In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the Orangetheory Fitness franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for an Orangetheory Fitness franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an Orangetheory Fitness franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Orangetheory Fitness’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average gross revenue and average number of active members for the 6 affiliate-owned and 146 franchised Orangetheory Fitness Studios that were open at least 24 months as of December 31, 2016
- 2016 average gross revenue and average number of active members for the 5 affiliate-owned and 149 non-affiliate franchised Orangetheory Fitness Studios that were open more than 12 months but less than 24 months as of December 31, 2016
Section I – Background Information
14 Things You Need to Know About the Orangetheory Fitness Franchise
Signed 1,000th U.S. Franchise Agreement
1. At the end of May, Orangetheory Fitness announced that the company had just signed its 1,000th franchise agreement for the United States. Orangetheory also reported a 108 percent increase in system-wide sales and a 19.3 percent increase in same-store sales for 2016.
2. The 1,000th studio will open later this year in Modesto, California, by new franchisee and triathlete Karen Neal.
3. Dave Long, co-founder and Chief Executive Officer of Orangetheory Fitness, says “The rate at which Orangetheory Fitness has grown since launching in 2010 has far surpassed our wildest expectations.” Long also said that the company has 1,230 agreements signed worldwide.
Named No. 1 Fastest Growing Woman-Owned or Led Business
4. In early May, Orangetheory Fitness earned the No. 1 spot on the annual ranking of the fastest growing woman-owned or led businesses released by the Women Presidents’ Organization (WPO) and American Express. Orangetheory, which was founded by Ellen Latham in 2010, was ranked No. 3 on the list in 2016. The list ranks companies based on both percentage and absolute growth.
5. To qualify, businesses must be privately-held, woman-owned or led, and have reached an annual revenue of at least $500,000 as of Jan. 1, 2012. According to WPO President Marsha Firestone, innovation is one of the characteristics that drive the growth of the companies on the list.
Plans to Grow Brand’s Presence in Connecticut
6. At the start of May, Orangetheory Fitness announced that multi-unit franchise owner Mark Molina had acquired rights to the Shelton, Connecticut studio, which would reopen under his leadership at the end of May. The acquisition is part of the company’s plans to expand its presence throughout the state of Connecticut, with a goal of doubling the studio count in the state by the end of the year.
7. Molina opened Connecticut’s first Orangetheory Fitness studio in Fairfield in 2014 and has since opened two additional studios, with the Shelton location marking his fourth Orangetheory in the state.
Partnered with Augie’s Quest for First Brand-Wide Fundraising Campaign
8. From February 20 through March 5, Orangetheory Fitness launched its first national fundraiser by partnering with Augie’s Quest, a foundation dedicated to finding the cure for amyotrophic lateral sclerosis (ALS) disease, to raise $1 million in two weeks.
9. During the campaign, more than 570 Orangetheory Fitness locations around the U.S. encouraged members to donate money toward the company’s $1 million goal. All money raised went to Augie’s Quest.
10. Orangetheory Fitness coaches challenged participants in each class to donate at least $1 per splat point achieved – splat points are attained for every minute a participant spends in the “orange zone,” which is their target-training zone of 84 to 91 percent of their heart rate.
11. On February 25, Orangetheory hosted the Augie-thon, a specialty donation session at every studio where a unique 90-minute class was offered to both members and non-members for a donation of $20.
12. Orangetheory Fitness was founded in 2010 by physiologist Ellen Latham in Fort Lauderdale, Florida. Latham laid the foundation for Orangetheory’s fitness program in 2009 when she developed an exercise regimen dubbed “The Ultimate Workout.”
13. After opening the first location, Latham brought in David Long and Jerome Kern to help her expand the business; franchising began later in 2010. Kern and Long helped the franchise expand rapidly and in under 10 years, Orangetheory Fitness has grown to over 600 locations around the world with 1,000 more locations in the works in the U.S. and internationally.
Entrepreneur’s Franchise 500
14. Orangetheory Fitness has earned a spot on Entrepreneur’s annual Franchise 500 list every year since debuting in 2014 at No. 403. The company’s highest rank was No. 19 in 2017, after climbing over 200 spots from 2016’s rank of No. 266. Orangetheory’s lowest rank was No. 463 in 2015.
Section II – Estimated Costs
- Please click here for detailed estimates of Orangetheory Fitness franchise costs, based on Item 7 of the company’s 2017 FDD (updated).
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Orangetheory Fitness’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.