Notes and Disclosures

All Notes are taken from the 2019 Anytime Fitness Franchise Disclosure Document.

Item 7

 

TYPE OF EXPENDITURE  ANYTIME FITNESS ANYTIME FITNESS EXPRESS METHOD OF PAYMENT WHEN DUE TO WHOM PAYMENT IS TO BE MADE
(Note 1)
Initial Franchise/Development Fee (Note 2) $6,375 to $42,500 $3,150 to $21,000 Lump sum When you sign your franchise agreement Us
Travel and Living Expenses While Training (Note 3) $413 to $2,750 $413 to $2,750 As Incurred Before and During Training Vendors (e.g., travel, hotel, restaurants)
Real Estate and Improvements (Note 4) $31,069 to $207,130 $20,706 to $138,041 As Incurred As Incurred Third Parties
Architect/Design Fees (Note 5) $1,350 to $9,000 $1,200 to $8,000 As specified in contract At the time of design Architect
Fitness Equipment (Note 6) $17,471 to $116,471 $16,417 to $109,447 Lump Sum Before Issuing Order for the Equipment Us or Vendors
Technology Solutions (Equipment Package) (Note 6) $5,460 to $36,399 $3,968 to $26,454 Lump Sum Before Issuing Order for the Equipment Vendors
First Aid Equipment (Note 7) $210 to $1,400 $210 to $1,400 As Incurred As Incurred Vendors
Interior Signs (Note 8) $589 to $3,925 $516 to $3,440 Lump Sum Before Opening Us or Vendors
Outside Signs (Note 8) $825 to $5,500 $825 to $5,500 As Incurred Before Opening Us or Vendors
Miscellaneous Opening Costs (Note 9) $934 to $6,428 $609 to $4,257 As Incurred As Incurred Vendors
Pre-Sale/Grand Opening Advertising (Note 10) $2,655 to $17,700 $1,755 to $11,700 As Incurred Between 60 Days Before Opening to 60 Days After Opening Us or Vendors
Insurance (Note 11) $413 to $2,750 $398 to $2,650 Lump Sum Before Opening Vendors
Supplies and Furniture $675 to $4,500 $675 to $4,500 As Incurred Before Opening Vendors
Legal and Accounting Expenses $500 to $4,500 $500 to $4,500 As Incurred Before Opening Vendors
Additional Funds – 3 Months (Note 12) $9,073 to $60,484 $7,528 to $50,190 As Incurred As Incurred Suppliers, Utilities, etc.
Total (Note 13) $78,012 to $521,437 $58,870 to $393,829

 

This table relates to the estimated initial investment for a start-up fitness center.

Notes:

