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PT Fit Redefined, LLC dba Koko FitClub Business Plan 2013 -14


Table of Contents I.

Executive Summary............................................................................................ ...2 Highlights Objectives Mission Statement Keys to Success

II.

Description of Business......................................................................................... 4 Company Ownership/Legal Entity Location Products and Services Management Start-Up/Acquisition Summary

III.

Marketing .............................................................................................................. 6 Market Analysis Market Segmentation Competition Analysis Sales Strategy and Implementation Competitive Edge SWOT Analysis

IV.

Financials Koko projections July 9 2013 150k


Executive Summary Company Overview The National Franchise Koko FitClub, LLC, with 150 locations nationwide, is a brand of personal training studios that allow franchises to provide premium customized strength utilizing patented SmarTraining, customized Cardio and customized nutritional plans for annual members at a cost of ONE MONTH compared to ONE HOUR of traditional personal training. PT Fit Redefined, LLC, formed December 25, 2010, was the first Franchise Area Developer in the Austin Market, and is currently operating three successful locations. The first FitClub location in Austin, Texas opened the doors in August, 2011. Due to tremendous growth and market acceptance, development plans began for a second FitClub location, which opened the doors in June, 2012. The second FitClub location is currently on record as the fastest franchisee to reach 100 members. As of June, 2013 Our Franchise group ranks #4 in the USA. The company’s rapid growth provided the momentum to develop plans for a third FitClub location, which opened the doors in November, 2012. PT Fit Redefined, LLC, by operating three successful locations with 710 total members, is currently generating sustained revenue due to recurring monthly profit at each of the three FitClub locations. PT Fit Redefined, LLC, is currently seeking $150,000 for exclusive use in retiring higher interest debt of $100,000 and marketing of $50,000 to fill all 3 clubs to capacity.

Highlights •

Sustained Profitability for 2013

Tied for 3rd Place - Koko Franchise Group in USA

High level employee commitment and performance

Extremely high Client retention & satisfaction

Objectives •

Obtain $150,000 Equity investment

$100k retires debt freeing up $5000 month cash flow

$ 50K marketing increases current clubs to 850 memberships

Increases monthly revenue to approx. $80,000/MTh by EOY 2013

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Mission Statement PT Fit Redefined, LLC was established to provide a venue and business opportunity that the owners could share their passion for fitness to bring about the life changing reality of health & wellness to their neighbors. Over the last couple of years the business grew and the Company is now seeking to bolster its existing businesses by running it to full member capacity and expanding franchisee operations in newer areas of Austin. From the new locations, the Company seeks to: •

Expand the Company’s brand in the Austin/Travis/Williamson county Market

Provide a steady year-round opportunity which will facilitate growth Provide a substantial return for all investors

Keys to Success PT Fit Redefined, LLC provides solutions and capitalizes on these opportunities with the following: 1. Results-With Koko, there's no wasted time. Every workout is designed for maximum effectiveness and efficiency. That's how Koko delivers the best results in the minimum time possible. In fact, one 30-minute Koko SmarTraining strength workout delivers the same benefits of up to 90 minutes of a typical gym workout for most people! And 15minutes of Koko Cardio is TWICE as effective as the typical treadmill or elliptical workout. With Koko, customers see and feel real results every single day. They can see them online, as each workout is scored for performance. 2. Motivation- By having the ability to track progress, and see how you stack up to others in the Koko fitness community, you stay motivated to achieve fitness. 3. Customer service- Koko even keeps you motivated and informed about your progress through monthly statements and progress emails to keep you on track. 4. Instruction- with Koko, whenever someone wants to work out, they simply come in; plug in the Koko Key into any Koko SmarTrainer and go! We provide step-by-step instruction along the way. Koko instantly greets the customer by name and guides them through the program for that day. Just like a private trainer. 5. Variation-Each time a customer comes back, Koko automatically adapts the new session to all the previous progress. So no two workouts are ever the same. No one gets bored, everyone stays motivated, and they see real results

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Description of Business Company Ownership/Legal Entity PT Fit Redefined, LLC is a Limited Partnership C corporation that is privately owned. Koko Fit is a franchise of PT Fit Redefined, LLC. SmarTraining is the principal strength and conditioning program for people of all shapes and sizes, from the highly specialized combat warrior to the grandmother trying to build enough strength to pick herself up after a fall. This is a fitness program that is, by design, broad, general and inclusive. We do not specialize. We generalize. Sports, combat, survival and life reward are just a few of the accomplished goals of our program. Our program utilizes the ten standards of fitness; cardiovascular/respiratory endurance, stamina, strength, flexibility, power, speed, coordination, agility, balance and accuracy.

