able to obtain financing, Gymboree cannot predict the terms of such financing. Gymboree does not guarantee the franchisee’s note, lease or obligations with third parties.

Training and Assistance: The franchisee (or, if a corporation, partnership or limited liability company, a principal who owns at least 51% of you and is approved by Gymboree) must attend and complete to Gymboree's satisfaction the initial training program for franchisees offered by Gymboree. If the franchisee has designated an Operations Manager at the time that the franchisee begins the initial training program, the franchisee may enroll the Operations Manager in the same initial training program at no additional charge. The training sessions generally last 8 days and average approximately 9 hours per day. Currently, the initial training for Metro Play Centers is approximately 6.5 hours shorter than the training for Play & Music Centers. The franchisee (or a principal who owns at least 51% and is approved by Gymboree) must attend once annually a franchisee meeting to discuss and review new programming ideas and concepts.

Territory: Except as otherwise noted, Gymboree will not establish or operate, or license any other person to establish or operate, a Gymboree Play & Music Center or Metro Play Center under the System and the Proprietary Marks at any location within a specified geographical area surrounding the Approved Location that will be described in the Franchise Agreement. The size of the Territory could vary depending on the number of children living in the area surrounding the Approved location, and geographic, socioeconomic and psychographic factors. Generally, a Play & Music Center will be granted in a Territory that has a larger population of households with children while a Metro Play Center will be granted in a Territory that has a smaller population of households with children. Metro Play Centers may also be granted in urban locations where the physical size of the Center is limited by real estate costs and availability.

Terms of Agreement and Renewal: The initial franchise term is 10 years. The franchisee may be eligible for a successor franchise for one additional 10-year term on the terms of the then-current franchise agreement if requirements are met.

Obligations and Restrictions: During the term of the Franchise Agreement, the franchisee (or, if a corporation, partnership or limited liability company, at least one of the principals who has signing authority on behalf of the corporation, partnership or limited liability company and is approved by Gymboree) must devote full-time and best efforts to the management and operation of the Center, and must not engage in any other outside activities which will interfere with the performance of the duties required. The franchisee (or, if a corporation, partnership or limited liability company, a principal of you who has signing authority on behalf of the corporation, partnership or limited liability company and who is approved by Gymboree) must be in charge of its day-to-day operations. The Center must be personally managed on a full-time basis by a person who has successfully completed all training required by Gymboree and meets all of Gymboree's other then-current standards. Gymboree strongly recommends that the franchisee personally manage the Center on an "on-premises" basis. The franchisee must keep Gymboree advised of the identities of the Operations Manager and other supervisors of the Center and Gymboree will have the right to deal with the Operations Manager on matters pertaining to day-to¬day operations of, and reporting requirements for, the Center. The franchisee must (1) sell or offer for sale only those products and services as Gymboree has expressly approved for sale in writing and as described in the Manuals; (2) refrain from any deviation from Gymboree standards and specifications without its prior written consent; and (3) discontinue selling and offering for sale any products and services which the franchisor may, in its discretion, disapprove in writing at any time.

Estimated number of units: 700

Investment Tables:
Initial Investment for a Play & Music Center
Name of Fee Low High
Initial Franchise Fee (1st Center) $45,000 $45,000
Lease Rental and Deposits (3 months’ rent) $3,000 $15,000
Broker Commissions, Key Money for Real Estate $0 $2,000
Construction, Architectural Fees, Related Expenses $0 $75,000
Equipment $48,424 $51,655
Decor and Signage $4,000 $9,000
Opening Inventory $10,800 $12,000
Pre-opening Salaries and Training (travel and living expenses) $250 $4,000
Office Equipment and Supplies $1,800 $7,900
Insurance $1,900 $5,000
Utility Deposits $0 $250
Professional Fees $1,000 $5,000
Music Rights $500 $650
Additional Funds for First 3 Months $30,000 $45,000
ESTIMATED TOTAL $146,492 $277,455
Initial Investment for a Metro Play Center
Name of Fee Low High
Initial Franchise Fee (1st Center) $35,000 $35,000
Lease Rental and Deposits (3 months’ rent) $2,000 $10,000
Broker Commissions, Key Money for Real Estate $0 $2,000
Construction, Architectural Fees, Related Expenses $0 $60,000
Equipment $48,242 $51,655
Decor and Signage $2,300 $6,000
Opening Inventory $7,900 $8,900
Pre-opening Salaries and Training (travel and living expenses) $250 $4,000
Office Equipment and Supplies $1,700 $5,600
Insurance $1,500 $2,500
Utility Deposits $0 $250
Professional Fees $1,000 $5,000
Music Rights $500 $650
Additional Funds for First 3 Months $20,000 $30,000
ESTIMATED TOTAL $120,392 $221,555
Other Fees
Type of Fee Amount
Royalty Fee 6% of Gross Receipts.
Catalogs and Consumer Products Varies.
Equipment, Program Aids and Promotional Material Varies.
Local Marketing Expenditures Not less than $4,000 per calendar year per Center.
Brand Fund Up to 5% of Gross Receipts.
Regional Advertising and Promotional Cooperative For Play & Music Centers: as determined by the Cooperative, but not to exceed $250 per month ($3,000 per year) per Center; for Metro Play Centers: as determined by the Cooperative, not to exceed $150 per month ($1,800 per year).
Booker License Fee $185 per month ($555 per quarter) per Center plus a one-time implementation fee of $300.
Insurance Reimbursement of any insurance payments that Gymboree elects to pay on the franchisee’s behalf if the franchisee fails to do so plus late fees and interest.
Initial Training The then-current training fee, which is currently $1,000 per person.
Additional Training Approximately $75 to $150 per attendee per training class for regional training; no charge currently for remedial training, but Gymboree reserves right to set remedial training fee in future.
Recordings List cost, plus postage and handling.
Transfer Fee 40% of the then-current per-site initial franchise fee (this fee is discounted for transfers to existing franchisees, or transfers of more than one Center to the same transferee)
Renewal Fee 10% of the then-current initial franchise fee.
Audit Cost of audit, including attorneys' and accountants' fees, travel expenses, room, board and applicable per diem charges for Gymboree's employees.
Interest Interest on the overdue amount at a rate equal to lesser of 1.5% per month, or the maximum rate allowed by law.
Late and Dishonored Check Fees $50 late fee; plus, for each 30-day period that the payment continues to be unpaid or report not submitted, $50 per 30-day period $50 for each dishonored check.
Reimbursements Amount disbursed.
Product Testing Gymboree's actual direct out of pocket costs estimated to be from $1,000 to $5,000.
Annual Meeting A fee equal to the then-current per-attendee fee, as designated by Gymboree prior to the meeting, multiplied by the number of attendees; currently, the registration fee ranges from $400 to $500 per attendee.

The above information has been taken from the FDD of Gymboree Play Programs. Year of FDD: 2015

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