  1. None of these payments are refundable. These figures are estimates based on our experience in establishing and operating Anytime Fitness centers in the last 3 years and reflect the anticipated initial costs based on a lease for a “vanilla shell” or “as is” space for the operation of a 5,100 square foot Anytime Fitness center. The low end of the ranges provided all assume that you are financing these costs with a loan from the Small Business Administration (“SBA loan”) which generally requires a 15% cash injection from you. You may not qualify for an SBA loan and even if you do, you may be required to make a cash injection that is higher than 15%. Except where noted, the high estimate assumes you will pay cash.
  2. The Initial Franchise Fee is generally $42,500 for an Anytime Fitness center franchise. The Initial Franchise Fee for an Anytime Fitness Express franchise is generally $21,000. However, we charge other Initial Franchise Fees in certain specific circumstances. The low end of the range assumes you finance the $42,500 initial franchise fee with an SBA loan. The high end of the range assumes you pay cash. The low estimates assume that you qualify for a pricing as a member of Club Platinum. Initial Franchise Fee pricing is described in Item 5.
  3. The person you designate as the “Principal Operator” of your business must attend mandatory training in Woodbury, Minnesota or such other place we designate. In addition, if your Principal Operator is not a Principal Owner, then a Principal Owner must also attend and complete this training to our satisfaction before you open your Anytime Fitness center. While we do not charge you for this training, you do have to pay your travel and living expenses while you attend the training. Your actual cost will vary, depending on the distance to be traveled, your method of travel, and your personal circumstances.
  4. Our estimate for initial expenses for real estate and improvements assumes you will lease a “vanilla shell” or “as is” space of 5,100 square feet which, at a minimum, includes rooms that will work as an office, bathrooms, studio space, concrete floors, demised exterior walls, HVAC, roof, and utilities stubbed to the premises sufficient for an Anytime Fitness center. The above estimates anticipate costs equal to $63 per square foot for the buildout, and assume that you will receive tenant improvement allowances of $26 per square foot from your landlord. Our estimate assumes you must pay only the first month’s rent and a security deposit equal to another month’s rent. All our estimates are based on these assumptions. Our franchise model is based on minimizing overhead expenses, including real estate costs. Costs will vary in relation to the physical size and location of the fitness center. A lower cost center is one that would require fewer leasehold improvements and fewer equipment expenditures. The lower estimates assume the landlord will cover many of the leasehold improvement costs. You may also need to provide a larger security deposit and a personal guaranty of the lease. Moderate and higher cost fitness centers may require extensive interior renovations and additional equipment. The above figures do not include extensive renovations. However, we assumed the general contractor will include permitting fees in the construction costs. If you are receiving a leasehold improvement allowance from your landlord, the landlord may require you show them that you paid for the leasehold improvements before giving you the money. We have a program that is exercised at our sole discretion and may provide a short-term loan to qualified franchisees when that happens so that you can pay for those improvements, pending receipt of money from your landlord. The maximum amount we will finance for any franchisee is $150,000. We may not agree to provide you this loan. We require you pay us a 6% origination fee, but we do not charge interest on the loan, unless it is in default. The loan must be repaid at the earlier of (i) when the landlord pays the tenant improvement money, (ii) 90 days after the last cash distribution is made to you under the loan documents, or (iii) 30 days after you open your Anytime Fitness center. See Item 10 for additional details. As described in Item 8, you may be required to participate in our “Construction Management Services” program offered through our approved vendor to oversee the construction of your Anytime Fitness center. As of the issuance date of this Disclosure Document, we anticipate that the cost of the Construction Management Services will be $6,500 to $8,500. At this time, participation in the Construction Management Services program is optional, and the $8,500 cost is included in the high range estimates.
  5. As described in Item 5, we will create a Compliance Drawing of your center. You must obtain a Compliance Drawing from us. If you are developing a new Anytime Fitness center, we will provide you with one Compliance Drawing at no additional cost. We anticipate this design will be sufficient to provide to an architectural vendor to create your Construction Documents. If you are signing the Franchise Agreement as part of a franchise renewal or transfer and we determine that your Anytime Fitness center requires renovation or re-equipment, then you must pay us $250 for your Compliance Drawing, but we will credit $250 against your Monthly Fee if you complete all renovation and reequipment requirements by the required due date. In either case, if you require additional Compliance Drawings, you must pay us $250 for each additional Compliance Drawing. You will be required to retain a designated architectural vendor to create a complete set of detailed Construction Documents, and to obtain any required permits, and conform the premises to local ordinances or building codes. If you do not use our designated architectural vendor to create the Construction Documents and this is your first Anytime Fitness center, we will charge you a fee of $2,700 to review the Construction Documents created by another vendor. We do not construct, remodel or decorate your premises. The low estimate assumes standard tenant improvements within a structure, designed for commercial use, and excludes items such as structural modifications, site work, energy studies, surveys and/or exterior improvements. The high estimate takes into account additional code studies, energy calculations and minor exterior building improvements.
  6. The total cost of equipment will vary depending on various factors, including the size of your fitness center and the type of equipment you obtain. Some costs will vary in relation to the physical size of the fitness center and whether you purchase from our recommended sources or from others. The Base Technology fee includes ProVision’s ongoing support of the technology purchased through ProVision, technology services, proprietary and club management software, any applicable development updates and release updates, networking equipment and support, door reader technology, security and surveillance system, fitness scanning and/or monitoring equipment, sound system, and email hosting. In addition, the Base Technology Fee includes access to Anytime Health’s suite of products.
  7. We require you have an automated external defibrillator. This equipment will generally cost between $1,000 and $1,400.
  8. The above amounts reflect our recommended package. The total cost of the signage will vary depending on various factors, including the size of your location, and local zoning requirements.
  9. This amount includes utility set-up and first month costs, permitting and licensing fees.
  10. If you are a new franchisee in the Anytime Fitness system and you open a new Anytime Fitness center, you will need to spend a minimum of between $11,000 and $23,000 (depending on your market Tier) for a Grand Opening and Ramp Up program as described in Items 6 and 11. Both estimates include your purchase of a required $700 marketing start-up kit. Some franchisees, particularly people who sign Area Development Agreements to control an entire market, may spend more than $23,000 per center for grand opening advertising because they believe they will receive a return on that investment. If you operate an Anytime Fitness Express center, there is no minimum amount that you must spend on grand opening advertising, however, we have included an $11,700 grand opening spend as we recommend that you spend at least this much on grand opening activities.
  11. You will need to purchase and maintain in effect at all times during the term of the Franchise Agreement a bond for your business, which you are required to purchase from our designated surety bond vendor to secure your obligations to pre-paid members for membership fees and for pre-paid personal training revenue. Some state laws also require the purchase of a bond. Because the requirements vary by state, and may depend on your net worth, we cannot estimate the amount you will need to obtain a bond, or the assets you may need to collateralize that bond. We have negotiated a base rate of $250 per year for bonds through our designated vendor, however your actual cost may vary based on your individual circumstances. Further, you will need to purchase and maintain in effect at all times during the term of the Franchise Agreement a policy or policies of insurance, naming us and our affiliates as additional insureds on the face of each policy. You must have and maintain general liability insurance with complete operations coverage, broad form contractual liability coverage, property damage all with current minimum limits of $1,000,000 per person and $1,000,000 per occurrence, $3,000,000 in the aggregate, and other insurance in the types and amounts as we may require or as required by law. The insurance policy must be written by a carrier who has a minimum rating acceptable to us. Our insurance estimate assumes that you will personally operate your Anytime Fitness center and have no employees. Therefore, the estimates do not include premiums for worker’s compensation insurance, employer’s liability insurance or automobile liability insurance. Your insurance costs may be substantially higher if you have to buy employer’s liability insurance, automobile liability insurance, or any other insurance required by your landlord. Before you make a decision to purchase the franchise, you should confirm that insurance is available for a fitness center of the type you intend to operate, given that you will not staff the premises all of the time.
  12. These figures estimate your initial startup expenses during the initial 3 months. These figures are estimates and we cannot guarantee that you will not have additional expenses starting the business. We recommend that you have additional funds available to you to fund your business. Your costs will depend on factors such as: how the business is staffed, your sales and management skills, experience and business acumen; local economic conditions; the local market for your services; competition; and the ability to obtain favorable real estate and equipment rates. These costs include payroll expenses for a fulltime personal trainer and two full-time employees. These costs do not include any owners’ draw amounts.
  13. These figures are estimates based on our experience in establishing and operating Anytime Fitness centers last year. Your actual expenses of establishing and operating this business could vary significantly from these estimates. It is possible to significantly exceed costs in any of the areas above. Some states have laws that require staffing or operational requirements that will significantly increase the amounts you will have to spend to open and operate your Anytime Fitness center. If your state requires you to have someone on the premises full-time or additional equipment on the premises, these costs may increase by $5,000 or more a month. You should review these figures carefully with a business and a legal advisor before making any decision to purchase the franchise. Except as specifically stated, we do not offer financing for any part of the initial investment. The availability and terms of financing will depend on factors like the availability of financing generally, your credit worthiness, your relationship with local banks, your experience in the fitness industry, and any additional collateral you may offer to a lender to secure the loan. Our estimates do not include any finance charges, interest or debt service obligations.

Item 19

FINANCIAL PERFORMANCE REPRESENTATIONS

The FTC’s Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the Disclosure Document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.

STATEMENT OF ANNUAL PROJECTED REVENUES AND EARNINGS FOR AN ANYTIME FITNESS CENTER

The following are statements of projected annual revenues and earnings for a franchised Anytime Fitness center. These projections are for an Anytime Fitness center that has been in operation for at least 12 months. They assume that at the end of the first year you have a fixed number of memberships, and, even though most of our clubs continue to increase their memberships after the first year, that you remain at that level for the entire year, adding as many new members as the number of members that leave. (During the first year, it will take you time to build your member base.) We have listed below 3 projections, one based on a center having 500 members, one based on 860 members, and one based on 1,150 members. They are based on revenue information provided to us by our proprietary software and designated billing processor for our franchisees in the United States in 2018.

Of the 2,235 Anytime Fitness clubs open for at least 12 months as of February 28, 2019, the number of members for these clubs ranged from 145 to 3,418. As measured on February 28, 2019 the clubs open at least 12 months had an average member count of 860; the member count on this date ranged from 136 to 3,402 and the median was 776.