Location There is a huge untapped and growing market in the Round Rock, Cedar Park and North West Austin areas that we intend to target and hence our new franchises will be based out of these locations. For our new Koko fit franchise operations, we will be occupying roughly 1,400 to 2,000 square feet of retail space.

Products, Services and Pricing Our Company has developed a 3 unit Koko FitClub franchise network in Austin, TX, which provides a service that features and offers for sale to the public, membership to a specialty fitness club with patent-pending fitness equipment, personalized technology and software programs, which develop individually customized exercise plans for Koko FitClub members, guides them through their daily workouts and provides them with website tracking of their exercise activity, along with various merchandising relating to fitness. PT Fit Redefined LLC has a professional personal training staff. Our personal trainers provide the knowledge and expertise in designing and implementing a fitness program. Each trainer is Koko Master certified and has standard first aid and CPR. We generate revenue by selling month-to-month memberships for $299 per month ($99 per month for a yearly contract) for unlimited personal training sessions using the patented KOKO Smart Training system. There is a one-time membership orientation fee of $299.

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Management Summary

Robert D. Reisch, CEO Robert holds an MA in Philosophy from St. Meinrad University and a BA in Business Management from The State University of New York.

Robert has 25 years of business

experience, both as an entrepreneur as well as an non-entrepreneur. He was co-founder of two startup companies. InVzn Development Corp, & LegalSpan/Manexa. Founded in 1992, inVzn developed the first trial presentation system used now in courtrooms across America & Europe. Legal Span/Manaexa develops online continuing education programs for Attorneys, Accountants, Bankers and Strength & Conditioning coaches. Robert attributes a large part of his company’s success to the fitness centers he developed in both companies at inception. Robert was also the founder of the underground fitness center, a non-profit fitness center for teens on Martha’s Vineyard, MA. Mr. Reisch has been featured on “The Today Show”, National Center for State Courts, and “Good Morning America” for his work in technology and business.

Funding and Use of Funds Summary In order to boost the memberships at each of the existing clubs to 850 members, funds will need to be secured for marketing. This will also be an additional equity investment sought worth $50,00.00. An additional $100,000 is required to pay off higher interest debt. Total Equity investment requested = $150,000.00

Budget for Koko FitClub Build-out, Equipment & Supplies List Items

Costs/club

Total/club

Total Costs Additional Marketing Budget for promoting membership in Clubs#1, #2, #3

$50,000.00

$100,000 debt payoff

$100,000.00

Total Equity investment

$150,000.00

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Marketing Market Analysis We are part of the fitness market. Entrepreneur magazine named the fitness category the fifth hottest franchising trend. This trend has accelerated within the $17.6 billion explosion in the health and fitness industry. Fitness franchises outpace overall franchising among the 1,500 franchise systems in the United States - there's plenty of market share for everyone. In fact, health club membership has grown by an average 4.6% annually in the past decade. Working out at a health club is the #1 sport activity in the United States according to the National Sporting Goods Association. •

Fitness is a $17.6 billion industry that has doubled in size in the last 10 years.

There are 42.7 million health club members in the United States.

The U.S. is home to 23,500 health clubs and the number grows each day!

Health club memberships nationwide are 48 percent male and 52 percent female.

The average health club member has an annual income of $76,000.

The average health club member attends their club 92 days per year.

Personal training is the most widely used health club programs.

Cardiovascular equipment is the top area of expansion in U.S. health clubs.

Even with a flood of publicity and medical research pointing to physical fitness as the solution; nearly 90% of America has yet to join a gym.

