Intro to the UFC Franchise
Franchising is a popular method for expanding business. Through a licensing relationship a franchisor, or business owner, essentially sells a franchisee the rights to open a new business location. For instance, the UFC Gym franchise has many franchise locations, all of which were sold to various franchisees across the country. Once the UFC Gym franchise finds a new franchisee, the franchisee is granted the right to build their own location using preexisting systems, regulations, etc.
Franchising is an attractive business model for anyone new (or not) to the industry. Unlike an independent business, which requires growing from the ground up, a franchise comes with a pre-established, and usually successful, operational system. Through extensive training programs, franchisees learn all the ropes behind the business, eliminating the daunting trial and error process. Not to mention, a franchise comes with brand recognition is built right in.
FRANCHISING IS AN ATTRACTIVE BUSINESS MODEL FOR ANYONE NEW TO THE INDUSTRY.
Anyone looking to purchase a franchise will be given a Franchise Disclosure Document (FDD). It’s imperative that any franchisee fully understand the components and contents in any business’ FDD. Consisting of 23 different parts, the FDD, a legally mandated document, outlines different key pieces of information involved in franchise purchase. For instance, a Franchise Disclosure Document tells the interested franchisee more about the total fees and costs associated with purchasing the franchise of their choice.
The overall intention of the document is transparency. Both the company and franchisee need to be on the same wavelength in order for the purchase and future management of the business to run smoothly. Click here to see a more in-depth description and analysis of the Franchise Disclosure Document.
UFC Gym History
In 2009, Mark Mastrov, founder of 24 hour fitness, and the Ultimate Fighting Championship (UFC) decided to collaborate and create a gym together in the East Bay area. At the time, the UFC had begun to gain traction as a popular spectator sport. Considering the growth in popularity, the franchise’s founders wanted to give fans the opportunity to involve themselves physically in the sport they loved to watch on TV.
“It’s going to have something for everyone in the family, from traditional mixed martial arts classes, to all-around fitness classes, personal training and a gym just for kids,” Dana White, UFC President, told MMA Mania prior to the first location opening. “We are going to redefine the fitness industry and get everyone excited about fitness again, starting with the first UFC Gym franchise in Concord California.”
UFC Gym franchise locations work to emulate the training programs and settings that real UFC fighters experience. The UFC Gym often feature state-of-the-art fitness equipment and even a large UFC octagon. The gym offers various training classes, including functional strength training, boxing, muay thai, brazilian jiu-jitsu, and kickboxing. The UFC Gym franchise even offers youth boxing, jiu-jitsu, and wrestling classes, among others.
With its classes, the UFC Gym franchise facilities work to create a family-friendly setting. Alongside youth classes, the gyms also offer womens-only lessons in various self-defense categories. The franchise recognizes that not all gym-goers love mixed martial arts. The company appeals to all types of training styles, offering personal training programs and high-level cardio equipment.
The franchise founders sought to prioritize equipment but also amenities in their franchise facilities. UFC Gym franchise locations feature spacious locker rooms with dry saunas. Locations also include “The Arm Bar,” a café-style portion of the gym where patrons can relax and buy protein shakes or snacks.
Franchising Since 2009
Mark Mastrov, Chief Executive Officer.
Adam Sedlack, President.
Kyle Glasgow, Vice President of Franchise Sales.
Initial Fees for the UFC Gym Franchise
The Initial Franchise fee is non-refundable under any circumstance upon payment. This fee is based on the size of the UFC Gym that the prospective franchisee will develop and the amount of locations purchased.
- Class by UFC Gym: The initial fee for a CLASS BY UFC GYM franchise is $30,000. This fee must be payed upon signing the Franchise Agreement via wire payment, cashier’s check, or other form of payment approved by the franchisor.
- UFC Gym Core: The initial fee for a UFC GYM CORE franchise is $40,000. This fee must be payed upon signing the Franchise Agreement via wire payment, cashier’s check, or other form of payment approved by the franchisor.
- UFC Gym Signature: The initial fee for a UFC GYM SIGNATURE franchise is $50,000. This fee must be payed upon signing the Franchise Agreement via wire payment, cashier’s check, or other form of payment approved by the franchisor. If the franchisee purchases a UFC GYM SIGNATURE franchise, the franchisor may require that they enter into a Management Services Agreement (MSA).
The franchisor does not offer any direct or indirect financing for any portion of the initial investment. This policy applies to all forms of the UFC Gym.
Training and Assistance
The UFC Gym provides franchisees with 5 business days of Initial Training for up to 5 different trainees at the franchisor’s training facility. Trainees must include either the managing owner or the designated general manager and instructors. All trainees must be approved by the franchisor
The initial training program includes instruction in owner-operator responsibilities, equipment instruction, membership sales, product sales and marketing, and administration. All necessary tools for the training program, including the instructors, facilities, manuals, and tools, will be provided by the franchisor.
