Educational overview · Approx. 8 min read · general description of franchise disclosure practice, not legal advice
Before anything else, the disclosure that matters most on this page: Atlas Metabolic is a licensor, not a franchisor. Atlas issues no Franchise Disclosure Document, because it has none to issue. This article is education about somebody else’s paperwork — specifically Item 6, the “Other Fees” table that every U.S. franchisor must give you before you sign. Item 6 is where the ongoing cost of a franchise is actually disclosed, and the column most buyers skim is the one where the obligations hide. Read it properly and you can price any franchise offer honestly — including against a structure that has no Item 6 at all.
FIRST, THE DISCLOSURE THAT MATTERS MOST HERE.
Atlas Metabolic is a licensor, not a franchisor. Atlas does not issue a Franchise Disclosure Document, does not sell franchises, and has no Item 6. Nothing on this page should be read as describing an Atlas offering, an Atlas fee table, or an Atlas franchise, because none of those things exist. This is an explainer about how franchise disclosure works, written by a company that chose the other structure, so that you can read a real FDD carefully when one is handed to you.
That distinction is not a technicality. A franchise is a regulated relationship governed by the FTC Franchise Rule and state franchise laws; a license is a commercial contract. Each carries different protections, different obligations, and different economics. Whichever one you are evaluating, have an attorney classify the actual agreement rather than the word printed on the cover — a “license” carrying a trademark, significant operating control, and required ongoing payments can legally be a franchise no matter what it is called. Franchise vs. License walks that boundary in detail.
WHERE ITEM 6 SITS IN THE DOCUMENT.
An FDD has 23 numbered items, delivered to a prospective buyer before any binding commitment. A handful carry most of the weight:
- Item 5 — Initial Fees. What you pay to get in, and what it does or does not include.
- Item 6 — Other Fees. Every other payment obligation for the life of the relationship. This is the article’s subject.
- Item 7 — Estimated Initial Investment. The full range to open, including working capital for an initial period.
- Item 8 — Restrictions on Sources. Required suppliers, and whether the franchisor or its affiliates earn revenue from them. Read this beside Item 6, always.
- Item 12 — Territory. What area protection, if any, actually exists, and what the franchisor may still do inside it.
- Item 17 — Renewal, Termination, Transfer and Dispute Resolution. How the relationship ends, and what survives the ending.
- Item 19 — Financial Performance Representations. The only place a franchisor may present figures about results, under strict conditions. If a salesperson quotes numbers that appear nowhere in Item 19, that is a compliance problem in front of you, not a preview of your future.
- Item 20 — Outlets and Franchisee Information in traditional franchise systems: openings, closures, transfers, terminations, and the contact list. Compare units awarded against units actually open, and call operators who left.
Item 6 is the recurring-cost engine of the entire relationship, and it is presented as a table — which is exactly why it gets skimmed. Tables read as reference material. This one reads as the deal.
THE FOUR COLUMNS OF ITEM 6.
The table is required to disclose, for each fee: the type of fee, the amount, the due date, and the remarks. Buyers read the first two columns. The obligations live in the last two.
- Type of fee names the obligation. Count the rows before you read them; a long Item 6 is itself a finding.
- Amount is often a range, a formula, or a phrase such as “then-current” rather than a fixed figure. A stated percentage is knowable. A discretionary amount is not a cost, it is a permission.
- Due date determines cash-flow pressure. Weekly automatic debit on gross sales is a materially different obligation from a monthly invoice, especially in a business with lagging collections.
- Remarks is where the fee is actually defined — the base it is calculated on, who may change it, what triggers it, whether it is refundable, and what happens if you are late. Read this column first, then go back to the amount.
THE ROWS YOU SHOULD EXPECT TO FIND.
