NrGize Lifestyle Cafe Franchise Costs, Fees & FDD

Year Business Began: 2006

Franchising Since: 2006

Headquarters: Scottsdale, Arizona

Estimated Number of Units: 55

Franchise Description: The franchisor is Kahala Franchising, L.L.C. Franchisees operate restaurants called “NrGize Lifestyle Café” preparing and serving low-calorie smoothies, fruit drinks, nutritional supplements, and other beverage and food items. If qualified, franchisees may (i) construct a new NrGize Lifestyle Cafe restaurant; (ii) purchase one of the franchisor’s NrGize Lifestyle Cafe franchises by acquiring an existing business from another franchisee or from the franchisor; or (iii) convert all of their existing retail operations from another brand to the franchisor’s NrGize Lifestyle Cafe brand.
Training Overview: The franchisor will make a training program available to franchisees and their designated representative after they sign the Franchise Agreement. Currently training consists of 40 hours of classroom training and 16 hours of in-store/on-the-job training. The classroom portion of the training program will be held either online or at KTEC (Kahala Training & Education Center), which is located at the franchisor’s corporate offices in Scottsdale, Arizona, or at such other location(s) as the franchisor may designate in its sole discretion. The in-store portion of the training program will be held at the designated training restaurant in the metropolitan Phoenix, Arizona area, or at such other location(s) as the franchisor may designate in its sole discretion. The franchisor will provide one of its representatives to come to the franchisee’s restaurant during opening week for up to three days at its expense to work with franchisees and their manager on the grand opening, and on operating and marketing the restaurant. The franchisor may, in the future, hold refresher or additional training programs, conferences and seminars. Franchisees’ attendance at these programs is mandatory.

Territory Granted: The franchise is granted only for the location specified in the Franchise Agreement or a location to be approved by the franchisor. The specific site of the NrGize Lifestyle Cafe restaurant is subject to the franchisor’s approval. Franchisees will not receive an exclusive territory. They may face competition from other franchisees, from restaurants that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls.

Obligations and Restrictions: While the Franchise Agreement does not specifically require franchisees or their principals to personally participate in the direct operation of the franchise, it is the franchisor’s intention to select as NrGize franchisees only those who plan to actively participate in the direct operation and daily affairs of the NrGize Lifestyle Cafe. The franchise must be personally managed with on-premises supervision and directly operated by franchisees or another partner, shareholder or member of their business organization, or a manager who must have successfully completed the training program. If franchisees are a married individual, their spouse must: sign the Guaranty of Franchise Agreement in which the spouse agrees to perform, and guarantees, all of the franchisee's obligations to the franchisor and its affiliates contained in the Franchise Agreement and a Non-Disclosure and Non-Competition Agreement; if applicable; sign the Guaranty of Sublease in which the spouse agrees to perform, and guarantees, all of the sublessee’s obligations to the franchisor and its affiliates contained in the sublease. The franchisor requires that the business is solely that of an NrGize Lifestyle Cafe, and franchisees may not conduct any other business or activity at the site of the restaurant without the franchisor’s prior written approval. For traditional NrGize Lifestyle Cafe franchises, franchisees must offer the full menu prescribed by the franchisor, subject to change from time to time in its sole discretion. Non-traditional NrGize Lifestyle Café franchises may offer a more limited menu than the traditional NrGize Lifestyle Cafe franchises, as detailed in the confidential manual.

Term of Agreement and Renewal: If franchisees are purchasing a new or existing restaurant, the term is (i) 10 years from the date the restaurant opens to the public if the franchisee owns the property, or enter into a lease directly with the landlord or other third party, or (ii) the term of the sublease if franchisees enter into a sublease with a Kahala Franchising affiliate excluding any extensions or renewal options. If franchisees are not in default and satisfy certain conditions, they may renew for a single renewal term of five years, with no further right to renew at the end of the renewal term. Different terms apply for franchises to be located within an LA Fitness health club.

