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FDD Talk: Our Latest Views on the Historical Actual Results of Club Pilates Studios Operated by Affiliate (2014 FDD)

by Franchise Chatter on March 6, 2015

in Fitness Franchises, Franchise Earnings

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Club Pilates Studio from sandiegoalist.cityvoter.com

Highlights of the Item 19 Financial Performance Representations of Club Pilates (2014 FDD) – Part 1 of 3

  • Part 1 contains a chart showing the average results of Club Pilates Studios operated by the franchisor’s affiliate, Club Pilates LLC. These are actual results from Studios that the franchisor’s affiliate operates.
  • There are five Club Pilates Studios operated by the franchisor’s affiliate in San Diego County.
  • The information included in the text and charts below is based on the experience of the affiliate. Club Pilates prepared this representation based on information provided by the Studios and the affiliate. The information provided is unaudited.
  • Club Pilates locations are typically “B” or “C” commercial or retail space, with sufficient parking, and range from 800 square feet to 2,700 square feet.
  • “Length of Time Opened” are as of December 31, 2013. Four Studios have been opened at least one full year; one Studio was open for 11 months in 2013, which, in Club Pilates’s experience, provides a sufficient basis of data to report here.
  • The number of Reformers directly affects the class size and thus the number of clients that may visit at any time and during the day or month. However, larger Studios with more Reformers may have higher start-up costs and overhead.
  • Each Studio is open 7 days/week, and operates 6-15 classes per day. Figures are for calendar year 2013.
  • The affiliate seeks low overhead locations, and the cost per square foot that you pay may be higher. The numbers reported here include rent and property and liability insurance.
  • Average payment by client per visit (i.e. per class) ranged from $10 to $17, with an average of $11. The price that you are able to charge may vary depending on your market, competitors, and other factors.
  • The range of prices reflects clients who purchase classes in bulk, and thus pay less per class, as well as discounted class rates (such as those offered through Groupon or Living Social).
  • For simplicity, revenue to the Studio from teacher training is not included. The affiliate charges $4,750 to train and certify a Club Pilates teacher.
  • You must pay Club Pilates the greater of $2,000 or 50% of what you charge, to train and certify teachers in your Studio. In the past year, the affiliate trained 71 teachers.
  • The affiliate’s teachers are employees of the affiliate. Some Studios in the industry use independent contractors. Independent contractors typically receive 50% of the fees paid by clients for each class.
  • The affiliate’s payroll varies depending on the experience of the teacher, size of class, and other factors. Generally, the affiliate spends 40-50% of its gross revenues on payroll-related expenses.
  • You should investigate whether your business model will work better with employees or independent contractors, and you must seek independent advice on whether your proposed business structure complies with tax and employment laws relating to employees and independent contractors.
  • Because Club Pilates is established in its current market, it does not market. It recommends, however, that you conduct marketing — at least initially.
  • Marketing that Club Pilates does through Groupon, Living Social, or other organizations, is not accounted for as marketing expense, but rather, a “cost of goods sold,” as it results in a discounted rate paid by the client.
  • In some instances, Club Pilates pays a professional cleaner to clean the Studio and to service Reformers regularly, and/or it pays a teacher to act as an on-site manager during certain times.

Morena Blvd. Location

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