Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk 2014: Our Latest Views on YogaFit’s Projected Revenues Based on 150, 250, and 350 Members

by Franchise Chatter on November 14, 2014

in Fitness Franchises, Franchise Earnings

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YogaFit 3

Highlights of YogaFit’s Item 19 Financial Performance Representations (2014 FDD)

  • The franchise offered is a YogaFit Studio. YogaFit Studios give members 24/7 access to state-of-the-art yoga studios that offer a selection of both live classes and virtual on-demand classes.
  • The following chart reflects a franchisee’s projected revenues based on 150 members, 250 members, and 350 members. YogaFit based the revenue and expense projections on its experience with opening its affiliate’s YogaFit Studio (which opened in May 2014) and its affiliate’s experience operating fitness centers.
  • In preparing these projections, YogaFit assumed that market conditions will stabilize or improve and the unemployment rate will remain stable or decrease.
  • These figures are only estimates of what YogaFit thinks you may earn. Your individual results may differ. There is no assurance that you’ll earn as much.
  • YogaFit rounded all revenues and expenses to the nearest $100 (except amounts you pay to YogaFit and its affiliates).
  • Typical membership fees are $59 to $79 for a single membership, $99 to $139 for a joint membership, and $119 to $159 for a family membership. You may also sell a punch card option and drop-in sessions.
  • You set your own membership prices (except for National Accounts and certain promotional programs as described in Item 16). Membership rates may vary between clubs. For example, you may offer discounts on membership pricing for pre-paid memberships, corporate discount programs, and other special promotions.
  • Under the Franchise Agreement, YogaFit has the right in the future to establish maximum or minimum membership rates, subject to applicable law.
  • The revenue numbers in the table assume that you collect membership fees for each active membership.
  • You may also charge enrollment fees and access fees for new memberships and sell a new member kit for new memberships. This amount will vary depending on how many new members join the Club and whether the enrollment and access fees are reduced or waived.
  • You may also have other revenue from the sale of merchandise, hosting yoga instructor training sessions, and other miscellaneous revenue.
  • The recommended size of a studio is 1,500 to 2,000 square feet. YogaFit’s projection is based on a 1,500 square foot club with gross rent of $25 per square foot. If your rent is higher or you choose to lease a larger space, your costs will be higher.
  • These amounts are based on YogaFit’s affiliate’s experience with fitness clubs and may vary depending on your location and operations.
  • The insurance cost is based on participation in the SAPP insurance program.
  • The amount for advertising and marketing is based on spending 5% of monthly membership revenue on marketing activities. YogaFit generally recommends spending at least 4% to 6% of total revenue on marketing.
  • The amounts for instructor wages, commissions, and manager wages include an estimate based on an hourly rate for yoga instructors, commissions on membership sales, and a salary for a manger that works 30-35 hours per week at the club. If you manage the club, you will not have manager wage expense (except the amount you pay or distribute to yourself).
  • Your payroll expenses will vary depending on how you staff the studio, the payroll taxes and workers’ compensation expense in your state, and any benefits you provide to your manager.
  • If you are an absentee-owner or operate in a state that requires additional staffing, your wage and payroll expenses could be significantly higher.
  • This amount assumes an equipment package of $75,000 and that you lease the equipment under a 48-month lease agreement with a 10% interest rate. If you fund your investment in cash or obtain different financing, you may have no or different debt retirement obligations.

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