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GolfTEC Franchise Cost & Fees

Date of Incorporation: 1995

Franchising Since: 2003

Headquarters: Colorado

Country: U.S.

Description: The franchisor operates retail centers that provide golf instruction to all experience levels, using digital video, impact analysis and motion analysis computers to measure a golfer’s swing and compare this information to our proprietary database of over 150 PGA TOUR players. The franchisor also operates a corporate entertainment division, providing golf swing analysis, contests and related entertainment activities at corporate gatherings and events.

Franchise Offer:
i.)    Golf Tec Improvement Center - The franchisor offers a franchise for the operation of an indoor golf instruction centre. The Golf Tec Improvement Center may be located in a strip mall, commercial shopping or office area, golf course or driving range, or other suitable facility. The Centers are typically between 1,000 and 3,500 square feet in size, in leased space. The Centers have one to five instruction bays, a reception counter and waiting area for clients and a changing room, bathrooms and a storage room. The instruction bays are equipped with Golf Tec Enterprise's proprietary g-SWTNGSM teaching system, consisting of three major components: Golf Tec Enterprise's proprietary motion analysis equipment that is used to measure and assess a client's golf swing, specialized recording and digital video equipment to enable recording and replay, and an impact analysis technology. At the instruction desk within each instruction bay, the specially trained GOLFTEC Certified Personal Coach and the client can view the client's swing and compare all aspects of the swing to the proprietary compilation of the PGA TOUR players' swings. Clients can follow up the lesson with a review via the Internet, in their own personalized web-lesson accessed by password on their own computer.

ii.)    Multiple franchises – If the franchisee qualifies, they may be granted the right to develop multiple GOLFTEC Centers within a designated geographic area.

Financial Assistance: The franchisor does not offer directly or indirectly, any financing arrangements to the franchisee, nor do they guarantee any lease or other obligations for the franchisee.

Training and Assistance:
Before the opening of the franchise, the franchisee or manager must attend and complete the initial training program. There must also be a minimum of two personal coaches certified at Golf Tec University and employed by the franchisee to handle client instruction at the center. Up to three individuals are trained at Golf Tec University without charge. The franchisee pays the travel, living expenses and wages for all employees who attend the training sessions. All training is currently conducted in the Denver metropolitan area. Additional trainees (in excess of three), attending Golf Tec University, pay the then published rate for tuition, which is currently $2,000 per person. Each of the two training sessions consists of approximately two to three days of instruction, either at our corporate headquarters in Denver, Colorado or at another location selected by the franchisor. The Golf Tec University certification sessions last for approximately 8 to 12 days, and consist of a combination of classroom and hands-on training.

Territory: The franchisee is given a protected territory surrounding the franchise location. The franchisee may operate their franchise center and use the Marks and the Licensed Methods only at a specific location, except when they are participating in g-WORLD events or off-site golf schools, short game sessions, golf clinics or playing lessons.

Term of Agreement and Renewal: The initial franchise term is for 10 years, with an option to renew for the then-current term in the franchise agreement.

Obligations and Restrictions:
The franchisee is required to participate personally in the overall business affairs and strategies of the center. If the franchisee is not planning to personally participate in the day to day operations of the franchise, they must designate a manager to be responsible for the direct on-premises supervision of the GOLFTEC Center at all times during its hours of operation.

Total Number of Franchised Units:  111 franchised units at the end of 2009

Total Number of Units:  114 units at the end of 2009

Investment Tables:

Initial Investment:

Expenditure Low High
Initial Franchise Fee $17,500 $35,000
Build-out Program $6,000 $6,000
Leasehold Improvements $5,000 $100,000
Security Deposits. Utility Deposits and Business Licenses $100 $30,000
Rent $2,175 $39,375
g-SWING, Office Systems and Store Network $34,600 $97,150
Furnishings $9,000 $17,000
Signage $5,000 $15,000
POS Software $2,300 $2,300
Equipment. Supplies and Inventory $7,500 $20,000
Initial Training $4,000 $20,000
Initial Advertising/ Marketing $15,000 $50,000
Additional Funds $10,000 $30,000
Estimated Total $118,175 $461,825

 Ongoing Fees:

Name of Fee Amount
Royalty Fee 5% of Gross Revenues and 2% of Merchandise Revenues
Advertising Contribution Up to 2% of Gross Revenues and Merchandise Revenues
NMAAF Contribution Up to 2% of Gross Revenues and Merchandise Revenues
Local Advertising Allocation An average of 5% of Gross Revenues and Merchandise Revenues monthly
Regional Advertising Groups May vary, with recurring contributions up to 5% of Gross Revenues and Merchandise Revenues, reduced by Local Advertising Allocation
Software License Fee $4,000. May  be increased based on the then current published rates
Technology Consulting $100. May  be increased based on the then current published rates
Management and Operations Consulting $100. May  be increased based on the then current published rates
Accounting and Finance Consulting $100. May  be increased based on the then current published rates
Marketing Consulting $100. May  be increased based on the then current published rates
Training program tuition and expenses Travel, lodging and living expenses associated with attending mandatory training sessions
Tuition for initial training –additional attendees $2,000 per attendee
Certified Personal Coach follow-up training fee $750 per trip (maximum two days) plus travel, lodging and living expenses
Transfer administrative fees An additional fee equal to 5% of the transfer fee
Certified Personal Coach transfer Fees vary from $10,000 to $65,000, based upon the coach’s experience, education, accomplishments, and position
Certified Personal Coach recruitment fee $500
Certified Personal Coach referral fee $250
Interest Lesser of 1.5% per month or highest rate of interest allowed by law
Late charge $50
Development schedule extension fee Up to $1,000
Default fee Reasonable amount will vary depending upon the nature of the default, up to $500 per month
Cost of inspection and audit Varies according to your location
Transfer fee $7,500 plus $5,000 for transfer of each undeveloped Center under any Development Agreement
Successor franchise fee $5,000
Costs and attorney’s fees Will vary depending on nature of the franchisee’s default
Indemnification Under Franchise Agreement Will vary depending on nature of the claim against the franchisor
Insurance Premiums Will vary depending on location and insurer
Lesson Reimbursement fee $30 for one-half hour session and $50 for one hour session
Electronic swing critique fee $5 per swing
Alterations of marks and licensed methods Varies
Build–out program fee $6,000
Call centre fee No fee for the first six months after opening, $125 for each month thereafter
Tracking $40 per month for each center
Payments for items supplies by franchisor $20 - $20,000
Inventory purchases Varies depending on inventory turnover
Golf Smith location rent Varies depending on location

Date of FDD: 2009

The above information has been taken from the UFOC/FDD and online sources of GolfTEC.

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