Acc/561 Cvp Analysis

CVP and Break-Even Analysis
Johnny Rodriguez, Lutwin Aldana, Mary Her, Nicole Sampson-Vargas, Tai Tu
April 8, 2013
Professor Myrtle Clark

Franchise Agreement: Would it be a good idea?
Hitting their 20 year mark last year in 2012, the Curves franchise has been successful in business all over the country. It was named the largest fitness franchise in the world with locations in over 90 countries (Curves, 2013). Curves have been a successful franchise because of their simple, quick workout program. The philosophy behind Curves is a focus on creating an exercise plan specifically for women. Their 30 minute workout program is designed to target the major muscle groups, burning 500 calories. In over just a year, the franchise grew to 50 franchise locations (Curves, 2013).
There are currently two ways to enter into the Curve Franchise. One is an investment in a new territory which cost approximately $30,000. This cost will cover the equipment. You must locate your own business location. The second option is to invest in an existing established club. The cost to enter the franchise this way will vary depending on club's location. Other fees associated with owning a club, but not included in the purchase price,   include monthly lease, other equipment, travels, utilities, local advertising, and third party vendor purchases (Curves, 2013). Franchise royalties are paid monthly and are based on 5% of the gross revenues, charging up to a maximum of $795.00 per month. Advertising royalties are also charged on a monthly basis of 3% of the gross revenues, charging a maximum of $395.00 per month.
Based on the information from the Curves Franchise, it appears that it would be a beneficial idea to enter into a franchise agreement verses going into an independent business. Franchises typically include businesses that have been in business long term. They have also marketed themselves and are well established in the community....