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

• Section I – Background information on the Farrell’s eXtreme Bodyshaping franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Farrell’s eXtreme Bodyshaping 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 Farrell’s eXtreme Bodyshaping franchise, based on Items 5 and 6 of the company’s 2017 FDD

• Section IV – Presentation and analysis of Farrell’s eXtreme Bodyshaping’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:

• 2016 average service gross sales for the top third, middle third, bottom third, and all 56 Farrell’s Center franchises that offered and ran 4 full 10-week Course sessions during the 2016 calendar year

• 2016 average first-time student enrollment in initial 10-week Courses for the top third, middle third, bottom third, and all 56 Farrell’s Center franchises that offered and ran 4 full 10-week Course sessions during the 2016 calendar year

• 2016 average conversion rate of first-time students to ongoing Course enrollment for the top third, middle third, bottom third, and all 56 Farrell’s Center franchises that offered and ran 4 full 10-week Course sessions during the 2016 calendar year

Section I – Background Information

13 Things You Need to Know About the Farrell’s eXtreme Bodyshaping Franchise

New Locations

1.  Farrell’s eXtreme Bodyshaping is continuing its growth across the U.S. with new gym openings. One of its newest locations will be in Frisco, Texas and will open sometime in the fall of 2017. The owners of the Frisco location are Mustaali and Shannon Carbaidwala, who already own a Farrell’s gym in Little Elm, Texas. The Carbaidwalas opened their first Farrell’s location after moving from Illinois to Texas, where they found it difficult to find a gym that could compare to the Farrell’s they attended in Illinois.

2.  In early August, Farrell’s announced that it will be opening a new location in Springfield, Illinois in January 2018. The location will be opened by Tamara and Pat Thomas along with Flynn McCartney, all of whom already own other Farrell’s centers. Between the three of them, the Thomases and McCartney own 10 Farrell’s eXtreme Bodyshaping locations across Eastern Iowa and Illinois.

10-Week Fitness Challenge

3.  One of Farrell’s eXtreme Bodyshaping’s biggest selling points is its 10-week fitness challenge, which is only offered four times a year. The 10-week challenge includes an orientation, 59 classes, a personal coach, a supportive team, nutrition consultation and coaching, three fitness assessments, kickboxing wraps and gloves, and a comprehensive program manual.

4.  The program features kickboxing classes, which are derived from martial arts and designed to be a high-intensity cardio workout that burns fat and builds endurance, and strength training sessions using resistance bands. Nutrition coaches provide resources and information such as simple meal plans and carbohydrate and protein intake suggestions based on a member’s body measurements.

5.  In addition to all the program features, Farrell’s gives away $1,000 to the person with the biggest transformation during the 10-week challenge at each of its locations. Some locations even give away two $1,000 prizes per challenge.

6.  Farrell’s eXtreme Bodyshaping also offers heart-rate tracking with its MYZONE system, available at all of its locations. MYZONE’s technology provides real-time tracking of exercise effort on displays in Farrell’s gyms and on members’ smartphones.

7.  Members can purchase the MZ-3 activity belt at their location. Once members start using the technology, they can see their MYZONE Effort Points (MEPs) during their classes so they and their instructors can be sure that they’re hitting their peak. Through MYZONE, members can also connect with one another and participate in MYZONE specific challenges.

$10,000 National Challenge

8.  Every year, Farrell’s eXtreme Bodyshaping holds its year-long National Challenge. Members at all Farrell’s locations are eligible to participate in the contest. Each participant must take quarterly measurements and fitness tests, attend at least 70% of classes throughout the year, submit an essay, and take before and after photos.

9.  Over the past eight years that Farrell’s has been running this contest, the company has only awarded one $10,000 prize each year, but in early February, Farrell’s gave out two prizes for the 2016 contest – one to a female winner and one to a male winner. The company said that it will be giving out two prizes for the contest going forward.

Company History

10.  Farrell’s eXtreme Bodyshaping was founded in 2001 by Lance Farrell in Des Moines, Iowa. Farrell, who has always had a passion for health and fitness, opened Farrell’s U.S. Martial Arts in Des Moines in 1989.

11.  Through his involvement with martial arts and his interest in body building, he developed the Farrell’s eXtreme Bodyshaping program. Farrell’s program combines fitness kickboxing, strength training, and nutrition coaching to help its members reach their fitness goals within 10 weeks.

12.  The first Farrell’s eXtreme Bodyshaping gym had 40 members. Today, there are over 60 locations around the U.S. with over 100,000 members.

Entrepreneur’s Franchise 500

13.  Farrell’s eXtreme Bodyshaping has experienced slow and steady growth since opening in 2001 and has not yet appeared on Entrepreneur’s annual Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Farrell’s eXtreme Bodyshaping franchise costs, based on Item 7 of the company’s 2017 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Farrell’s eXtreme Bodyshaping’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

• As of December 31, 2016, there were 62 Farrell’s Centers in operation, 59 of which were franchised, and 3 of which were owned and operated by Farrell’s or its affiliates and which offered a different mix of products and services than franchised Farrell’s Centers, including martial arts classes and other experimental courses that were not offered by franchised Farrell’s Centers.

• Of the 59 franchised Farrell’s Centers that were open and operating as of December 31, 2016, 56 offered 4 full 10-week Course sessions during the 2016 calendar year. The remaining 3 franchised Farrell’s Centers operated during only part of the year, therefore their results were excluded.

Part 1 – Average Service Gross Sales for 56 Franchised Centers for Fiscal Year Ended December 31, 2016

• The following chart reflects information about the “Service Gross Sales” achieved by the 56 franchised Centers that offered 4 full 10-week Course sessions during calendar year 2016.

• Farrell’s did not include “Merchandise Gross Sales” for these Centers, because revenues derived from equipment and apparel sales typically comprise 15% or less of total revenue and because those revenues tend to vary among Farrell’s Centers depending on a particular Center’s retail space and emphasis on merchandising.

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