50 Million By 2010 - The industry's goal is to have 50 million health club members nationwide by 2010. Source: International Health, Racquet & Sportsclub Association (IHRSA) Member Census

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The Austin Market Economic Growth Potential in Austin- Austin has consistently over the last few years been voted the best place to work and live in Texas, frequently making the top five and ten lists of Forbes, Money, and Inc. magazines . This is attributable to factors such as a flourishing private sector with 6.5% growth in five years, expansion of small businesses by 1% last year, a spurt in population growth by 18% in five years. It has one of the most educated populations, that is either self-employed or employed in High-Tech and Services industries. Besides they have a burgeoning youth and retired population. This demography loosely correlates to earning potential, or at least indicates a higher average household income and buying capacity. Therefore, being in Austin, PT Fit Redefined, LLC’s target market is broad enough and we enjoy significant market opportunity. Despite experiencing solid growth during the past decade (with the exception of the past two years), the health and fitness clubs market has not yet reached saturation. As a result, the Gym, Health and Fitness Clubs industry are expected to remain in a growth phase, with revenue expected to rise at an average annual rate of 2.6% to $28.2 billion nationally in the five years to 2016, according to IBISWorld, the nation’s largest publisher of industry research. During this period, demand is expected to improve as the US economy stabilizes and unemployment declines. According to IBISWorld’s latest report, the Gym, Health and Fitness Clubs industry in Austin have benefited greatly from the vast array of marketing campaigns and ensuing consumer trends for fighting obesity and improving health. This trend has resulted in soaring demand for fitness activities especially among youth and baby boomers, and industry operators have capitalized on this growth by expanding establishments in both size and number. Demographics and market indicators

Population Growth Rate The population in Austin has grown by 37% in the last decade as compared to a national average growth of 9.7%.

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Growth rates

2010-

2020-

2030-

2040-

2020

2030

2040

2050

Austin MSA

35.30%

32.50%

31.50%

31.80%

Texas

21.80%

22.00%

21.50%

21.60%

Population by Age & Sex Nearly half of the region's population, 43%, is in the peak working years between the ages of 18-44 (compared to 36% nationally). The median age of the Austin metro is more than four years younger than the national median (32.9 years vs. 37.3 years).

Population by Age & Sex, Austin MSA, 2011 Male

Female

Total

0-17

229,702

219,273

448,975

18-24

101,785

99,242

201,027

25-44

293,128

280,314

573,442

45-64

203,420

208,121

411,541

65+

65,641

82,893

148,534

Total

893,676

889,843

1,783,519

Population Distribution by Age, 2011

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Income The median household income in Austin is $57000 which is higher than the national median household income. This gives us an advantage to expand our business in a thriving and fortified economy like Austin. Income, 2011

Median household income Per capita income

Austin MSA

Texas

United States

$56,783

$49,392

$50,502

30,093

24,682

26,708

Households by Income Group, 2011

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The Austin Market Segmentation In Austin, Customers’ top needs include: 1. Results- Customers want to see results when they go to the gym. They lose motivation if they do not feel or see a change. 2. Instruction- Many people stop going to the gym because they do not know how to properly use the equipment. 3. Customer service- Customers want to feel recognized and not be intimidated to come to the gym. We at PT Fit Redefined, LLC understand this and make the extra endeavor to achieve this. Our target market is individuals that live/work within a 5-10 mile radius, who are between the ages of 30-60 years old earning a household income of $70,000 per year or more. The latest study shows that 15% of the population have a gym membership. Koko Fit facilities tend to capture 13% of the population. To run a successful facility, we need at least 1% of 20,000 residents in the bustling North Austin neighborhood, to generate a sufficient number of members to run profitable new and old franchises.

Weekend Warriors: an important market segment for Koko fitness will be the weekend warriors. These people don't like to be locked into long-term commitments but like the freedom to come and go when the opportunity presents itself. These people will be a target market for special promotions and periodic activities.

