In this FDD Talk 2016 post, you’ll learn the following:
- Section I – Background information on the i9 Sports franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for an i9 Sports franchise, based on Item 7 of the company’s 2016 FDD
- Section III – Presentation and analysis of i9 Sports’ financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
- 2015 average revenue for the 99 full-time i9 Sports franchises that were open for more than 60 months, between 49 and 60 months, between 37 and 48 months, between 25 and 36 months, and between 13 and 24 months, respectively, as of December 31, 2015
- 2015 average registration fee for the 99 full-time i9 Sports franchises that were open and operating for over 12 months as of December 31, 2015
- yearly revenue growth of “same franchise units” for those 99 full-time i9 Sports franchises that were open and operating for the entire 2014 calendar year and 2015 calendar year
- average owner’s discretionary profit margin for the period from April 1, 2014 to March 31, 2015, based on data provided by 63 full-time i9 Sports franchises that were open and operating for at least 12 months as of April 1, 2014
- median team equipment, officiating costs, venue costs, site managers and paid instructors, liability insurance and background checks, and total cost per registration for the period from April 1, 2014 to March 31, 2015, based on data provided by 63 full-time i9 Sports franchises that were open and operating for at least 12 months as of April 1, 2014 (except for the team equipment percentage, which was derived from the franchisor’s Approved Supplier price list as of December 31, 2015)
Section I – Background Information
Big Expansion Plans for i9 Sports
i9 Sports, the first and largest youth sports league franchise in the United States, is on the move, with plans for the addition of dozens of franchised locations each year for several years, adding to the nearly 150 locations currently franchised.
Backed by a year of record-breaking revenue growth in 2015, the company is aggressively seeking franchisees in many U.S. states and has plans to move into the international scene as well. i9 Sports has set a long-term goal of becoming the worldwide leader in recreational youth activities.
Franchise costs are relatively low, depending on territory size, because franchisees do not need to purchase real estate or significant equipment or inventory.
Owners make money primarily through registration fees paid for youth leagues, camps, clinics and programs involving several sports. Franchisees can also benefit from local advertising, concessions, merchandise and partnership fees.
Territories are available in almost every U.S. state, the only exceptions being Montana, Wyoming, North Dakota, South Dakota, Vermont and West Virginia.
Fiume Sells to Employees
i9 Sports became an employee-owned company in February 2016 when founder Frank Fiume sold his company to his employees.
“Our employees have acted like owners for a long time,” Fiume said in a news release. “Now, they no longer need to act – all eligible i9 Sports Corporation employees will have a literal ownership stake in the company they are helping to build. This is about more than just compensation. It’s about rewarding the contagious sense of pride and personal ownership our employees have in the company’s success.”
i9 Sports joins about 7,000 U.S. companies with Employee Stock Ownership Plans, which grant employees shares in the company over time. At i9 Sports, all eligible employees who work 1,000 hours or more per year will automatically be participants in the ESOP.
The company’s operating system remained the same, Fiume continued to be chairman of the board, and current executives retained their positions.
“A company comprised of owners who have skin in the game on top of the momentum we already have as a business is an unbeatable combination,” Fiume said in the news release. “This is a game changer for our employees and for our company.”
Chain’s Mission to Help Kids Succeed
Frank V. Fiume Jr. founded i9 Sports in 2002 on the principle that children play sports for fun. The company’s mission is to help kids succeed in life through sports. Its name is based on nine “I” words: Imaginative, Innovative, Interactive, Integrity-driven, Impassioned, Inspirational, Instructional, Insightful and Inclusive.
Franchisees run sports leagues, tournaments, camps and events for children ages 3-17. The sports involved include football, basketball, soccer and more. More than one million have registered with franchises in more than 500 communities across the United States.
The company, which started franchising in 2003, was the first youth sports league franchise in the United States.
Company Rises in Franchise 500
i9 Sports was ranked No. 276 in the Entrepreneur Franchise 500 list for 2016. The company reached its highest rank of No. 213 in 2011 but two years later almost dropped off the list with a No. 492 ranking. Since then it’s been climbing back, going up to No. 461 and No. 432 before leaping to the current ranking.
The chain finished 2015 with 125 franchised locations and 16 corporate locations.
NFL’s Kevin Smith Joins i9 Team
Kevin Smith, a former NFL cornerback with the Detroit Lions and the San Francisco 49ers, purchased an i9 Sports franchise in March 2016.
Smith’s four children take part in i9 sporting leagues. He and his wife, Bianca, are both program directors for the franchise.
Section II – Estimated Costs
- Please click here for detailed estimates of i9 Sports franchise costs, based on Item 7 of the company’s 2016 FDD (updated).