$318

Business Description

To simplify the language in this Disclosure Document, “we”, “us” or “our” means Anytime Fitness, LLC, the franchisor; “you” or “your” means the person or entity that buys the franchise. If you are a corporation, partnership or other entity, “you” includes the franchisee’s owners. We are a Minnesota limited liability company that was originally formed as a corporation on February 22, 2002, and converted to a limited liability company in December 2009. We maintain our principal place of business at 111 Weir Drive, Woodbury, Minnesota 55125. We do business under our corporate name and as “Anytime Fitness.”

Prior Experience

In February 2014, ownership of our company was transferred to Self Esteem Brands, LLC, a Minnesota limited liability company formed in February 2014. That company is owned by Anytime Worldwide, LLC, a Delaware limited liability company, that was our direct parent company from December 2009 to February 2014. Majority ownership of Anytime Worldwide, LLC is beneficially owned by Anytime Holdings, Inc., a Minnesota corporation. (The original majority owners of our company own all of Anytime Holdings, Inc. and therefore indirectly continue to own a majority of the beneficial interest in our company.) We do not have any other parent companies, and we do not have any predecessors. The franchises we offer are for the operation of fitness centers designed to operate under the trademark, “Anytime Fitness®,” or “Anytime Fitness Express®.” Whenever we talk about an Anytime Fitness franchise in this Disclosure Document, we are referring to both concepts, unless we specifically refer to one or the other. We began offering Anytime Fitness franchises in October 2002. We began offering Anytime Fitness Express franchises in October 2006. We do not do business under any other names. We do not sell franchises for any other businesses. We began operating our own Anytime Fitness centers in January 2005. We began operating an Anytime Fitness Express center in October 2006. (We sold that center in 2009, and no longer operate any Anytime Fitness Express centers.) We do not have any other business activities.

Business Offered

Our franchise system consists of fitness centers offering convenient access and one on one, small and large group training. As of the issuance date of this Disclosure Document, we require you to staff your standard Anytime Fitness center or Anytime Fitness Express center for a minimum amount of hours per week, and we require you to offer small and/or large group training and personal training services to your members, both of which may be done by you or by qualified staff that you hire. We may also require you to use a telephone answering service during the time your Anytime Fitness center is not staffed. Through an affiliate, we have developed an access and security system that allows members of an Anytime Fitness center to have access to any Anytime Fitness center 24 hours a day, automated tanning and vending services, and reciprocal benefits between centers. In limited cases, we may allow your center to not be accessible 24 hours a day. We will grant you the right to operate 1 Anytime Fitness center at a location we specify in your Franchise Agreement (the “Franchise Agreement”). The center will be an Anytime Fitness center unless we designate it as an Anytime Fitness Express center. Generally, an Anytime Fitness Express center will be a center located in an area having fewer than 7,000 people living within a 3 mile radius of the center. Anytime Fitness centers will typically have 4,000 to 6,000 square feet, while Anytime Fitness Express centers will typically have 1,500 to 4,000 square feet. We also offer to qualified people the right to develop multiple Anytime Fitness franchises within a specific territory under the terms of an Area Development Agreement. If you sign an Area Development Agreement, you will sign a separate Franchise Agreement for each Anytime Fitness (or Anytime Fitness Express) center you develop under your Area Development Agreement. You will sign the first Franchise Agreement when you sign the Area Development Agreement. The form of that agreement will be the form attached to this Disclosure Document. Later Franchise Agreements you sign will be on the form of agreement we use at the time you sign the agreement. The terms of those agreements may differ from the form attached to this Disclosure Document. The market for fitness centers is a developed market in most areas. Your customers will be the general public. Your competitors include other national fitness chains, personal training studios and local fitness centers.

