The word on the street is that Orangetheory Fitness is a franchise on fire, both for people who are clients of the chain and for entrepreneurs who want to buy into a proven concept in the booming niche of boutique fitness studios. That word has actually been on the streets for a number of years now, but the fire burns on with no signs of letting up any time soon.
Here are 17 things you need to know about Orangetheory Fitness:
The Founders of Orangetheory Fitness
The three founding partners each bring a unique contribution to the company, resulting in a kind of perfect storm that has Orangetheory Fitness (OTF) spreading like wildfire.
1. Ellen Latham is credited with the original idea that eventually became OTF. With a Bachelor’s Degree in Physical Education and a Master’s Degree in Physiology and decades of experience as a fitness instructor, she had her own pilates studio but wanted to offer metabolic workouts as well. Most of the metabolic workouts, however, did not meet the scientific criteria to reach the Holy Grail of workouts – burning fat.
She formulated her own workout and opened Ellen’s Ultimate Workout. She also wanted to make it a workout for everyone, not just the fitness elites who are already in great shape.
2. Jerome Kern found out about Ellen Latham through his wife who had become a big fan of Ellen’s Ultimate Workout. She mentioned to Kern that people were literally throwing money across the desk to get a spot in the workouts. Kern was already a very successful Massage Envy franchise owner and operator, helping the chain expand significantly throughout Florida and New York.
In a partnership with Dave Long, the two took on a major expansion of the European Wax Center chain, growing it from 5 locations to 200. Kern’s general business acumen and specific franchising savvy help fuel the continued growth of OTF.
3. David Long is the third founding partner of OTF and serves the company as its current CEO. His previous track record of success includes growing franchise companies such as Massage Envy and European Wax Center from a handful of locations to hundreds of sites.
Dave’s leadership at OTF has seen the company through one momentous achievement after another,
including the development and launch of two different apps, the creation of the company’s proprietary heart rate monitors, establishing key business partnerships, and obtaining celebrity brand ambassadors.
He is a lifelong self-described fitness nut who appreciates the science behind effective workouts.
The Orangetheory Fitness Workout
The company’s branding claims it has crafted the best one-hour workout in the country. A growing number of clients seems to agree. Here’s what goes into it:
4. The equipment that is standard in every OTF location isn’t a lot. There are treadmills, rowing machines, free weights, and suspension cords for calisthenics, which just goes to show it’s not about having all kinds of fancy equipment but using a few key pieces effectively to achieve the desired results.
Striders and stationary bikes are available as alternatives to the treadmills for those with knee, hip, or lower back issues.
5. The “orange effect” is the goal of every OTF group personal training workout (group size varies up to 25 participants). During each 60-minute full-body workout, the objective is to spend at least 12 of those minutes in the orange or red zone as measured by the heart rate monitor. Participants who do that will not only burn calories during the hour-long session, but they will then keep burning calories at an accelerated rate for up to 36 hours after the workout, up to a grand total of 500-1,000 calories.
Running, jumping, pulling, and pushing to the right level combines high-intensity endurance, power, and strength training to achieve what OTF calls “afterburn.”
6. The science behind the workout is based on the concept of Excess Post-Exercise Oxygen Consumption or EPOC. By hitting the heart-rate targets for at least 12 out of 60 minutes, participants kick their metabolism up enough to keep burning calories and building muscle for a full day-and-a-half after the workout. What participants are aiming for is exercising at 84-91% of their maximum heart rate.
During the time after the workout, the metabolic boost will even break down some of the fat in the body and use it as fuel.
7. The OTBeat app and wearable tracker are important elements of the OTF experience. The proprietary wearable heart-rate monitors (chest-strap, armband, or wristband) measure cardiac output from gray to blue to green to orange to red with the stats displayed on monitors so participants can see how they’re doing and push a little harder in order to hit the target.
This is indicated by what the chain calls Splat points, and you rack up one for each minute you spend in the orange or red zones during your workout. The goal is to get 12 Splat points during each session.
The technology makes it easier to reach fitness goals, but it does have to be purchased for around $100.
8. The instructors at OTF are always highly experienced and incredibly enthusiastic. Clients can count on their coach to not only remember their name but also to cheer them on, give constructive feedback, and remind them to work within the boundaries of their personal fitness level to stay safe and avoid injury.
The heart-thumping music that accompanies each workout helps as well. And clients feel like they’re getting a surprising amount of one-on-one attention even though it’s a group workout.
Instructors need to have a high-level fitness certificate as well as group-instruction experience. Then they still have to go through four long days of OTF training, and as many as half will be let go at that point for not rising to OTF standards.