Hardcore Fitness Buffs: another market segment for our facility will be those who view themselves as dedicated fitness gurus/athletes. These people are very particular about the type of workout equipment they use, and usually enjoy the opportunity to be "looked at" by other users of the facility. As long as the right equipment is available, these people are willing to lock into long-term commitments with a facility.

Gym Rats: a third market segment for Koko fitness clubs will be those people who love to be in a gym. Usually associated with basketball, gym rats seek to find places to play, practice, or just hang out, usually at a very reasonable price. The better the atmosphere and the more people to watch them, the more gym rats are attracted to a facility. This is a very large market for us.

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The Austin Market Segmentation

Families: this is a smaller, but important market segment for our facility. We have "something for everyone" and that will attract families that want to become members of the facility as well as families who simply want a few hours of fun every now and again. These people will also be the main target for summer camps and activities that allow for fun and education for the children while the parents enjoy some relatively cheap babysitting.

Senior Citizens: this market segment will be our fastest growing market as more senior citizens are retiring to Austin than any other group. When provided with health promoting programs, senior citizens are willing to participate due to the new focus on physical activity and the constant encouragement from family and physicians. In fact, this group was the fastest growing club membership segment over the last 10 years according in the Texas. It grew up to four times faster than other segments.

Tourists: another small market segment for Koko fitness will be the tourists who are attracted to the facility because of its size and appearance. Fabric structures often become tourist attractions because of their different and interesting appearance.

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The SWOT Analysis Analysis of Strengths, Weaknesses, Opportunities, and Threats for Koko Fitness Club and their two major competitors:

Koko Fitness Club

Personal Training Studios

Competitive rates

Well known- Have a strong reputation

High quality Facility with new/large selection of equipment, good results

Personable Atmosphere

A lot of equipment, low costs

Kids center with computers

Manufacture own equipment

Many Locations, no scheduling issues

Personal attention, highly motivational

Have a strong understanding of equipment

They have a variety of classes offered

Good hours- convenient for those working out at different hours

Classes offered at a variety of times

Informative website

Small and unknown

Crowded, may scare away beginners

Not many different classes offered

Difficult to find location- and only one location

Impersonal atmosphere

Classes are not offered at convenient times

May be intimidating to beginners

May be intimidating to beginners

Commute time

Prohibitive costs

Offer discounts to employees of certain

Good location

Strengths

Weaknesses

Big Box Centers

Hours are less convenient

Out of date website Smaller staff Opportunities

There is room to grow and increase

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the company and its reputation

companies

To expand the number of facilities Could take advantage of location within North Austin and surrounds with hightech corporations and communities People are getting used to have gym and health clubs in their daily routine of life. A large segment of market is still untapped, low income area will be of special focus for Koko Fitness which is totally ignored by the rivals. Appeals to beginnersmay bring in new customers Threats

There is only one location- many not willing to travel for a workout

There are a lot of strong competitors

Current advertising is not sufficient

Reputation may be bad It is getting older, facilities may become dated

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Marketing & Promotion Strategy PT Fit Redefined, LLC will utilize a variety of the modern marketing methods that will collectively make up the company’s marketing strategy. A budget of $50,000 has been earmarked for marketing the existing clubs. The great thing about marketing Koko Fitness clubs ( existing and new ones), is that each market segment relates, in certain ways, to all the others. Our main objective with our marketing strategy will be to get people into our new facility. Once people see what we have to offer, and feel the atmosphere, they will want to return and participate in the many activities and programs that will be available to them. Some of the ways to increase new memberships in the existing clubs and to get people into the facility include: 1. Offering tours to junior colleges, universities and senior high schools of the facility. 2. Radio and Newspapers-Advertise on 100.3 and 98.7, which are popular radio stations among the target population. Having a large promotional event in the facility with a DJ advertising the company’s programs and offerings in a morning show and which will be free to everyone in the facility. Promote the facility in local newspapers and popular health magazines 3. Hosting and supporting various community and charity events that will bring in many people who otherwise would not come. 4. Mailing out free day passes and sponsoring local sports events in the surrounding areas in North Austin/ Cedar Park/ Round Rock. 5. Direct Mail- We take out pinpointed Direct Mail campaigns such as postcards directed to a 3060 YEAR OLD demographic. The postcard will also contain pricing, the packages offered at Koko fitness, the location, a free tour, and the first class equipment that we have in our facility. 6. Vehicles- We Have KOKO fit wrap on owners’ vehicles with the message to follow the vehicle to KOKO 7. Flyers, business cards, brochures- We distribute brochures, flyers and business cards to our contacts and potential clients. We will have a Free strength and condition analysis flyer that will be distributed to all local businesses within a 3-mile radius. 8. To measure current customer satisfaction, we will have a five question survey done half yearly. The survey will be given to current members on a gym visit. The survey will include questions about the instructors, the facility, and the service. It will allow the customer to rate these items on a scale of 1 to 5. It will be based on an overall score. The president and manager of Koko fitness will review and calculate the results of this survey. PT FIT REDEFINED, LLC DBA KOKO FITCLUB BUSINESS PLAN 2013 -14 - JULY 2013