Initial Fees

We offer franchises for Anytime Fitness and Anytime Fitness Express centers. Our standard initial franchise fee for an Anytime Fitness center is $42,500. Our standard initial franchise fee for an Anytime Fitness Express center is $21,000. However, we do offer other pricing options for veterans, existing franchisees who are not in default under their existing Franchise Agreement(s) with us, and for people signing an Area Development Agreement to operate multiple franchises. We will also offer you a way to reduce your initial franchise fee by up to an additional $2,000. We have initiated a charitable contribution program, currently known as the HeartFirst Charitable Foundation, which we offer to all new franchisees. Under this program, we will reduce your initial franchise fee by $2,000 for the first franchise you purchase from us, and $500 for each subsequent one, if you agree to pay a charitable contribution of $100 per month from the date you open each center through the term of the Franchise Agreement, that we will contribute directly to the HeartFirst Charitable Foundation on your behalf, or another charity or charities we designate on your behalf. Each of your centers that participate in this program will also be designated as an Anytime Fitness center participating in our charitable contribution program and will be able to include this designation in all advertising and promotional materials you distribute. If you are an existing franchisee signing a franchise agreement to open a new location and you did not work with our affiliate, Franchise Real Estate, for your most recent location, we will offer you a way to reduce your initial franchise fee by $2,000. To qualify for this reduction, you must: 1) be an existing franchisee; 2) sign a representation agreement with Franchise Real Estate at the time of your territory purchase and agree to work with them to find a site for the next location you open; 3) sign a franchise agreement to open a new location; and 4) did not work with Franchise Real Estate to find a location for the most recent club you opened. If you sign an Area Development Agreement, the initial franchise fee is referred to as a Development Fee, and you pay it in full, for all the centers you commit to open, when you sign the Development Agreement. In all other cases, the initial franchise fee is due in full when you sign the Franchise Agreement. All portions of the initial franchise fee (and Development Fee) are nonrefundable. You will have 12 months from the date you sign the Franchise Agreement to open and begin operating your center. If you want to extend that time for an additional 3 months, and we agree to allow you to do so, you must pay a $500 extension fee to us as a condition to our granting the extension. (However, we will waive this extension fee if you are actively working with FRE in locating a site.) After 15 months from the date you sign the Franchise Agreement, you must begin paying the monthly royalty fee (Monthly Fee) to us, whether or not your Anytime Fitness center is open. If you are actively working with FRE in locating a site or have signed a lease with the assistance of FRE, we will waive the Monthly Fee until your Anytime Fitness center is open. If your Franchise Agreement designates the site of your business “to be determined,” so that you have no protected territory, or if you agree to release any protected territory that has been given to you and to seek a site in an area “to be determined,” then we will grant you one 3 month extension for a $500 extension fee, and we will waive the Monthly Fee until you begin operating your center. The extension fee also applies if we agree to allow you to extend the date for opening of any Anytime Fitness center that you agree to open under your Area Development Agreement. We are not, however, obligated to grant these extensions, and we have the right to condition our consent on other requirements. Extension fees are not refundable and are not credited against any other obligation you may have to us. After 18 months from the date you sign the Franchise Agreement, if you have not signed a lease for a location, the Franchise Agreement will be placed in default and if you do not open within the time provided for cure, we will terminate the Franchise Agreement. In the last 12 months before the date of this Disclosure Document, our Initial Franchise Fees ranged from $14,000 to $42,500, depending on which category the franchise fit. There are other fees you will pay to our affiliate, ProVision, before you begin operating. You must purchase certain technology components from ProVision, including certain computer hardware, software and networking equipment, door readers, key fobs or equivalent technology, security and surveillance system, fitness scanning and/or monitoring equipment, sound system, and CCTV’s (collectively, the “Technology System”). You also must have ProVision install the Technology System. The cost to purchase the base Technology System is $27,999 for an Anytime Fitness center and $20,349 for any Anytime Fitness Express center. You may, but are not required to, purchase additional equipment from ProVision a la carte to enhance the base Technology System package. The above amounts for the base Technology System do not include the cost of taxes, shipping or installation, which we estimate will cost approximately 30% of the Technology System package cost. The Training Suite (as defined in Item 11) is a required element of the Anytime Fitness system and you must implement it in your Anytime Fitness center. The Training Suite is optional for Anytime Fitness Express centers. The Training Suite Training Program is provided as part of our initial training program. If you are an existing franchisee that will now elect to offer the Training Suite at your center, and have not already attended training, then you must attend the Training Suite Training portion of the initial training program and pay our then-current fee, currently $250 per person. You are responsible for travel costs, room and board, and the salaries, fringe benefits, and other expenses you and your employees incur to attend such training. Subject to corporate trainer availability, we also offer the Training Suite Training Program in the field, on-site at your Anytime Fitness center, or the Anytime Fitness center of another franchise owner with whom you have partnered to receive this training. For a fee ranging from $6,000 to $10,500 depending on how many ownership groups are receiving training (up to a maximum of three), we will send two corporate staff members to the designated center to provide two days of customized, interactive, on-site training designed to teach program methodology, how to deliver programming, how to set up and conduct group and personal training sessions, and how to educate members and sell group and personal training to members. This on-site training is conducted for up to 21 total attendees and includes pre-visit communication and post-visit follow-up. We will create a specific club layout/design (“Compliance Drawing”) of your center using the as-built drawings, surveys, technical data, and site plans you provide. You must obtain a Compliance Drawing from us. If you are developing a new Anytime Fitness center, we will provide you with one Compliance Drawing at no additional cost. We anticipate this design will be sufficient to provide to an architectural vendor to create your Construction Documents (defined below). If you are signing the Franchise Agreement as part of a franchise renewal or transfer and we determine that your Anytime Fitness center requires renovation or re-equipment, then you must pay us $250 for your Compliance Drawing, but we will credit $250 against your Monthly Fee if you complete all renovation and re-equipment requirements by the required due date. In either case, if you require additional Compliance Drawings, you must pay us $250 for each additional Compliance Drawing. You will be required to retain a designated architectural vendor to create a complete set of detailed construction documents and to complete construction of your Anytime Fitness center in compliance with the Compliance Drawing and our mandatory specifications (“Construction Documents”), and to obtain any required permits, and conform the premises to local ordinances or building codes. If you do not use our designated architectural vendor to create the Construction Documents and this is your first Anytime Fitness center, we will charge you a fee of $2,700 to review the Construction Documents created by another vendor. If this is your first Anytime Fitness center, we may require you to obtain your Construction Documents from our designated architectural vendor.

