UFC Gym Franchise Costs & Fees
Date of Incorporation: 1992
Franchising Since: 2004
Headquarters: Santa Ana, California
Business Description: The name of the franchisor is UG Franchise Operations, LLC. The franchise is to operate a membership-based physical fitness gym under the UFC Gym name that offers functional fitness training regimens including mixed martial arts, cardio boxing, cardio kick boxing, TRX training, Jiu Jitsu and Muay Thai boxing, utilizing a weight room, a bag area and an octagon with unique construction and design features.
Franchise Offer: The franchisor offers and sells franchises for UFC Gym Businesses, and services, supports and administers all functions inherent in operating a UFC Gym Business under its System.
Financial Assistance: The franchisor does not offer direct or indirect financing, and it does not guarantee franchisees’ note, lease, or other financial obligations.
Training and Assistance: Currently, the franchisor provides franchisees with 3 Business Days of Initial Training for up to 5 trainees at its training facilities in Santa Ana, California (or at another location it determines in its sole discretion). Unless the franchisor and the franchisee agree in writing, the trainees must include either the Managing Owner or the Designated General Manager and the instructors. If franchisees or their Managing Owner will not be active in the day-to-day activities of the Gym, they may designate another person as their Designated General Manager with the franchisor’s prior approval who will be active in the day-to-day activities of the Gym to be another trainee. The franchisor must approve all trainees. The franchisor will make available to franchisees pre-opening, on-site training for a Business Day by its Opening Supervisor, in most instances to be conducted at the Gym shortly before the Opening Date. The franchisor may provide refresher training programs, seminars, or advanced management training for franchisees and their employees at the franchisor’s principal training facility in Santa Ana, California, which must be attended by either the Managing Owner or the Designated General Manager approved by the franchisor. Refresher or additional training is not required more often than once a year.
Territory: Franchisees will operate the Gym at a specific location that the franchisor first must approve. The franchisor will describe the Designated Territory in the Franchise Agreement. The franchisor has the sole discretion whether to base the size of the Designated Territory on a population density and/or a certain radius from the Premises. However, the franchisor reserves for itself the right to sole determination as to the location, size and delineation of the Designated Territory. Franchisees may not receive an exclusive territory and may face competition from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years beginning on the Agreement Date. Franchisees have the right to renew for 4 additional terms of 5 years each, if they meet the requirements for renewal and pay the renewal fee equal to 50% of the then current initial franchise fee.
Obligations and Restrictions: Franchisees are not the franchisor’s employee but are their own boss subject to certain rights and obligations under the Franchise Agreement. The franchisor encourages franchisees to be active in the operation of the Gym but does not require any personal participation on premises by franchisees. The franchisor does not require any personal participation of any specific person affiliated with a corporate or partnership franchisee. However, the Franchise for the Gym is not a “passive” investment and franchisees or the Designated General Manager approved by the franchisor must provide day-to-day supervision of the operation of the Gym. Franchisees must use the premises only for the operation of the Gym. Franchisees must keep the Gym open for business and in normal operation for the minimum hours and days as the franchisor reasonably requires in the Manuals or otherwise in writing except as may be limited by local law or the landlord's rules and regulations. Franchisees must sell or offer for sale only the products and services that meet the franchisor’s reasonable uniform standards of quality and quantity; have been expressly approved for sale in the Manuals or otherwise in writing by us to consumers only from the Gym; not sell any items for redistribution or resale; sell or offer for sale all approved products and services; refrain from any deviation from the franchisor’s standards and specifications for providing or selling the products and services without the franchisor’s written consent.
Estimated Number of Units: 140
|Name of Fee||Low||High|
|Initial Franchise Fee||$0||$30,000|
|Printing, Signage and Graphics||$25,000||$65,000|
|Office Equipment/P.O.S. System||$3,500||$15,000|
|Initial Advertising (Pre-Sale to Grand Opening)||$27,500||$55,000|
|Software Support Fee||$507||$507|
|Licenses and Permits||$5,000||$20,000|
|Travel, Lodging, Meals, Etc. for Initial Training||$3,500||$7,000|
|Additional Funds (3 - 6 months)||$75,000||$100,000|
|Type of Fee||Amount|
|Royalty Fee||6% of monthly Gross Revenues.|
|Advertising Contributions to the Marketing Fund||2% of monthly Gross Revenues.|
|Music Licensing Fee||$800 - $1,000|
|Regional Cooperative Advertising||As determined by the Cooperative (not more than 2% of monthly Gross Revenues).|
|UFC Gym Products||As set by the franchisor or its Affiliate.|
|Training Fees||As set by the franchisor or its Affiliate.|
|Additional Training or Assistance||Sales & Operations Training – currently up to $500 per day, plus all travel and lodging expenses;
Group Fitness Training or Private Coach Training (minimum 3 days) – currently up to $500 per day, plus travel and lodging expenses and CPR certification fees (currently $50 per coach).
|Fees for Special Assistance||As set by the franchisor or its Affiliate.|
|Insurance Coverage||Cost of the insurance, interest on the monies the franchisor advances and a reasonable fee.|
|Reimbursement of Audit Costs||Actual cost to the franchisor.|
|Deficiencies||Actual cost to the franchisor.|
|Renewal Fee||50% of the then current Initial Franchise Fee.|
|Advertising||Franchisees must spend at least 5% of Gross Revenues or $5,500, whichever is higher, per month on local marketing.|
|Fee for Lost Manuals||$250 for each manual.|
|Fee for Failure to Provide Financial Reports||$350 for each occurrence.|
|Interest on Late Payments||The lesser of: (i) 18% per annum; or (ii) the maximum rate of interest permitted by law.|
|Liquidated Damages for Sale of Prohibited Products or Services||$100 per day that unauthorized products or services are offered.|
|Liquidated Damages for Premature Termination||A lump sum equal to the total of all Royalty Fees and Advertising Contributions for 24 months.|
|Liquidated Damages for Violation of Covenant not to Compete||$2,000 per week.|
|Indemnification||Actual cost to the franchisor.|
|Enforcement Costs||Actual cost to the franchisor.|
|Management Fee||Franchisees must reimburse the franchisor its costs and expenses.|
|Testing||Costs of testing.|
|Taxes||Franchisees must reimburse the franchisor its costs and expenses.|
|Removal of Signage||Franchisees must reimburse the franchisor its costs and expenses.|
The above information has been taken from the FDD of UFC Gym. Year of FDD: 2016
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