| Item 6 row | What it usually is | What to check in remarks |
|---|---|---|
| Royalty | Percent of gross sales, weekly or monthly | What gross includes; whether refunds and discounts are deducted; whether the rate can change; minimum royalties payable even in a slow period |
| Brand / advertising fund | Additional percent of gross | Whether the franchisor must spend any of it in your area; whether it may be spent on recruiting more owners; whether it is accounted for to you |
| Local advertising minimum | Required own-market spend | Whether it stacks on top of the fund; who approves the creative; whether unspent amounts are swept |
| Technology / software | Fixed monthly, per location or per seat | Whether the rate is adjustable at the franchisor’s discretion; whether new required systems can be added mid-term |
| Training | Included initially, billed thereafter | Who pays travel and wages; what a replacement manager costs; whether attendance at conferences is mandatory and billed |
| Audit | Charged on discrepancy | The discrepancy threshold; who defines it; whether you also pay the auditor’s travel; whether interest applies retroactively |
| Late fees and interest | Flat charge plus interest rate | The rate, the grace period, and whether late payment is itself a default trigger |
| Transfer | Paid when you sell | Right of first refusal; approval standards for your buyer; whether the buyer signs the then-current agreement instead of yours |
| Renewal | Paid to continue | Whether renewal is onto current terms; required refresh or remodel as a renewal condition; general release requirements |
| Insurance and indemnity | Required coverage, plus costs | Whether the franchisor may place coverage for you and bill it; the scope of indemnification you are accepting |
| Liquidated damages | Charged on early termination | How it is calculated — often as a multiple of royalties the franchisor would have collected had you stayed |
Not every system charges every row, and a short Item 6 is a genuinely good sign. But read the ones that are present with the assumption that each was drafted by counsel representing the other side, because each one was.
THE ARITHMETIC ITEM 6 WILL NOT DO FOR YOU.
Item 6 discloses obligations one row at a time. It does not add them up, and it does not translate them into the only figure that matters to an owner: the share of what you keep.
Do it yourself in two steps. First, sum every row calculated on gross sales — royalty, brand fund, local minimum, and any technology fee you can reasonably convert to a percentage. Second, divide that total by the margin you expect to keep after operating costs.
Then read Item 8 immediately afterwards. If required suppliers pay the franchisor rebates or commissions, that markup functions as an additional percentage of your volume that appears nowhere in Item 6. Full mechanics of the compounding are in What a Royalty Really Costs.
WHAT IT LOOKS LIKE WHEN THERE IS NO ITEM 6.
To repeat the framing plainly, because it matters: Atlas Metabolic is a licensor and issues no FDD. There is no Item 6 to hand you, no royalty row, and no brand fund row — not because they are hidden, but because the structure does not contain them.
A zero-percent ongoing gross royalty license inverts the shape of the cost. It is concentrated, up front, and finite. After handoff, no percentage of gross sales follows the owner, which means the arithmetic above has no numerator: every improvement the owner makes belongs entirely to the owner. The partner owns the brand, the entity, the member list, and the right to sell the business as their own asset rather than as a transfer requiring approval.
The honest trade runs the other way too, and you should weigh it. Franchising’s disclosure regime is a real consumer protection: standardized, comparable, and legally enforced, with litigation history and an owner contact list included. Licensing has no equivalent, so the diligence burden shifts entirely onto you. The correct response is to demand voluntarily what an FDD would have compelled:
- Every fee, in writing, for the full term. One-time, recurring, event-driven, and post-exit. If a fee is not on the page, it should not exist.
- Itemized deliverables with acceptance criteria. What is built, what is transferred, and how completion is judged.
- Ownership stated explicitly. Brand, entity, domain, accounts, content, member list, and the unrestricted right to sell.
- Reference partners you choose from an open list — including any who left. A curated list is marketing; an open one is evidence.
- Continuity terms. What happens to the business if the licensor disappears. If the answer is “nothing changes,” the paperwork should say so.
- Litigation and background disclosure, voluntarily. An FDD would have required it. Ask for it anyway, and note whether the answer arrives or the subject changes.
- No urgency mechanics. No countdowns, no geography held back, no expiring pricing. Atlas sells no exclusivity and no geographic protection of any kind — if any company offers you a shrinking window, that is your diligence result, not an opportunity.
Two structural facts about Atlas belong in the same paragraph, for the same reason. The license fee is not published; it is stated on the Fit Call with the written terms attached, because a number without its deliverables is unusable in exactly the way a royalty percentage without Item 6 is unusable. And clinical care, where any licensed medical service is involved, sits with a separately licensed medical entity — never Atlas, never the partner. Atlas provides no medical services and employs no clinicians.
WHAT TO DO NEXT.
If you are holding an FDD, work Item 6 against Item 8 and Item 17 before you look at anything else, then run the combined percentage against your own kept margin in the Model It calculator. If you are weighing that against a structure with no ongoing royalty, read Franchise vs. License for the end-to-end comparison and How Atlas Works for what a complete royalty-free buildout actually contains. Then start an application or book a Fit Call and put the seven demands above to us directly. Full written terms come before any decision, and “not a fit” is a real possible answer in both directions.