The Little Gym
The Little Gym offers physical fitness, gymnastics, and motor skills development programs for children across multiple locations. Known for its playful approach to early childhood education, it operates in the family entertainment and child development franchise sector.
About The Little Gym
The Little Gym International is a franchisor of infant and child oriented fitness gyms, following the guidelines set out by USA Gymnastics. It offers classes in gymnastics, dance, karate, and Kindermusic. It was founded in 1976, by educator Robin Wes.
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The Little Gym franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of one THE LITTLE GYM ® franchised business under a two-unit minimum development agreement ranges from $476,874 to $828,923. This includes costs such as the Start-Up Equipment and Inventory Package (priced at $65,000 to $75,000), initial franchise fees, and other required purchases and leases of products and services from the franchisor or designated suppliers, which constitute over 90% of total costs. [p.1, p.31]
What is the initial franchise fee?
The initial franchise fee is $59,500 for one Gym, as stated on [p.14]. This fee is non-refundable and must be paid in full upon signing the Franchise Agreement, according to [p.117].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee ranges from 7-16% of gross revenue based on the franchise brand [p.340]. For advertising, franchisees contribute to various marketing funds that range from 1-4.5% of gross sales for brand advertising [p.341], and there are also local marketing expenses that franchisees must cover [p.342]. Additionally, there is a requirement to spend at least the Grand Opening Advertising Amount set forth in the Summary Page, which can be conducted by a Designated Supplier designated by the franchisor [p.148].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts. The provided FDD excerpts do not detail the length of the initial franchise agreement or the renewal terms beyond stating that there are conditions for renewal, such as timely execution and payment of the Renewal Fee [p.211] and meeting certain conditions set forth in Article 2 [p.110].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you may not sell or transfer your interest in this Agreement, your Controlling Interest, or the assets of the Franchised Business (except in the ordinary course of your business) without Franchisor's prior written consent [p.155]. This includes any Owner transferring all or any portion of their equity interest in a Business Entity [p.155].
On what grounds can the franchisor terminate the agreement?
The franchisor may terminate the agreement upon the occurrence of any events of default, as specified in Section 160 of the FDD [p.160]. This isn't specified in more detail in the provided excerpts.
What financial requirements — net worth and liquid capital — do I need to qualify?
To qualify as a transferee, you must demonstrate sufficient equity capital to operate the Franchised Business. This condition is presumed if your net worth equals or exceeds the franchisor's net worth at the time of transfer, excluding the value of the Franchised Business [p.155]. The financial excerpts do not specify exact net worth or liquid capital amounts beyond this presumption [p.337].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory [p.79, p.43]. You will operate within a Protected Area, but this area is not guaranteed to be exclusive from other The Little Gym franchises or outlets owned by the company [p.107, p.39].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program at its headquarters or a designated location [p.122], covering various business procedures and operations [p.123]. Additionally, the franchisor offers consultation on development and operation of the franchise, building plans, personnel qualifications, purchasing, and inventory control [p.116]. For the first The Little Gym business, the franchisor provides two to three days of on-site opening assistance free of charge [p.116], but subsequent businesses may incur additional training fees based on the number of trainers needed [p.116]. Ongoing compliance with current training requirements is necessary for renewal approval [p.109], and remedial training can be required if quality standards are not met [p.123].
How many franchised outlets are there, and how many have closed or been terminated?
The FDD does not provide specific numbers for the total number of franchised outlets or those that have closed or been terminated. However, it mentions that as of the end of the last fiscal year, there were 166 outlets open for at least a full year [p.71]. For more detailed information on closures and terminations, you would need to refer to Tables 2 and 3 which focus on units not associated with private equity funding and those that are, respectively [p.68].
Does the franchisor share any financial performance or earnings information?
The franchisor does not provide specific financial performance information beyond what is included in Item 19 of the current franchise disclosure document [p.178]. The franchisor also prohibits its employees and representatives from providing any other financial performance information [p.63, p.69]. However, if you are purchasing an existing outlet, the franchisor may provide actual records of that outlet's performance [p.63].
What am I restricted to selling, and where must I buy supplies?
This isn't specified in the excerpts. The provided FDD excerpts focus on supply chain restrictions rather than limitations on what you can sell. They indicate that you may be required to purchase certain items from the franchisor or designated suppliers, but there is no information about restrictions on what products or services you are allowed to offer for sale.