Club Pilates Franchise Costs & Fees
Date of Incorporation: 2007
Franchising Since: 2012
Headquarters: Costa Mesa, California
Business Description: Club Pilates Franchise, LLC is the franchisor. Club Pilates Studios are established and operated under a comprehensive design that includes spacious interior, a significant number of exercise equipment/apparatuses, specifications, and procedures for operations; quality customer service; management and financial control; training and assistance; and advertising and promotional programs.
Franchise Offer: The franchisor offers for sale a franchise to establish and operate a fitness studio that provides Pilates and other exercise classes under the “Club Pilates” marks.
Financial Assistance: The franchisor does not offer direct or indirect financing for any amount due under the Franchise Agreement. The franchisor does not guarantee a franchisee’s note, lease or any other obligation.
Training and Assistance: Prior to opening the Franchised Business, franchisees must ensure that: (i) they (or, if they are an entity, the Designated Operator) completes the Owner/Operator Module of the Initial Training Program, which will typically last 2-3 business days at the franchisor’s corporate headquarters or another training facility it designates (most likely in California); (ii) the Designated Manager (if appointed) attend and complete the Designated Manager Training Program; and (iii) at the franchisee’s option and if they wish, 1 or more individuals that are Certified Pilates Instructor(s) and that will be responsible for providing the Approved Services at the Franchised Business may participate and complete the Orientation Program component of the Initial Training Program, which typically lasts 1 business day and is designed to provide advanced instruction on how to provide Pilates instruction, as well as the other Approved Services, in accordance with the franchisor’s System standards and specifications. Around the time franchisees first open their Studio, the franchisor may send 1 or more representatives to the Studio to (a) provide assistance and recommendations regarding the opening and initial operations, and/or (b) provide additional or refresher training associated with the Owner/Operator Module and/or Orientation Program, as it deems appropriate in its discretion. The franchisor may also provide, and require that franchisees (and their Designated Operator and Designated Manager, as appropriate) attend, up to 5 days of additional training each year at its designated training facility.
Territory: Franchisees will operate the Studio at a specific location approved by the franchisor (referred to as the Authorized Location). Once franchisees have secured their Authorized Location, the franchisor will provide them a Designated Territory within which they will have certain protected rights. The Designated Territory will contain a maximum of 50,000 people which will be approximately a two-mile radius around the Studio, unless the Studio is located in a major metropolitan downtown area or similarly situated/populated central business district (a Central Business District). If the Studio is located in a Central Business District, the Designated Territory will contain 50,000 people but may be limited to a geographic area comprised of anywhere from a radius of two blocks to two miles around the Studio, as the franchisor deems appropriate in its discretion.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years from the date the Franchise Agreement is signed. Franchisees have the option to extend the term for two consecutive 5 year periods, if requirements are met.
Obligations and Restrictions: Under the Franchise Agreement, the franchisor does not require, but does recommend, that franchisees (or the Designated Operator) personally supervise the Studio. Franchisees may appoint a Designated Manager the franchisor approves to manage daily operations of the Studio. The franchisor will not unreasonably withhold its approval of any Designated Manager franchisees propose, provided the individual has successfully completed the Owner/Operator Module of the Initial Training Program and, if that individual will be providing any Approved Services, the Orientation Program (or, if necessary, the full Teacher Training Program). Franchisees must offer for sale and sell, only and all those Approved Products and Services, and deal only with those suppliers, that the franchisor authorizes or requires, and has authorized. Franchisees may not advertise, offer for sale or sell, any products and/or services that the franchisor has not authorized. Franchisees will not make any material alterations to their Studio or its appearance as originally approved by the franchisor without its prior written approval.
Estimated Number of Units: 55
|Name of Fee||Low||High|
|Initial Franchise Fee||$49,500||$49,500|
|Initial Training Program (Fees)||$0||$0|
|Travel and Living Expenses while Training||$500||$3,000|
|Pilates and Other Exercise Equipment||$70,000||$75,000|
|Proprietary Initial Inventory Kit||$5,000||$5,000|
|Licenses and Permits||$0||$3,000|
|Furniture, Fixtures and Related Supplies||$7,000||$7,000|
|Computer System and Related Equipment||$3,000||$3,000|
|Additional Funds (3 months)||$10,250||$63,500|
|Type of Fee||Amount|
|Royalty||6% of Gross Sales.|
|Marketing Fund||Currently, 2% of Gross Sales.|
|Orientation Program||Costs and Expenses (if franchisees or their instructor decide to attend the Orientation Program as part of the Initial Training Program).|
|Teacher Training Program Fee||$2,000 per person.|
|Ongoing/Refresher Training||Then-current training fee, which is currently $500/day per trainer.|
|Transfer Fee under Franchise Agreement||$10,000|
|Assignment Fee under Development Agreement||$10,000|
|Audit Fees||Amount of unpaid premium. The franchisor estimates for 3 mos. of the minimum required insurance is $300 - $900|
|Late Fees||The greater of the highest applicable legal rate for open account business credit, or 1.5% per month.|
|Penalty Fee||Then-current fee charged by the franchisor. Currently, $100 for each day of non-compliance.|
|Cost of Enforcement or Defense||All costs including attorneys’ fees.|
|Indemnification||All costs including attorneys’ fees.|
|Alternative Supplier Approval||$1,500 per day for personnel engaged in evaluating a supplier.|
|Business Management Software Fee||Then-current fee charged by the Approved Supplier, which is currently $269|
|Regional Cooperative||As the Cooperative determines.|
The above information has been taken from the FDD of Club Pilates. Year of FDD: 2016
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