The first example, for a 500-member club, is intended to give you an idea of the revenues, expenses and projected income of a club that performs well below our average but is still profitable. Of these 2,235 clubs, 1,909 (85%) had an average of over 500 members as measured on February 28, 2019. The 860-member example will give you an idea of the revenues, expenses and income of a club that is able to maintain, throughout the year, the average number of members of the Anytime Fitness clubs that were open for at least 12 months, as measured on February 28, 2019. Of the 2,235 Anytime Fitness clubs open for at least 12 months as of February 28, 2019, 887 (40%) had an average of over 860 members, as measured on February 28, 2019. The 1,150-member example gives you an idea of the revenues, expenses and profitability of a high achieving club. Of the 2,235 Anytime Fitness clubs open for at least 12 months as of February 28, 2019, 391 (17%) had an average of over 1,150 members as measured on February 28, 2019.

The assumptions we made in compiling these projections are detailed following the projections. Any change in these assumptions would require material alterations to the projections.

500 Members  860 Members 1,150 Members
Revenues1 
Enrollment Fee2 $13,500 $23,200 $31,000
Membership Fees3,4 $183,100 $315,000 $421,200
Vending Revenues5 $1,500 $2,600 $3,500
Personal Training6 $52,100 $89,500 $119,700
Total Revenues7 $250,200 $430,300 $575,400
Operating Expenses1
Rent8 $95,600 $95,600 $95,600
Personal Training Expenses6 $31,300 $53,700 $83,800
Royalties $8,400 $8,400 $8,400
Processing/Credit Card Fees9 $10,100 $17,400 $23,300
Bad Debt10 $6,100 $10,400 $13,900
Utilities11 $21,700 $21,700 $21,700
Insurance $2,500 $2,500 $2,500
Proximity Cards2, 3 $1,600 $2,700 $3,600
Advertising Funds12 $7,200 $7,200 $7,200
Local Advertising13 $10,000 $12,700 $14,900
Vending Products5 $500 $800 $1,100
Maintenance $7,900 $13,700 $18,300
Base Technology Fee14 $9,600 $9,600
Healthy Contribution Fees15 $300 $500 $700
Conference Fee $200 $200 $200
Miscellaneous16,18 $8,100 $13,500 $17,900
Total Operating Expenses $221,100 $270,600 $322,700
Income Before Salaries, Depreciation, Interest, Taxes and Debt Expense17  $29,100 $159,700 $252,700
Manager(s) Salary and Payroll Costs17 $45,900 $45,900
Income Before Depreciation, Interest, Taxes and Debt Expense17, 18 $29,100 $113,800 $206,800

 

These figures are only estimates of what we think you may earn. Your individual results may differ. There is no assurance that you will earn as much.

These figures were prepared without an audit. Prospective franchisees or sellers of franchises should be advised that no certified public accountant has audited these figures or expressed his/her opinion with regard to the content or form.

NOTES AND ASSUMPTIONS

  1. We rounded revenues and expenses to the nearest $100.
  2. In projecting enrollment fee revenues and the cost of proximity cards, we assumed, based on data reported to us by our designated processor, that 45% of your members would be replaced through attrition, and that the average enrollment fee you charge is $49. The attrition rate is based on the average rolling 12-month attrition of membership contracts of 12 months or longer at Anytime Fitness clubs that have been open 12 months or longer and measures net transfers out of the Anytime Fitness® system.

GP:4830-8514-5477 v4

FDD 54

  1. In projecting membership revenues, we had to make certain assumptions regarding the types of memberships you will sell in your center and the prices you will charge for each type of membership. The membership numbers above consist of members paying monthly fees under a membership agreement with you, as well as “pay per visit” members, for which you are paid a dollar amount per visit to your center. We have projected membership revenues equal to approximately $365.89 per member per year. Based on reports from our designated processor under each membership agreement to our Anytime Fitness franchisees, the average monthly membership fees paid was $36.55 per member and the median monthly membership fees paid was $36.08 in the 12 months ended on February 1, 2019, for clubs that were open for 12 months or more as of February 28, 2019. These clubs had an average of 678 members who joined as monthly members and a median of 621 members who joined as monthly members. Based on the data reported to us by our designated processor, the average “pay per visit” member fees paid to our Anytime Fitness franchisees was $8.05 per member per month and the median “pay per visit” member fees paid to our Anytime Fitness franchisees was $6.56 per member per month in the 12 months ended on February 1, 2019, for clubs that were open for 12 months or more as of February 28, 2019. These clubs had an average “pay per visit” member count of 182 members and a median “pay per visit” member count of 131 in the 12 months ending on February 28, 2019. However, membership rates will vary significantly between clubs, depending upon what you elect to charge, how your rates are affected by competition, and the number of memberships you sell that receive corporate discounts, and we do not represent that any franchisee can expect to attain any particular level of sales.
  1. Under the 2010 Affordable (Health) Care Act, you are required to collect sales taxes on tanning services, and remit those taxes to the Internal Revenue Service. We assumed that you will collect the tax and pay it to the taxing authorities, which has no effect on your bottom line, and that tanning sales will not be impacted by this tax.
  1. It is up to you to determine whether you offer vending machines in your center, the products you place in those machines and the vending prices. The amounts we have projected for vending revenue reflect the per membership revenues we receive from vending. We also do not tell you the sources from which you can purchase vending products. We assumed you would purchase your vending products from a warehouse seller such as Sam’s Club, and that you pick up these items. If you go to other sources, or have these products delivered, your expenses will likely be higher.
  1. Most of our clubs hire personal trainers to provide personal training services to their members and all new and renewing clubs must offer and provide personal training services and the Training Suite. Our franchisees typically collect a percentage of what the members pay for these services. We have projected training revenues equal to $106.91 per member per year. These numbers are based on the average monthly personal training revenue reports above $1,500 of clubs who were open for at least 12 months and reported 1 or more months of personal training revenues using the Club Management Software or other personal training management software. We assumed that if a club reported less than $1,500 in revenue from personal training services for any month, that the club was either in the beginning stages of offering personal training services or did not have a fully operational personal training program. In total, 514 clubs reported an average of $1,500 a month in personal training revenues for the reporting period. We believe that this projection is consistent with the average for all our franchisees, but many franchisees do not report their training revenues to us. Compensation models for trainers vary widely. In the 500 and 860 member models, we projected that personal training expenses, including compensation to your personal trainers, equal 60% of your personal training revenues. Once personal training revenues reach a certain level, some of our clubs have added a Member Experience Manager to oversee the personal training program. Therefore, in the 1,150 member model, we assumed you have this additional expense and therefore projected personal training expenses at 70% of personal training revenue. If you perform all or a portion of the training services yourself, this would increase your income from operating your center.

