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Koko FitClub Franchise Costs & Fees

Date of Incorporation: 2004
Franchising Since: 2008
Headquarters: Rockland, Massachusetts

Business Description: Koko FitClub, LLC, offers a franchise to establish and operate a Koko FitClub, a digital gym that features and offers for sale to the public membership to a specialty health and fitness club with patented fitness equipment, personalized technology, exercise and nutrition plans for Koko FitClub members, guidance for members through their daily workouts, and website tracking of their health and fitness activity, along with various merchandising relating to health and fitness.

Franchise Offer: Two types of franchise agreements are offered:

  1. The franchisee is granted the right to operate a Koko FitClub under a Franchise Agreement. Each Koko FitClub is a “digital gym” that features and offers for sale to the public:
    • (a) membership to a specialty health and fitness club with patented fitness equipment, personalized technology, and exercise plans for Koko FitClub members;
    • (b) guidance for members through their daily workouts and website tracking of their health and fitness activity;
    • (c) a Koko FitCheck body assessment system that measures each member’s unique body composition and Koko Metabolic Rate, the data from which enables customized nutritional plans via Koko Fuel;
    • (d) various merchandising relating to health, fitness, and nutrition; and
    • (e) such other proprietary and non-proprietary products and services as the franchisor may designate from time to time. The Koko FitClub will operate according to a unique system, the distinguishing characteristics of which include exercise equipment, technology, and health and fitness programs, including the Koko Smartrainer with Koko Key customization, Koko Cardio, Koko FitCheck, and Koko Fuel; distinctive exterior and interior designs and décor; uniform standards; specifications and procedures for operations; training and assistance; products and services; and advertising and promotional programs.
  2. The franchisor also offers the opportunity to establish and operate more than one Koko FitClub in a designated area under an Area Development Agreement. Under the Area Development Agreement, the franchisee will receive certain rights to develop a specified number of franchised businesses within the Development Area under a development schedule.

Financial Assistance: Koko Fitclub nor any agent or affiliate offers direct or indirect financing to franchisees, or guarantees any note, lease, or obligation of franchisees.

Training and Assistance: Koko FitClub will make available its standard Koko Build Book with specifications for a prototypical Koko FitClub. The franchisor will provide Initial Training for first-time owners which includes 3 days of Owner Orientation and 3 days of FitCoach Academy training. The franchisor will make available advertising and promotional materials which the franchisee may purchase and distribute. Koko FitClub will provide franchisees with access to its confidential online Owner Management System which includes information on product, real estate and build out, marketing, and financial/business support, in addition to detailed information on the Opening Process, brand standards, best practices, and training.

Territory: Franchisees are granted a territory a specific geographic area approved by the franchisor. Most franchisees will receive a Territory that encompasses a population of up to 15,000 individuals or an area measured by a 3 mile radius from the approved location, whichever is smaller. Franchisees are not granted an exclusive territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor control. However, Koko FitClub will not establish or operate, or license another person to establish or operate, another Koko FitClub under the system and the proprietary marks within your territory.

Term of Agreement and Renewal: The length of the franchise term is 10 years. A franchisee has the right to renew the Franchise Agreement for 2 additional consecutive terms of 5 years each. An Area Development franchise term is the earlier of (1) the last date specified in the Development Schedule; or (2) the date when the franchisee has open and in operation all of the Koko FitClubs required by the Development Schedule. Franchisees cannot renew the Area Development Agreement.

Obligations and Restrictions: Franchisees or managers who have been approved by the franchisor and who have successfully completed the training programs must take an active role in the operation of the Koko FitClub. Franchisees are not required to supervise the Koko FitClub through “on-premises” supervision, but all of on-premise employees must successfully complete Koko FitClub’s Initial Training Program or be trained by the franchisee or a manager who has successfully completed the Initial Training Program, on-premises at the Koko FitClub. All owners, managers and FitCoaches, must successfully complete Koko FitCoach certification requirements. Only Certified FitCoaches may work unsupervised in a Koko FitClub. Franchisees must use, sell or offer for sale only such equipment, products and services as the franchisor has expressly approved in writing. The franchisee must use, sell or offer for sale all types of equipment, products and services the franchisor specifies. The franchisee must refrain from any deviation from the franchisor’s standards and specifications without prior written consent. The franchisee must discontinue using, selling and offering for sale any equipment, products or services which the franchisor may disapprove in writing at any time.

Estimated Number of Units: 110

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $39,000 $39,000
Real Estate $18,000 $18,000
Renovation and Improvements to Real Estate $54,000 $54,000
Store Furnishings, Interior Signs, and Decorative Items $2,250 $22,500
Supplies $575 $575
Initial Equipment, Technology, and Computer Systems $19,196 $191,862
Initial Inventory of Koko Keys $3,990 $3,990
Initial Inventory of Starter Kits $1,960 $1,960
Exterior Signage $7,000 $7,000
Travel Expenses while Training $2,500 $2,500
CPR Training and Heart Defibrillator $1,750 $1,750
Initial Launch Marketing and Advertising $10,000 $10,000
Prepaid Insurance Premiums $3,000 $3,000
Permits, Licenses, Club Layout/Initial Architectural Plans $5,500 $5,500
Prepaid Utilities / Expenses $700 $700
Legal and Accounting and Services $2,000 $2,000
Additional Funds (first 3 months) $32,000 $32,000
ESTIMATED TOTAL $203,421 $396,337
Other Fees
Type of Fee Amount
Royalty 3% - 5% of Gross Collections.
Common Marketing Services Fee 2% of Gross Collections.
Additional Training Then-current training fee (currently $859 per day) and actual expense.
On-Site Evaluation Actual expenses.
Insurance If you do not acquire the required insurance, the actual cost the franchise incurs to procure that insurance.
Insufficient Funds and Late Payment Fees $25 insufficient funds fee for first occurrence, $50 for second occurrence, $100 for third occurrence, and $500 if unpaid after 30 days and for each subsequent unpaid month.
Renewal Fee $13,000 or one-third of then current initial franchise fee, whichever is greater.
Franchise System Rights Transfer Fee $19,500 of 50% of the then current initial franchise fee, whichever is greater.
Indemnification Actual cost of loss.
Collection Costs and Attorneys’ Fees Cost of collection or attorneys’ fees.
Smartraining Software Service Fee $8-$10 per month for each unique Registered Koko Smartraining System User at any time during that month whose data we maintain and manage.
Evaluation and Testing Charge Actual cost (approximately $250 to $500)
Suspension Fee $500 per day plus expenses.

The above information has been taken from the FDD of Koko FitClub. Year of FDD: 2015

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