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

by Franchise Chatter on November 16, 2016

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

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Bar Method Photo 2 by Lory_DC

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

  • Section I – Background information on The Bar Method franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Bar Method franchise, based on Item 7 of the company’s 2016 FDD
  • Section III – Presentation and analysis of The Bar Method’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
  • 2015 average gross revenue, number/percent exceeding average, and median gross revenue for the:
  • 8 franchised Bar Method studios that have been open 12 to 24 months as of December 31, 2015;
  • 10 franchised Bar Method studios that have been open 25 to 36 months as of December 31, 2015;
  • 58 franchised Bar Method studios that have been open 37 months or more as of December 31, 2015; and
  • all 76 franchised Bar Method Studios in operation during the entire 12-month period from January 1, 2015 until December 31, 2015

Section I – Background Information

Exercise Enthusiast Dreams Big

The story of The Bar Method begins in 1981, when founder Ellen Burr Leonard took her first Lotte Berk Method class in New York. The Lotte Berk Method, which is a ballet bar inspired exercise routine, would be the basis for Burr’s future exercise program.

Burr quickly fell in love with the Lotte Berk Method and in 1991 she traveled with her husband Carl Diehl to meet Lotte Berk in London. They were inspired by this meeting and decided to buy a license to own and operate Lotte Berk Method studios in Connecticut.

Burr spent the next year training at the Lotte Berk studio in New York and in 1992 returned to Greenwich, Connecticut to open her first Lotte Berk Method studio. Upon opening her new studio, Burr noticed that some of her clients’ knees, backs, and shoulders were not responding well to the exercises and brought in a physical therapist to help her re-work the exercises to make them safer and more effective.

Burr and her husband spent the rest of the 90s opening three additional studios and teaching her revised exercise method.

In 2000, at the end of their 10-year agreement with Lotte Berk, Burr and her husband founded The Bar Method after realizing that the exercises they were teaching no longer resembled Berk’s method. They sold their Connecticut studios and opened the first Bar Method exercise studio in San Francisco, CA in 2001.

Though they did not initially have intentions of opening more locations, many of their students began asking if they could open their own studios. Over the next decade, they continued opening locations throughout the U.S. and Canada.

In 2008, they incorporated The Bar Method Franchising Company and officially began franchising. In 2012, Carl left the company and Mainsail Partners, a private equity firm, acquired a 40% interest in its operations; Burr became CEO and President. Today, The Bar Method has over 90 locations.

Building an Exercise Empire

While Burr continued to open new locations, she expanded on her success by producing home exercise DVDs and selling branded merchandise.

In 2009, they incorporated The Bar Method Media Company and produced the Change Your Body and Accelerated Workout DVDs. Over the next few years, they produced five more DVDs — Beginner’s Workout, Dancer’s Workout, Pregnancy Workout, Super Sculpting, and Super Sculpting II.

The Bar Method’s merchandise includes graphic tanks and sweatshirts, at-home ballet bars, workout mats, grip socks, water bottles, and bags.

Popular Among Celebrities

Ballet inspired workouts have risen in popularity in recent years. Due to this, studios like The Bar Method and competitor Pure Barre have seen success. The combination of isometrics that the method uses burns fat and stretches the muscles helping clients to achieve lean and long bodies or what has been dubbed a “Bar Method Body.”

Over the years, The Bar Method has attracted many celebrity clientele including Kelly Ripa, Anna Paquin, Ricki Lake, Drew Barrymore, and Ginnifer Goodwin. Many people enjoy the difficulty of The Bar Method’s classes and as long as clients maintain full participation, they can see results quickly, often after only a few classes.

Celebrating The Bar Method’s 15th Anniversary

In August of 2016, The Bar Method celebrated its 15th anniversary. To celebrate the occasion, they offered free classes to new members on August 20th and 21st. They also offered 15% off select memberships and merchandise, launched new products, and held in-studio parties where treats and prizes were given away.

At this time, The Bar Method also announced that it would be offering new express classes that are 15 minutes shorter than their regular sessions. These new classes began rolling out in September and they are 45 minutes of fast-paced and high-intensity exercises.

To cap off their birthday celebration, The Bar Method held a social media contest #WhyDoYouBar where participants were encouraged to share what the workout means to them. The winner received Bar Method branded apparel.

Not Yet Ranked on Entrepreneur’s Franchise 500

Although The Bar Method has been around for 15 years, growth has been moderate. The company has only been franchising for eight years and has not yet reached 100 locations. They have yet to garner a spot on Entrepreneur’s annual Franchise 500 list.

Section II – Estimated Costs

  • Please click here for detailed estimates of The Bar Method 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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