Financing

We do not generally offer, directly or indirectly, any financing to you to help you establish your business, except as set forth at the end of this Item 10. However, we do have arrangements with a number of thirdparty equipment lenders who provide financing to our franchisees. If you want us to assist you in obtaining financing, you must sign a separate Financing Consulting Agreement with us. A copy of that agreement is attached to this Disclosure Document as Exhibit J. Our consultation process begins with a review of your current personal and business financial statements. We will discuss with you the various financing products and services that are available and assist you in preparing applications for financing with the lenders with whom we have established relationships. We do not participate in any underwriting or lending determinations with respect to any of the financing options made available by any of the lenders listed below. Our current lender relationships, as of the date of this Disclosure Document, are described below: 1. Geneva Capital, LLC (“Geneva”), offers equipment financing of up to $250,000 for a new location, including, among others, cardio and strength equipment, virtual fitness equipment, security system, tanning equipment, and signage (but excluding your initial franchise fee and working capital), based on credit approvals. Geneva will also offer reinvention financing of up to $75,000 per location, including tenant improvements and equipment, for owners that have operated their Anytime Fitness business for at least 5 years, based on credit approval. Financing is offered as a lease that typically requires 1 advance payment of up to 20%. Geneva also collects a security deposit equal to 1 month’s lease payment. Lease terms vary from 12 to 60 months. Geneva offers both true tax and capital leases. Fixed equivalent interest rates typically vary from 7.99%, to 11.99% per annum, based on your financial and credit worthiness. Geneva will not require you to pledge any other assets to secure the lease, but you must provide a personal guaranty. The amount of your lease payments will depend on the amount financed, the term of the lease, and the interest rate. You will have the right to purchase the equipment at the end of the lease at fair market value, typically capped at 10% or 20% of the original equipment cost, assuming you have not defaulted under the lease. The ability to prepay your obligations is negotiated on a case by case basis. Geneva also offers financing up to $400,000, including construction costs, to members of Club Purple and Club Platinum. Terms are similar to the financing described above. You will be in default under Geneva’s lease documents if you fail to pay amounts owed when due or you breach any other provision of the lease documents. If you commit a payment default, you must pay a late charge of 15% of the payment which is late or $15.00, whichever is greater or, if less, the maximum charge allowed by law. Regardless of the type of default, Geneva may retain your security deposit, elect not to renew any or all time-out controls programmed within the equipment, terminate or accelerate the lease and require that you pay the remaining balance of the lease (discounted at 6% per annum), and any purchase option due, and/or return the equipment to Geneva. Geneva may recover interest on the unpaid balance at the rate of 8% per annum. It may also exercise any remedies available to it under the Minnesota Uniform Commercial Code or the law of its assignee’s principal place of business. It may also file criminal charges against you and prosecute you to the fullest extent of the law if any information supplied by you on your credit application or during the credit process is found to have been falsified or misrepresented. You must also pay Geneva’s reasonable attorneys’ fees and actual court costs. If it has to take possession of the equipment, you must pay the cost of repossession including damage to the equipment or real property as a result of repossession. Under the personal guaranty, which is contained in Geneva’s equipment lease agreement, you waive all notices. If you default under the lease agreement, Geneva may obtain and use consumer credit reports to determine acceptable means of remedies, and you waive any right or claim you may otherwise have under the Fair Credit Reporting Act (Equipment Lease Agreement – Section 13). Because the lease is a noncancelable net lease you are not entitled to any reduction of rent or any setoff for any reason, nor will the lease terminate or will your obligations be affected by any defect in, damage to or loss of possession or use of any of the equipment (Equipment Lease Agreement – Section 2). You waive any and all rights or remedies not in the lease (Equipment Lease Agreement – Section 14) and you and your guarantors, consent to personal jurisdiction in the state that Geneva or its assignee, as applicable, has its principal place of business and you and your guarantors waive trial by jury. If Geneva transfers the lease the transferee will not have to perform any of Geneva’s obligations and the rights of the transferee will not be subject to any claims you have against Geneva (Equipment Lease Agreement – Section 12). A copy of the current Geneva lease documents as of the date of this Disclosure Document is attached as Exhibit K-1. We have signed a separate agreement with Geneva, under which we agreed to assume certain obligations if you default under your lease, including an obligation to assist Geneva in remarketing your equipment. Under that agreement, we also agreed to establish a pool to compensate Geneva for certain of the losses it incurs, and to guaranty payment of certain of those losses. This agreement also provides that Geneva is to pay 1.5% of the lease amount to us as a referral fee and 1.5% of the lease amount is added to the guaranty pool. There is no direct affiliation between Geneva Capital and Anytime Fitness. 