GP:4830-8514-5477 v4

FDD 55

  1. There are other revenue sources we have not included. For example, our clubs may elect to charge members a monthly membership in Anytime Health. While the fees you pay us for each Anytime Health membership are included in your Base Technology Fee, since the majority of our clubs have elected not to separately charge their members for these memberships, we did not include such charges in revenues. Likewise, we recommend that our franchisees charge members a club enhancement fee of $29-$39 per year that we recommend be used to purchase new equipment and upgrade their club. While a significant number of our clubs are charging these fees, we have not included these fees in revenues because we also did not include in your expenses the cost of purchasing new equipment or upgrading your facilities.
  1. Your rent can vary significantly depending on the size and location of your center. However, in our experience, the number of members you have does not necessarily correlate to the size of your center. Our projections assumed that the center had 5,100 square feet, and that the gross rent paid was $18.74 per square foot per year. These assumptions are based on information reported to us by franchisees in 2018. If you have a larger center, or you pay more for rent, your rent expense could increase significantly.
  1. Processing and credit card fees will vary depending on how many members prepay their membership fees, how many pay by bank draft, credit card, and the credit card they use. In our experience, costs for these services generally average about 5% of your membership fees and 1.5% on enrollment fees and personal training fees.
  1. We assumed you would have 3.3% bad debt on your membership fees. This is consistent with the bad debt experience for our franchisees in 2018 as reported to us by our designated billing processor.
  1. This amount includes gas, electric, water, cable, Internet and telephone. It does not include expenses for an answering service because we assume you will forward your calls to you or a manager to answer during unstaffed hours. It assumes utilities average $4.26 per square foot. Our franchisees do not report this data to us, therefore, this projected expense is based on actual expenses reported by our 28 company owned and operated Anytime Fitness centers in 2018.
  1. This amount is based on our current requirement that you contribute $600 per month to our General Advertising Fund, however this required contribution may increase during the term of your franchise agreement, we reserve the right to increase this fee upon written notice to you but will not increase it to more than 2% of your gross revenue.
  1. Your required local marketing spend is determined by your market tier. If you are in a Tier 1 market, you must spend $12,000 per year. If you are in a Tier 2 market, you must spend $9,600 per year. If you are in a Tier 3 market, you must spend $7,200 per year. Our projection assumes that you will spend $10,000 per year for local advertising and that spending on local advertising increases by 1.5% of your revenue as you have more members.
  1. In some states, you will also be required to pay sales tax on these fees. We have not included those sales taxes because they are payable in only a handful of states. You will pay this fee to us or our affiliate for ongoing support for our proprietary access control software, development and release updates of that software, access to Anytime Health resources and memberships, email hosting, fitness scanning and/or monitoring, and sound system services. As part of this fee, ProVision will also provide security monitoring services and ongoing support for your technology, email, club operating software,

and club management software.

GP:4830-8514-5477 v4

FDD 56

  1. These fees represent an estimate of the initial and ongoing Healthy Contributions program fees you will incur for your monthly members if you participate in the Healthy Contributions Reimbursement Programs. They are based on the actual reports of the Anytime Fitness centers participating in the Healthy Contributions programs as of December 31, 2018. Of the 27% of members that participate in the Healthy Contributions program, the average total fees per club for that period was $0.18 for each member participating in a Healthy Contributions program.
  1. Miscellaneous includes janitorial services, legal and accounting fees, cell phone, supplies, licenses, 1 registration to our conference and minimum travel expenses to attend that conference, and other similar items. Many of these costs can vary significantly depending on the location of your center and the time you spend looking for the best possible cost on these items. Our franchisees are not required to report these expenses to us, however, these expense projections are consistent with the experience of our company owned and operated Anytime Fitness centers.
  1. The low projection assumes you act as manager of your center and do not receive a separate salary. As your business grows, you may wish to hire a manager to oversee some or all of the club operations. Some states or municipalities may require you have an employee on premises whenever your center is open and we have a minimum staffed hours policy that requires you, or a staff person, to be in the center for at least 30 hours per week. We are assuming you would pay that manager $2,000 per month, plus commissions and limited benefits, so that with payroll costs, the total cost for a manager will be $35,000 a year. This is consistent with what we understand to be the average compensation our franchisees pay their managers. In the 865 and 1,150 member projections, we assumed that you would pay for staffing equivalent to 1.5 times a single manager. Except as noted in footnote 6, the projections assume you do not hire any other employees to help you and assume you oversee some of your club operations. If you are an absentee-owner, or you operate in a location that requires the center to be staffed at all times, your expenses will increase significantly because you will have to pay salaries and benefits to employees. These assumptions are based on information reported to us by franchisees in 2018.
  1. We also recommend that you set aside at least $500 per month to defray the cost of remodeling and acquiring new equipment for your Anytime Fitness center as a condition to renewing your franchise. We have not deducted these amounts from the projected income because (i) these are still your monies and therefore it would not affect your profitability to set the amounts aside, and (ii) we recommend that you charge your members a club enhancement fee that will generate these amounts and we did not include the club enhancement fees in the projected revenues. We gave you information above about the number of all our franchised centers that were open for at least 12 months as of February 28, 2019. We, or our affiliates, also operated 28 centers for the entire 12-month period ending February 28, 2019. Revenue and membership data for those company-owned and managed locations has not been included in the above calculations. Because our franchisees are not required to report their revenues and expenses to us, we used the data from the expenses incurred by our 28 corporate owned and managed centers in calculating the following three expense projections: utility costs, maintenance costs and miscellaneous. Our corporate owned and managed centers operate in substantially the same manner as our franchised centers and we believe these expenses are consistent with those incurred by our franchisees. Because our franchisees are not required to give us this level of detail as to their revenues and expenses, we cannot tell you how many of our franchisees exceeded the projected revenues or projected EBITDA.

