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FDD Talk 2016: The CycleBar Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on October 31, 2016

in FDD Talk 2017: Fitness Franchises, Fitness Franchises, Franchise Earnings



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CycleBar Franchise Photo

In this FDD Talk 2016 post, you’ll learn the following:

  • Section I – Background information on the CycleBar franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a CycleBar franchise, based on Item 7 of the company’s 2016 FDD
  • Section III – Presentation and analysis of CycleBar’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
  • 2014 and 2015 actual gross revenue, merchant services, payroll, rent, marketing, insurance, utilities, bike lease, equipment, website + software, general operations expense, total expenses, EBITDA before royalty, royalty at 7%, and EBITDA after royalty for the 2 franchised CycleBar studios (Wellesley, MA and Royal Oak, MI studios) that were open for at least 12 full months as of December 31, 2014 and December 31, 2015, respectively
  • actual gross revenue for the 2 franchised CycleBar studios (Wellesley, MA and Royal Oak, MI studios) and the 1 affiliate-owned CycleBar studio (Cincinnati, OH studio) during the affiliate-owned studio’s first quarter of operation (October 6, 2014 to December 31, 2014), first year of operation (October 6, 2014 to October 5, 2015), and first 16 months of operation (October 6, 2014 to February 5, 2016)
  • 2014 and 2015 actual gross revenue for the 2 franchised CycleBar studios (Wellesley, MA and Royal Oak, MI studios) and the 1 affiliate-owned CycleBar studio (Cincinnati, OH studio)

Section I – Background Information

CycleBar Prides Itself on Unique Approach

CycleBar isn’t the only boutique indoor cycling studio company, but part of its broad appeal is that it’s affordable (around $20 per class, compared to as high as $34 elsewhere) and accessible to more people of all ages and fitness levels. The high-tech audio-visual CycleTheatre experience is meant to accommodate everyone, from those who want an intense, powerful experience to those who aren’t used to a fitness regime but want to get started.

As part of the chain’s mission, it seeks to make participants healthy and happy. Stress is placed on fun and community within the studios, and CycleBar also puts a strong focus on being part of the community and doing fundraising and special events to benefit local and area nonprofits.

The Cincinnati-based chain has 46 studios open across the country, with a footprint that has spread from coast to coast.



Chain Enters Pennsylvania

CycleBar’s goal for 2016 is to open 100 studios. One of these locations, which opened in October 2016, is within Main Street at Exton, a shopping center in Exton, Pennsylvania. It’s the first CycleBar studio in the state.

General Manager Allison Weller told the Phoenix Reporter that CycleBar doesn’t try to compete with chains like LA Fitness and ACAC, which offer a variety of fitness options. CycleBar provides an intense and energetic group cycling experience amid state-of-the-art audio and video.

“We provide an experience,” Weller said. “We bring out all of our energy. When it’s done, (participants) should say, ‘oh, was that 50 minutes?’”

State-of-the-Art Cycling Experience

Weller’s studio has tiers for 44 bikes (a CycleBar studio can have as many as 55), backed up by an audio-visual experience through LED lighting, a huge video screen and enhanced audio in the CycleTheatre.

Earplugs are provided for people who don’t want to hear loud music, but for those who do, they can download the tunes they hear in class. They can also track their performance data through CycleStats.

Both Participants and Franchisees Vary in Fitness Levels

Classes are tuned to a variety of needs. Beginners start out with an intro class, and the classic class is a 50-minute ride. From there, participants can take part in a 50-minute strength ride, a mind-body connection ride, a 75-minute endurance ride for strong cyclists, and a number of themed rides. In other words, something for just about everyone.

Franchisees, similarly, have varying fitness levels and need not be into fitness or cycling themselves to be interested and involved in CycleBar. What’s important is to have highly trained and energetic instructors, who are known as CycleStars.

A participant can burn 400 to 700 calories in a 50-minute ride. Memberships are not necessary, as participants can pay per class. They can also buy class packages to save money on per-class rates. The studios provide showers, towels, lockers, and shoes that are compatible with the bikes, as well as snacks and water bottles.

High-Calorie Burn

At the Exton CycleBar, it’s not just the participants who enjoy the experience. Weller left a bank job to manage the cycling fitness facility and said she’s happy to make other people happy.

“I just really didn’t want a desk job,” she said. “I always liked spinning and really wanted to get into the fitness industry. This is more about making people happy.”



Section II – Estimated Costs

  • Please click here for detailed estimates of CycleBar franchise costs, based on Item 7 of the company’s 2016 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis



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