StretchMed Franchise Costs, Fees & Owner Salary (2023)

Initial Franchise Fee

The Initial Franchise Fee for a STRETCH MED Franchise is Fifteen Thousand Dollars ($15,000). This fee is due upon the execution of the franchise agreement and is non-refundable. It covers various pre-opening services such as territory identification, site selection, lease negotiation, studio design, and initial training for up to two individuals.

Royalty Fee

Franchisees are required to pay a Royalty Fee of 6% of Gross Sales. This fee is due weekly, based on the gross sales from the previous week ending Sunday. "Gross Sales" includes all revenue from the franchised business, excluding taxes collected from customers and paid to taxing authorities, and is reduced by documented refunds, credits, allowances, and chargebacks.

Marketing Fee

The Marketing Fee, also known as the Advertising and Development Fund contribution, is 2% of Gross Sales. Similar to the Royalty Fee, this is due weekly on the gross sales of the previous week. Additionally, franchisees must spend a minimum of $2,000 per month on local advertising, which counts towards any contributions made to the Cooperative Advertising Programs that may also require up to 2% of Gross Sales.

Other significant fees mentioned include:

• Local Advertising: Franchisees must spend at least $2,000 per month on local advertising, payable to STRETCH MED or third parties.
• Cooperative Advertising Programs: Contributions can be up to 2% of Gross Sales, which are included in the local advertising budget.
• Transfer or Renewal: If a franchisee sells their Studio or renews their franchise agreement, they must pay 50% of the then-current single unit franchise fee or the initial franchise fee, whichever is applicable at that time.
  

Initial Training Program

The Initial Training Program is mandatory for the franchisee (or the managing owner) and one management personnel, which is provided at no charge if completed prior to the Studio opening. This training covers the operational aspects of running a STRETCH MED studio and is conducted at the Franchisor's Home Office or another designated location.

The program includes approximately 28 hours of classroom training. Additional individuals beyond the first two may attend, but the franchisee must pay the current training charge for each additional person. All travel, lodging, meal, or other costs for attendees are the responsibility of the franchisee.

Ongoing Training

STRETCH MED may also offer, at its discretion, additional seminars or training programs that can be mandatory for owners and managers. These programs may include webinars and in-person meetings that can be scheduled weekly, monthly, quarterly, or annually. The franchisor reserves the right to charge a reasonable fee for these seminars or programs, and all related travel and living expenses are to be paid by the franchisee.

Additional Training or Assistance

Franchisees may request additional training beyond what is specified, which the franchisor will provide at the franchisee's expense. This may include charges of up to $300 per day plus expenses for training at the franchisor's designated location, and $500 per day plus travel expenses for training at the franchisee's Studio. Webinar sessions may cost between $50 to $100 each. The franchisor may also provide periodic advice, consultation, and assistance as deemed necessary.

Yes, the franchise does provide territory protection to its franchisees, ensuring that they have exclusive rights to operate within a defined area, subject to the terms of the Franchise Agreement and the franchisor's policies.

The franchise cannot be run as a passive investment. The franchisee is expected to be actively involved in the training, operation, and management of the franchise to ensure compliance with the franchisor's standards and procedures.