STATEMENT OF ANNUAL PROJECTED REVENUES AND EARNINGS FOR AN ANYTIME FITNESS CENTER IMPLEMENTING THE TRAINING SUITE

The following are statements of projected annual revenues and earnings for a franchised Anytime Fitness center that implemented the Training Suite. These projections are based on revenue information provided

GP:4830-8514-5477 v4

FDD 57

to us in 2018 by our proprietary software and designated billing processor for a subset of 510 franchisees in the United States who have implemented the Training Suite for a minimum of 24 months and earned at least $1,500 per month in personal training revenue during that period. We have listed below 3 projections, one based on a center having 500 members, one based on 941 members, and one based on 1,150 members. Of the 510 Anytime Fitness clubs who have implemented the Training Suite for a minimum of 24 months and earned at least $1,500 per month in personal training revenue as of February 28, 2019, the number of members for these clubs ranged from 286 to 2,928. As measured on February 28, 2019 this subset of clubs had an average member count of 941; the member count on this date ranged from 270 to 3,103 and the median was 863.

The first example, for a 500-member club, is intended to give you an idea of the revenues, expenses and projected income of a club that performs well below our average but is still profitable. Of these 510 clubs, 473 (93%) had an average of over 500 members as measured on February 28, 2019. The 941-member example will give you an idea of the revenues, expenses and income of a club that is able to maintain, throughout the year, the average number of members of the Anytime Fitness clubs who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue as of February 28, 2019. Of the 510 Anytime Fitness clubs who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue as of February 28, 2019, 206 (40%) had an average of over 941 members, as measured on February 28, 2019. The 1,150-member example gives you an idea of the revenues, expenses and profitability of a high achieving club. Of the 510 Anytime Fitness clubs who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue as of February 28, 2019, 121 (24%) had an average of over 1,150 members as measured on February 28, 2019.

The assumptions we made in compiling these projections are detailed following the projections. Any change in these assumptions would require material alterations to the projections.

500 Members 941 Members 1,150 Members
Revenues1
Enrollment Fee2 $14,000 $26,400 $32,200
Membership Fees3,4 $195,100 $367,200 $448,700
Vending Revenues5 $1,500 $2,800 $3,500
Personal Training6 $53,500 $100,600 $123,000
Total Revenues7 $264,100 $497,000 $607,400
Operating Expenses1
Rent8 $103,100 $103,100 $103,100
Personal Training Expenses6 $32,100 $60,400 $86,100
Royalties $8,400 $8,400
Processing/Credit Card Fees9 $10,800 $20,300 $24,800
Bad Debt10 $6,500 $12,200 $14,900
Utilities11 $23,400 $23,400 $23,400
Insurance $2,500 $2,500 $2,500
Proximity Cards2, 3 $1,600 $3,000 $3,700
Advertising Funds12 $7,200 $7,200 $7,200
Local Advertising13 $10,000 $13,500 $15,100
Vending Products5 $500 $800 $1,100
Maintenance $7,900 $14,900 $18,300
Base Technology Fee14 $9,600 $9,600 $9,600
Healthy Contribution Fees15 $300 $500 $700
Conference Fee $200 $200 $200
Miscellaneous16,18 $8,100 $14,700 $17,900
Total Operating Expenses $232,200 $294,700 $337,000
Income Before Salaries, Depreciation, Interest, Taxes and Debt Expense17  $31,900 $202,300 $270,400
Manager(s) Salary and Payroll Costs17 $45,900 $45,900
Income Before Depreciation, Interest, Taxes and Debt Expense17, 18 $31,900 $156,400 $224,500

These figures are only estimates of what we think you may earn. Your individual results may differ. There is no assurance that you will earn as much.

These figures were prepared without an audit. Prospective franchisees or sellers of franchises should be advised that no certified public accountant has audited these figures or expressed his/her opinion with regard to the content or form.

NOTES AND ASSUMPTIONS

  1. We rounded revenues and expenses to the nearest $100.
  2. In projecting enrollment fee revenues and the cost of proximity cards, we assumed, based on data reported to us by our designated processor, that 43% of your members would be replaced through attrition, and that the average enrollment fee you charge is $49. The attrition rate is based on the average rolling 12-month attrition of membership contracts of 12 months or longer at the subset of 510 Anytime Fitness clubs in the United States who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue and measures net transfers out of the Anytime Fitness® system.
  1. In projecting membership revenues, we had to make certain assumptions regarding the types of memberships you will sell in your center and the prices you will charge for each type of membership. The membership numbers above consist of members paying monthly fees under a membership agreement with you, as well as “pay per visit” members, for which you are paid a dollar amount per visit to your center. We have projected membership revenues equal to approximately $390.21

GP:4830-8514-5477 v4

FDD 59

per member per year. Based on reports from our designated processor under each membership agreement to our Anytime Fitness franchisees, as of February 28, 2019 the average monthly membership fees paid was $38.54 per member and the median monthly membership fees paid was $38.08 in the 12 months ended on February 1, 2019, for the subset of 510 Anytime Fitness clubs in the United States who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue. These clubs had an average of 758 members who joined as monthly members and a median of 699 members who joined as monthly members. Based on the data reported to us by our designated processor, the average “pay per visit” member fees paid to our Anytime Fitness franchisees was $7.57 per member per month and the median “pay per visit” member fees paid to our Anytime Fitness franchisees was $6.33 per member per month in the 12 months ended on February 1, 2019, for the subset of 510 Anytime Fitness clubs in the United States who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue. This subset of 510 clubs had an average “pay per visit” member count of 183 members and a median “pay per visit” member count of 122 in the 12 months ending on February 28, 2019. However, membership rates will vary significantly between clubs, depending upon what you elect to charge, how your rates are affected by competition, and the number of memberships you sell that receive corporate discounts, and we do not represent that any franchisee can expect to attain any particular level of sales.