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9. Have a suggestion box in the gym that customers can put ideas in. Also put a suggestion box online that website visitors can enter suggestions into. 10. Have longer hours of operation of gyms and invest in more cleaning staff to maintain the property and equipment. Also, enhance the image of the clubs by replacing the current signage with a more aesthetically pleasing and a larger one. 11. Networking- We have a great working relationship with local businesses who are able to provide us with referrals each year. 12. Website- Up to date and professionally maintained. Our website allows prospective customers to see our products and services and find our location. We intend to form an online community of existing members through our blogs and use this tool to attract new members as well 13. Social Media- With the advent of Facebook, You TUBE, Twitter, and the likes, we have a comprehensive campaign to market ourselves through these channels. We promote social word of mouth by having contests using the proprietary KOKO fit score amongst members. Clients are offered incentives to post their KOKO fit score on their Facebook pages. We have member videos showing how to and how fun on YOUTUBE. We have local merchant owner KOKO fit contests posted on their business pages. 14. Word of Mouth- Our reputation with our existing clientele brings in many new customers through word-of-mouth referrals.

Sales Strategy and Implementation Competitive Edge

While each of our competitor companies possesses several strengths and has been able to establish itself as a legitimate competitor in the marketplace, PT Fit Redefined, LLC maintains several competitive advantages over these companies. People buy our services because we capitalize on every flaw a "global gym" has to offer. Koko Fit offers real one-on-one coaching each and every time a person comes into the facility at a fraction of the cost of a "global gym". Most gyms offer personal training for $50-$100 a session. Our gym charges $99 per month for unlimited sessions. Our facility creates workouts that compound full body movements. These workouts are fun, very intense and can be scaled to all ages and experience levels. The typical "global gym" caters to the bodybuilder types that have no functionality to what life can throw at you. Our gym doesn't use expensive, useless machines that isolate each muscle, thereby creating uneven muscle balance. Koko Fit gives each individual an opportunity to lose weight, gain muscle mass and regain the agility and balance once enjoyed a child.

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The competitive advantages that we offer that set us apart are: 1. Product- Koko FitClub is the exclusive franchisor of the revolutionary Koko SmarTraining System. This proprietary technology separates Koko FitClub from all others. 2. Unlimited personal training- SmarTraining enables PT Fit Redefined, LLC to offer their members unlimited personal training each month -- at a price that's lower than what other clubs charge for just one session! 3. Club design- KOKO’s club design sets them apart as well; a sleek, studio-sized space of just 1,800 square feet that exclusively features Koko's state-of-the-art SmartTraining equipment. 4. Pricing- We offer personal training, state of the art technology, no staffing problems, and tons more at a convenient, affordable price.

Financial Analysis PT Fit redefined LLC will acquire 150 new customers in existing clubs by EOY 2013, •

$100k retires debt freeing up $5000 month cash flow

$ 50K marketing increases current clubs to 850 memberships

Increases monthly revenue to approx. $80,000/MTh by EOY 2013

Recurring revenue is a critical part of the business model. The new clubs will be cash flow positive in the first year. Please see financial projections attached.

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Kokofit 150k july 11 2013