If you are looking towards opening a Max Muscle Sports Nutrition Franchise, it will be nice for you to have a preview of what the company represents before going ahead to make enquiries about the total cost of opening the franchise in your location.
Max Muscle Sports Nutrition was founded in 1991 and they began franchising in 2001, about 19 years ago. The current CEO of the company is Joe Wells and they have their corporate head office at 210 W. Taft Ave. Orange, CA 92865, USA. Currently, Max Muscle has over 100 franchise locations operating across the United States with a projected 750 new franchises in the next 5 years.
Before founding Max Muscle Sports Nutrition, Joe Wells was a linebacker for the L.A. Raiders. After his NFL career ended, he began developing sports nutrition products, and started Max Muscle.
Max Muscle is the premier franchise specializing in Sports Nutrition. Max Muscle offers a diverse but integrated product mix of innovative nutritional supplements, fashionable athletic apparel and magazine publishing that targets a broad consumer base with a true passion for fitness and health. This combination is unique within the industry and has allowed Max Muscle to establish itself as a market leader within the health and fitness industry.
Here are areas where you are expected to spend money and the cost associated with it;
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Initial Investment Range
$114,600 to $281,300
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Initial Franchise Fee
$35,000
Please note that except as outlined in Item 5, if you are a first time Max Muscle Franchisee, and not a qualified participant in the Conversion Program, you will be eligible to participate in Max Muscle’s standard franchise program (“Standard Franchise Program”).
Under the Standard Franchise Program, you must pay a $35,000 franchise fee (“Initial Franchise Fee”) payable when you execute a Franchise Agreement. The Initial Franchise Fee must be paid in full at the time you sign the Franchise Agreement and is nonrefundable under any circumstances once you have signed the Franchise Agreement.
If you currently operate one or more Max Muscle Stores and are in good standing under the terms of your Franchise Agreement, you are eligible to participate in Max Muscle’s franchise ownership extension program (“Ownership Extension Program”).
Under the Ownership Extension Program, you may acquire the right to operate one additional Max Muscle Store without the payment of any Initial Franchise Fee for the Max Muscle Store.
In order to participate in the Ownership Extension Program, you must (1) sign a Franchise Agreement and the Ownership Extension Program addendum (“OEP Addendum”) for the new Max Muscle Store, and (2) the new Max Muscle Store must be opened on or before the opening date (“Ownership Extension Opening Date”) set forth in your OEP Addendum.
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Site Selection Assistance
$0 to $2,500, plus travel expenses estimated at $500 to $2,500
Please note that if you require Max Muscle’s assistance in your site selection process before operating your Max Muscle Store, you must reimburse Max Muscle for its travel and living expenses, plus pay the then-current published daily fee.
The estimated range of costs are $0 to $2,500, plus travel expenses estimated at $500 to $2,500.
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Build-Out, Fixturing, Fabrication, and Installation for the Interior of Your Max Muscle Store
$30,500 to $85,500
Prior to operating your Max Muscle Store, you must also pay Max Muscle to complete the build-out, fixturing, fabrication, and installation for the interior of your Max Muscle Store.
Please note that depending on the format of your Max Muscle Store, the cost for the build-out, fixturing, fabrication, and installation is estimated between $30,500 and $85,500.
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Initial Inventory
$25,000 to $40,000
Please note that depending upon the format of your Max Muscle Store, you must pay JWE between $25,000 and $40,000 for initial inventory.
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Point-of-Sale System Software and Hardware
$3,600 to $4,800
Prior to operating each Max Muscle Store, you must also purchase a software license for the Max Muscle Point-of-Sale System software and hardware from Max Muscle’s designated software supplier.
Please note that the initial investment for the Max Muscle Point-of-Sale System software and hardware ranges from $3,600 to $4,800.
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Area Development Rights
This fee varies
Max Muscle also offers to select qualified persons the opportunity to acquire the exclusive right to develop and operate multiple Max Muscle Stores in a designated Development Area by executing an Area Development Agreement.
