ANYTIME FITNESS FRANCHISE DISCLOSURE DOCUMENT

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ANYTIME FITNESS, INC. STATEMENT OF CASH FLOWS For The Year Ended December 31, 2008 SEE INDEPENDENT AUDITOR'S REPORT Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flows from operating activities: Depreciation Amortization Gain on sale of property and equipment Changes in assets and liabilities: Initial franchise receivables Other receivables Prepaid expense and other current assets Deferred revenue Advertising obligation Accounts payable and other accrued expenses Net cash flows provided by operating activities Cash flows from investing activities: Purchases of property and equipment Proceeds from sale of property and equipment Purchase of goodwill Change in rent deposits Change in due from related party Net cash flows provided by investing activities Cash flows from financing activities: Principal payments under capital lease obligations Proceeds from issuance of long-term debt Principal payments on long-term debt _ Distributions paid Net cash flows used in financing activities Net increase in cash Cash - beginning of year Cash - end of year Supplemental disclosures of cash flow information: Cash paid for interest Supplemental schedule of noncash investing and financing activities: Equipment acquisition financed with a note payable Issuance of note receivable for club rights Assets contributed by shareholders Debt contributed by shareholders Receivables contributed by shareholders The accompanying notes are an integral part of these financial statements. 8 Statement 4 2008 $6,443,212 279,738 1,410 (922,097) 155,719 (43,110) (111,768) 60,000 372,246 148,643 6,383,993 (8,542) 1,367,795 (31,071) (1,562) (417,003) 909,617 (312,952) 152,387 (301,518) (6,475,160) (6,937,243) 356,366 206,872 $563,238 $76,084 $590,716 $52,500 $252,841 $115,532 $137,407
ANYTIME FITNESS, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2008 Note 1 NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS Anytime Fitness, Inc. was incorporated in February of 2002. The Company franchises the right to open, operate and manage fitness centers in exclusive territories in the United States, Canada and Australia. The initial franchise fee associated with buying a franchise varies depending on the circumstances. The fee for a new franchise is $14,999 for a regular fitness center. Actual investment costs experienced by a franchisee can vary significantly depending on a host of variables, including: lease expense, equipment purchases, fixtures and leasehold improvements. The Company must approve the lease agreement signed by the franchisee and provide training to all franchisees. If a suitable site cannot be agreed on with in 60 days of signing the franchise agreement, a refund of up to $5,000 can be requested. The initial franchise fee paid above the $5,000 is retained by the Company. There is a monthly franchise fee of $359 to $419 depending on when the franchise agreement was signed. Franchisees are also required to pay a monthly national advertising fee of$150, this amount is used for current and future advertising and marketing campaigns. Additional local advertising costs may apply. The Company provides, opens, buys and operates fitness centers of its own. These fitness centers are subject to the same monthly fee structure as other franchisees. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United State of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly assesses these estimates and, while actual results could differ, management believes that the estimates are reasonable. CASH The Company maintains its cash in financial institutions which, at times, may exceed federally insured limits of $250,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant cash credit risk. The Company considers all highly liquid investments available for current use with an initial maturity of three months or less to be cash and cash equivalents. ACCOUNTS RECEIVABLE Accounts receivable evolve in the normal course of business. It is the policy of management to review the outstanding accounts receivable at year end, as well as the bad debt expenses in the past, and establish an allowance for doubtful accounts for uncollectible amounts, if necessary. IMPAIRMENT OF LONG-LIVED ASSETS AND INTANGIBLE ASSETS In 2007, the Company paid and capitalized fees for the development ofintemational trademarks which have indefinite lives. 9
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ANYTIME FITNESS FRANCHISE DISCLOSUR
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ANYTIME FITNESS, LLC FRANCmSE DISCL
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operations and licenses. Many state
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1. Anytime Fitness, Inc. v. Reserve
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If you are an existing franchisee t
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Type of Fee (Note 1) Amount (Note 2
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AMOUNT TYPE OF ANYTIME METHOD TO WH
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(7) We require you have an automate
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We may negotiate preferred vendor c
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Section in Franchise Section in Dev
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Under the personal guaranty, which
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$150,000 per location. Gaia will ty
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ITEM 11. FRANCmSOR'S ASSISTANCE, AD
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Name Subjects Taught Background Deb
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the initial training, will provide
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services to the fund. We will not s
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ITEM 13. TRADEMARKS The Franchise A
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Provision b. Renewal or extension o
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Section in Franchise or Provision O
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Section in Franchise or Provision O
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ACCOUNTANT HAS AUDITED THESE FIGURE
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the third (800 members) column. Bec
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State Year Number of Transfers 2006
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Reacquired Ceased Outlets by the Op
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Outlets Outlets at Reacquired Outle
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Name l City and State Telephone Num
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Name l City and State Telephone Num
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FDD EXHIBIT A LIST OF STATE AGENCIE
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Virginia State Corporation Commissi
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FDD EXHIBITB TABLE OF CONTENTS OF O
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150 -151 152 153 153 154 -160 161 -
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FDD EXHIBITC LIST OF FRANCmSEES AS
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Name Scott & Shelby Mitteer Shane M
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Name Address Telephone GymDay Corp.
