Franchises From $500,000 to $1,000,000 in the USA

Not at every brand in this range. Orangetheory Fitness and Taco Bell charge a percentage: Orangetheory's Royalty is 8% of Gross Sales, which include revenue from presale memberships sold before the studio opens, and Taco Bell's royalty, which it calls the Period Franchise Fee, is 5.5% of the Unit's Gross Sales. Anytime Fitness does not currently charge a percentage royalty: it bills a flat Monthly Fee, currently $842 per month per center, adjusted each January for inflation (Consumer Price Index), and on 30 days' notice it may replace that fee with a royalty of no more than 8% of Gross Revenue. Each brand here also charges an advertising or marketing contribution: Anytime Fitness's General Advertising and Marketing Fee is currently $900 per month per center, and the franchisor may increase it, but not above the greater of $900 per month or 3% of Gross Revenue; Orangetheory's Brand Fund Contributions are currently 3% of Gross Sales, which the franchisor may raise to as much as 5%; and Taco Bell's Period Marketing Fee is 4.25% of Gross Sales. For everything else, read Item 6 of the FDD, Other Fees: it lists every other fee you must pay the franchisor or its affiliates, with the amount, the due date, and any formula used to compute it.

The initial terms differ, and none of these agreements renews automatically. Anytime Fitness's Franchise Agreement runs 6 years; a franchisee in good standing may renew once, for 5 more years, by giving written notice at least 210 days before the term ends, signing the then-current franchise agreement, updating the center to current standards, and meeting the other renewal conditions. Orangetheory Fitness's Franchise Agreement runs 10 years from its effective date, and once the site's lease or other agreement is signed, the parties may agree on a longer term, of no more than 11 years, to line it up with that agreement; a franchisee who meets the conditions may acquire a successor franchise for one more 10-year term. A new Taco Bell In-Line or End-Cap is franchised for 10 years, and the Franchise Agreement grants no renewal rights; in limited situations, an In-Line 10+10 Addendum gives certain In-Line Units one 10-year successor term on conditions, and Taco Bell may also grant a successor agreement at its discretion. Item 17 of the FDD, a table titled "The Franchise Relationship," covers the length of the term, renewal, termination, transfer, and non-competition covenants; in it, the franchisor must state what renewal means in its system, including, if applicable, that you may be asked to sign a contract with materially different terms and conditions than your original one. Set the term next to the length of your site lease before you sign either.

That is set out in Item 15 of the FDD, Obligation to Participate in the Actual Operation of the Franchise Business. It states whether you must take part personally in the direct operation of the business and whether the franchisor recommends it. If on-premises supervision by you is not required, Item 15 also gives any limits on whom you can hire as the on-premises supervisor, whether that person must successfully complete the franchisor's training program, and, if the franchisee is a business entity, how much equity, if any, the supervisor must hold in it; it also lists restrictions you must place on your manager, such as keeping trade secrets or a covenant not to compete. The listings in this range name who takes the franchisor's training. At Anytime Fitness, the Principal Operator, and a Principal Owner too if the Principal Operator is not one, must complete mandatory initial training before the center opens, in Woodbury, Minnesota, or another place the franchisor designates. Orangetheory Fitness's Initial Training Program for your first studio is for all owners who sign the Franchise Agreement, including the Principal Owner. At Taco Bell, you and one manager must successfully complete the operations training program, which lasts at least 7 weeks. If someone else will run the location day to day, include that person's pay in your budget from the start.

Check Item 8 of the FDD, Restrictions on Sources of Products and Services. It covers what you must buy or lease from the franchisor, its designee, or suppliers it approves, or under its specifications, including equipment, fixtures, supplies, inventory, computer hardware and software, and real estate, whether the obligation comes from the written agreement or from the franchisor's practice. For each such obligation, Item 8 names the item, says whether the franchisor or its affiliates are approved suppliers or the only approved suppliers, and explains how the franchisor grants and revokes approval of alternative suppliers. It also discloses whether the franchisor or its affiliates will or may derive revenue or other material consideration from your required purchases, and estimates what share of everything you buy or lease to set up and run the business those required purchases and leases make up. Anytime Fitness, for example, requires you to purchase the ProVision Technology System package (access control, key fobs, security cameras, and a sound system) from the franchisor's affiliate ProVision, and before an Orangetheory Fitness studio opens, you must buy the fitness equipment, the OTbeat heart rate monitoring system, and OT Connect tablets or displays from the franchisor's affiliate OTF Sourcing. Ask the franchisor which required purchases continue after opening.