Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk 2014: Our Latest Views on Orangetheory Fitness’s Average Gross Revenue and Average Number of Active Members

by Franchise Chatter on November 19, 2014

in Fitness Franchises, Franchise Earnings

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

  • The following information shows the average gross revenue and average number of active members for the 26 Orangetheory Fitness Facilities that were open a full 12 months as of December 31, 2013.
  • As of December 31, 2013, there were 59 Orangetheory Fitness Facilities open and in operation, but only 26 were open for the full 12-month period.
  • Of the 26 Orangetheory Fitness Facilities, 3 are owned and operated by the franchisor’s affiliates and 23 are owned by franchisees.
  • All Orangetheory Fitness Facilities offer substantially the same products and services to the public. None of them (including the affiliates) received any services not generally available to franchisees, and substantially the same services will be offered to new franchisees.
  • Orangetheory Fitness obtained the gross revenue figures from the point-of-sale computer systems utilized by its affiliates and franchisees. Orangetheory Fitness obtained the information on the number of active clients from the same point-of-sale computer system utilized by affiliates and franchisees. Neither the franchisor nor an independent accountant has independently audited or verified the information.
  • The information may not be representative of the Orangetheory Fitness Facilities in any other years. Gross revenue and membership figures for any new Orangetheory Fitness Facility may be substantially lower during the first year of operations.
  • “Gross Revenue” means all revenue derived from sales of products and services to members of the Orangetheory Fitness Facility.
  • An active member is a client that is current in paying membership fees or a customer with an active membership package as of December 31, 2013.
  • This financial performance representation does not include any information regarding costs or expenses.
  • The gross revenue and membership fees are based on the historical results from existing and operating Orangetheory Fitness Facilities. They should not be considered as the actual or potential sales that will be recognized by anyone else, including you. Orangetheory Fitness does not represent that you can expect to attain these operating results.
  • Some facilities have sold this amount. Your individual results may differ. There is no assurance you’ll sell as much.
  • The gross revenue and membership of Orangetheory Fitness Facilities are affected by seasonality. However, not every Orangetheory Fitness Facility will be similarly affected by seasonality due to a wide variety of factors, including location, proximity to tourist destinations and “snowbird” communities, population density of year-round residents, geographic location in winter-weather climates, market draw, local advertising, and management efforts.
  • The fitness industry is intensely competitive based on numerous factors, including membership rates, service, location, types of services offered, and other factors. The performance of your Orangetheory Fitness Facility will be affected by the region in which you operate, your competitors, and the success you have in marketing and managing your operations.

Calendar Year 2013

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