Please note that if you request the right to sign an Area Development Agreement, you will not be eligible to participate in the Ownership Extension Program. If you are approved to purchase more than one Max Muscle Store, you will pay a development Initial Franchise Fee (“Development Franchise Fee”), an area development fee (“Area Development Fee”), and a franchise agreement execution fee (“Franchise Agreement Execution Fee”), based on the total number of Max Muscle Stores you commit to develop in accordance with the table below:
Number of Max Muscle Stores to be Developed: 1
Initial Franchise Fee or Development Franchise Fee: $35,000
Fee Due for First Max Muscle Store at Signing of Initial Agreements: $35,000
Area Development Fee per Subsequent Max Muscle Store: $0
Franchise Agreement Execution Fee: $0
Number of Max Muscle Stores to be Developed: 2
Initial Franchise Fee or Development Franchise Fee: $32,500
- Fee Due for First Max Muscle Store at Signing of Initial Agreements: $32,500/first store
- Area Development Fee per Subsequent Max Muscle Store: $30,000
- Franchise Agreement Execution Fee: $2,500
- Number of Max Muscle Stores to be Developed: 3 to 5
Initial Franchise Fee or Development Franchise Fee: $25,000
- Fee Due for First Max Muscle Store at Signing of Initial Agreements: $25,000/first store
- Area Development Fee per Subsequent Max Muscle Store: $22,500
- Franchise Agreement Execution Fee: $2,500
- Number of Max Muscle Stores to be Developed: 6 to 8
Initial Franchise Fee or Development Franchise Fee: $22,500
- Fee Due for First Max Muscle Store at Signing of Initial Agreements: $22,500/first store
- Area Development Fee per Subsequent Max Muscle Store: $20,000
- Franchise Agreement Execution Fee: $2,500
- Number of Max Muscle Stores to be Developed: 9 or more
Initial Franchise Fee or Development Franchise Fee: $18,500
- Fee Due for First Max Muscle Store at Signing of Initial Agreements: $18,500/first store
- Area Development Fee per Subsequent Max Muscle Store: $16,000
- Franchise Agreement Execution Fee: $2,500
- Ownership Extension Program and Conversion Net Royalty Rates (months 1-12): Ranges between 0% and 6% of Gross Revenue and the Due Date for this fee is Monthly on or before the 10th day of each month.
The reduced Net Royalty Rate charged for new Max Muscle Stores opened as part of the Ownership Extension Program or Conversion Program is determined by the amount of your monthly product purchases during months 13-24.
Please note that you will be required to begin paying Max Muscle a royalty of 6% of Gross Revenue as soon as you open your Max Muscle Store.
However, as part of the Ownership Extension Program or the Conversion Program, Max Muscle will rebate all of the royalty that it collects from you during the first 12 months you operate your Max Muscle Store and you will be eligible to receive a Royalty Rate rebate for months 13 through 24 (months 1 through 24 are referred to as the “Royalty Rebate Period”) based on your purchases of Max Muscle Products.
If you fail to open your Max Muscle Store by the Ownership Extension Opening Date or the Conversion Opening Date, you will be required to pay the standard royalty rate of 6%.
- Royalty Fee (starting in month 25): 6% of Gross Revenue and the Due Date for this fee is Monthly or before the 13th day of each month.
Please note that you will pay the standard royalty rate of 6% of Gross Revenue starting the 25th month of operating your Max Muscle Store.
- National Marketing Fee: 2% to 3% of Gross Revenue and the Due Date for this fee is Monthly on or before the 10th day of each month.
Please note that it required of all Franchisees.
The National Marketing Fee is initially assessed at 2% of Gross Revenue through the end of the first term of the Franchise Agreement, but Max Muscle reserves the right to increase this amount in the future up to an additional 1% of Gross Revenue each year, for a maximum amount of 3% of Gross Revenue each year.
- Local Advertising Expense: 2% of Gross Revenue and the Due Date for this fee is Monthly.
Please note that you must spend this amount on regional and local advertising and submit monthly reports to Max Muscle.
- Cooperative Advertising: This is proportional share to be determined, but not to exceed 2% of Gross Revenue and the Due Date for this fee is Monthly.
Please note that this fee is Payable only if a cooperative is formed in your Authorized Territory.
- Inventory Purchases: This fee will vary based on needs. At a minimum, you must purchase $7,500, net of any credits, per month of Max Muscle Products and the Due Date is On placement of order.
Please note that Max Muscle’s affiliate charges you for the products you purchase from them.
- Successor Franchise Fee: $1,500 and the Due Date for this fee is Upon execution of a Successor Franchise Agreement.
Please note that the Successor Franchise Fee is currently $1,500, but Max Muscle can increase this fee in its discretion. If you sign a Successor Franchise Agreement, you will pay the then-current successor Franchise Fee.
- Audit Fee: The cost of inspection or audit and cost of re-audit within 1 year of current audit. Costs may range from $3,000 to $10,000 and the Due Date for this fee is As incurred.
Please note that it is Payable only if you understate your Gross Revenue by 2% or more, or fail to submit reports when due.
- Transfer Fee: $0 to $7,500 and the Due Date for this fee is Before consummation of transfer.
Please note that it is Payable by you or your buyer when the Franchise Agreement or other interest in your Max Muscle Store is transferred by you, except transfers to an entity controlled by you or to certain family members.
- Max Muscle Point-of-Sale System Licensing Fee: $100 per month and the Due Date for this fee is Monthly.
Please note that this is Payable for access to the Max Muscle Point-of-Sale System.
- Interest: This lesser of 1.5% per month or highest rate of interest allowed by law and the Due Date is As incurred.
Please note that this begins to accrue the day after payment becomes past due.
- Insurance: This fee will vary based on location and the Due Date for this fee Depends on insurance provider.
Please note that Insurance requirements may be modified periodically by Max Muscle in the Operations Manual.
- Indemnification: fee This will vary under circumstances but the Due Date is As incurred.
