F45 Training FDD Item 17 is the section of the Franchise Disclosure Document that defines the three most consequential exit-related provisions in the franchise relationship: under what conditions can you renew your franchise, under what conditions can F45 terminate your franchise, and under what conditions can you sell or transfer your franchise to a third party. For a brand that has experienced multiple lawsuits from franchisees, significant studio closures, and corporate upheaval since its founding in Australia, these provisions are not theoretical. They are the legal framework that determines whether you can stay, whether you can leave, and what happens to your $299,950 to $549,950 investment in either scenario. At Lopes Law LLC, Item 17 analysis is a core component of every F45 FDD review we conduct because these provisions directly determine whether a franchisee retains any meaningful leverage over the life of the investment.

F45 Training, backed by celebrity investor Mark Wahlberg, grew rapidly from its Australian origins to approximately 1,700+ locations globally. The brand’s 45-minute group functional training model generated significant buzz and attracted a wave of franchisees drawn by the celebrity association and the boutique fitness trend. However, the rapid expansion was followed by a period of significant franchisee closures, corporate restructuring, and litigation. Multiple franchisee lawsuits have alleged misrepresentation of financial performance, failure to deliver promised support, and aggressive territory saturation. In this context, the renewal, termination, and transfer provisions in Item 17 take on heightened importance because they define what happens when the franchise relationship breaks down.

What Is FDD Item 17 and Why Does It Matter for F45 Training?

Item 17 of any Franchise Disclosure Document is titled “Renewal, Termination, Transfer, and Dispute Resolution.” The FTC Franchise Rule (16 C.F.R. Part 436) requires franchisors to disclose the specific provisions governing each of these topics. Unlike most FDD items that describe the franchise opportunity at the point of purchase, Item 17 governs the entire lifecycle of the franchise relationship from renewal through exit.

For F45 Training specifically, Item 17 matters because the brand’s turbulent corporate history means franchisees are more likely to encounter situations where these provisions come into play. A franchisee whose studio is underperforming may need to sell. A franchisee facing termination threats needs to understand what triggers are valid and what cure rights exist. A franchisee approaching the end of the franchise term needs to evaluate whether renewal makes financial sense given the terms being offered. In every scenario, the language in Item 17 determines the franchisee’s options.

The total investment for an F45 franchise ranges from $299,950 to $549,950, with a $50,000 franchise fee and ongoing obligations of 7% royalty plus 2% advertising fund contribution on gross sales. These financial commitments make the exit provisions critically important because a franchisee who cannot sell, cannot renew on reasonable terms, or faces termination risks losing the entire investment.

What Are the Renewal Conditions for an F45 Training Franchise?

Renewal is the process by which a franchisee extends the franchise agreement beyond its initial term. For F45 Training, renewal is not automatic. It is a conditional right that requires the franchisee to meet specific criteria and the franchisor to approve the renewal on terms that may differ significantly from the original agreement.

Key renewal conditions typically found in F45 franchise agreements include:

• Compliance with all agreement terms: The franchisee must be in good standing at the time of renewal. Any outstanding defaults, unpaid fees, or unresolved compliance issues can be grounds for denial of renewal.
• Signing the then-current franchise agreement: This is one of the most significant renewal provisions. Upon renewal, the franchisee typically must sign whatever version of the franchise agreement F45 is using at the time. This new agreement may contain different royalty rates, territory provisions, operational requirements, or other material terms. The deal you signed is not necessarily the deal you renew under.
• Payment of a renewal fee: F45 typically charges a fee to process the renewal, which is separate from any ongoing royalty or advertising obligations.
• Studio renovation and modernization: The franchisor may require the franchisee to update the studio to meet current brand standards, including new equipment, signage, technology systems, and interior design specifications. These renovations can represent a significant capital expenditure at the point where the franchisee might have been hoping to recoup their initial investment.
• Meeting performance standards: If the franchise agreement includes minimum performance thresholds (membership targets, revenue minimums, or operational benchmarks), the franchisee may need to demonstrate compliance with those standards to qualify for renewal.
• Advance notice requirements: Renewal typically requires written notice within a specified window (often 6 to 12 months before the franchise term expires). Missing this window can forfeit the renewal right entirely.