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Name Address Telephone Full of Life
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Name Address Telephone Colorado 534
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Name Address Telephone Good Life Ve
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Name Address Telephone H-I02 Inc. 1
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Name Address Telephone Chris Naples
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Name Address Telephone Bill Taylor
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Name Address Telephone Make It Happ
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Name Address Telephone Joe Koeppl 1
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Name Address Telephone Temple Keepe
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Name Address Telephone 7350 West St
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Name Address Telephone 24 Fitness,
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Name Address Telephone Dana Cates H
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Name Address Telephone Metairie Fit
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Name Address Telephone Ultimate Sec
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Name Address Telephone NK Fitness,
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Name Address Telephone FIF, Inc. 65
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Name Address Telephone J Abernethy,
Page 104 and 105: Name Address Telephone Kenneth & Kr
Page 107 and 108: Name Miranda Hills Miranda Hills Mi
Page 109 and 110: Name Address Telephone Kenny Stubbl
Page 111 and 112: Name Address Telephone West-Am Fitn
Page 113 and 114: Name Address Telephone 24 Fitness,
Page 115 and 116: Name Address Telephone Clifford Pie
Page 117 and 118: Name Address Telephone Rick Whittin
Page 119 and 120: Name Address Telephone Effects Pers
Page 121 and 122: Name Address Telepbone RL W Enterpr
Page 123 and 124: Name Address Telephone Silent Owl,
Page 125 and 126: Name Address Telephone 2101 Broadwa
Page 127 and 128: Name Address Telephone Dennis Rudni
Page 129 and 130: Name Address Telephone Fitness 180,
Page 131 and 132: Name Address Telephone 1604 N Calab
Page 133 and 134: Name Address Telephone Jerry Greger
Page 135 and 136: Name Address Telephone CM Fitness,
Page 137 and 138: Name Address Telephone Erik Recende
Page 139: Name Address Telephone Helen Wada 1
Page 142: Name Address Telephone Scott Schimm
Page 145 and 146: FDD EXHIBITD FINANCIAL STATEMENTS
Page 147 and 148: ANYTIME FITNESS, INC. FINANCIAL STA
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Page 158 and 159: ANYTIME FITNESS, INC. NOTES TO FINA
Page 166 and 167: ANYTllvIE FITNESS, INC. FINANCIAL S
Page 173: SUPPLEMENTAL DISCLOSURES OF CASH FL
Page 182 and 183: FA 12/09 FRANCHISE AGREEMENT ANYTIM
Page 184 and 185: ANYTIME FITNESS FRANCHISE AGREEMENT
Page 186 and 187: fees and a modification to the Prot
Page 188 and 189: 5. MONTHLY FEE A. Monthly Fee. You
Page 190 and 191: 1. We will have ten (10) business d
Page 192 and 193: containing such Marks as we designa
Page 194 and 195: 1. You acknowledge that the mandato
Page 196 and 197: You will also allow us to visit you
Page 198 and 199: insurance program and waive any cla
Page 200 and 201: 7. prior to the date of the propose
Page 202 and 203: C. Applicable Law. If the provision
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17. YOUR COVENANTS NOT TO COMPETE A
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arbitration proceeding brought agai
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provisions relating to assignment.
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L. Patriot Act. You represent and w
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1. Effective Date: ________ _ FRANC
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PERSONAL GUARANTY AND AGREEMENT TO
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STATE SPECIFIC ADDENDUM TO FRANCHIS
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IN WITNESS WHEREOF, the undersigned
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STATE SPECIFIC ADDENDUM AS REQUIRED
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ADA 12/09 AREA DEVELOPMENT AGREEMEN
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ANYTIME FITNESS® AREA DEVELOPMENT
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provided, however, that you will no
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1. Effective Date: _______ _ AREA D
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PERSONAL GUARANTY AND AGREEMENT TO
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STATE SPECIFIC ADDENDUM TO DEVELOPM
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FDD EXHIBITG STATE SPECIFIC ADDENDA
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5. The Franchise Agreement contains
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TOGETHER WITH A COPY OF ALL PROPOSE
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exercising a right of first refusal
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6. The following is added in Item 1
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Financing Consultant Agreement You,
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FDD EXHffiITI-l US BANK FINANCE DOC
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FDD AMERIFUND FINANCE DOCUMENTS
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SCBEDULE"A" COLLATERAL For the Fina
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FDD ExmBIT 1-3-2
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REQUEST FOR DRIVER'S LICENSE Please
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FDD EXHIBIT 1-3-3
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(9) Lessee shall have no remedy for
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Purchase Option Lease #: _____ _ Fo
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FDD EXHIBIT 1-4 KLC FINANCIAL, INC.
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GAIA Leasing LLC 50 South Sixth Str
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11. Location, Ownership and Use The
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(b) The failure of Lessee to perfor
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EXHIBIT A EARLY TERMINATION SCHEDUL
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FDD EXHIBIT 1-6 LIFE FITNESS FINANC
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Re: "Obligor" Personal Guaranty To
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EQUIPMENT LEASE AGREEMENT THIS AGRE
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and Lessor. At Lessor's option, all
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(b) Lessee shall fail to make any o
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this Lease inures to the benefit of
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IF LESSEE IS OTHER THAN AN INDIVIDU
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EXHIBIT A AGREEMENT OF UNCONDITIONA
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FDD EXHIBIT J PROVISION SECURITY SO
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e. ProVision Materia/s. In connecti
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Hosting Services Fee = $19.99 Monit
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9. General a. Independent Contracto
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ITEM 23. RECEIPT This Disclosure Do
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ITEM 23. RECEIPT This Disclosure Do
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ANYTIME FITNESS FRANCHISE DISCLOSURE DOCUMENT

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