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How Much Does It Cost To Own A Fleet Feet Franchise
If you’re looking to franchise a store that sells running shoes and apparel, you might have seen Fleet Feet as one of the most viable options. But one important question needs to be answered: how much exactly does a Fleet Feet franchise cost? In this article, we’ll discuss that as well as other things you need to understand before you sign on the dotted line.
Franchise Description
Before we tackle the Fleet Feet franchise cost, let’s discuss a few basic information about the business. Headquartered in Carrboro, North Carolina, the venture began in 1976 and started offering franchises two years after.
Presently, the business is franchised by Fleet Feet, Incorporated. Ecommerce platforms, on the other hand, are handled by the company’s affiliate, FFS Digital. When you franchise this business, you’ll have the right to operate a retail store that sells running and fitness merchandise as well as their training programs and other services.
Training Overview
If you’re dreaming of putting up your own store, raising enough money to cover the Fleet Feet franchise cost isn’t enough; you also need to invest time. The training program requires a minimum of 22 days of training. This includes 15 to 17 training days at the Carrboro headquarters as well. In addition to that, you’ll also have to undergo 7 to 11 training days that involve on-the-job training.
The franchisor requires at least one of the owners to complete the training program. Moreover, if, in the future, the franchisor sees that the business isn’t doing in accordance with standards, the franchisee could be required to attend extra training.
There are also conferences and other training courses from time to time. For instances like this, it’s a must for the franchisee or the store manager to attend.
Territory Granted
Each store has a territory with a population base of 200,000 people as long as the base doesn’t go beyond a 25-mile radius. Not to mention, the franchise will not allow other franchisees to locate a retail store within that territory. Aside from the radius method, both parties could also mutually agree on identifying the territory based on other methods.
Obligations and Restrictions
The franchisor gives preference to applicants with a hands-on approach commitment towards the business. However, if you don’t intend to oversee the business’s day-to-day operations, it’s still possible to get approved. But you must have a manager or supervisor, trained by the franchisor, assigned to manage the business for you.
In addition to that, owners who hold 20 percent or more of the business equity, as well as their spouse, must sign a personal guarantee agreement. This agreement guarantees the performance of the franchisee’s obligations as well. Furthermore, the document includes non-disclosure and non-competition agreements.
Besides covering the Fleet Feet franchise cost, franchisees must also prepare to guarantee a minimum sales volume of $350,000 calculated on a rolling 12-month basis. In addition, retail stores shouldn’t sell products and services not authorized by the franchisor. The initial franchise term runs for 20 years, and franchisees can renew it for another 20 years as long as they’re in good standing.
Financial Assistance
As for financial assistance, in particular, there’s a veteran discount of $10,000 off the initial franchise fee. This is part of the IFA’s VetFran program. Except for this, however, the franchisor nor its affiliate doesn’t offer direct or indirect financing. In the same way, neither guarantees any lease, note, or obligation.
Your Investment
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $19,000 | $38,000 |
| Inventory | $60,000 | $100,000 |
| Real Estate & Improvements | $30,000 | $100,000 |
| Store Fixtures | $30,000 | $90,000 |
| Furniture & Equipment | $4,500 | $6,000 |
| Computer System Equipment | $2,656 | $9,590 |
| FIT ID Hardware | $4,750 | $4,750 |
| Technology Fee | $594 | $600 |
| Travel and Living Expenses While Training | $4,000 | $6,000 |
| Miscellaneous Costs | $3,700 | $7,700 |
| Additional Funds – 3 Months | $25,000 | $40,000 |
| E-Commerce Fee – 3 Months | $300 | $300 |
| Legal, Accounting, License/ Registration Fees | $3,000 | $10,000 |
| ESTIMATED TOTAL | $187,500 | $413,000 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Royalty – Standard | 4% of Gross Sales for new Fleet Feet franchised stores. |
| Royalty – Independent Retail Store Conversion Program | From 1% to 4% of gross sales based on Pre-Conversion Gross Sales volume. |
| National Marketing Fund | 0.25% of Gross Sales. |
| E-Commerce | Currently $100 per month. |
| FIT ID Hardware | FIT ID hardware price is $4,750 for each additional FIT ID scanner purchased. Franchisees can also pay a portion of the hardware price over 12 months. |
| Technology Fee | The Technology Fee covers the cost of the FIT ID software. Varies from $198 to $220 per month based on the franchisee’s number of units. |
| Business Conference Registration Fee | Ranges from $0 to $600 per person. |
| Bookkeeping Services “CFO in a Box” (optional) | Varies, will be a mutually agreed upon price. |
| Customer Experience Services (optional) | $35 per month for self-selecting franchises. |
| Email Newsletter Services (optional) | $175 per market as well as an additional $50 for each additional market per month for self-selecting franchises. |
| Miscellaneous Vendor Sales from Inventory | Varies. |
| Local or Regional Cooperative Fees | Currently not collected; No cooperative currently established. |
| Audit Fee | The cost of audit. |
| Collection and Interest Charges | 18% or highest lawful rate if lower. |
| Initial Training | Initial franchise fee includes pre-opening training for two people. |
| Additional Training (for extra people at outset of the franchisee’s option or later if desired or required) | Then-current training fee unless waived by the franchisor. If remedial training, then $200/day plus expenses. |
| National Training Program Liability Insurance | Rate is $1.80/training program participant for recurring programs + $0.90/training program participant for one-time events. Annual rate varies depending on total number of participants nationwide. The franchisor reserves the right to adjust the rate more frequently if necessary. |
| Renewal Fee | None. |
| Late Payment or Insufficient Funds Fee | $50 |
| Transfer Fee | Greater of $10,000 or 25% of the then-current franchise fee. |
| Attorneys’ Fees and Cost of Litigation | Depends on what the franchisor spends. |
| Enforcement Costs | Will vary. |
| Continued Operation After Expiration | Greater of $1,000 or 150% of royalties per month. |
Did You Know?
Here are a few fun tidbits of information about Fleet Feet:
- The venture’s vision is to inspire the runner in everyone. Presently, with 180 stores in communities across the country, it seems to be running towards that goal!
- Fleet feet takes pride in a personalized outfitting process called with fit id®. It involves taking 3D measurements of clients’ feet and taking note of how they walk. That is to say, they help customers find the shows and gear that perfectly fits their feet.
- Another point to mention is personalization. The business offers a customized shopping experience. They also train sellers to spend one-on-one time with customers to ensure that the customers are getting the right running gear to fit your unique needs.
- What’s more, it’s obvious that Fleet Feet puts a premium on customer satisfaction. In fact, they offer a 60-day return policy if the client doesn’t love the gear – and they aptly call it the “Happy Fit Guarantee.”
- The venture knows it’s not fun to run alone, so they have Fleet Feet training programs and running groups. As a result, they bring like-minded people together to achieve fitness goals as a community.
By and large, the business isn’t all about business. They also partner with medical professionals for outreach programs that aim to find pain-management solutions for medical conditions like IT band syndrome, plantar fasciitis, and runner’s knee.