2. Baycap, LLC (“Baycap”) offers equipment financing of up to $500,000 of your equipment costs, including fitness, outdoor signage, tanning, and security system. They offer both a finance agreement, where you own the equipment, and equipment leases, where you have the right to purchase the equipment at the end of the term for fair market value. The terms of the agreements vary from 24 to 48 months. Interest rates vary from 10% to 20% per annum. Baycap will evaluate your credit, your net worth, your adjusted gross income, and the equipment you are purchasing to determine the exact term, rate and down payment. You must personally guarantee the financing, and pledge the equipment you purchase. Baycap does not require you to pledge any other collateral. There is a one-time $495 processing fee for each type of financing. For the equipment loan, you will sign an Equipment Finance Agreement. You must pay a down payment of 10%-20% of the cost of the equipment. If you fail to make your payments, or break any of your other promises in the Finance Agreement, you will be in default. Baycap will have the right to take the equipment, sell it, and hold you responsible for any deficiency. They can sue you in California, and if they win, you must pay their court costs and attorneys’ fees. You also waive your right to a jury trial. If you lease the equipment from Baycap, you will sign an Equipment Lease Agreement. You must pay a security deposit of 10% to 20% of the total cost of the equipment, which will be refunded to you when you return your equipment or purchase the equipment. At the end of the term, you must either return the equipment, or purchase it based on its fair market value, which will be agreed upon between you and Baycap at the beginning of the lease term. If you fail to make your payments, or break any of your other promises in the Lease Agreement, Baycap can terminate the lease. If they terminate the Lease Agreement, they can retain your security deposit and any other monies they have collected and require that you pay all the remaining payments, discounted at 4% per annum, return the equipment, and pay the price specified on the Lease Agreement as the fair market value (or if none is listed, then 20% of the original equipment cost). They can recover interest on any unpaid balance at 8% per annum. They can sue you in California, and if they win, you must pay their costs and attorneys’ fees. You also waive your right to a jury trial. Copies of the current Baycap finance documents as of the date of this Disclosure Document are attached as Exhibits K-2-1 and K-2-2. We have a separate agreement with Baycap which requires that we are paid 2% of the lease amount as a referral fee. There is no direct affiliation between Baycap and Anytime Fitness. 3. Guidant Financial offers a program that allows you to use your retirement funds to buy your business without incurring tax penalties or getting a loan. Known as 401(k) business financing (or formally Rollovers for Business Start-ups), Guidant charges a fee of $4,995 for this service, which includes filing your business entity, designing a company 401(k) plan, helping you roll all (or a portion of) your existing retirement funds from your current custodian account to the new 401(k), and providing you with 2 consultations with a tax attorney to review the transaction. In addition, they provide ongoing, annual administration to your 401(k) plan for $139 per month. The form of agreement you would sign with them is attached as Exhibit K-3. Guidant can also help you secure an SBA loan for your business. A consulting fee of $2,500 applies, however, this does come with a fully refundable guarantee should Guidant not be able to secure you funding. You may also use 401(k) business financing as the down payment for your SBA loan through Guidant. Guidant further offers unsecured financing. This program allows you to secure up to $125,000 in capital pending credit score and debt utilization. Minimum credit score of 680 is required. There is 9% fee of whatever amount you draw against for this service. Guidant can also secure equipment leasing for you. Approvals generally obtained within 48 hours. New locations require 10% down. Interest rates vary from 6.99 to 13.90% depending on credit score. Lease term up to 60 months. New business requires a credit score of 700 or higher while existing business require accredit score of 650 or higher. There is a fee associated with this service and it can range from $250 to $500. Guidant also offers Portfolio Loans. This is a way to leverage your non-retirement stocks, bonds and mutual funds up to 80% of their value. Portfolio must be worth at least $85,000. No minimum credit score required. The fee associated with this program is 2-3% of the value of the collateral. Start-up locations can also elect to defer payments for up to 2 years. We have a separate agreement with Guidant Financial Group which requires that we are paid $1,000 as a referral fee for each client that engages in their retirement rollover program. There is no direct affiliation between Guidant Financial Group and Anytime Fitness. 4. RV Now, LLC (“RVN”), an affiliate of ABC Financial Services, Inc. (“ABC”), our designated billing processor, also offers financing to our franchisees for the “reinvention” of their Anytime Fitness center to conform to our current standards after their 5-year anniversary. This financing is, however, still subject to credit approval. You will also need to use ABC as your billing processor to qualify for this loan. Under this arrangement, RVN may offer to loan you up to $40,000 for your reinvention. RVN will charge you a 3% origination fee for this financing. You will repay the loan in fixed monthly payments, ranging from 12 months to 48 months. No down payment is required. The first payment will be due 30 days after you sign the loan documents but it will only be an interest payment. The regular monthly payments will begin 60 days after you sign RVN’s loan documents. Interest rates for this financing currently range from 8.99% to 11.99% per annum, depending on the strength of your credit and credit availability. The amount of the monthly payment will depend on the amount financed, the interest rate, and the term for repayment. RVN will require you to pledge a security interest in the accounts receivable, member contracts, payment intangibles and proceeds of your Anytime Fitness center, and you will also need to personally guarantee the note. Under our agreement with RVN, we will guaranty 50% of any amounts that you fail to pay under the loan documents with RVN. In consideration for that agreement, RVN pays us 50% of any origination fees it collects from you. You have the right to prepay all or a portion of your obligations to RVN at any time. You will be in default under the loan documents if you fail to pay amounts owed when due. And your default continues for 10 days, or if you violate any other provision of the loan documents and do not cure your default within 10 days after notice. You will also be in default if you make any false or misleading representation in the loan documents, if your financial statements or other objectively verifiable information shows a material adverse change in your financial condition, or if your billing agreement with ABC is terminated (Section 7 – Loan Agreement). If you commit a payment default, you must pay a late charge of 10% of the overdue amount (not less than $50 or more than $250 per instance). You also will pay interest on any overdue amount equal to the lesser of 17% or the maximum rate of interest allowed by law. If you default, RVN may accelerate the balance of payments, offset any amounts from amounts due from ABC to you, or foreclose on the collateral you pledge. It may also exercise any remedies available to it by law. You also must pay all costs incurred by RVN if you default, including legal fees. Under the personal guaranty contained in RVN’s loan documents, you waive all notices, your right to a jury trial, certain defenses, and rights to require RVN to exhaust other remedies in the event of your default. RVN may assign the agreements or sell the loan to other entities or persons without your consent (Section 9 – Secured Loan Agreement). Any litigation concerning the loan documents will generally be venued in Arkansas. A copy of the RVN loan documents as of the date of this Disclosure Document is attached as Exhibit K-4. 