  1. Under the 2010 Affordable (Health) Care Act, you are required to collect sales taxes on tanning services, and remit those taxes to the Internal Revenue Service. We assumed that you will collect the tax and pay it to the taxing authorities, which has no effect on your bottom line, and that tanning sales will not be impacted by this tax.
  1. It is up to you to determine whether you offer vending machines in your center, the products you place in those machines and the vending prices. The amounts we have projected for vending revenue reflect the per membership revenues we receive from vending. We also do not tell you the sources from which you can purchase vending products. We assumed you would purchase your vending products from a warehouse seller such as Sam’s Club, and that you pick up these items. If you go to other sources, or have these products delivered, your expenses will likely be higher.
  1. Most of our clubs hire personal trainers to provide personal training services to their members and all new and renewing clubs must offer and provide personal training services and use the Training Suite. Our franchisees typically collect a percentage of what the members pay for these services. We have projected training revenues equal to $106.93 per member per year. These numbers are based on the average monthly personal training revenue reports for the subset of 510 Anytime Fitness clubs in the United States who have implemented the Training Suite for a minimum of 24 months, earn at least $1,500 per month in personal training revenue and report that revenue using the Club Management Software or other personal training management software. We believe that this projection is consistent with the average for all our franchisees in the United States who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue, but many franchisees do not report their training revenues to us. Compensation models for trainers vary widely. In the 500 and 941 member models, we projected that personal training expenses, including compensation to your personal trainers, equal 60% of your personal training revenues. Once personal training revenues reach a certain level, some of our clubs have added a Member Experience Manager to oversee the personal training program. Therefore, in the 1,150 member model, we assumed you have this additional expense and therefore projected personal training expenses at 70% of personal training revenue. If you perform all or a portion of the training services yourself, this would increase your income from operating your center.
  1. There are other revenue sources we have not included. For example, our clubs may elect to change members a monthly membership in Anytime Health. While the fees you pay us for each Anytime Health membership are included in your Base Technology Fee, since the majority of our clubs

GP:4830-8514-5477 v4

FDD 60

have elected not to separately charge their members for these memberships, we did not include these charges in revenues. Likewise, we recommend that our franchisees charge members a club enhancement fee of $29-$39 per year that we recommend be used to purchase new equipment and upgrade their club. While a significant number of our clubs are charging these fees, we have not included these fees in revenues because we also did not include in your expenses the cost of purchasing new equipment or upgrading your facilities.

  1. Your rent can vary significantly depending on the size and location of your center. However, in our experience, the number of members you have does not necessarily correlate to the size of your center. Our projections assumed that the center had 5,500 square feet, which is consistent with the average square footage of the subset of 510 Anytime Fitness clubs in the United States who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue, and that the gross rent paid was $18.74 per square foot per year. These assumptions are based on information reported to us by franchisees in 2018. If you have a larger center, or you pay more for rent, your rent expense could increase significantly.
  1. Processing and credit card fees will vary depending on how many members prepay their membership fees, how many pay by bank draft, credit card, and the credit card they use. In our experience, costs for these services generally average about 5% of your membership fees and 1.5% on enrollment fees and personal training fees.
  1. We assumed you would have 3.3% bad debt on your membership fees. This is consistent with the bad debt experience for our franchisees in 2018 as reported to us by our designated billing processor.
  1. This amount includes gas, electric, water, cable, Internet and telephone. It does not include expenses for an answering service because we assume you will forward your calls to you or a manager to answer during unstaffed hours. It assumes utilities average $4.26 per square foot. Our franchisees do not report this data to us, therefore, this projected expense is based on actual expenses reported by our 28 company owned and operated Anytime Fitness centers in 2018.
  1. This amount is based on our current requirement that you contribute $600 per month to our General Advertising Fund, however this required contribution may increase during the term of your franchise agreement.
  1. Your required local marketing spend is determined by your market tier. If you are in a Tier 1 market, you must spend $12,000 per year. If you are in a Tier 2 market, you must spend $9,600 per year. If you are in a Tier 3 market, you must spend $7,200 per year. Our projection assumes that you will spend $10,000 per year for local advertising and that spending on local advertising increases by 1.5% of your revenue as you have more members.
  1. In some states, you will also be required to pay sales tax on these fees. We have not included those sales taxes because they are payable in only a handful of states. You will pay this fee to us or our affiliate for ongoing support for our proprietary access control software, development and release updates of that software, access to Anytime Health resources and memberships, email hosting, fitness scanning and/or monitoring, and sound system services. As part of this fee, ProVision will also provide security monitoring services and ongoing support for your technology, email, club operating software, and club management software.
  1. These fees represent an estimate of the initial and ongoing Healthy Contributions program fees you will incur for your monthly members if you participate in the Healthy Contributions Reimbursement Programs. They are based on the actual reports of all of the Anytime Fitness centers

GP:4830-8514-5477 v4

FDD 61

participating in the Healthy Contributions programs as of December 31, 2018. Of the 27% of members that participate in the Healthy Contributions program, the average total fees per club for that period was $0.18 for each member participating in a Healthy Contributions program.

  1. Miscellaneous includes janitorial services, legal and accounting fees, cell phone, supplies, licenses, 1 registration to our conference and minimum travel expenses to attend that conference, and other similar items. Many of these costs can vary significantly depending on the location of your center and the time you spend looking for the best possible cost on these items. Our franchisees are not required to report these expenses to us, however, these expense projections are consistent with the experience of our company owned and operated Anytime Fitness centers.
  1. The low projection assumes you act as manager of your center and do not receive a separate salary. As your business grows, you may wish to hire a manager to oversee some or all of the club operations. Some states or municipalities may require you have an employee on premises whenever your center is open and we have a minimum staffed hours policy that requires you, or a staff person, to be in the center for at least 30 hours per week. We are assuming you would pay that manager $2,000 per month, plus commissions and limited benefits, so that with payroll costs, the total cost for a manager will be $35,000 a year. This is consistent with what we understand to be the average compensation our franchisees pay their managers. In the 941 and 1,150 member projections, we assumed that you would pay for staffing equivalent to 1.5 times a single manager. Except as noted in footnote 6, the projections assume you do not hire any other employees to help you and assume you oversee some of your club operations. If you are an absentee-owner, or you operate in a location that requires the center to be staffed at all times, your expenses will increase significantly because you will have to pay salaries and benefits to employees. These assumptions are based on information reported to us by franchisees in 2018.
  1. We also recommend that you set aside at least $500 per month to defray the cost of remodeling and acquiring new equipment for your Anytime Fitness center as a condition to renewing your franchise. We have not deducted these amounts from the projected income because (i) these are still your monies and therefore it would not affect your profitability to set the amounts aside, and (ii) we recommend that you charge your members a club enhancement fee that will generate these amounts and we did not include the club enhancement fees in the projected revenues. We gave you information above about the subset of 510 Anytime Fitness clubs in the United States who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue as of February 28, 2019. We, or our affiliates, also operated 28 centers for the entire 12-month period ending February 28, 2019. Revenue and membership data for those company-owned and managed locations has not been included in the above calculations. Because our franchisees are not required to report their revenues and expenses to us, we used the data from the expenses incurred by our 28 corporate owned and managed centers in calculating the following three expense projections: utility costs, maintenance costs and miscellaneous. Our corporate owned and managed centers operate in substantially the same manner as our franchised centers and we believe these expenses are consistent with those incurred by our franchisees. Because our franchisees are not required to give us this level of detail as to their revenues and expenses, we cannot tell you how many of our franchisees exceeded the projected revenues or projected EBITDA.

