Gold's Gym
Date Incorporation: 1965
Franchising Since: 1980
Headquarters: Irving, Texas
Business Description: The franchise system operates health clubs offering various fitness, health, and exercise facilities, goods, and services under the "Gold's Gym" trademarks, service marks and trade names.
Franchise Offer: Franchises are offered for two different sizes of Gold's Gym Facilities:
- Gold's Gym Express Facilities will offer a limited number of products and services to members periodically specified by the franchisor. Currently, Gold's Gym Express Facilities must offer cardio training equipment, resistance training equipment, cardio cinema and locker room services, may (at the option of the franchisee, and depending on the Site's layout) offer tanning services and massage services, and may not offer any other products or services. Gold's Gym Express Facilities also will utilize a comprehensive and uniform approach to facility advertising, marketing and promotion.
- Full Amenity Gold's Gym Facilities typically offer a broader array of products and services than the typical Gold's Gym Express Facility. Currently, in addition to offering the services that Gold's Gym Express Facilities offer, Full Amenity Gold's Gym Facilities must have a "pro shop" offering Gold's Gym-branded products, supplements and other merchandise for sale and must offer personal training and group exercise services. Many Full Amenity Gold's Gym Facilities also offer some of the optional services the franchisor authorizes, such as kid's club, pool, basketball, racquet and other courts, smoothie bars and juice bars. Historically, Full Amenity Gold's Gym Facilities also have utilized a less comprehensive and unified approach to facility advertising, marketing and promotion than intended for Gold's Gym Express Facilities.
Financial Assistance: The franchisor does not offer direct or indirect financing nor do they guarantee your note, lease, or other obligation. Gold’s Gym is currently registered with the SBA Franchise Registry, which may help franchisees when obtaining SBA financing. However, the franchisor is currently developing a program to help franchisees obtain financing for their development of Gold's Gym Express Facilities.
Training and Assistance: Training is mandatory for all franchisees. The franchisee (or managing owner) or the Facility's general manager must complete the initial training program to the satisfaction of Gold’s Gym before the Facility is opened. Any manager who fails to satisfactorily complete the initial training program must be replaced. In addition, the franchisee (or your managing owner) or the Facility's general manager must attend an annual regional or national Gold's Gym convention.
Territory: The franchisee will operate the Facility at a specific Site that first must be approved by the franchisor. If an approved Site hasn’t been selected by the franchisee when the Franchise Agreement is signed, Gold’s Gym will designate a Site Selection Area. Site Selection Areas are typically identified using longitudes and latitudes, and there is no minimum size for a Site Selection Area. The Site Selection Area is the area within which the franchisee must look for a Site. During the period beginning on the Franchise Agreement's effective date and ending on the date the franchisor delivers written notice approving the Facility's site (the Site Approval Date), Gold’s Gym and affiliates will not operate or authorize others to operate a Gold's Gym Express Facility or Full Amenity Gold's Gym Facility where the physical premises of which are located within the Site Selection Area.
Term of Agreement and Renewal: The length of the franchise term is 10 years, with an option for one renewal franchise.
Obligations and Restrictions: The franchisor does not require but recommends that the franchisee or on-premises manager, who has satisfactorily completed the management training program, personally supervises the franchise facility. The full-time, on-premises manager must devote his or her full working time and best efforts to the facility's day-to-day on-premises operations.
Estimated Number of Units: 700
Investment Tables:
Fees listed are for an Express Facility (For Full Amenity Gold’s Gym Costs, see FDD)
| Name of Fee | Low | High |
|---|---|---|
| Initial Fee | $20,000 | $20,000 |
| Expenses for Site Selection and During Training | $4,500 | $7,500 |
| 3 Months' Rent | $11,500 | $112,500 |
| Deposit for Leasehold | $0 | $75,000 |
| Leasehold Improvements and Construction Costs | $450,000 | $675,000 |
| Cardiovascular and Resistance Training Equipment | $300,000 | $605,000 |
| Signage | $5,000 | $50,000 |
| Initial Inventory, Other Equipment and Supplies | $12,000 | $56,000 |
| Computer System and Gym Management System | $15,000 | $20,000 |
| Pre-Sale, Grand Opening and Initial Marketing | $50,000 | $170,000 |
| Miscellaneous Opening Costs | $10,000 | $40,000 |
| Additional Funds - 3 Months | $20,000 | $90,000 |
| TOTAL ESTIMATED INITIAL INVESTMENT | $897,000 | $1,921,000 |
Ongoing fees:
| Type of Fee | Amount |
|---|---|
| Monthly Fee | 3% of monthly Gross Revenue or $1,500 per month, whichever is greater |
| Marketing Fund Contribution | 2% of monthly Gross Revenue or $1,000 per month, whichever is greater |
| Fees for Special Assessments | Amounts periodically specified by Gold’s Gym, but aggregate of Special Assessments, Marketing Fund contribution and Local Marketing Spending Requirement will not be more than 7% of Gross Revenue |
| Billing Services Fee | Currently 4.5% of Credit Card Billing Revenue and 2% of ACH Billing Revenue during the previous month under Standard Program, or 4.25% of Credit Card Billing Revenue and 2% of ACH Billing Revenue under Premium Program |
| Relocation Fee | Actual out-of-pocket costs and expenses the franchisor incurs inspecting the proposed new site |
| Collections Services Fees | Varies depending on the service |
| Relocation Fee | Actual out-of-pocket costs and expenses incurred by Gold’s Gym in inspecting the proposed new site |
| Fee for Artwork and other Marketing Material | Costs of Gold's Gym |
| Convention Fees | Under $500 |
| Training Fee | Currently $500 per person per session |
| Transfer Fee | $1,000 if transfer is of non-controlling ownership interest in the franchisee, $2,500 if transfer is Immediate Family Transfer or Heritage Transfer, or $25,000 for other transfers |
| Renewal Fee | 50% of initial franchise fee then charged for new Gold's Gym Express Facility franchises (currently would be $12,500) |
| Fee on Transfer Outside the System | 150% of all unpaid Monthly Fees and Marketing Fund contributions for unexpired contract term (or 100% if Facility will not operate as a competitive business), if any |
| Management Fee | 3% of Gross Revenue |
| Costs and Attorneys' Fees | Will vary under circumstances |
| Indemnification | Will vary under circumstances |
| Administrative Fee and Interest on Delinquent Payments | $100 administrative fee and interest at 18% per year or highest interest rate the law allows, whichever is less, on all overdue amounts and dishonored payments |
| Evaluation Fees | Approximately $300 to $500 per evaluation, but could increase if franchisor’s costs increase |
| Supplier Testing Fees | Approximately $500 to $5,000 |
| Audit Expenses | Cost of audit |
Date of FDD: 2011
The above information has been compiled from the FDD of Gold’s Gym (Express Facility) along with online sources.
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