5. Wells Fargo SBA Lending, a division of Wells Fargo Bank, N.A., offers United States Small Business Administration (“SBA”)-backed financing programs for new start-up franchises including tenant improvements, equipment, fixtures, working capital, the initial franchisee fee, and other start-up costs. Wells Fargo SBA Lending also offers financing programs for the expansion of locations, the acquisition of new locations, and the reinvention of existing locations. Financing is offered in the form of a promissory note. You will also have to pledge a first security interest in all the assets of your business. You may also have to give the lender a lien on your personal residence. You will be required to insure the collateral. You will also be required to personally and unconditionally guaranty the loan. The SBA may impose other collateral, guaranty and additional requirements for SBA-guaranteed loans which will be disclosed to and discussed with you by Wells Fargo SBA Lending. If this is financing for an expansion or reinvention, you must have an equity investment of at least 10% of the project amount. If it is for a new fitness center, or one you acquire, you will need an equity investment of at least 15% of the project amount. The actual equity required will vary, depending on a number of factors, including your credit. Wells Fargo SBA Lending offers variable or fixed rates for terms of up to 10 years with no prepayment penalty. The interest rates will depend on your credit and current market rates, but for fixed rates, the current maximum rate as of the date of this Disclosure Document is 8.72% per annum, and the current maximum rate for a variable rate loan is 6.50% per annum. The maximum amount they will loan to you (assuming you do not own the real estate for the fitness center) is $550,000 per location. Your monthly payment amount will depend on the amount financed, the term of the loan, and the interest rate. All financing is subject to credit approval and determination of SBA eligibility by Wells Fargo SBA Lending. You will be in default under your promissory note and the personal unconditional guaranty if you fail to make a payment when due, you fail to preserve the collateral, or if you fail to do anything required by the promissory note, personal unconditional guaranty, or other loan documents. If you default, Wells Fargo SBA Lending may require the immediate payment of all amounts remaining under the note, obtain a judgment against you, take possession of the collateral, and sell, lease, or otherwise dispose of the collateral. You will waive all notices under the note and personal unconditional guaranty. You will also pay all costs and expenses incurred by Wells Fargo SBA Lending to collect any amounts owed, including attorneys’ fees. The promissory note may include a confession of judgment that allows Wells Fargo SBA Lending to enter judgment against you in any court without notice and without the filing of a lawsuit against you. In states that do not permit confession of judgment clauses in promissory notes, Wells Fargo SBA Lending will have the right to initiate an arbitration action against you. The loan documents will typically be governed by the laws of Minnesota, except that any real estate documents will be governed by the laws of the state where the real estate is located. When the SBA is the holder of the Note, the Note will be interpreted and enforced under federal laws, including SBA regulations. Wells Fargo SBA Lending or the SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. A copy of the current Wells Fargo SBA Lending loan documents as of the date of this Disclosure Document is attached as Exhibit K-5. We also have a direct bridge financing program that we offer, at our discretion, to qualifying franchisees to help finance tenant improvements. We occasionally offer a bridge financing program to certain new franchisees to pay a part of the tenant improvement costs that will ultimately be expected to be reimbursed by the landlord. You may not be offered such financing. The maximum amount of this loan is $150,000. You must pay us a 6% origination fee at the time you sign the loan agreement, but you do not have to pay any interest on the loan unless you fail to repay it when it is due (and then it accrues interest at 12% per annum). The loan is due at the earlier of 90 days after the last cash distribution is made to under the loan documents, or 30 days after you open your Anytime Fitness center. You can prepay the loan at any time, without penalty, and you must pay any proceeds you receive from your landlord against this loan. As a condition to our making the loan, we have the right to choose or approve your contractor, and you must escrow an amount equal to 10% of your contractor’s construction bid. You also must sign a Lease Rider, which among other provisions, requires that the landlord pay any tenant improvement monies it owes you directly to us to offset your loan obligation. (Any excess will be paid to you.) You must sign a promissory note (and if you are an entity, all your owners must sign the note) and give us a security interest in the assets of your Anytime Fitness center. The note provides that if you default, we can accelerate the balance. The note also provides we can direct your payment processor to make these payments directly to us on your behalf, from remits owed to you from the processor. You are also liable for attorneys’ fees if you default. In addition, the Franchise Agreement has a cross default clause that applies if you fail to pay any obligations you owe to us, and therefore, if you fail to pay this note, we can terminate your Franchise Agreement. The note also contains waivers from all defenses except for payment. We do not require you to pledge any other assets to secure the loan, but you must provide a personal guaranty. A copy of the loan agreement, promissory note, personal guaranty, security agreement and Lease Rider to be signed for this financing is attached as Exhibit K-7. We do not guarantee any note, lease or other obligation you incur. We and our affiliates have the right to sell, assign or discount to a third party all or part of any amounts you may owe to us or our affiliates.