9. Why it works is because it’s not an intimidating workout at all. Everyone moves at their own pace and within their abilities. Everyone is focused on their own heart-rate stats so no one cares about what others are or are not achieving. The group environment results in an easy-going camaraderie that helps rather than hinders. The value clients get is great without paying for a long-term contract membership that they might not use enough to get their money’s worth.
10. Mixing it up is important to maintain people’s interest, so OTF puts a significant effort into the design of the workouts. Every single OTF location is delivering the very same workout across all 1,000+ studios, but it also changes each and every day. The same basic outline of dividing time between the treadmill, rowing machine, and weights area applies to every workout, but there’s significant variation in what specific things clients do.
OTF has a group of five certified trainers who develop more than 90 different exercises each month focusing on different muscle groups. The workouts are assembled and then tested with members before being rolled out across the chain.
11. What clients are saying: On Influenster, a product discovery and reviews platform, there are nearly 300 reviews of OTF written by clients with an overall 4.72 out of 5 stars. People who love it tend to highlight the quality of the instructors, never doing the same workout twice, and having the tech-assisted real-time data to help get into the right zone for reaching the orange effect and its afterburn.
People who don’t like it as much tend to be those who have problems with the heart-rate monitors not working for them and those who find it too expensive.
The Orangetheory Fitness Franchise Opportunity
People are flocking to Orangetheory Fitness centers to “earn the burn” and get those coveted fitness results, and entrepreneurs who want to buy into a proven fitness concept are taking advantage of the chain’s explosive growth.
12. A highly competitive field exists in the niche of boutique fitness studios, but this hasn’t seemed to slow down OTF at all. Growth in the fitness studio segment has been a hot trend for several years with studios reporting a 6% increase in their membership base during 2017, along with an average member retention rate of 76%.
Fitness studio growth has been so rapid and strong that some have wondered if there is a fitness studio bubble that’s about to burst. It may feel that way in some major metropolitan markets like New York City, but there is still plenty of room for more growth throughout the rest of the county and world.
13. The business model is one that places OTF not at the discount end of the fitness spectrum, but also not at the high end of boutique studios.
The chain’s Orange Basic membership is month-to-month (no annual contract) and includes up to 4 workouts per month with a discount on additional classes. The Orange Elite membership is the same kind of deal for up to eight sessions per month. The Orange Premier level is still month-to-month with no annual contract and includes an unlimited number of sessions at a cost that would only get you a handful of sessions at many other true boutique studios.
Customers can also purchase packs of classes in the amount of 10, 20, or 30 that are good for a year, so they can be used whenever it’s convenient for the client.
14. The real estate isn’t as much of a challenge as it can be with other fitness concepts because each studio has a relatively small footprint of about 2,800 square feet. The big full-service health clubs and gyms are often ten or more times that size in terms of their footprint. That’s the beauty of a more specialized fitness studio – it doesn’t have to be huge to pull in plenty of revenue.
15. The Franchise 500 list published by Entrepreneur magazine each year is one barometer of franchise success to which many people pay close attention.
OTF made its debut on the list in 2014 at #403 when it had just 112 locations. In 2015, although it had added 226 new locations for a new total of 338, it dropped to #462. When the 2016 list was published, it had vaulted up to #255 even though it had only added 126 locations for a new total of 464. In 2017, the chain rocketed up to position #19 on the list after adding nearly 300 locations for a total of 731 but in 2018 dropped back to #48 even though it had added 254 more locations for a grand total of 985.
16. Recent performance data for the chain continues to be impressive. In the first quarter of 2018 alone, OTF opened 61 new locations, including nine in California and five in Texas, which are both key target markets this year. It’s this kind of incredible growth that put OTF in the #1 spot on the Franchise Times 2018 Fast & Serious list as a franchise that’s not just growing fast, but one that is also growing smart.
By all accounts, 2018 should see OTF hitting the milestone of $1 billion in system-wide sales and opening as many as 270 new locations. And many new locations quickly reach full booking capacity, which is a nice “problem” to have.
17. Celebrity brand ambassadors include the Fox sportscaster Erin Andrews who recently signed her fourth contract as the network’s lead NFL sideline reporter, not to mention her highly successful turn at hosting Dancing with the Stars and the CMT Awards; three-time Olympian Lolo Jones, one of only a very few women who have competed in both the summer Olympics (hurdles) and winter Olympics (bobsled); and Justin Tucker, the NFL placekicker for the Baltimore Ravens.
The above list of 17 things you should know about Orangetheory Fitness gives a very clear picture of why this franchise is on fire, both for the clients who love the workouts and for the franchisees who are riding the chain’s wave of success all the way to the bank. If you’ve thought about owning your own fitness studio, this is one concept that is worth a closer look.