Dependence on Franchise Sales and Strong Leadership: Our business relies on attracting franchisees who are committed to building and managing their own VERSAGYM franchises. While our mobile gym model is designed to simplify franchise ownership, its success depends on an effective leadership team to support and guide our franchisees. Without consistent franchisee performance and strong leadership, our growth could be limited.

Revenue Model Reliant on Franchisee Success: Our revenue is primarily derived from franchise fees, profit from VERSAGYM Sprinter sales, and monthly royalties. We aim to provide a sustainable model for single-unit and multi-unit franchisees, with royalties set at either 10% per month or a minimum of $650, whichever is higher. It’s important to note that our returns depend on the financial performance of each franchisee, and fluctuations in this area could impact overall profitability. Ensuring franchisee success will be essential to our brand’s sustainability and our ability to fulfill investor expectations.

We’re in the early stages of securing a manufacturer for our new VERSAGYM Sprinters. We anticipate a competitive bidding process as manufacturers vie for the contract, and while these negotiations will directly impact our profit margins, we cannot make any guarantees at this time. Our goal remains to partner with a manufacturer who meets our quality standards and offers terms that support strong profitability.