In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for an M14 Hoops franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for an M14 Hoops franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned M14 Hoops outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the M14 Hoops franchise opportunity

Section V – Presentation and analysis of M14 Hoops’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2021, 2022, and 2023 average gross sales, cost of goods sold, gross profit, disclosed expenses, franchise adjustment, and adjusted profit for the two company-owned M14 Hoops outlets in Indianapolis, Indiana that were open for the entire applicable calendar year and are representative of the franchise that M14 Hoops offers under the Disclosure Document

• 2023 annual gross sales, cost of goods sold, gross profit, disclosed expenses, and adjusted profit for the one franchised M14 Hoops outlet in Milwaukee, Wisconsin that was open for the entire 2023 calendar year

Section VI – Key ratios, comparables, computations, and analyses for the M14 Hoops franchise opportunity (exclusive content for Platinum subscribers)

Section I – M14 Hoops Franchise Costs

• M14 Hoops franchise costs, based on Item 7 of the company’s 2024 FDD:

• Initial Franchise Fee:  $49,500
• Travel for Owner’s Initial Training:  $500 to $4,000
• Travel for New Hire Process:  $500 to $2,500
• Initial Head Trainer/Director of Basketball Operations (“DBO”) Training:  $20,000
• Travel for Head Trainer/DBO Initial Training:  $1,500 to $5,000
• Initial Marketing:  $6,500 to $10,000
• Furniture and Fixtures, Equipment, Signage, and Office Supplies:  $1,000 to $3,500
• Computer and Software System:  $2,250 to $4,250
• Insurance Deposits – 3 Months:  $80 to $250
• Professional Fees:  $500 to $3,000
• Licenses and Permits:  $50 to $500
• Additional Funds – 3 Months:  $15,000 to $25,000
• Total Estimated M14 Hoops Franchise Costs:  $97,380 to $127,500

Section II – M14 Hoops’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• M14 Hoops’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2024 FDD:

• Initial Franchise Fee:  $49,500
• Royalty Fee:  8% of weekly Gross Sales, subject to a quarterly Minimum Royalty
• Minimum Royalty:  the annual Minimum Royalty for one Territory shall be as follows: Year 1: $0; Year 2: $8,000 ($2,000/quarter); Year 3: $16,000 ($4,000/quarter); Years 4-10: $24,000 ($6,000/quarter)
• Brand Development Fund:  not currently assessed; up to 1% of Gross Sales
• Local Marketing:  not currently required; may be adjusted to 1% of Gross Sales
• Local and Regional Advertising Cooperatives:  as established by cooperative members, up to 2% of Gross Sales

Section III – Number of Franchised and Company-Owned M14 Hoops Outlets

Franchised

2021

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2022

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  1
• Net Change:  +1

2023

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  7
• Net Change:  +6

Company-Owned

2021

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

2022

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

2023

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  3
• Net Change:  +1

Section IV – News Updates on the M14 Hoops Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the M14 Hoops Franchise (Item 19, 2024 FDD)

• 2021 Measurement Period refers to the period of January 1, 2021, through December 31, 2021. 2022 Measurement Period refers to the period of January 1, 2022, through December 31, 2022. 2023 Measurement Period refers to the period of January 1, 2023, through December 31, 2023.

• Adjusted Profit means Gross Profit less Disclosed Expenses and Adjustment. Adjusted Profit is not equal to net profit or income and, except as to Cost of Goods and Services Sold and Disclosed Expenses, does not include the deduction of all other expenses incurred by an M14 Hoops Business including, but not limited to, other operating expenses, interest, taxes, depreciation, and amortization.

• Adjustments for Franchisee Related Expenses are for expenses that you will be required to pay to M14 Hoops as a franchisee but that were not incurred by the Company-Owned Outlet.

• Company-Owned Outlet means an Outlet owned either directly or indirectly by M14 Hoops, its affiliate, or any person identified in Item 2 of the Disclosure Document. A Company-Owned Outlet also includes any Outlet that is operated as a joint venture owned in part by M14 Hoops, its affiliate, or any person identified in Item 2 of the Disclosure Document, or that is managed by M14 Hoops, its affiliate, or any person identified in Item 2.

• Costs of Goods and Services Sold means the direct non-managerial and non-administrative cost of goods sold and labor incurred by an Outlet in directly performing Approved Services and Products resulting in Gross Sales. Cost of Goods and Services Sold do not include managerial expenses, administrative expenses, Disclosed Expenses, general expenses, or operating expenses.

• Disclosed Expenses refers to a limited selection of expenses as disclosed in the tables to this Item 19, comprised of the following select expense categories: rent, utilities, facility maintenance, insurance, computer and internet, marketing, office supply expenses, vehicle expenses, and franchisor-related charges for contact center fees, technology fees, brand development fund fees, and royalty fees.

• Franchise Outlet refers to an M14 Hoops Business operated under a Franchise Agreement that is not a Company-Owned Outlet.

• Gross Profit means Gross Sales less Cost of Goods and Services Sold.

• Gross Sales means the total revenue derived by each outlet less sales tax, discounts, allowances, and returns.