The franchisee is expected to pay all expenses of the trainees attending the initial training. This includes travel, lodging, meal expenses and the CPR certification costs for trainers. If the franchisee desires to bring additional trainees, all of the costs and expenses are the responsibility of the franchisee.
The UFC Gym franchise also provides refresher training programs and seminars over time. These seminars must be attended by either the managing owner or the designated general manager. Often, these refresher courses are not scheduled more than once a year. However, in the instance that the franchisee receives an unsatisfactory inspection report or fails to remedy deficiencies, managers must attend refresher training immediately.
All coaches employed by the franchisee must successfully complete the UFC Gym franchise’s private coach training program. This can be done at either the franchisee’s facility or the principal training facility in Newport Beach, CT. This program must be complete within a reasonable time after hiring. The franchisee is expected to pay all of the fees associated with this training program.
Prior to opening, there are certain measures the franchisor will take to provide assistance to the franchisee.
- Accounting Services:
- The designated supplier provides the franchisee with membership sales, product sales, EFT and general, administrative accounting services. The franchisee must pay a fee to this supplier for these services.
- Field Visits:
- The UFC Gym franchise provides assistance in the operation of the gym, providing visits from field representatives.
- Telephone Assistance:
- The franchisor provides informational assistance and consultation over the phone.
- Advertising and PR Campaigns:
- The franchisor assists in promoting the gym through advertising and public relations campaigns.
- Local Advertising
- Advice on local advertising is provided to the franchisee.
- Promotional Methods and Materials
- Research and Development:
- The franchisor will continue to research and develop new services, products, equipment, and techniques. This may include market research and testing. Franchisees may choose to participate in market research programs.
- Radio and Television Commercials:
- The franchisor may provide a radio script and camera-ready TV commercials.
- Periodic Assistance:
- The franchisor may provide advisory assistance as necessary.
- Refresher or Additional Training
- Failure to Complete Initial Training Program
- If any trainee fails to complete the initial training program the UFC Gym may approve retraining at the expense of the franchisee.
Location of the UFC Gym franchise
The franchisor must approve of any location that the franchisee selects. Once a location is approved, the GYM may only be operated at the approved location. Relocation can only take place with franchisor approval.
The designated territory is outlined in the Franchise Agreement and typically depends on the size of the franchise being selected. If the franchisee is not provided with an exclusive territory at the time of the Franchise Agreement signing, they will enter into the Site Selection Addendum.
The franchisee is prohibited from soliciting business or memberships for their location outside of their designated territory. This includes the internet.
Term of Agreement and Renewal
Restrictions on What the Franchisee May Sell
Use of the Premises
The designated premises may only be used for the operation of the gym. The gym must be open for business and in normal operation for the minimum days and hours required by the franchisor, which are outlined in the operational manuals. Franchisees are prohibited from holding any events at the gym sponsored by or associated with any competitive business, unless they receive approval from the franchisor. The franchisee is also prohibited from entering into any agreements or arrangements with a competitive business without approval from the franchisor.
Approved Products and Services
The franchisee must sell or offer only products and services that meet the UFC Gym franchise standards of quality and quantity. The products approved for sale are outlined in the training manual and other texts provided by the franchisor. The franchisee may not sell any items for redistribution or resale
The UFC Gym franchisee obligations include:
- Site selection and acquisition/lease
- Pre-opening purchases/leases
- Site development and other pre-opening requirements
- Initial and ongoing training
- Fees paid on time
- Compliance with standards and policies from operating manual
- Trademarks and proprietary information
- Restrictions on products/services offered
- Warranty and customer service requirements
- Territorial development and sales quotas
- Ongoing product/service purchases
- Maintenance, appearance and remodeling requirements
- Owner’s participation/management/staffing
- Records and reports
- Inspections and audits
- Post-termination obligations
- Non-Competition covenants
- Dispute resolution
At the end of 2017, there was a total of 113 UFC Gym franchise locations across the country.
Initial Investment Costs
|Name of Fee||Low||High|
|Initial Franchise Fee||$40,000||$80,000|
|Additional Development Costs||$22,000||$75,000|
|Equipment, Fixtures, and Signs||$300,000||$450,000|
|Electronic Cash Register/Retail Information System||$16,050||$23,550|
|Miscellaneous Opening Costs||$16,800||$68,100|
|Licenses, Permits, Fees, and Deposits||$3,500||$5,500|
|Travel and Living Expenses While Training||$2,000||$4,500|
|Marketing Start-Up Fee||$5,000||$7,500|
|Additional Funds for First 3 Months Operation||$81,000||$184,000|
|Travel/Lodging/Meals for Training||$500||$3,500|