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FDD Talk 2017: What You Need to Know About the Retro Fitness Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

by Franchise Chatter on July 3, 2017

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



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Retro Fitness Interior Photo

In this FDD Talk 2017 post, you’ll learn the following:

  • Section I – Background information on the Retro Fitness franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Retro 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 a Retro Fitness franchise, based on Items 5 and 6 of the company’s 2017 FDD
  • Section IV – Presentation and analysis of Retro Fitness’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
  • fiscal year 2016 average gross sales for the 131 Retro Fitness franchised outlets that were fully open and operating for more than 12 full months as of February 28, 2017, and were open and in operation as of the issuance date of the 2017 disclosure document
  • fiscal year 2016 average gross revenue per square foot for the 131 Retro Fitness franchised outlets that were fully open and operating for more than 12 full months as of February 28, 2017, and were open and in operation as of the issuance date of the 2017 disclosure document
  • average number of members as of February 28, 2017 for the 131 Retro Fitness franchised outlets that were fully open and operating for more than 12 full months as of February 28, 2017, and were open and in operation as of the issuance date of the 2017 disclosure document
  • 2015 average earnings before interest, taxes, depreciation, and amortization for the 74 Retro Fitness franchised outlets that were open to the public and in operation for more than 24 months as of December 31, 2015, and submitted copies of their 2015 tax returns to Retro Fitness
  • 2015 average earnings before interest, taxes, depreciation, and amortization as a percentage of total revenue for the 74 Retro Fitness franchised outlets that were open to the public and in operation for more than 24 months as of December 31, 2015, and submitted copies of their 2015 tax returns to Retro Fitness
  • 2015 average payroll expenses for the 74 Retro Fitness franchised outlets that were open to the public and in operation for more than 24 months as of December 31, 2015, and submitted copies of their 2015 tax returns to Retro Fitness
  • 2015 average rent expenses for the 74 Retro Fitness franchised outlets that were open to the public and in operation for more than 24 months as of December 31, 2015, and submitted copies of their 2015 tax returns to Retro Fitness

Section I – Background Information

13 Things You Need to Know About the Retro Fitness Franchise

Plans to Have 250 Locations Open by 2019

1.  In early March, Retro Fitness released a press statement celebrating its growth in 2016 and outlining the company’s future growth plans. Retro Fitness opened 14 gyms and signed more than 20 new franchise agreements for new or emerging market development in 2016.

2.  The gym franchise has over 100 gyms in its development pipeline and opened four new locations in 2017 by March. The company says that it is on track to have 250 gyms open by 2019.



3.  One of the key factors driving Retro Fitness’s success is the brand’s history of taking proven, popular fitness trends and making them affordable for a wide range of consumers. According to CEO Eric Casaburi, membership numbers at Retro Fitness are rising rapidly and franchise prospects are increasingly becoming interested in the brand.

4.  Casaburi also says that franchisees are attracted to how Retro Fitness combines “state of the art equipment associated with big-box clubs and the high-end amenities and training associated with boutique concepts.”

New Training Program Targets Boutique Consumers

5.  Last summer (June 2016), Retro Fitness announced plans to roll out its New Exercise Order (NEO) training program across its network in 2017. NEO is a “multi-level personal training program” that provides solutions to members with varying fitness levels and desired price points. The program starts at $69 and offers three different tiers:  Team Conditioning, Small Group Strength Training, and One-on-One Training.

6.  Mike Urti, Vice-President of Personal Training at Retro Fitness, said that the company noticed that some of its members also have memberships at boutique studios and that Retro Fitness wanted to find a way to keep them only in Retro Fitness facilities. The New Exercise Order is Retro Fitness’s answer to its members’ problems as the brand claims the program offers members “a far more effective fitness regimen at a more affordable price.”



7.  Before rolling out the program nationwide, Retro Fitness tested the New Exercise Order program at its six franchised locations in Florida.

Plans to Expand in Florida and Open a Second Headquarters in the State

8.  In early December 2016, Retro Fitness announced that it would be growing its Florida footprint with plans to open 30 additional health clubs in the state over the next three years and a second corporate headquarters.

9.  The fitness franchise’s new locations will be concentrated in the growing markets of Orlando, Jacksonville, Naples, Fort Myers, Miami, Fort Lauderdale, and West Palm Beach. The new headquarters is already under construction in Apopka, which is about 20 miles outside of Orlando.

10.  CEO Eric Casaburi and several other executives have already relocated to the Orlando area in anticipation of the new headquarters. According to Casaburi, the company plans to keep expanding in Florida until there is a Retro Fitness location within every 3 to 5 miles in populated areas. Retro Fitness is currently seeking franchisees throughout Florida to help with the statewide expansion.

Company History

11.  Retro Fitness was founded in New Jersey in 2002 by Eric Casaburi. The Retro Fitness philosophy is “More Fitness, Less Money.” To help the gym stand out from the competition, Casaburi ensures that each Retro Fitness location has exceptional customer service and a keen attention to cleanliness. Casaburi also believes in constantly evolving the Retro Fitness brand to keep up with customers’ changing tastes and attitudes.

12.  Retro Fitness began franchising in 2006 and today there are over 150 locations.

Entrepreneur’s Franchise 500

13.  Retro Fitness debuted on Entrepreneur’s annual Franchise 500 list in 2011 and has ranked on the list every year since. The company’s highest rank was No. 119 in 2017, while its lowest rank was No. 289 in 2014. Retro Fitness also ranked on Entrepreneur’s Top New Franchises list in 2011 at No. 10.

Section II – Estimated Costs

  • Please click here for detailed estimates of Retro 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 Retro Fitness’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis



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