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 Facilities will offer a full array of products and services to members that the franchisor periodically specifies. Currently, all new full amenity Gold's Gym Facilities must offer cardio training equipment, resistance training equipment, cardio cinema, group fitness, personal training and locker room services, and must have a “Pro Shop” including sales of clothing, accessories, drinks, bars supplements, nutritional products and other items. New full amenity Gold's Gym Facilities also may offer other optional products and services that are authorized, like kids’ club, pool, basketball, racquet and other courts, smoothie bars and juice bars.
- 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.
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.
Training and Assistance: Before the Facility opens, the franchisor will furnish a five-day management training program for up to two people from the franchisee’s Facility on operating a Gold's Gym Facility. More personnel may attend training (depending on capacity) at the franchisee’s expense. Training is mandatory for all franchisees, except for some franchisees signing the Renewal Addendum. The franchisee (or the managing owner) or the Facility's general manager must complete initial training program to the franchisor’s satisfaction before selling memberships (including presales), advertise, or open the Facility, whichever occurs first. The franchisee (or 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. The franchisor will identity the franchisee’s protected territory once he or she signs a lease or sublease for an approved Site (if an approved Site has not located when the Royalty Franchise Agreement is signed), or upon signing the Royalty Franchise Agreement (if the franchisee has located an approved Site at that time). During the Royalty Franchise Agreement's term, neither the franchisor nor its affiliates will operate or authorize others to operate a Gold's Gym Facility or a Gold's Gym Express Facility the physical premises of which are located within the Territory. However, the franchisor may operate and authorize others to operate health and fitness facilities located at any hotels, motels and similar operations the physical premises of which are located, or during the Royalty
Franchise Agreement's term are built, within the Territory.
Term of Agreement and Renewal: Royalty Franchise Agreement typically expires 10 years after the earlier of the Facility's actual opening date or the 15th day of the 18th month after the Royalty Franchise Agreement's effective date. If the franchisee has complied with the Royalty Franchise Agreement during its term, the franchise may acquire one renewal franchise under our then current form of franchise agreement.
Obligations and Restrictions: The franchisor does not require but recommends that the franchisee (or managing owner) personally supervise the Facility. The franchisee and his or her employees must perform and exercise direct management control over all Core Business Operations at the Facility, and may not contract with or allow any other party, including any licensee, lessee, consultant or other independent contractor, to perform or exercise management control over any Core Business Operations. The franchisee must offer all products and services that the franchisor periodically requires for Gold's Gym Facilities.
Estimated Number of Units: 660
Fees listed are for an Express Facility (For Full Amenity Gold’s Gym Costs, see FDD)
|Name of Fee||Low||High|
|Travel and Living Expenses During Training (for all attendees)
|3 Months' Rent||$19,000||$250,000|
|Deposit for Leasehold||$6,000||$150,000|
|Leasehold Improvements and Construction Costs (assuming no pool)
|Selectorized Equipment and Free Weights||$100,000||$500,000|
|Initial Inventory, Other Equipment and Supplies||$12,000||$56,000|
|Computer System and Gym Management System||$20,000||$35,000|
|Miscellaneous Opening Costs||$10,000||$50,000|
|Additional Funds - 3 Months||$20,000||$150,000|
|TOTAL ESTIMATED INITIAL INVESTMENT||$1,033,000||$3,957,000|
|Type of Fee||Amount|
|Monthly Fee||3% of monthly Gross Revenue or $2,000 per month, whichever is greater.|
|Promotion Fund Contribution||2% of monthly Gross Revenue or $1,000 per month, whichever is greater with possible increases during the franchise term.
|Contributions to Regional Alliance of Franchisees||Amount that the Alliance determines; estimated at $100 to $500 per month.|
|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.|
|Collections Services Fees||Varies depending on the services.|
|Fee for Online Membership Enrollment||During 2013 the franchisor plans to charge S5 per transaction, which could increase if its costs increase.|
|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, but could increase if costs increase.
|Training Fee||Currently $500 per person per session, but could increase if costs increase.
|Revenue Sharing for Fitness Benefit/Corporate Wellness Programs||Will vary with the circumstances, depending on terms Gold’s Gym negotiates for the program.
|Transfer Fee||$10,000 for most transfers, but $1,000 if transfer is of non-controlling ownership interest in the franchisee.|
|Renewal Fee||50% of initial franchise fee then charged for new Gold's Gym Express Facility franchises (currently would be $20,000)|
|Fee to Terminate Royalty Franchise Agreement 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), plus amounts then due, 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.|
|Fee for Evaluating Consideration to be Paid in Proposed Transfer||50% of costs that a “Big Four” accounting firm may charge to
evaluate consideration's “true value” (or 100% if the franchisee elects not to move forward with transfer after receiving evaluation)
|Supplier Testing Fees||Approximately $500 to $5,000|
|Audit Expenses||Cost of audit.|
|Liquidated Damages Upon Royalty Franchise Agreement Termination||All unpaid Monthly Fees and Promotion Fund contributions for unexpired contract term, plus 50% of that amount if within 6 months after termination, the franchisee operates Facility as competitive business or you transfer and Facility will be competitive business.|
Date of FDD: 2013
The above information has been compiled from the FDD of Gold’s Gym (Express Facility) along with online sources.
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