TAF™
Date of Incorporation: 1985
Franchising Since: 1972
Headquarters: Norcross, Georgia
Country: U.S.
Description: The franchisor operates stores which specialize in selling quality athletic footwear and footwear accessory products including merchandise related to athletics and physical and mental well-being. The Athlete’s Foot (TAF) Brand offers a specialty retail athletic footwear store which may be located in storefronts, strip shopping centers or regional malls.
Franchise Offer: There are two types of franchise programs offered:
i.) 1. Single Store Program: Under the Single Store Program, the franchise offered is the right to open one specialty athletic footwear store in a designated area of responsibility.
ii.) 2. Area Development Program: Under Athlete's Foot Brand's Area Development Program, the franchise offered is the right to develop a geographic area by accepting a license to open specialty athletic footwear stores in the Territory up to a fixed maximum number of stores. The number of stores to be opened in the Territory will be dependent upon a number of factors such as population density, demographic data, the number of potential locations for stores, and the presence of competition.
Financial Assistance: The franchisor does not offer direct or indirect financing for any purpose in establishing or operating the franchise business. Also, they do not guarantee the lease or any other obligations in the operation of the franchise business.
Training and Assistance: The franchisor will provide initial training at their offices, currently in Norcross, Georgia and at an existing TAF store that they designate. TAF may require that additional training be conducted at another location that they designate, including other stores or the franchisee’s Store. Currently, initial franchisee training is provided six times per year. The franchisee is responsible for any travel and living expenses, wages, and other expenses his or her trainees incur.
Territory: The franchisee will not receive an exclusive territory. The franchisee must locate an acceptable site within the non-exclusive Site Selection Area that TAF specifies. The franchisee may face competition from other franchisees, from outlets owned by the franchisor, or from other channels of distribution or competitive brands that TAF controls.
Term of Agreement and Renewal: The initial franchise term is 10 years, with an option to add successive additional terms of five years if the franchisee is in good standing.
Obligations and Restrictions: The franchisee must devote his or her full-time, best efforts to the proper and effective operation of the Store. In addition, the Store must have at least one Manager; the franchisee may serve as the Manager or the franchisee may designate a Manager. The franchisee or Operating Principal and Manager(s) must successfully complete the training program and any other training programs that TAF requires.
Total Number of Units: 530 units
Investment Tables (Based on a Single Store Program):
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $39,900 | $39,900 |
| Travel and Living Expenses While Training | $1,000 | $5,000 |
| Architect's Fees | $1,250 | $6,750 |
| Furniture, Fixtures, Equipment & Decor | $48,000 | $105,000 |
| Signs | $6,500 | $10,500 |
| Prepaid rent and security deposit | $2,500 | $5,000 |
| Leasehold improvements | $30,000 | $85,000 |
| Utility deposits | $2,200 | $3,000 |
| Professional Fees | $1,500 | $6,000 |
| Grand Opening Marketing | $5,000 | $5,000 |
| Opening Inventory | $75,000 | $150,000 |
| Computer System | $3,000 | $8,000 |
| Business Licenses | $1,500 | $2,500 |
| Insurance – 3 Months | $2,500 | $3,500 |
| Additional Funds -3 Months | $20,000 | $75,000 |
| Total | $239,850 | $510,150 |
Ongoing Fees:
| Name of Fee | Amount | |
|---|---|---|
| Royalty Fee (if franchisee owns 1 or 2 Store(s)) | Years 1, 2 and 3 | 5.0% |
| Years 4, 5 and 6 | 4.5% | |
| Years 7, 8 and 9 | 4.0% | |
| Years 10 through 14 | 3.0% | |
| Year 5 and thereafter | 2.5% | |
| Royalty Fee (if franchisee owns 3 or more Stores) | Years 1, 2 and 3 | 5.0% |
| Years 4, 5 and 6 | 4.0% | |
| Years 7, 8 and 9 | 3.0% | |
| Year 10 and thereafter | 2.0% | |
| Marketing Fee | 1% of your Net Sales for the preceding calendar month | |
| Interest | 18% per year (or maximum legal rate, if less) | |
| Late Fee | $25 per week | |
| Additional Training | Currently, $300 per employee or agent for each full or partial day | |
| Additional Consulting Services |
Currently, $300 per employee or agent for each full or partial day, plus their travel and living expenses | |
| Assigned Trainers | Franchisor’s actual expenses, including travel and living expenses for our trainers | |
| Product, Service, Supplier, and Service Provider Review | Franchisor’s reasonable cost of inspecting the supplier, testing the proposed product, or evaluating the service provider or proposed service, including personnel and travel costs | |
| Relocation Charge | Franchisor’s reasonable costs incurred in evaluating a proposed new Site | |
| Transfer Fee | $10,000 for a transfer of the Store or Franchise Agreement. For a transfer of a partial ownership interest, the franchisee must pay an administrative fee equal to the administrative costs in processing the transfer (currently, $1,000) | |
| Transfer Referral Fee | $29,000 | |
| Successor Fee | 30% of the then-current Franchise Fee | |
| Insurance | Cost of the premium (usually $3,000 to $5,000) plus a reasonable fee ($50 per hour) for franchisor’s services in procuring the insurance | |
| Audit | Cost of audit, including travel and living expenses, plus interest on the amount of the under¬payment at an annual rate of the lesser of 18% or the maximum interest rate permitted by law | |
| Inspection | Franchisor’s reasonable expenses incurred in inspecting the franchisee’s business, including travel and living expenses, wages, and other expenses | |
| Convention or Meeting Attendance | As determined based on costs of holding the convention or meeting | |
| Remedial Expenses | Franchisor’s reasonable expenses incurred in correcting your operational deficiencies | |
| Enforcement Expenses | Franchisor’s reasonable cost of de-identifying your Store | |
| Indemnification | Franchisor’s liabilities, fines, losses, damages, costs, and expenses (including reasonable attorneys' fees) | |
| Liquidated Damages | Liquidated damages is calculated as (i) the average of the franchisee’s monthly Royalty Fees and Marketing Fees due for the last 12 months (or for any shorter time that the Store has been open) before the delivery of the notice of default, (ii) multiplied by the lesser of 36 or the number of months remaining in the then-current term, (iii) discounted to present value using the then-current prime rate of interest quoted by the franchisor’s principal commercial bank. | |
Date of FDD: 2010
The above information has been taken from the UFOC/FDD of The Athelete's Foot.
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