Franchisee Revenue and Profit

STATEMENT OF ANNUAL PROJECTED REVENUES AND EARNINGS FOR AN ANYTIME FITNESS CENTER The following are statements of projected annual revenues and earnings for a franchised Anytime Fitness center. These projections are for an Anytime Fitness center that has been in operation for at least 12 months. They assume that at the end of the first year you have a fixed number of memberships, and, even though most of our clubs continue to increase their memberships after the first year, that you remain at that level for the entire year, adding as many new members as the number of members that leave. (During the first year, it will take you time to build your member base.) We have listed below 3 projections, one based on a center having 500 members, one based on 860 members, and one based on 1,150 members. They are based on revenue information provided to us by our proprietary software and designated billing processor for our franchisees in the United States in 2018. Of the 2,235 Anytime Fitness clubs open for at least 12 months as of February 28, 2019, the number of members for these clubs ranged from 145 to 3,418. As measured on February 28, 2019 the clubs open at least 12 months had an average member count of 860; the member count on this date ranged from 136 to 3,402 and the median was 776. The first example, for a 500-member club, is intended to give you an idea of the revenues, expenses and projected income of a club that performs well below our average but is still profitable. Of these 2,235 clubs, 1,909 (85%) had an average of over 500 members as measured on February 28, 2019. The 860- member example will give you an idea of the revenues, expenses and income of a club that is able to maintain, throughout the year, the average number of members of the Anytime Fitness clubs that were open for at least 12 months, as measured on February 28, 2019. Of the 2,235 Anytime Fitness clubs open for at least 12 months as of February 28, 2019, 887 (40%) had an average of over 860 members, as measured on February 28, 2019. The 1,150-member example gives you an idea of the revenues, expenses and profitability of a high achieving club. Of the 2,235 Anytime Fitness clubs open for at least 12 months as of February 28, 2019, 391 (17%) had an average of over 1,150 members as measured on February 28, 2019. These figures are only estimates of what we think you may earn. Your individual results may differ. There is no assurance that you will earn as much. These figures were prepared without an audit. Prospective franchisees or sellers of franchises should be advised that no certified public accountant has audited these figures or expressed his/her opinion with regard to the content or form. NOTES AND ASSUMPTIONS 1. We rounded revenues and expenses to the nearest $100. 2. In projecting enrollment fee revenues and the cost of proximity cards, we assumed, based on data reported to us by our designated processor, that 45% of your members would be replaced through attrition, and that the average enrollment fee you charge is $49. The attrition rate is based on the average rolling 12-month attrition of membership contracts of 12 months or longer at Anytime Fitness clubs that have been open 12 months or longer and measures net transfers out of the Anytime Fitness® system. 3. In projecting membership revenues, we had to make certain assumptions regarding the types of memberships you will sell in your center and the prices you will charge for each type of membership. The membership numbers above consist of members paying monthly fees under a membership agreement with you, as well as “pay per visit” members, for which you are paid a dollar amount per visit to your center. We have projected membership revenues equal to approximately $365.89 per member per year. Based on reports from our designated processor under each membership agreement to our Anytime Fitness franchisees, the average monthly membership fees paid was $36.55 per member and the median monthly membership fees paid was $36.08 in the 12 months ended on February 1, 2019, for clubs that were open for 12 months or more as of February 28, 2019. These clubs had an average of 678 members who joined as monthly members and a median of 621 members who joined as monthly members. Based on the data reported to us by our designated processor, the average “pay per visit” member fees paid to our Anytime Fitness franchisees was $8.05 per member per month and the median “pay per visit” member fees paid to our Anytime Fitness franchisees was $6.56 per member per month in the 12 months ended on February 1, 2019, for clubs that were open for 12 months or more as of February 28, 2019. These clubs had an average “pay per visit” member count of 182 members and a median “pay per visit” member count of 131 in the 12 months ending on February 28, 2019. However, membership rates will vary significantly between clubs, depending upon what you elect to charge, how your rates are affected by competition, and the number of memberships you sell that receive corporate discounts, and we do not represent that any franchisee can expect to attain any particular level of sales. 4. Under the 2010 Affordable (Health) Care Act, you are required to collect sales taxes on tanning services, and remit those taxes to the Internal Revenue Service. We assumed that you will collect the tax and pay it to the taxing authorities, which has no effect on your bottom line, and that tanning sales will not be impacted by this tax. 5. It is up to you to determine whether you offer vending machines in your center, the products you place in those machines and the vending prices. The amounts we have projected for vending revenue reflect the per membership revenues we receive from vending. We also do not tell you the sources from which you can purchase vending products. We assumed you would purchase your vending products from a warehouse seller such as Sam’s Club, and that you pick up these items. If you go to other sources, or have these products delivered, your expenses will likely be higher. 