In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Club Pilates franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Club Pilates franchise, based on Item 7 of the company’s 2018 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Club Pilates franchise, based on Items 5 and 6 of the company’s 2018 FDD
- Section IV – Number of franchised and company-owned Club Pilates outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD
- Section V – Presentation and analysis of Club Pilates’ financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:
- 2017 average gross revenue for the 89 franchisee-owned Club Pilates Studios that were open and operating for the period beginning April 1, 2017 and ending March 31, 2018, and operated utilizing at least 12 reformers as required by the current franchise offering and System (“Franchisee-Owned Representative Studios”)
- 2017 average gross revenue for the 48 franchisee-owned Club Pilates Studios that were open and operating for the period beginning April 1, 2017 and ending March 31, 2018, and operated utilizing at least 12 reformers as required by the current franchise offering and System, as well as all “New Model” updates to the System implemented in 2015 (“Franchisee-Owned New Model Studios”)
Section I – Background Information
15 Things You Need to Know About the Club Pilates Franchise
Announces First International Studios
1. Following its rapid growth in the U.S. in recent years, Club Pilates announced in early August 2018 its first international studio development in Canada. The Canadian expansion will begin in October with three locations, two in British Columbia and one in Alberta. Currently, Club Pilates has more than 400 locations open in the United States and is on track to have 600 locations open by the end of the year, with an additional 300 opening in 2019. The brand’s extensive domestic growth has led Club Pilates to turn its attention to Canada.
2. Shaun Grove, president of Club Pilates, said, “With incredibly high consumer demand coupled with our highly successful business model, Club Pilates has seen immense success in the United States. With over 400 studios open nationwide and hundreds more in development, Club Pilates has never closed a studio. We’re now excited to bring this incredible success to our neighbors to the north to further our mission of making Pilates accessible to everyone.”
3. Club Pilates anticipates that these first three locations will be the start of rapid growth for the brand in Canada. Grove added, “We are expecting to have over 100 locations open in Canada by the end of 2019. There is so much consumer and investor interest. With such a strong brand in the U.S., we expect expansion to be even faster than the pace we’ve set domestically.” Club Pilates is currently looking for instructors, general managers, and people to fill sales roles at its future Canadian locations.
Launches On-The-Go Pilates Classes
4. In early July 2018, Club Pilates launched its new state-of-the-art Club Pilates On Demand offering. Club Pilates On Demand – available in several app stores including Google Play, iPhone and iPad, Amazon Fire, and Apple TV – provides a solution for Pilates lovers to practice at home, while traveling, or at the gym of their choice.
5. The app provides users access to quick Pilates workouts with certified instructors anytime and anywhere. The 100+ fitness workouts are about 15 minutes in length and are customized to fit which equipment (free weight, mat, TRX, Reformer, or nothing at all) is available and which body part (arms, legs, core, full-body, posture) the user would like to target. Club Pilates On Demand also allows users to track workouts completed within the app, monitoring the progress of their mind and body routines.
6. Everyone interested in the program will receive a free one-week trial, and can then join on a monthly or annual agreement. There are no long-term requirements, and interested parties can sign up online or in-studio.
7. Sarah Luna, SVP of operations for Club Pilates, said, “At Club Pilates, many of our clients are constantly on the go, whether it be juggling work, school, family or travel. We felt it was important to offer Club Pilates On Demand to cater to these busy clients who need to squeeze in a workout in their hotel rooms, late at night after the kids go to bed, or even on an airplane. Club Pilates On Demand allows everyone to continue their Pilates journey wherever and whenever they please, while still being connected to the Club Pilates family online.”
Celebrates 300th Studio Opening With Private Training Giveaway
8. At the end of February 2018, Club Pilates celebrated the opening of its 300th location by giving away 300 Private Training sessions. The nationwide giveaway, which was open to both members and non-members, ran from February 19 to 28. Anyone interested in the contest was able to enter by visiting the Club Pilates website.
