If you are looking towards opening a YogaFit Franchising, LLC Franchise, it will be nice for you to have a preview of what the company represents before going ahead to enquire about the total cost of opening the franchise in your location.
YogaFit Franchising, LLC was founded in 2013 and they began franchising in 2014, about 6 years ago. The company has her corporate headquarter in Chanhassen, Minnesota. As of the 2016 Franchise Disclosure Document, there are 12 franchised YogaFit locations in the USA. YogaFit has franchise locations in 5 states. The largest region is the Midwest with 6 franchise locations.
YogaFit Franchising, LLC is the franchisor. The franchisee will utilize the franchisor’s proprietary business format and system for operating a yoga studio. YogaFit Studios give members, of all levels, unlimited access to modern, welcoming, and instruction-driven yoga studios that offer a selection of both live classes and virtual on-demand classes.
Here are areas where you are expected to spend money and the cost associated with it;
Financial Investment Required to Open Yoga Fit Franchise
Table of Content
Initial Investment Range – $133,800 to $270,600
Franchise Fee – $60,000
3. Royalty Fee
The greater of 5% of Gross Revenues or $500 per month and the Due Date for this fee is Paid by electronic funds transfer every Friday for the preceding Reporting Period. The amount of the Royalty Fee for any renewal term will be that provided in the Franchise Agreement executed for such renewal term.
Please note that “Gross Revenues” include all revenues generated from the provision of any and all services and/or the sale of any and all products and, whether by the franchisee or a third-party provider, that relate to or arise from the Franchised Business. It does not include taxes collected from customers.
GO FAST Kit – $16,300
Security and Media Package (including FitnessOnDemand) – $19,000
Grand Opening Marketing – $4,000
Please note that you must conduct certain marketing, advertising, and public relations activities in connection with the opening of your Studio, as YogaFit specifies in writing. YogaFit requires you to spend, in addition to any national or local advertising fee, at least $4,000 for such grand opening activities.
- Mirrors: $2,000 to $2,900
- Miscellaneous Equipment: $2,400
- Exterior Signage: $2,500 to $4,000
- Flooring (and installation): $7,800 to $9,000
- Leasehold Improvements (not including flooring): $0 to $95,000
Please note that the costs of construction and leasehold improvements depend upon the size and condition of the Studio premises, the nature and extent of leasehold improvements required, the local cost of contract work, and the location of your Studio.
In some cases, your landlord may agree to pay for some or all of the leasehold improvements as part of your lease negotiations. The flooring (including installation) must be installed by the approved vendor.
- Deposits, Utilities, and Insurance: $2,700 to $5,700
Please note that the estimated expenses for your business location are based on leasing a 1,250 to 2,200 square foot facility, include your security deposit, utility deposits, and insurance and assume that your landlord will provide several months of free rent. A typical lease location is in a strip center and the typical Studio has approximately 1,250 to 2,200 square feet of space.
The space must be enclosed and separate from other businesses with its own locking door. A security deposit is typically refundable only if you have not breached your lease. The estimated deposit for utilities include electric, gas, and water, but your deposit may vary due to policies of local utility companies.
This estimate includes premium for three months of YogaFit’s SAPP insurance plan. If you need additional insurance for your Studio (for example, state workers’ compensation or a surety bond), you may have additional costs.
A surety bond may range from $100 to $500, depending on the state. Workers’ compensation coverage may range from $450 to $1,000 and may be more depending on the number of employees and your state’s requirements.
- Training Expenses: $500 to $2,000
Please note that there is no separate training fee payable to YogaFit for the initial franchise training program, as it is included in the Initial Franchise Fee. You must make arrangements and pay the expenses for you and your General Manager to attend the training program, including transportation, lodging, meals, and wages.
The high figure represents the estimated cost of airfare to and from the training locale, lodging expenses (assuming double occupancy for three nights), and dining expenses for two people attending four days of training. The low figure assumes the two individuals will drive from home to the training locale in the same vehicle, and includes fuel costs, lodging expenses (assuming double occupancy for three nights), and dining expenses.