6. Most of our clubs hire personal trainers to provide personal training services to their members and all new and renewing clubs must offer and provide personal training services and the Training Suite. Our franchisees typically collect a percentage of what the members pay for these services. We have projected training revenues equal to $106.91 per member per year. These numbers are based on the average monthly personal training revenue reports above $1,500 of clubs who were open for at least 12 months and reported 1 or more months of personal training revenues using the Club Management Software or other personal training management software. We assumed that if a club reported less than $1,500 in revenue from personal training services for any month, that the club was either in the beginning stages of offering personal training services or did not have a fully operational personal training program. In total, 514 clubs reported an average of $1,500 a month in personal training revenues for the reporting period. We believe that this projection is consistent with the average for all our franchisees, but many franchisees do not report their training revenues to us. Compensation models for trainers vary widely. In the 500 and 860 member models, we projected that personal training expenses, including compensation to your personal trainers, equal 60% of your personal training revenues. Once personal training revenues reach a certain level, some of our clubs have added a Member Experience Manager to oversee the personal training program. Therefore, in the 1,150 member model, we assumed you have this additional expense and therefore projected personal training expenses at 70% of personal training revenue. If you perform all or a portion of the training services yourself, this would increase your income from operating your center. 7. There are other revenue sources we have not included. For example, our clubs may elect to charge members a monthly membership in Anytime Health. While the fees you pay us for each Anytime Health membership are included in your Base Technology Fee, since the majority of our clubs have elected not to separately charge their members for these memberships, we did not include such charges in revenues. Likewise, we recommend that our franchisees charge members a club enhancement fee of $29-$39 per year that we recommend be used to purchase new equipment and upgrade their club. While a significant number of our clubs are charging these fees, we have not included these fees in revenues because we also did not include in your expenses the cost of purchasing new equipment or upgrading your facilities. 8. Your rent can vary significantly depending on the size and location of your center. However, in our experience, the number of members you have does not necessarily correlate to the size of your center. Our projections assumed that the center had 5,100 square feet, and that the gross rent paid was $18.74 per square foot per year. These assumptions are based on information reported to us by franchisees in 2018. If you have a larger center, or you pay more for rent, your rent expense could increase significantly. 9. Processing and credit card fees will vary depending on how many members prepay their membership fees, how many pay by bank draft, credit card, and the credit card they use. In our experience, costs for these services generally average about 5% of your membership fees and 1.5% on enrollment fees and personal training fees. 10. We assumed you would have 3.3% bad debt on your membership fees. This is consistent with the bad debt experience for our franchisees in 2018 as reported to us by our designated billing processor. 11. This amount includes gas, electric, water, cable, Internet and telephone. It does not include expenses for an answering service because we assume you will forward your calls to you or a manager to answer during unstaffed hours. It assumes utilities average $4.26 per square foot. Our franchisees do not report this data to us, therefore, this projected expense is based on actual expenses reported by our 28 company owned and operated Anytime Fitness centers in 2018. 12. This amount is based on our current requirement that you contribute $600 per month to our General Advertising Fund, however this required contribution may increase during the term of your franchise agreement, we reserve the right to increase this fee upon written notice to you but will not increase it to more than 2% of your gross revenue. 13. Your required local marketing spend is determined by your market tier. If you are in a Tier 1 market, you must spend $12,000 per year. If you are in a Tier 2 market, you must spend $9,600 per year. If you are in a Tier 3 market, you must spend $7,200 per year. Our projection assumes that you will spend $10,000 per year for local advertising and that spending on local advertising increases by 1.5% of your revenue as you have more members. 14. In some states, you will also be required to pay sales tax on these fees. We have not included those sales taxes because they are payable in only a handful of states. You will pay this fee to us or our affiliate for ongoing support for our proprietary access control software, development and release updates of that software, access to Anytime Health resources and memberships, email hosting, fitness scanning and/or monitoring, and sound system services. As part of this fee, ProVision will also provide security monitoring services and ongoing support for your technology, email, club operating software, and club management software. 15. These fees represent an estimate of the initial and ongoing Healthy Contributions program fees you will incur for your monthly members if you participate in the Healthy Contributions Reimbursement Programs. They are based on the actual reports of the Anytime Fitness centers participating in the Healthy Contributions programs as of December 31, 2018. Of the 27% of members that participate in the Healthy Contributions program, the average total fees per club for that period was $0.18 for each member participating in a Healthy Contributions program. 16. Miscellaneous includes janitorial services, legal and accounting fees, cell phone, supplies, licenses, 1 registration to our conference and minimum travel expenses to attend that conference, and other similar items. Many of these costs can vary significantly depending on the location of your center and the time you spend looking for the best possible cost on these items. Our franchisees are not required to report these expenses to us, however, these expense projections are consistent with the experience of our company owned and operated Anytime Fitness centers. 17. The low projection assumes you act as manager of your center and do not receive a separate salary. As your business grows, you may wish to hire a manager to oversee some or all of the club operations. Some states or municipalities may require you have an employee on premises whenever your center is open and we have a minimum staffed hours policy that requires you, or a staff person, to be in the center for at least 30 hours per week. We are assuming you would pay that manager $2,000 per month, plus commissions and limited benefits, so that with payroll costs, the total cost for a manager will be $35,000 a year. This is consistent with what we understand to be the average compensation our franchisees pay their managers. In the 865 and 1,150 member projections, we assumed that you would pay for staffing equivalent to 1.5 times a single manager. Except as noted in footnote 6, the projections assume you do not hire any other employees to help you and assume you oversee some of your club operations. If you are an absentee-owner, or you operate in a location that requires the center to be staffed at all times, your expenses will increase significantly because you will have to pay salaries and benefits to employees. These assumptions are based on information reported to us by franchisees in 2018. 