year was a little different. More specifically, we received a number of proposed changes somewhat early in the process but then received an additional set of proposed changes later in the process. This resulted in additional back and forth significantly later in the process than is typical and was not a process either side would likely prefer to repeat next year. After the exchange of some preliminary redlined drafts( and numerous telephone calls, texts, Zooms and emails), PFCSC finalized its FDD, FA and ADA on June 27.
Key Changes in the 2025 FDD
• Area Development Fee( Item 5): The Area Development Fee for a new ADA is still equal to $ 10,000 multiplied by the number of clubs to be developed. If, however, you are signing a new ADA because your existing ADA was terminated, i. e., you are“ repurchasing” your ADA, Item 5 of the FDD says the Area Development Fee will now be $ 60,000 multiplied by the number of clubs to be developed.
• Update to Required Insurance( Item 8): In the FDD, PFCSC is required to disclose certain types and amounts of insurance franchisees are required to obtain and maintain throughout the duration of the FA. PFCSC modified some of the required cyber and umbrella liability levels for certain operators, which may result in some savings( depending upon how many clubs you own and operate). As a matter of practice, you should send your insurance broker the required information from Item 8 every year to ensure compliance with the updated requirements.
Key Changes in the 2025 FA
• Accelerated Brand Evolution( FA § 9.3( 4)): PFCSC inserted a new provision allowing it to require a franchisee to remodel and / or replace, remove or add equipment in the club at a more accelerated pace than normal. To exercise this right, however, PFCSC must first receive approval via a vote of either:( i) sixty-six percent( 66 %) of all then existing U. S. clubs( company and franchised), or( ii) fifty-one percent( 51 %) of all then existing franchised U. S. clubs.
• Ability to Increase NAF Without a Vote( FA § 10.1( 1)): Previously, PFCSC could not raise the NAF contribution rate above 2 % of EFT without submitting the increase to a vote of the franchisees. This year, PFCSC modified this language to give it the right to set the NAF contribution rate up to 3 % without needing a vote. PFCSC would still need to submit anything above a 3 % NAF contribution to a vote and receive approval from either:( i) sixty-six percent( 66 %) of all then existing U. S. clubs( company and franchised), or( ii) fifty-one percent( 51 %) of all then existing franchised U. S. clubs. If there is a change without a vote, PFCSC agrees to provide at least 180 days’ notice of the increase. In addition, PFCSC inserted language making it clear that any increase to the NAF would result in a corresponding decrease in LAF, such that the NAF and LAF requirement will not exceed 9 % of EFT in the aggregate.
Continued on page 26
Planet Construction J2911, LLC understands the unique needs associated with fitness facilities.
Specializing in
• New Facility build outs
• Renovating Clubs to be compliant with up-to-date Brand Standards
Licensed to operate in 34 states. www. planetconstructionj2911. com
700 Ryan Street • Lake Charles, LA 70601 • 814-897-3196
GearedUp | 2025 Issue 3
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