STATEMENT OF ANNUAL PROJECTED REVENUES AND EARNINGS FOR AN ANYTIME FITNESS EXPRESS® CENTER

The following are statements of projected annual revenues and earnings for a franchised Anytime Fitness Express® center. These projections are for a second year of operation. They assume that at the end of the first year you have a fixed number of memberships, and, even though most of our clubs continue to increase their memberships after the first year, that you remain at that level for the entire year, adding as

GP:4830-8514-5477 v4

FDD 62

many new members as the number of members that leave. (During the first year, it will take you time to build your member base.) We have listed below 3 projections, one based on a center having 360 members, one based on 577 members, and one based on 700 members. They are based on revenue information provided to us by our designated billing processor for our 82 Anytime Fitness Express franchisees that operated in the United States during all of the 12 months ended February 28, 2019, and our expense experience operating Anytime Fitness centers. Of the 82 Anytime Fitness Express clubs open for at least 12 months as of February 28, 2019, the number of members for these clubs ranged from 145 to 1,264. As measured on February 28, 2019 the 82 Anytime Fitness Express clubs open at least 12 months had an average member count of 577; the member count on this date ranged from 138 to 1,278 and the median was 512. The first example, for a 360-member club, is intended to give you an idea of the revenues, expenses and projected income of a club that performs well below our average but is still profitable. Of these 82 clubs, 63 (74%) had an average of over 500 members as measured on February 28, 2019. The 577 -member example will give you an idea of the revenues, expenses and income of a club that is able to maintain, throughout the year, the average number of members of the 82 Anytime Fitness Express clubs that were open for at least 12 months, as measured on February 28, 2019. Of the 82 Anytime Fitness clubs open for at least 12 months as of February 28, 2019, 32 (39%) had an average of over 577 members, as measured on February 28, 2019. The 700-member example gives you an idea of the revenues, expenses and profitability of a high achieving club. Of the 82 Anytime Fitness Express clubs open for at least 12 months as of February 28, 2019, 24 (29%) had an average of over 700 members as measured on February 28, 2019.

360 Members 577 Members 700 Members
Revenues1
Enrollment Fee2 $9,700 $15,600 $18,900
Membership Fees3,4 $133,900 $214,600 $260,300
Vending Revenues5 $1,100 $1,600 $2,100
Base Technology Fee14 $8,600 $8,600 $8,600
Healthy Contribution Fees15 $200 $300 $300
Conference Fee $200 $200 $400
Miscellaneous16,18 $6,000 $9,300 $11,100
Total Operating Expenses $115,400 $131,400 $140,200
Income Before Salaries, Depreciation, Interest, Taxes and Debt Expense17  $29,300 $100,500 $141,100

These figures are only estimates of what we think you may earn. Your individual results may differ. There is no assurance that you will earn as much.

These figures were prepared without an audit. Prospective franchisees or sellers of franchises should be advised that no certified public accountant has audited these figures or expressed his/her opinion with regard to the content or form.

NOTES AND ASSUMPTIONS

  1. We rounded all revenues and expenses to the nearest $100.
  2. In projecting enrollment fee revenues and the cost of proximity cards, we assumed that 45% of your members would be replaced through attrition, and that the average enrollment fee you charge is $49. The attrition rate is based on the average rolling 12-month attrition of membership contracts of 12 months or longer at Anytime Fitness clubs that have been open 12 months or longer and measures net transfers out of the Anytime Fitness® system.
  1. In projecting membership revenues, we had to make certain assumptions regarding the types of memberships you will sell in your center and the prices you will charge for each type of membership. The membership numbers above consist of members paying monthly fees under a membership agreement with you, as well as “pay per visit” members, for which you are paid a dollar amount per visit to your center. We have projected membership revenue equal to approximately $371.84 per member per year. Based on reports from our designated processor, the average monthly membership fees paid to our Anytime Fitness Express franchisees was $35.71 per member and the median monthly membership fee paid was $35.83 the 12 months ending on February 28, 2019, for clubs that were open for 12 months or more as of February 28, 2019. These clubs had an average monthly member count of 563 members and a median monthly member count of 512 in the 12 month period ended February 28, 2019. Based on the data reported to us by our designated processor, the average “pay per visit” member fees paid to our Anytime Fitness Express franchisees was $7.90 per member per month and the median “pay per visit” member fees paid were $4.52 per member per month based in the 12 months ended on February 28, 2019, for clubs that were open for 12 months or more as of February 28, 2019. These clubs had an average “pay per visit” member count of 83 and a median “pay per visit” member count of 56 members in the 12 months ending on February 28, 2019. However, membership rates will vary significantly between clubs, depending upon what you elect to charge, how your rates are affected by competition, and the number of memberships you sell that receive corporate discounts. We do not represent that any franchisee can expect to attain any particular level of sales.