18. We also recommend that you set aside at least $500 per month to defray the cost of remodeling and acquiring new equipment for your Anytime Fitness center as a condition to renewing your franchise. We have not deducted these amounts from the projected income because (i) these are still your monies and therefore it would not affect your profitability to set the amounts aside, and (ii) we recommend that you charge your members a club enhancement fee that will generate these amounts and we did not include the club enhancement fees in the projected revenues. We gave you information above about the number of all our franchised centers that were open for at least 12 months as of February 28, 2019. We, or our affiliates, also operated 28 centers for the entire 12-month period ending February 28, 2019. Revenue and membership data for those company-owned and managed locations has not been included in the above calculations. Because our franchisees are not required to report their revenues and expenses to us, we used the data from the expenses incurred by our 28 corporate owned and managed centers in calculating the following three expense projections: utility costs, maintenance costs and miscellaneous. Our corporate owned and managed centers operate in substantially the same manner as our franchised centers and we believe these expenses are consistent with those incurred by our franchisees. Because our franchisees are not required to give us this level of detail as to their revenues and expenses, we cannot tell you how many of our franchisees exceeded the projected revenues or projected EBITDA. STATEMENT OF ANNUAL PROJECTED REVENUES AND EARNINGS FOR AN ANYTIME FITNESS CENTER IMPLEMENTING THE TRAINING SUITE The following are statements of projected annual revenues and earnings for a franchised Anytime Fitness center that implemented the Training Suite. These projections are based on revenue information provided to us in 2018 by our proprietary software and designated billing processor for a subset of 510 franchisees in the United States who have implemented the Training Suite for a minimum of 24 months and earned at least $1,500 per month in personal training revenue during that period. We have listed below 3 projections, one based on a center having 500 members, one based on 941 members, and one based on 1,150 members. Of the 510 Anytime Fitness clubs who have implemented the Training Suite for a minimum of 24 months and earned at least $1,500 per month in personal training revenue as of February 28, 2019, the number of members for these clubs ranged from 286 to 2,928. As measured on February 28, 2019 this subset of clubs had an average member count of 941; the member count on this date ranged from 270 to 3,103 and the median was 863. The first example, for a 500-member club, is intended to give you an idea of the revenues, expenses and projected income of a club that performs well below our average but is still profitable. Of these 510 clubs, 473 (93%) had an average of over 500 members as measured on February 28, 2019. The 941- member example will give you an idea of the revenues, expenses and income of a club that is able to maintain, throughout the year, the average number of members of the Anytime Fitness clubs who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue as of February 28, 2019. Of the 510 Anytime Fitness clubs who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue as of February 28, 2019, 206 (40%) had an average of over 941 members, as measured on February 28, 2019. The 1,150-member example gives you an idea of the revenues, expenses and profitability of a high achieving club. Of the 510 Anytime Fitness clubs who have implemented the Training Suite for a minimum of 24 months and earn at least $1,500 per month in personal training revenue as of February 28, 2019, 121 (24%) had an average of over 1,150 members as measured on February 28, 2019. PRESALE HISTORIC RESULTS We encourage our centers to begin selling memberships 60 days before their projected opening. Doing so gives the center an immediate cash flow upon opening, because these members pay their monthly membership fees, in advance, starting on the day the center opens for business. Among the 127 franchised Anytime Fitness centers that opened in 2018, the presale memberships ranged from a low of 12, to a high of 644, with an average of 160 and a median of 112. Of the 127 centers, 44 (35%) had more than 160 pre-opening members when the center opened. Some outlets have sold this amount. There is no assurance you will do as well. If you rely upon our figures, you must accept the risk of not doing as well. Written substantiation for the financial performance representations made in this Item 19 will be made available to you upon reasonable request. We recommend you use QuickBooks Online as your accounting system. Most of the centers we used in compiling these projections used the accounting system we and our affiliates use in centers we operate. That system is consistent with generally accepted accounting principles. We provided substantially the same services to those centers as we will offer to you. All of these centers offered substantially the same products and services as you are expected to offer. We do not furnish or authorize our salespersons to furnish any other oral or written information concerning the actual, average or potential sales, costs, income or profits of an Anytime Fitness or Anytime Fitness Express business. If you receive any other oral or written information concerning the actual, average or potential sales, income or profits of an Anytime Fitness or Anytime Fitness Express center from any of our representatives, or from a person claiming to act on our behalf, you should immediately report that incident to us, as we have not authorized that information. You should not rely on any oral or written estimate or projection of sales, income or profits, or statement of actual, average, estimated or potential sales, income or profits of an existing or future Anytime Fitness or Anytime Fitness Express center, because reliance on that information would not be reasonable in light of the fact that we have not authorized that information to be provided to you or to any other prospective franchisee. Other than the preceding financial performance representations, Anytime Fitness does not make any financial performance representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor’s management by contacting General Counsel James Goniea, at 111 Weir Drive, Woodbury, Minnesota 55125, telephone: (651) 438-5000, the Federal Trade Commission, and the appropriate state regulatory agencies.