What Are the Termination Triggers in an F45 Franchise Agreement?

Termination provisions define the circumstances under which F45 Training can end the franchise relationship before the agreement’s natural expiration. These provisions typically fall into two categories: termination with a cure period (where the franchisee has an opportunity to fix the problem) and termination without a cure period (where the franchisor can terminate immediately).

Termination Triggers That Typically Allow a Cure Period

• Failure to pay fees: If a franchisee falls behind on royalty payments, advertising fund contributions, technology fees, or other financial obligations, the franchisor typically provides a specified cure period (often 10 to 30 days) to bring the account current before termination.
• Operational standards violations: Failure to maintain F45’s brand standards, class quality requirements, equipment maintenance, or other operational benchmarks typically triggers a notice and cure period.
• Insurance lapses: Failure to maintain required insurance coverage may trigger a short cure period for the franchisee to reinstate coverage.
• Failure to meet performance minimums: If the agreement includes performance thresholds, falling below those minimums may trigger a cure period.

Termination Triggers That May Permit Immediate Termination

• Bankruptcy or insolvency: If the franchisee files for bankruptcy, is adjudicated insolvent, or makes an assignment for the benefit of creditors, the franchisor may terminate immediately without providing a cure period.
• Unauthorized transfer: Transferring the franchise, the franchise agreement, or a controlling ownership interest without the franchisor’s prior written consent is typically grounds for immediate termination.
• Conviction of a felony or crime of moral turpitude: Criminal convictions that could harm the brand’s reputation may trigger immediate termination.
• Repeated defaults: If the franchisee cures a default but then commits the same or a similar default within a specified period (often 12 months), the franchisor may terminate without providing another cure opportunity.
• Misrepresentation in the franchise application: If the franchisor discovers material misstatements in the original franchise application, the agreement may be terminated immediately.
• Abandonment: Ceasing operations for a specified number of consecutive days without the franchisor’s approval is typically grounds for immediate termination.

Given F45’s history of multiple lawsuits from franchisees alleging corporate misrepresentation and failure to deliver promised support, the termination provisions create an asymmetry that warrants careful scrutiny. The franchisor holds a comprehensive set of termination triggers, while the franchisee’s ability to exit the agreement is governed by the much more restrictive transfer provisions.

What Are the Transfer Restrictions for an F45 Franchise?

Transfer provisions govern whether and how a franchisee can sell or assign the franchise to a third party. For an investment of $299,950 to $549,950, the ability to recoup some or all of that investment through a sale is a critical consideration. F45’s transfer restrictions typically include the following requirements:

• Franchisor approval required: F45 must approve any proposed transfer and any proposed buyer. The franchisor has broad discretion to evaluate the buyer’s qualifications, financial capacity, and suitability for the F45 system.
• Buyer must meet current qualifications: The buyer must satisfy F45’s then-current standards for new franchisees, which may have changed since the original franchisee signed. This effectively gives the franchisor a gatekeeping function over any sale.
• Buyer must sign the then-current franchise agreement: Just as with renewal, the buyer must sign whatever version of the franchise agreement is in effect at the time of transfer. This means the buyer may face different fee structures, territory provisions, or operational requirements than the selling franchisee had.
• Transfer fee payment: A transfer fee is typically required to process the transfer. This fee comes from the transaction proceeds and reduces the net amount the selling franchisee receives.
• Selling franchisee must be current on all obligations: All royalties, advertising contributions, technology fees, and other financial obligations must be paid in full before the transfer can proceed.
• General release required: The selling franchisee is typically required to sign a general release of all claims against the franchisor as a condition of the transfer. This means that any grievances, disputes, or potential claims the franchisee may have against F45 are extinguished upon sale.
• Right of first refusal: F45 typically retains a right of first refusal on any proposed transfer. When the franchisee receives a bona fide third-party offer, F45 can match that offer and acquire the franchise themselves on the same terms.

The right of first refusal deserves particular attention for F45 franchisees. This provision means that even after you negotiate a deal with a buyer, F45 can step in and acquire the franchise at the agreed price. This can have a chilling effect on the transfer process because potential buyers may be reluctant to invest time and resources negotiating a deal that the franchisor can simply take over. It also gives the franchisor significant leverage in any transfer negotiation.