Please note that you must reimburse Max Muscle if it is held liable for claims arising from your Max Muscle Store operations.
- Cost of Enforcement or Defense: All costs including accounting and attorney’s fees and the Due Date is Upon settlement or conclusion of claim or action.
Please note that you must reimburse Max Muscle if it is required to incur any expenses in enforcing its rights against you under the Franchise Agreement.
In addition, if you continue to sell any Product after Max Muscle tells you to stop selling such Product, it has the right to seek injunctive relief and you must reimburse it for all costs and legal fees it incurs in seeking such relief.
- Requested Additional Assistance: This fee varies based on needs. The estimated range of costs are $0 to $5,000, plus travel expenses. The estimated range of costs for travel are $500 to $2,500. The Due Date is As incurred.
Please note that additional training and assistance is available if you request. Max Muscle has the right to charge you for this additional training and assistance.
- Initial Training for Additional Persons: $100 per person per day and the Due Date for this fee is As incurred.
Please note that training for 2 people is included in the Initial Franchise Fee.
- Training Fee for a Replacement Manager: $1,500 and the Due Date for this fee is As incurred.
Please note that this is Payable only when training a replacement Manager.
- Lease Negotiation Fee: $2,500 to $5,000 and the Due Date for this fee is Prior to commencing lease negotiation.
Please note that this is Payable only if Max Muscle or its attorneys negotiate a lease or sublease for your Max Muscle Store.
- Site Selection Assistance Fee: Reimburse Max Muscle for its travel and living expenses, plus pay the then-current published daily fee. The estimated range of costs are $0 to $2,500, plus travel expenses estimated at $500 to $2,500. Th Due Date for this fee is Within 30 days after assistance is rendered.
Payable only if you request that Max Muscle send a representative to your Authorized Territory for site selection assistance.
In most cases, this fee will not be relevant to participants in the Conversion Program.
Please note that as of the date of the 2017 Franchise Disclosure Document, Max Muscle’s daily fee is $500, plus travel and lodging expenses.
- Operations Manual Replacement Fee: $500 and the Due Date for this fee is Upon delivery.
Please note that you must replace any part of the Operations Manual which is lost, stolen, or destroyed. The Operations Manual remains Max Muscle’s property at all times.
- Max Muscle Point-of-Sale System License Renewal Fee: $12,000 and the Due Date for this fee is 30 days after the expiration of the Term or the then Renewal Term of the License Agreement.
Please note that this fee is due at the time you enter into a Successor Franchise Agreement with Max Muscle.
- Technology Maintenance Expense: The then-current cost of purchasing required hardware and software upgrades. The estimated range of costs are $0 to $5,000.
The Due Date for this fee is at time of upgrade, which may be required at any time if Max Muscle determines that the existing hardware and/or software is outdated.
You should be aware that the cost to upgrade may exceed the estimate in certain circumstances.
- Relocation Processing Fee: $1,500 and the Due Date for this fee is Upon submission of relocation request.
Please note that this fee is Payable only if you request to relocate your Max Muscle Store.
- Relocation Logistics Fee: $12,000 and the Due Date for this fee is Within 10 business days of approval of relocation request.
Please note that this is Payable only if Max Muscle approves your request to relocate your Max Muscle Store.
- Third-Party Product Review Fee: Up to $1,500 for inspections and evaluation, plus actual costs of tests. Costs may range from $3,000 to $10,000 and the Due Date for this fee is at time of request.
Please note that this is Payable only if you request that Max Muscle review a new supplier, product, or type of supply used in your Max Muscle Store.
- Refurbishing: This fee varies based on refurbishment needs. The estimated range of costs is $5,000 to $50,000. The Due Date for this fee is At time of refurbishment. The refurbishment may be required at the time the Franchise Agreement is renewed.
Please note that Max Muscle imposes no cap or limitation on the amount of expense you may incur for refurbishing your Max Muscle Store.
- Mandatory Seminars, Conventions, or Programs: You must pay your expenses as well as the expenses your employees incur in attending these meetings. The estimated range of costs is $500 to $2,500, plus materials estimated at $50 and the Due Date for this fee is As incurred.
Please note that Max Muscle reserves the right to conduct periodic meetings of all Max Muscle franchisees that you must attend.
- Resale Marketing Fee: $20,000 to $40,000 and the Due Date for this fee is Prior to engaging Max Muscle to assist you with the resale of your franchise.
Please note that this fee is applicable only if you ask Max Muscle to assist you in the resale of your Franchise.
- Veteran Incentives: This is open for negotiation with the company.
- Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If requirements are met, franchisees can renew for one additional term of 10 years.
- Financial Assistance: Max Muscle Sports Nutrition has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, and payroll et al.
In Summary,
- Initial Investment: $114,600 – $281,300
- Net-worth Requirement: $200,000
- Liquid Cash Requirement: $50,000
- Ongoing Initial Franchise Fee: $18,500 – $35,000
- Ongoing Royalty Fee: 6%
- Ad Royalty Fee: 2%