Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk: Our Latest Views on the Pro Forma Revenue, Expenses, and Gross Profit for Club Pilates Studios (2014 FDD)

by Franchise Chatter on March 10, 2015

in Fitness Franchises, Franchise Earnings

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Club Pilates Studio 1

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

  • Part 3 contains a pro forma based on the historical results of the Studios operated by the affiliate of Club Pilates.
  • The assumptions for the pro forma below are described in the notes in Parts 1 and 2, and in the accompanying comments below.
  • This pro forma is based on, but is not an exact historical representation, of the Studios operated by the affiliate. This pro forma is not intended to be a complete business plan, and is not intended to capture every potential source of revenue or expense that you may experience.
  • These figures are only estimates. Your actual results may vary.
  • The figures below are for a standard Club Pilates Studio and do not reflect the costs of a Half-Size Studio.
  • Additionally, the figures below do not reflect the cost of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit.
  • You should conduct an independent investigation of the costs and expenses you will incur in operating your Club Pilates Studio. Franchisees or former franchisees, listed in the disclosure document, may be one source of this information.
  • Monthly Gross Revenue – Based on 80-100 clients per day paying $11 per class, in a 30-day month.
  • Teacher Expense – Typically, you will pay a teacher 50% of the Gross Sales from each class. For simplicity, this model assumes that the owner/franchisee teaches no classes.
  • Royalty to Club Pilates – The greater of 4% of Gross Sales, or $600 every 4 weeks. At the low end of the range, the minimum $600 fee paid every 4th week applies.
  • Marketing Fund – 1% of Gross Sales, payable to Club Pilates.
  • Estimated Monthly Overhead – Rent, cleaning, utilities, insurance. Does not include interest on equipment loans, debts, or tenant improvements.
  • Gross Profit – Before owner salaries or benefits.
  • The Club Pilates brand started in San Diego county, and has invested significant sums in marketing its name in San Diego county. If you open a Studio outside the San Diego county market, your Studio may not enjoy the same initial level of name recognition as Club Pilates Studios in San Diego county or adjacent markets, and this may adversely affect your results.
  • The client visits, sales, and expenses stated in this Item 19 are the results of actual Club Pilates Studios, and should not be considered as the actual or potential sales or expenses that are realized by franchise owners or that may be realized by you.
  • In some cases, the actual Club Pilates Studios whose results are reported here have been open for a very limited time, and may not be as reliable as the results from a Club Pilates Studio opened for longer.
  • Club Pilates does not represent that you can expect to attain these levels of client visits, sales, or expenses. Your individual financial results are likely to differ from the results stated in Item 19.

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