Business Tips
When you sign a fitness franchise agreement, you could be signing for a longer duration than the contract actually calls for, if you don’t know what to look out for. So be aware of these and other little tricks that some companies will use to lock you into their system!
If you’re just about ready to sign an agreement and still do not have an attorney in place, STOP, and retain one immediately! Lack of legal representation will be the BIGGEST mistake you’ll ever make! No matter who you’re dealing with, every company, including ourselves, have legal counsel firmly in place. So make sure that you have it in place too!
Some fitness club brands will place a clause in their contract stipulating that a prescribed amount of equipment MUST be painted with their corporate colors and decaled with their logos. Be aware of this, and as you’re negotiating, DEMAND that such a clause be stricken. If the company won’t remove it, then simply walk away and go talk to someone else. If your contract is coming up for renewal, demand that it be deleted, otherwise you’ll opt out. As a matter of fact, in either case, come and talk with us. You’re going to like what you hear. That’s because we DO NOT incorporate this type of clause into our fitness club agreement.
Although a company might say the policy is in place to create consistency among affiliates, the real reason they use it is to extend the duration of your contract beyond the agreed upon amount of time. They know that if they can get you to paint a large chunk of your equipment in their corporate colors and then have you decal it with their logo, they’ll have you locked in for a lot longer than just the 5 years, or whatever the duration of your contract. They know that it will take at least 10 years, maybe even longer, for your equipment to pay for itself.
So, just by using this one little tactic; using it to convince you that it’s necessary in order to give everyone the same look and feel, they’ve, in essence, converted your 5-year contract into a 10-year contract without you even knowing it!
What if you become dissatisfied with their system and decide that you want out after the 5th year? You won’t be able to get out, and they know it! They’ve got you right where they want you, locked in, with no way out, and nowhere to go!
If you wanted to opt out, your only immediate option would be to become an independent brand. That’s because, in all likelihood, no other brand would take you on. Why would they, when you’ve got equipment painted with someone else’s colors?
You’ll be left with only three choices. One, sign on for another 5 years, or for however long it will take for your corporate colored equipment to pay for itself. Two, become independent. Or three, pray that you’ll get an opportunity to sign on with someone else.
But before you do the latter, you’ll have to either scrap your corporate colored equipment at a huge loss, or have it repainted at somewhat less of a loss.