9. Sarah Luna, SVP of operations for Club Pilates, said, “At Club Pilates, we strive to make Pilates accessible and affordable to all. This revolution in the fitness space has allowed us to reach people across the country and transform their relationships with working out. Over the past two years, we’ve seen immense growth in the brand, and we’re thrilled to open our 300th location. Club Pilates’ Private Training giveaway is the perfect way to give back to those who have joined and supported our mission, as well as reach out to those looking to start their Pilates journey.”
10. The 300th Club Pilates studio opened in Tribeca, New York City and comes during a time of strong growth for the brand across the country and in the New York area specifically. The New York City market now has five locations open with 25 additional studios in development. The official grand opening event for this location was hosted on Saturday, April 21 and Sunday, April 22. At the time of the announcement, the Tribeca Club Pilates was in soft open and offered free 30-minute introductory classes throughout the day.
11. Club Pilates was founded in 2007 by Allison Beardsley in San Diego, California. Beardsley based the Club Pilates workout program on Joseph Pilates’ original Reformer-based Contrology Method. To update the method for today’s Pilates enthusiasts, Beardsley decided to use group practice and state of the art equipment, and make the training program affordable.
12. Beardsley started franchising Club Pilates in 2012 but as the company continued to grow, she realized that she did not have the experience to run a large business. In 2015, when there were 35 Club Pilates locations, Beardsley sold the company to LAG Fit, a franchise development firm that specializes in the acquisition and expansion of boutique wellness concepts and is owned by Anthony Geisler. After the sale, Beardsley retained 25 percent ownership of the company and Geisler stepped in as CEO, a position he still holds today.
13. After Geisler took control of the company, he made several changes that have helped fuel the brand’s growth. One of the first things that Geisler did was to change the brand’s color scheme to something more gender-neutral to draw in male clientele. Under Beardsley, Club Pilates locations had mint walls and pink and purple weights; Geisler painted the walls blue and started using black and blue equipment.
14. He also restructured the company’s pricing, moving it away from the previous pay-by-class system to a monthly membership fee that gave the company a recurring revenue stream. Additionally, Geisler revamped their website, added front desk staff so the studios could stay open between classes, and started selling retail items. All of these changes enabled Club Pilates to grow rapidly.
Entrepreneur’s Franchise 500
15. Club Pilates ranked No. 237 on Entrepreneur’s 2018 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Club Pilates franchise costs, based on Item 7 of the company’s 2018 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Club Pilates’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 19
- Outlets at the End of the Year: 39
- Net Change: +20
- Outlets at the Start of the Year: 39
- Outlets at the End of the Year: 74
- Net Change: +35
- Outlets at the Start of the Year: 74
- Outlets at the End of the Year: 204
- Net Change: +130
- Outlets at the Start of the Year: 5
- Outlets at the End of the Year: 4
- Net Change: -1
- Outlets at the Start of the Year: 4
- Outlets at the End of the Year: 3
- Net Change: -1
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 0
- Net Change: -3
Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis
- This Item 19 discloses the historical financial information regarding the 89 Studios that were (a) open and operating for the period beginning April 1, 2017 and ending March 31, 2018 (the “Measurement Period”), and (b) operated by Club Pilates’ System franchisees utilizing at least 12 reformers as required by the current franchise offering and System (collectively, the “Representative Franchised Studios”).
- Of the 257 Studios operating as of March 31, 2018, the franchisor excluded the information of (a) 158 Studios from this Item on the grounds that they were not open and operating throughout the entire Measurement Period (either because they opened or closed at some point during the Measurement Period), and (b) 10 additional Studios from this Item on the grounds that they did not utilize at least 12 reformers in their operations as required under the current System standards and specifications (and as part of the standard franchise offered under the 2018 Disclosure Document).
Average Gross Revenue Amongst Franchisee-Owned Representative Studios Over the Measurement Period
- The table below discloses the average gross revenue amongst (a) the 89 franchisee-owned Representative Studios over the Measurement Period (the “Franchisee-Owned Studios”), and 48 of those Franchisee-Owned Studios utilizing all “New Model” updates to the System implemented in 2015 (“Franchisee-Owned New Model Studios”).