- Business Licenses and Professional Fees: $1,000 to $4,000
YogaFit recommends that you hire your own attorney to help you evaluate the franchise offering, to identify the laws and regulations that may apply to your Studio, to help you set up a business entity, to review and negotiate your lease, to assist you in adapting the Membership Agreement to laws and regulations in your state or locality, and for whatever other purpose you deem appropriate.
- Additional Funds (3-month period): $10,000
The figures in the chart represent the estimated amount of working capital you will need to cover other initial operating expenses for a period of three months. These figures are estimates, and YogaFit cannot guarantee you will not have additional expenses starting the business.
Please note that expenses not included are hourly labor costs and rent. Some states may have staffing requirements that may increase this number significantly.
- Liquidated Damages Under Area Development Agreement: This fee varies but the Due Date is Payable within 30 days of the termination of the Development Agreement.
- Audit Costs: All costs and expenses associated with the audit, reasonable accounting and legal costs.
- Indemnity: This fee will vary under the circumstances and the Due Date is As incurred.
Please note that you must reimburse YogaFit Franchising, LLC if it is held liable for claims arising out of your franchise operations.
- Insurance: $130-$200 monthly.
- Equipment, Supply, or Supplier Testing or Inspecting: Fee not to exceed the actual costs of inspecting and testing. (Due Date: Due on receipt of invoice.)
Please note that This fee covers the cost of testing or inspecting equipment, supplies, or suppliers you propose.
- POS Hardware and Software: Depends upon vendor and products purchased. (Due Date: Depends upon vendor and products purchased.)
- Attorneys’ Fees and Costs: Will vary under circumstances. (Due Date: As incurred.)
Payable to YogaFit Franchising, LLC if it is forced to retain independent counsel and seek damages or injunctive relief to enforce the Franchise Agreement (whether or not suit is filed) or if YogaFit Franchising, LLC is required to defend your unsuccessful claim against it.
- Convention: All franchisees are required to attend the annual convention and the franchisor anticipates that there will be a fee in future years.
- Renewal Fee: 10% of the then-current initial franchise fee (reduced to 5% if the renewal franchise documents are returned on time).
- Supplier Review Fee: The franchisor’s costs and expenses, which are currently expected to range between $1,000 and $3,000, although costs could exceed those amounts depending on the product.
- Veteran Incentives: $1,000 off franchise fee
- Total: $93,200 to $199,300
To compile these estimates, YogaFit relied on its affiliate’s experience in operating similar businesses. (Snap Fitness and Kosama are both affiliates of YogaFit.)
The estimate of initial investment funds is based on owner-operated businesses, or incorporating franchise operations to an existing complementary business and does not include salaries or benefits for full-time employees. As your business grows, you may choose to hire employees to carry out support service tasks.
The estimate does not include any finance charges, interest, or debt service obligations, or your living expenses. You should have sufficient capital or other means to pay for living expenses for at least 12 months.
The estimated initial investment for developing three Studios under YogaFit’s Market Accelerator Program ranges from $264,600 to $582,900 (calculated as three times the investment required for a single Studio, less the initial franchise fee discount offered under the Market Accelerator Program).
You should allow for inflation, discretionary expenditures, fluctuating interest rates and other costs of financing, and local market conditions, which can be highly variable and can result in a substantial, rapid, and unpredictable increase in costs.
- Term of Agreement and Renewal: The length of the initial franchise term is 10 years. Renewal is for unlimited additional 10-year terms, if requirements are met.
- Financial Assistance: Franchisees may qualify for financing through the franchisor’s preferred financing vendor, Lease Servicing Center (LSC), through a program under which the franchisor guarantees a portion of the financed amount. Qualification depends on the franchisee’s personal credit profile and other factors. Except for the financing disclosed, the franchisor does not offer any direct or indirect financing.
- Initial Franchise Fee: $25,000 to $60,000
- Total Investment: $133,800 to $270,600
- Working Capital: $50,000
- Royalty Fee: 5.0%
- Ad Royalty Fee: 2.0%