• The financial information was prepared on a basis consistent with generally accepted accounting principles during the respective measurement periods. The information in this analysis has not been audited, and is based on historical financial data.

• During the 2021 Measurement Period, M14 Hoops did not have any Franchise Outlets. During the 2022 Measurement Period, M14 Hoops did not have any Franchise Outlets that were open and in operation at the start of the Measurement Period. During the 2023 Measurement Period, M14 Hoops had one Franchise Outlet open at the start of the Measurement Period. The information reported in this Item 19 relates to M14 Hoops’ Company-Owned Outlets and the one Franchise Outlet open for the entire 2023 Measurement Period.

Part 1 – Gross Sales, Cost of Goods Sold, and Disclosed Expenses of Indy Company-Owned Outlets for the 2021, 2022, and 2023 Measurement Periods (Utilizes Short-Term Gym Rental Facilities)

• M14 Hoops has three Company-Owned Outlets. The first Company-Owned Outlet is located in Chicago, Illinois (“Chicagoland Outlet”). The Chicagoland Outlet has been in operation since October 2015. The Chicagoland Outlet is not representative of the franchise that M14 Hoops offers under the Disclosure Document as it occupies and operates out of a dedicated 53,000 square foot basketball facility. M14 Hoops does not disclose any financial performance data of its Chicagoland Outlet.

• The second Company-Owned Outlet is located in Indianapolis, Indiana maintaining a physical office location in Fishers, Indiana. Fishers, Indiana is a suburb of Indianapolis, Indiana (“Indy Westfield Outlet” and “Indy Noblesville Outlet”, collectively, “Indy Company-Owned Outlets”). Neither of the Indy Company-Owned Outlets have a dedicated basketball facility and provide Approved Services and Products from third-party sites. The Indy Company-Owned Outlets are representative of the franchise that M14 Hoops offers under the Disclosure Document.

• The Indy Company-Owned Outlets have been in operation since January 2016 as the Indy Noblesville Outlet which separated its operations into the Indy Westfield Outlet and Indy Noblesville Outlet beginning in 2024.

• The Indy Company-Owned Outlets operate in a market where the M14 Hoops brand maintains significant awareness among consumers and a significant market presence for over six years. The territories in which these Company-Owned Outlets operate includes approximately 800,000 total people with a Territory approximately comprised of one Territory for each.

• Below, M14 Hoops reports select financial performance data of its Indy Company-Owned Outlets for the 2021 Measurement Period, 2022 Measurement Period, and 2023 Measurement Period.

Indy Company-Owned Outlets: Combined

2021

Gross Sales

• Programs and Instruction:  $1,097,671 (99.9%)
• Miscellaneous Sales:  $645 (0.1%)
• Total Gross Sales:  $1,098,316 (100.0%)

Cost of Goods Sold

• Hourly Trainer Labor:  $115,874 (10.6%)
• Gym Rental:  $199,978 (18.2%)
• Miscellaneous Fees:  $1,600 (0.1%)
• Credit Card Processing Fees:  $31,878 (2.9%)
• Cost of Merchandise Sold:  $1,492 (0.1%)
• Supplies and Equipment:  $706 (0.1%)
• Total Cost of Goods Sold:  $351,528 (32.0%)

Gross Profit:  $746,788 (68.0%)

Disclosed Expenses

• Direct (Full-Time) Labor:  $93,828 (8.5%)
• Uniforms:  $15,392 (1.4%)
• Office Supplies:  $9,431 (0.9%)
• Telephone:  $7,496 (0.7%)
• Rent (Office):  $6,560 (0.6%)
• Professional Services:  $7,844 (0.7%)
• Advertising and Marketing:  $7,255 (0.7%)
• Travel and Meals:  $6,179 (0.5%)
• Insurance:  $2,539 (0.2%)
• Computer and Internet:  $3,715 (0.3%)
• Auto Expense:  $3,652 (0.3%)
• Staff Development and Training:  $693 (0.1%)
• Other Expenses:  $6,233 (0.6%)
• Total Expenses:  $170,817 (15.6%)

Adjustment (Disclosed Expenses Not Paid by Company-Owned Outlet But Charged to Franchisees)

• Royalty Fee:  $87,865 (8.0%)

Adjusted Profit:  $488,106 (44.4%)

2022

Gross Sales

• Programs and Instruction:  $1,196,004 (99.8%)
• Miscellaneous Sales:  $2,124 (0.2%)
• Total Gross Sales:  $1,198,253 (100.0%)

Cost of Goods Sold

• Hourly Trainer Labor:  $112,549 (9.4%)
• Gym Rental:  $205,516 (17.2%)
• Miscellaneous Fees:  $0 (0.0%)
• Credit Card Processing Fees:  $38,028 (3.2%)
• Cost of Merchandise Sold:  $3,071 (0.3%)
• Supplies and Equipment:  $564 (0.0%)
• Total Cost of Goods Sold:  $359,728 (30.0%)

Gross Profit:  $835,525 (69.7%)

