Anytime Fitness Franchise

Financing Details

Anytime Fitness does not generally offer direct or indirect financing to help franchisees establish their business. However, it maintains arrangements with several third-party equipment lenders. For example, Geneva Capital, LLC, offers equipment financing up to $200,000 for new locations and up to $75,000 for reinvention financing for existing clubs, with terms varying from 12 to 60 months and fixed equivalent interest rates based on market conditions and creditworthiness. Anytime Fitness receives a 1.5% referral fee from Geneva Capital and guarantees payment of certain losses, establishing a pool to compensate Geneva. Guidant Financial offers programs that allow franchisees to use retirement funds for their business for a fee of $4,995, with an ongoing annual administration fee of $149 per month. Guidant also assists with SBA loans and unsecured financing up to $125,000, requiring a minimum credit score of 680, and receives a $1,000 referral fee for retirement rollover clients. RV Now, LLC, an affiliate of the designated billing processor, provides reinvention financing up to $40,000 for clubs that have operated for at least 5 years, with interest rates from 8.99% to 11.99% per annum over 12 to 48 months. Anytime Fitness guarantees 50% of any amounts unpaid under RV Now loans and receives 50% of the origination fees. Mitsubishi HC Capital America offers equipment financing up to $600,000 for new locations and up to $250,000 for reinvention financing, with terms from 24 to 66 months and fixed interest rates from 7.50% to 10.50%, and pays Anytime Fitness up to 1.5% of the transaction cost as a referral fee. Anytime Fitness does not guarantee any notes, leases, or other obligations franchisees incur from these third parties, except as noted in its specific agreements with Geneva and RV Now.

Litigation Summary

Anytime Fitness Franchisor LLC discloses three litigation cases. One case is recent and ongoing: Canadas Fitness, S.L. v. Anytime Fitness Iberia, SLU, filed in November 2021, against an affiliated entity (Anytime Fitness Iberia, SLU) in Spain. The lawsuit alleges breach of franchise duties, failure to provide assistance, untruthful pre-contractual disclosures, and unreasonable fees, seeking 1.1 million Euros in damages or rescission. Anytime Fitness Iberia, SLU denies the allegations and plans to vigorously defend the lawsuit. The other two cases involve an affiliate and its predecessor, The Bar Method, and are older, dating back to 2009. These cases involved allegations of unregistered franchise offerings and failure to provide a franchise disclosure document in Illinois and New York. Both were resolved through consent decrees and assurances of discontinuance, with penalties paid and rescission offers made (though not accepted by the franchisees involved).

Renewal Conditions

Anytime Fitness franchisees must provide written notice at least 210 days before their current agreement expires. They must be in full compliance with all agreements they have with Anytime Fitness or its affiliates, without a history of repeated defaults. Franchisees are required to renovate and re-equip their Anytime Fitness center to meet the then-current brand standards and image. They must pay a $7,500 renewal fee and sign the standard franchise agreement used at the time of renewal, which may have different terms, including higher fees and a modified protected territory. Franchisees also need to demonstrate their right to possess the location for the renewal term or obtain a new approved site. Additionally, their management staff must complete any required refresher training, and they must sign a general release of claims against Anytime Fitness and its affiliates.

Staffing Notes

Anytime Fitness requires its centers to be staffed for a minimum number of hours each week, with services like one-on-one, small and large group training, coaching, and recovery provided by the franchisee or qualified staff. A telephone answering service may be required during unstaffed hours. While personal supervision is recommended, if the franchisee is not the on-premise supervisor, they must designate a 'Principal Operator.' This Principal Operator, along with any 'Principal Owner' holding over a 10% interest (if different from the Principal Operator), must complete all required initial and ongoing training programs. Franchisees are responsible for all aspects of employee management, including recruitment, hiring, training, compensation, and compliance with all employment laws, such as any state or local certification requirements like CPR. Anytime Fitness may also mandate the use of a designated vendor for personal training sales development and coaching services.