GP:4830-8514-5477 v4

FDD 64

  1. Under the 2010 Affordable (Health) Care Act, you are required to collect sales taxes on tanning services, and remit those taxes to the Internal Revenue Service. We assumed that you will collect the tax and pay it to the taxing authorities, which has no effect on your bottom line, and that tanning sales will not be impacted by this tax.
  1. It is up to you to determine whether you offer vending machines in your center, the products you place in those machines and the vending prices. The amounts we have projected for vending revenue reflect the per membership revenues we receive from vending. We also do not tell you the sources from which you can purchase vending products. We assumed you would purchase your vending products from a warehouse seller such as Sam’s Club, and that you pick up these items. If you go to other sources, or have these products delivered, your expenses will likely be higher.
  1. There are other revenue sources we have not included. For example, our clubs may elect to change members a monthly membership in Anytime Health. While the fees you pay us for each Anytime Health membership are included in your Base Technology Fee, since the majority of our clubs have elected not to separately charge their members for these memberships, we did not include these charges in revenues. Likewise, we recommend that our franchisees charge members a club enhancement fee of $29-$39 per year that we recommend be used to purchase new equipment and upgrade their club. While a significant number of our clubs are charging these fees, we have not included these fees in revenues because we also did not include in your expenses the cost of purchasing new equipment or upgrading your facilities. Thus, if you are charging these fees, your cash flow would increase.
  1. Your rent can vary significantly depending on the size and location of your center. However, in our experience, the number of members you have does not necessarily correlate to the size of your center. Our projections therefore assumed that the center had 3,900 square feet, and that the gross rent paid was $12.36 per square foot per year. These assumptions are based on information reported to us by Anytime Fitness Express center franchisees in 2018. If you have a larger center, or you pay more for rent, your rent expense could increase significantly.
  1. Processing and credit card fees will vary depending on how many members prepay their membership fees, how many pay by credit card, and the credit card they use. In our experience, costs for these services generally average about 5% of your membership fees and 1.5% on enrollment fees and personal training fees.
  1. We assumed you would have 3.3% bad debt on your membership fees. This is consistent with the bad debt experience for our franchisees in 2018 as reported to us by our designated billing processor.
  1. This amount includes gas, electric, water, cable, Internet and telephone. It does not include expenses for an answering service because we assume you will forward your calls to you or a manager to answer during unstaffed hours. It assumes utilities average $4.26 per square foot. Our franchisees do not report this data to us; therefore this projected expense is based on actual expenses reported by our company owned and operated Anytime Fitness centers.
  1. This amount is based on our current requirement that you contribute $300 per month to our General Advertising Fund, however this required contribution may increase during the term of your franchise agreement.
  1. There is no required minimum local advertising spend for Anytime Fitness Express clubs. However, we expect you to spend at least $6,000 per year for local advertising. Our projection assumes your spending on local advertising increases by 1.5% of your revenue as you have more members.

GP:4830-8514-5477 v4

FDD 65

  1. In some states, you will also be required to pay sales tax on these fees. We have not included those sales taxes because they are payable in only a handful of states. You will pay this fee to us or our affiliate for ongoing support for our proprietary access control software, development and release updates of that software, access to Anytime Health resources and memberships, email hosting, fitness scanning and/or monitoring, and sound system services. As part of this fee, ProVision will also provide security monitoring services and ongoing support for your technology, email, club operating software, and club management software.
  1. These fees represent an estimate of the initial and ongoing Healthy Contributions program fees you will incur for your monthly members if you participate in the Healthy Contributions Reimbursement Programs. They are based on the actual reports of all of the Anytime Fitness centers participating in the Healthy Contributions programs for the last 6 months of 2018. The average total fees per club for that period was $0.18 for each member participating in a Healthy Contributions program.
  1. Miscellaneous includes janitorial services, legal and accounting fees, cell phone, supplies, licenses, 1 registration to our Conference and minimum travel expenses to attend that conference and other items. Many of these costs can vary significantly depending on the location of your center and the time you spend looking for the best possible cost on these items. Our franchisees are not required to report these expenses to us, however, these projections are consistent with the experience of our company owned and operated Anytime Fitness centers.
  1. The projection assumes you act as manager of your center and do not receive a separate salary. We therefore have not included any additional expense for salary. The projections assume you do not hire any other employees to help you. Some municipalities may require you have an employee on premises whenever your center is open. If you are an absentee-owner, or you operate in a location that requires the center to be staffed at all times, your expenses will increase significantly because you will have to pay salaries and benefits to employees. These assumptions are based on information reported to us by franchisees in 2017.
  1. We also recommend that you set aside at least $500 per month to defray the cost of the remodeling and refreshing you must do to your Anytime Fitness center as a condition to renewing your franchise. We have not deducted these amounts from the projected income because (i) these are still your monies and therefore it would not affect your profitability to set the amounts aside, and (ii) we recommend that you charge your members a club enhancement fee that will generate these amounts and we did not include the club enhancement fees in the projected revenues.

ADDITIONAL ASSUMPTIONS APPLICABLE TO BOTH ANYTIME FITNESS CENTERS AND ANYTIME FITNESS EXPRESS CENTERS:

A. We did not provide any allowance for corporate or personal income taxes.

B. We did not include any expenses for depreciation, amortization, interest, or the repayment of debt. We anticipate every franchisee will fund its initial investment differently, and we therefore cannot project how you would account for these items.

C. The projections are based on economic conditions that existed in March 2019, with no consideration in any category for inflation related adjustments or further weaknesses in general economic conditions.

D. The projections assume you follow our guidelines in terms of the products and services you offer and the way you operate your business. If you do not, your results will likely vary dramatically from the results we have projected.

GP:4830-8514-5477 v4

FDD 66

E. These figures are only estimates of what we think you may earn. There is no assurance you will do as well. If you rely upon our figures, you must accept the risk of not doing as well.

PRESALE HISTORIC RESULTS

We encourage our centers to begin selling memberships 60 days before their projected opening. Doing so gives the center an immediate cash flow upon opening, because these members pay their monthly membership fees, in advance, starting on the day the center opens for business. Among the 127 franchised Anytime Fitness centers that opened in 2018, the presale memberships ranged from a low of 12, to a high of 644, with an average of 160 and a median of 112. Of the 127 centers, 44 (35%) had more than 160 pre-opening members when the center opened.

Some outlets have sold this amount. There is no assurance you will do as well. If you rely upon our figures, you must accept the risk of not doing as well.

Written substantiation for the financial performance representations made in this Item 19 will be made available to you upon reasonable request. We recommend you use QuickBooks Online as your accounting system. Most of the centers we used in compiling these projections used the accounting system we and our affiliates use in centers we operate. That system is consistent with generally accepted accounting principles. We provided substantially the same services to those centers as we will offer to you. All of these centers offered substantially the same products and services as you are expected to offer. We do not furnish or authorize our salespersons to furnish any other oral or written information concerning the actual, average or potential sales, costs, income or profits of an Anytime Fitness or Anytime Fitness Express business. If you receive any other oral or written information concerning the actual, average or potential sales, income or profits of an Anytime Fitness or Anytime Fitness Express center from any of our representatives, or from a person claiming to act on our behalf, you should immediately report that incident to us, as we have not authorized that information. You should not rely on any oral or written estimate or projection of sales, income or profits, or statement of actual, average, estimated or potential sales, income or profits of an existing or future Anytime Fitness or Anytime Fitness Express center, because reliance on that information would not be reasonable in light of the fact that we have not authorized that information to be provided to you or to any other prospective franchisee. Other than the preceding financial performance representations, Anytime Fitness does not make any financial performance representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor’s management by contacting General Counsel James Goniea, at 111 Weir Drive, Woodbury, Minnesota 55125, telephone: (651) 438-5000, the Federal Trade Commission, and the appropriate state regulatory agencies.