General Nutrition Corporation Franchise Cost & Fees

Date of Incorporation: 1935

Franchising Since: 1935

Headquarters: Pittsburgh, Pennsylvania

Business Description: General Nutrition Corporation (GNC) Stores are retail nutrition, health and/or fitness stores that offer for sale vitamin and mineral supplements and depending on the store size, franchisee preferences, and other requirements, may offer for sale sports nutrition products, herbs, health foods, natural cosmetics and miscellaneous healthcare products, diet products, physical fitness products, specialty workout apparel, health-management products, and related products, as approved for sale by the franchisor.

Franchise Offer: General Nutrition Corporation offer franchises for the establishment and operation of a GNC retail store specializing in the sale of vitamins, minerals and other food supplements, natural cosmetics and other health management items. GNC currently offers the following franchise programs:

1. New Franchise Store: A new franchise Store may be awarded to a qualified person who is new to the GNC System; who is an existing franchisee; or who is an employee of GNC or an affiliate pursuant to the GNC employee program. A New Franchise Store will be a new Store constructed by GNC (unless the franchisor designates otherwise in writing) at a location approved by GNC.
2. Affiliate Conversion Store: This program to convert company-owned GNC Stores to franchised GNC Stores. This program is available to qualified new franchisees, existing franchisees, and employees of GNC or GNC affiliates pursuant to the GNC employee program. To qualify under the employee program, the franchise must currently be an employee of GNC or an affiliate and must have been employed (regardless of the position held) full-time for at least six months or part-time for at least nine months prior to the date the franchisee executes the Franchise Agreement.
3. Independent Conversion Store: This program is available to qualified independent health food/nutrition stores that wish to convert to a franchised GNC Store. To qualify the franchisee must have operated their independent health food/nutrition store for at least one year before executing a Franchise Agreement, and must not be a party to an existing Franchise Agreement with GNC. This type of GNC Store is also available to existing franchisees that wish to acquire an independent health food/nutrition store and convert it immediately.

Financial Assistance: The franchisor or affiliates may offer, directly or indirectly, financing for the franchisee’s inventory, equipment, signage, fixtures and other construction costs for the types of franchises disclosed. Before selecting a financing program, GNC must qualify the franchisee according to a number of factors, including, but not limited to, creditworthiness. The franchisor reserves the right to refuse financing to the franchisee, even if the franchisee qualifies, at their sole discretion. GNC may also finance replacements for equipment, fixtures and inventory during the term of the Franchise Agreement. GNC will not finance ongoing Store operations, nor do they finance any new or existing franchisees that purchase existing franchised Stores. 

Training and Assistance: The franchisee must successfully complete the 3 phases of initial training to the franchisor’s satisfaction to be eligible to open a New Franchise, Affiliate Conversion or Independent Conversion Store. The training consists of 28 hours of classroom training and 40-56 hours of hands-on training at a franchised location. If the franchisee does not successfully complete any Phase of the training program to the franchisor’s satisfaction, the franchisor may require the franchisee to repeat it. If you the franchisee does not successfully complete all Phases of training to the franchisor’s satisfaction, they have the option to terminate the Franchise Agreement.

Territory: In the franchise agreement, the franchisor grants the right to operate a store at a specific location once it is approved. The franchisor will grant the franchisee a protected territory within a particular radius measured from the public entrance to the Store (not the mall or strip center entrance) for a specified period of time. If the approved location is located in an enclosed shopping mall, the protected territory will generally encompass the shopping mall premises (including the parking lot). If the approved location is not located in a shopping mall, the size of the protected territory will vary depending on a number of factors, including demographic barriers, market strength measured by various market data profile studies, population density, median income per household, and the categories of products to be offered at the franchisee’s store, particularly in relation to the competition in the relevant market.

Term of Agreement and Renewal: The length of the franchise agreement commences on the store opening date and ends on the earlier of 10 years from the store opening date, or the expiration or termination of the sublease/lease for the store. If the franchisee meets the requirements, he or she can renew their franchise for two additional consecutive five year terms.

Obligations and Restrictions: The franchisor encourages the franchise to participate personally in the on-premises supervision of the GNC Store. While the franchisor does not require the franchisee personally to participate in the direct supervision of the GNC store, they do require either the franchisee or their designated manager to directly supervise the GNC store on its premises and to devote full-time, energy and best efforts to managing the store. The franchisee may sell only products and services which have been approved and which conform to the franchisors standards and specifications. The franchisee must offer GNC Brand Supplements for sale.

Total Number of Units: 7,300

Selected Investment Costs:

Franchise Fee: $40,000

Start-up Cash: $85,000 - $100,000

Estimated Initial Investment Range: $178,000 - $218,500 (estimate varies by location)

• Equipment: $4,500
• Signage: $4,000 - $6,000
• Fixtures: $33,750 - $53,750
• Construction: $35,000 - $53,000
• Opening Inventory: $60,000
• Promotional Materials: $1,250

Royalty: 6% of gross sales, and is exclusive of any sales tax and documented refunds

Advertising: 3% of gross sales
 

The above information has been compiled from the FDD of GNC along with online sources.

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