If you are currently an F45 franchisee considering a sale, transfer, or exit, a franchise exit audit is an important first step to understanding your options and the practical implications of the transfer restrictions in your specific agreement.

What Happens After Termination or Non-Renewal of an F45 Franchise?

Post-termination obligations define what the former franchisee must do and must not do after the franchise relationship ends. For F45 Training, these obligations typically include:

• Non-compete covenant: The former franchisee is typically prohibited from operating a competing fitness business within a defined geographic area for a specified period after termination. This covenant can prevent you from opening an independent gym or joining a competing fitness franchise in the same market, which means you may lose not only your F45 investment but also your ability to leverage the fitness industry expertise you have developed.
• De-identification: All F45 branding, signage, proprietary materials, workout programming, and marketing materials must be removed from the studio. The studio must be stripped of all F45 identity, even if the former franchisee continues to lease the same space for a different purpose.
• Return of proprietary property: All F45 proprietary materials, including workout programming content, member management software access, and any other intellectual property, must be returned or deleted.
• Payment of outstanding obligations: All unpaid royalties, advertising contributions, technology fees, and any damages owed under the franchise agreement must be paid in full.
• Member data: The franchise agreement may restrict or prohibit the former franchisee from retaining or using member data that was collected through F45’s systems. This can prevent you from marketing to existing members if you open a competing fitness business.

How Does F45’s Corporate History Affect Item 17 Analysis?

F45 Training’s corporate trajectory has been marked by rapid expansion fueled by celebrity investment, followed by franchisee distress, multiple lawsuits, and significant closures. This pattern is directly relevant to Item 17 because:

• Renewal risk is elevated: If F45 has modified its franchise agreement since your original signing, the terms you face at renewal may be materially different and potentially less favorable. Corporate restructuring often leads to changes in fee structures, operational requirements, and territory provisions.
• Termination risk is real: Franchisees whose studios are underperforming face the dual risk of financial distress and termination. If the franchisor terminates the agreement, the non-compete covenant restricts the franchisee’s ability to continue in the fitness industry, and the general release required upon transfer means the franchisee may not be able to pursue claims against the franchisor.
• Transfer market may be challenging: In a franchise system experiencing closures and negative publicity, finding a qualified buyer willing to invest $299,950 to $549,950 can be difficult. The right of first refusal gives F45 additional leverage in a market where the pool of willing buyers may already be limited.

For perspective on franchise system distress, Dickey’s Barbecue Pit recorded 27 SBA loan defaults, and Patrice & Associates showed a 31% failure rate. When franchise systems experience distress, the Item 17 provisions determine whether franchisees can exit with any portion of their investment intact or whether they are locked into an underperforming system with limited options.

What Should Prospective F45 Franchisees Negotiate in Item 17?

While franchise agreements are typically presented on a take-it-or-leave-it basis, some franchisors will negotiate specific provisions, particularly for experienced or multi-unit operators. For F45 Training Item 17, consider asking for:

• Renewal on the same terms: Request that renewal be on substantially the same terms as the original agreement, rather than requiring the then-current agreement. This protects you from adverse changes the franchisor may make to the standard agreement during your franchise term.
• Extended cure periods: Negotiate for longer cure periods on operational and financial defaults, particularly during the first 12 to 18 months when the studio is building its membership base.
• Narrower non-compete: Request a more limited geographic scope or shorter duration on the post-termination non-compete covenant. The enforceability of non-competes varies significantly by state, and a narrower covenant is more likely to be enforceable if challenged.
• Waiver of right of first refusal: In some cases, franchisors will agree to waive or limit the right of first refusal, particularly if the transfer is to a family member or existing F45 franchisee.
• Mutual termination right: Request a provision that allows the franchisee to terminate the agreement if the franchisor fails to provide material obligations, such as workout programming, technology platform access, or national marketing support.

At Lopes Law LLC, we handle franchise agreement negotiations for clients investing in F45 and other franchise systems nationally. Our experience with franchise agreement language across hundreds of FDDs gives us practical insight into what provisions franchisors are willing to modify and what approaches are most effective.

Frequently Asked Questions About F45 Training FDD Item 17

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Last updated: March 11, 2026