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The Little Gym Franchise Cost & Fees

Date of Incorporation: 1981
Franchising Since: 1992
Headquarters: Scottsdale, Arizona

Business Description: The Little Gym provides physical fitness, recreational gymnastic, motor skills development and other related programs for children.

Franchise Offer: To qualifying franchisees, The Little Gym Inc. licenses the right to operate a The Little Gym franchised business and provide physical fitness, recreational gymnastic, motor skills development and other related programs to children in a non-threatening, highly motivational environment that enhances physical and mental growth. Franchises are offered for Standard Territories or Small Market Territories.

Financial Assistance: The Little Gym Inc. does not offer direct or indirect financing nor does it guarantee any note, lease or obligation.

Training and Assistance: The training program currently consists of four parts and is typically three to four weeks in length. The first part of the training program is the 21-Day Business Startup Training, and this may vary in length. The second part is Boot Camp Training I and is approximately 45 hours in length. The third part is Boot Camp Training II and is approximately 72 to 90 hours in length. The fourth part is Internship Training and is 40 to 50 hours in length. All training takes place at locations that chosen by The Little Gym Inc. This training is without additional charge to the franchisee and up to two additional persons, all attending each training event together with the franchisee. For the Internship portion of training, the franchisee may choose to have between one to three people attend the training. With one or two attendees, each attendee will be fully trained on Parent/Child, Preschool/Kindergarten classes, and Grade School classes. With three attendees, each attendee will be partially but not fully trained in all three areas. All additional trainees must serve in key full time positions of the franchised business, or be an individual majority owner, shareholder, or partner of the franchise owner. The franchisee may be required to attend an individual training program, or a course or conference with other franchisees. The franchisor retains the absolute right, in its sole discretion, to prescribe optional and mandatory Continuing Training Programs for franchise owners without charge throughout the Term Franchise Agreement.

Territory: The franchisee will be granted a defined territory, usually delineated by boundary streets, highways and other geographical markers. Standard Territories typically contain a population of at least 10,000 children under the age of 10. Medium Market Territories typically contain a population of between 6,000 and 10,000 children under the age of 10. Small Market Territories typically contain a population of between 4,000 and 8,000 children under the age of 10. The Little Gym Inc. has sole discretion in creating a Small Market Territory as opposed to a Standard Territory. The Little Gym Inc. will not establish other franchised operations or company-owned locations using its name or trademarks in the Territory without the franchisee’s advance written permission.

Term of Agreement and Renewal: The length of the franchise term is 10 years. The franchisee can renew for two additional periods of 10 years each if requirements are met.

Obligations and Restrictions: The franchised business must be under the direct control and supervision of the franchisee at all times. The franchisee may hire a General Manager to conduct day-to-day operation of the franchised business; however, the General Manager must first either successfully complete The Little Gym Inc.'s initial training program or its equivalent through individual training programs. The Franchise Agreement requires that the franchisee offer all goods and services required by the franchisor in the Confidential Operations Manuals, as amended. The franchisee must not offer any goods or services not authorized by The Little Gym Inc.

Estimated Number of Units: 323

Investment Tables:
Initial Investment for a Standard Territory
Name of Fee Low High
Initial Franchise Fee; $24,750 $49,500
Start-Up Equipment and Inventory Package $50,000 $55,000
Signs and Fixtures $6,000 $18,000
Tenants Improvements $0 $100,000
Furnishings, Computer systems, Security Surveillance System, Other Equipment & Supplies $15,500 $22,000
Initial Sales Promotion $10,000 $18,000
Security Deposits and Other Prepaid Expenses $5,000 $20,000
Training Related Expenses $5,000 $10,000
Insurance Premiums $2,500 $3,500
Miscellaneous payments and expenses before beginning of Operations $4,000 $11,000
Additional Funds - 3 months $35,000 $70,000
ESTIMATED TOTAL $157,750 $337,000
Initial Investment for a Medium Market Territory
Name of Fee Low High
Initial Franchise Fee $14,750 $29,500
Start-Up Equipment and Inventory Package $48,000 $53,000
Signs and Fixtures $5,000 $12,000
Tenants Improvements $0 $90,000
Furnishings, Computer systems, Security Surveillance System, Other Equipment & Supplies $15,500 $22,000
Initial Sales Promotion $6,000 $13,000
Security Deposits and Other Prepaid Expenses $5,000 $15,000
Training Related Expenses $5,000 $10,000
Insurance Premiums $2,000 $3,000
Miscellaneous payments and expenses before beginning of Operations $3,000 $9,000
Additional Funds - 3 months $25,000 $50,000
ESTIMATED TOTAL $129,250 $306,500
Other Fees
Type of Fee Amount
Royalty 8% of Monthly Gross Revenue, subject to the Annual Minimum Royalty Requirement or Unopened Center Fee.
Marketing Fund 1% of Gross Monthly Revenue.
Local Advertising and Regional Advertising Cooperatives 4% of Gross Monthly Revenue, $1,250 Minimum on averaged annualized basis.
Proprietary Software Maintenance Fee Currently $65 per month (first 90 days at no charge except the initial license fee).
Additional Training $250/person/day, plus travel, lodging, and meals.
Interest and Late Charges $250 late fee per month, plus interest of 1% for each month overdue (or maximum allowable by law)
Audit Fees Cost of Audit.
Additional Assistance $500-$1000 per day, plus if the assistance is at the franchisee’s site, the franchisor’s expenses for travel and accommodations.
Transfer and Retaining Fees $15,000; plus $12,500 if the franchised business is open or has been opened to the public, or $5,000 if the franchise is not open.
Fee to Divide Territory $20,000
Fees on Default and Indemnity All amounts due.
Insurance Varies.
Payments for Goods or Services, including computer system upgrades Varies.
Franchisee Owner Website Fee $1,150
TLG Automated Communication Touchpoint System $39 monthly fee.

The above information has been taken from the FDD of The Little Gym. Year of FDD: 2016

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