Financial Assistance: The franchisor does not offer any direct or indirect financing or financing arrangement, nor will it guaranty a franchisee’s obligations under any note or other obligation, except potentially for the lease for the franchisee’s site or if they purchase a restaurant corporate-owned “as-is” by one of the franchisor’s affiliates, and only in its sole and absolute discretion.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$4,000	$30,000
Lease Review Fee	$0	$2,500
Rent/Security Deposit (for 3 months)	$6,000	$30,000
Travel and Living Expenses (2 persons) while training, not including salaries, if any, for franchisees and their employees	$2,500	$5,000
Real Estate	Varies
Architectural and Project Management Fees, Leasehold Improvements, Restaurant Equipment, Furniture and Small Wares, Interior and Exterior Signage, Menu Panels, Cameras, Computer Hardware and Software, Security Devices and Security Software (as applicable)	$58,510	$335,000
PCI Compliance Costs	$150	$1,300
Opening Inventory (food and paper)	$2,500	$7,000
Business Insurance	$1,000	$5,000
Miscellaneous Opening Costs	$4,750	$15,500
Grand Opening Marketing	$2,000	$5,000
Depository Account	$3,000	$3,000
Additional Funds – 3 month initial period	$5,000	$15,000
ESTIMATED TOTAL*	$89,410	$454,300

*The estimated initial investment range covers from a non-traditional location size up to a traditional location size. See FDD for more details. Estimates do not include real estate costs and/or rent for the business location except for the initial security deposit. 

Other Fees

Type of Fee	Amount
Royalty Fee and Surcharge – excluding NrGize Restaurants Located within LA Fitness Health Clubs	Royalty fee is the greater of the following: (i) 6% of total weekly gross sales or (ii) $150 per week. Surcharge is a maximum of $10 per week in addition to the royalty fee.
Royalty Fee and Surcharge - for NrGize Restaurants Located within LA Fitness Health Clubs ONLY	The royalty fee is a flat fee (subject to increase): of $750 per month. The monthly royalty fee may be increased 3% annually to account for inflation and compounded annually on January 1st. Surcharge is a maximum of $10 per week in addition to the royalty fee.
Advertising Fees	Up to 4% of weekly gross sales.
Additional Persons Training Fee	$1,250 per person ($500 per person for the in-store portion of the training program, and $750 per person for the new owner training portion of the training program).
Additional Training Fee	$300 per person per day.
Annual Meeting Registration Fee	Up to $1,000 plus incidental costs to attend.
Monthly Service Fee Charged by LA Fitness (only applies to NrGize franchises located within an LA Fitness health club)	Either $1,000 per month, increased annually by 3% compounded, $1,250 per month, increased annually by 3% compounded, or the greater of: (1) $1,250 per month; or (2) 6% of monthly gross sales.
Depository Account	$3,000 (Must be replenished on a regular basis.)
Data Fees	Up to $75 per month. (Subject to reasonable annual and/or service enhancement increases.)
POS Help Desk Phone Support Maintenance Contract Fee	$55 per month.
Renewal Franchise Fee	50% of then-current initial franchise fee, not including any discounts or reductions.
Transfer Fee – Traditional Locations	$7,500
Transfer Fee – Non-Traditional Locations	$5,000
Relocation Fee	$500
Transfer Training Fee	$2,500 for two individuals ($500 for each additional individual).
Document Administration Fee	$500
Default Interest under the Franchise Agreement	$50 plus interest at 1.5% per month or maximum legal rate, if less.
Interest and Late Fees under the Single-Unit Facility License Agreement (only applies to NrGize franchises located within an LA Fitness health club)	Annual rate of 12% or the maximum interest rate permitted by applicable law. Any payments received 5 days or more after the due date may be assessed and additional fee equal to 10% of the original payment due plus 1% per day on the overdue amount.
Late Report Fee	$100 per report.
Sublease Late Charge	5% of the late or unpaid amount plus any late charges and interest incurred under the master lease as a result of the late payment (where applicable).
Collection Costs	All collection costs including, but not limited to, reasonable attorneys' fees.
Non-Sufficient Funds	$50 for each electronic funds transfer returned for non-sufficient funds; $25 for each check or draft returned for non-sufficient funds.
Audit	Cost of audit plus interest at default rate on underpayments or the maximum rate permissible by law.
New Supplier Approval Fee	A charge not to exceed the reasonable cost of the inspection and the actual cost of the test not to exceed $5,000.
Non-Participation Fee	$100 per day.
Early Termination Fee	The average monthly royalty and advertising fees paid for any consecutive 12 month period within the preceding 48 month period multiplied by the number of months remaining in the term of the Franchise Agreement, and the product is divided by 2.
Management Fee	6% of the franchised business’ gross sales (in addition to the royalty fee and advertising fee) plus the franchisor’s direct out-of-pocket costs and expenses.
Access Fee	$5,000
Construction Fee	$35,000 and subject to annual increases.

The above information has been compiled from the FDD of NrGize Lifestyle Cafe. Year of FDD: 2025.
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