Disclosed Expenses

• Direct (Full-Time) Labor:  $145,723 (12.2%)
• Uniforms:  $19,041 (1.6%)
• Office Supplies:  $7,109 (0.6%)
• Telephone:  $6,162 (0.5%)
• Rent (Office):  $9,486 (0.8%)
• Professional Services:  $13,401 (1.1%)
• Advertising and Marketing:  $8,079 (0.7%)
• Travel and Meals:  $5,929 (0.5%)
• Insurance:  $4,139 (0.3%)
• Computer and Internet:  $1,448 (0.1%)
• Auto Expense:  $5,130 (0.4%)
• Staff Development and Training:  $0 (0.0%)
• Other Expenses:  $26,651 (2.2%)
• Total Expenses:  $252,298 (21.1%)

Adjustment (Disclosed Expenses Not Paid by Company-Owned Outlet But Charged to Franchisees)

• Royalty Fee:  $95,860 (8.0%)

Adjusted Profit:  $487,367 (40.7%)

2023

Gross Sales

• Programs and Instruction:  $1,423,232 (99.9%)
• Miscellaneous Sales:  $1,425 (0.1%)
• Total Gross Sales:  $1,424,657 (100.0%)

Cost of Goods Sold

• Hourly Trainer Labor:  $0 (0.0%)
• Gym Rental:  $326,447 (22.9%)
• Miscellaneous Fees:  $2,614 (0.2%)
• Credit Card Processing Fees:  $45,600 (3.2%)
• Cost of Merchandise Sold:  $24,686 (1.7%)
• Supplies and Equipment:  $5,107 (0.4%)
• Total Cost of Goods Sold:  $404,454 (28.4%)

Gross Profit:  $1,020,203 (71.6%)

Disclosed Expenses

• Direct (Full-Time) Labor:  $363,369 (25.5%)
• Uniforms:  $0 (0%)
• Office Supplies:  $13,566 (1.0%)
• Telephone:  $5,520 (0.4%)
• Rent (Office):  $645 (0.0%)
• Professional Services:  $30,544 (2.1%)
• Advertising and Marketing:  $31,112 (2.2%)
• Travel and Meals:  $10,724 (0.8%)
• Insurance:  $5,323 (0.4%)
• Computer and Internet:  $5,998 (0.4%)
• Auto Expense:  $7,055 (0.5%)
• Staff Development and Training:  $0 (0%)
• Other Expenses:  $39,237 (2.8%)
• Total Expenses:  $513,094 (36.0%)

Adjustment (Disclosed Expenses Not Paid by Company-Owned Outlet But Charged to Franchisees)

• Royalty Fee:  $113,973 (8.0%)

Adjusted Profit:  $393,136 (27.6%)

• Direct Labor includes the wages paid to coaches and instructors including the applicable employer taxes. Owner compensation is not included in Part 1.

• Gym Rental represents the amounts paid for short-term rental of gym facilities where instructional and camp sessions are held.

• Outside Services represents amounts paid to non-employee coaches and instructors.

• Adjustments for Franchisee-Related Expenses are for expenses that you will be required to pay to M14 Hoops as a franchisee but that were not incurred by the Company-Owned Outlet.

• The recurring monthly Royalty Fee is equal to 8% of Gross Sales.

• M14 Hoops does not collect a marketing fund from its franchisees so it did not subtract a marketing fund from this data.

Part 2 – Gross Sales, Cost of Goods Sold, and Disclosed Expenses Franchised Outlet for the 2023 Measurement Period (Utilizes Short Term Gym Rental Facilities)

Franchised Outlet: Milwaukee, WI

2023

Gross Sales

• Programs and Instruction:  $130,675 (99.9%)
• Miscellaneous Sales:  $152 (0.1%)
• Total Gross Sales:  $130,828 (100.0%)

Cost of Goods Sold

• Hourly Trainer Labor:  $13,632 (10.4%)
• Gym Rental:  $33,259 (25.4%)
• Credit Card Processing Fees:  $4,902 (3.7%)
• Cost of Merchandise Sold:  $5,135 (3.9%)
• Supplies and Equipment:  $0 (0.0%)
• Royalty Fees:  $11,446 (8.7%)
• Total Cost of Goods Sold:  $68,374 (52.3%)

Gross Profit:  $62,454 (47.7%)

Disclosed Expenses

• Direct (Full-Time) Labor:  $66,908 (51.1%)
• Uniforms:  $458 (0.4%)
• Office Supplies:  $106 (0.1%)
• Telephone:  $0 (0.0%)
• Rent (Office):  $0 (0.0%)
• Professional Services:  $4,071 (3.1%)
• Advertising and Marketing:  $5,931 (4.5%)
• Travel and Meals:  $250 (0.2%)
• Insurance:  $1,677 (1.3%)
• Computer and Internet:  $657 (0.5%)
• Auto Expense:  $0 (0%)
• Staff Development and Training:  $5,000 (3.8%)
• Other Expenses:  $6,065 (4.6%)
• Total Expenses:  $91,124 (69.7%)

Adjusted Profit:  $28,670 (-21.9%)

• Some outlets have earned this amount. Your individual results may differ. There is no assurance that you will earn as much.

Section VI – M14 Hoops Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️