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

• Section I – Background information on the CycleBar franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a CycleBar 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 CycleBar franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned CycleBar 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 CycleBar’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• 2017 average, median, highest, and lowest gross revenue for the 61 franchised CycleBar Studios that were open and operating over the entire 2017 calendar year (the “Franchisee-Owned Disclosed Studios”)

• 2017 average, median, highest, and lowest gross revenue for the subset of 5 Franchisee-Owned Disclosed Studios that were open during the entire 2017 calendar year and were operated in accordance with a new CycleBar membership model developed and implemented in 2016 (“Franchisee-Owned Disclosed Studios – New Membership Model”)

Section I – Background Information

14 Things You Need to Know About the CycleBar Franchise

Partners With Kiehl’s LifeRide for amfAR

1.  At the end of July 2018, Kiehl’s announced that it was continuing its long-standing commitment to support HIV/AIDS charities, with its enduring partnership with amfAR, The Foundation for AIDS Research, and the ninth annual motorcycle ride, Kiehl’s LifeRide for amfAR.

2.  Kiehl’s also partnered with CycleBar this year so that 1,500 LifeRide supporters in Southern California would be able to ride along with the LifeRiders. Through the partnership, CycleBar offered Kiehl’s LifeRide for amfAR classes in 30 CycleBar studios across the country. Kiehl’s also donated $30 per bike in one of these classes, as part of its overall donation to amfAR.

Hosts Charity Event to Raise Money for Hurricane Harvey Relief

3.  In early September 2017, following the devastation caused by Hurricane Harvey, CycleBar announced that it would be hosting charity rides at nearly 100 studios over a few weeks to raise donations to benefit the Hurricane Harvey Relief Fund. Additionally, CycleBar sold “We Ride with Texas” shirts and hats, to show its solidarity with those affected by the hurricane and to raise more money.

4.  Depending on the studio, riders were given the chance to pledge a dollar amount per mile ridden for a specific period of time or were granted a free ride in exchange for a donation. Shirts and hats were sold for $20 each, and a portion of the profits were donated. Between the funds raised through the charity rides and merchandise sales, CycleBar aimed to raise a total of $100,000 for hurricane relief efforts.

5.  Heather Harris, president of CycleBar, said, “There is truly no limit to how much someone can give to those in need, and at CycleBar, we’ve witnessed the power of coming together to benefit our communities more times than we can count. The wonderful thing about our studios is that they provide us with a platform to bring people together quickly to fundraise in times of need, and we pledge to do all we can in order to help our friends and family in Texas get back on their feet.”

6.  In an effort to ensure that more volunteers were able to help in Texas, the CycleBar studio in Vintage Park pledged 100 percent of the proceeds from its fundraising rides to YesPrep!, where around 85 percent of attending students qualify for food stamps and/or assisted lunch programs. With many of the children having nowhere to turn for their basic needs, CycleBar Vintage Park aided YesPrep!, which helped those families by donating gift cards for clothes, mattresses, blankets, water, food, etc. to directly benefit YesPrep! children and families as Houston rebuilds.

Appoints Former Creative Director of IMAXshift as New Master Training Instructor

7.  At the beginning of June 2017, Jesse Alexander, one of New York City’s visionary and elite indoor cycling instructors, joined CycleBar’s roster of Master Training Instructors. Alexander, who was previously the creative director of IMAXshift and an instructor at Flywheel Sports, will be based out of studios in Bergen County, New Jersey.

8.  Tevia Celli, CycleBar’s director of instructor training and class experience, stated, “Jesse Alexander is coming on as a Master Instructor for my training team. As a Master Instructor, Jesse will help facilitate bootcamps for studios opening on the East Coast as well as other demographics when needed. Jesse brings so much knowledge to the table and I am looking forward to being back on the same team with him.”

9.  According to Alexander, CycleBar is the future of modern cycling. He said, “CycleBar is a perfect blend of everything I love about indoor cycling and fitness. I have many years of experience in various studios and this is the first time I will have this kind of creative freedom on the bike. I see a place where as a master instructor I can create a ride – an experience – which includes my love of riding to the beat, rhythm, and sweating. Combined with my years of HIIT training and using the metrics on the bike, I am ecstatic to be able to deliver a ride that will genuinely feel like ‘mine’.”

10.  Alexander added, “My greatest professional passion is leading my riders to their next level with the beat of the music as our guide, rhythm riding with reckless abandon as our tool and always, tapping it back – especially when I can infuse my Brooklyn boy, East Coast flavor. My vision for the East Coast (and beyond!) is for everyone, no matter what their vibe is – performance-driven or rhythm-based rides – they will find something in the CycleBar experience for them.”

Company History

11.  CycleBar was founded in 2004 by Bill Pryor and his sister Alex Klemmer in Boston, Massachusetts. The siblings wanted to start one of the first independent cycling studios in the United States. At the time, Pryor was a corporate executive and Klemmer was a stay at home mom and both of them had often taken cycling classes at traditional gyms.

12.  Both Pryor and Klemmer felt that the quality of these cycling classes was inconsistent and so they visited successful cycling studios in Los Angeles to see how they should run their own studio in Boston. Pryor and Klemmer refined what they saw in Los Angeles and established their first studio in a suburban Boston neighborhood in 2005.

13.  Franchising started in 2015 and today, there are CycleBar locations across the country and in Canada, the United Kingdom, and the United Arab Emirates. In 2017, CycleBar was acquired by TPG Capital, which created a new company called Xponential Fitness to oversee its boutique fitness brands, which now also include Club Pilates, Pure Barre, StretchLab, Row House, Yoga Six, and AKT.

Entrepreneur’s Franchise 500

14.  CycleBar did not rank on Entrepreneur’s 2018 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of CycleBar 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 CycleBar’s 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

Franchised

2015

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  3
• Net Change:  +1

2016

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  54
• Net Change:  +51

2017

• Outlets at the Start of the Year:  54
• Outlets at the End of the Year:  117
• Net Change:  +63

Company-Owned

2015

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2016

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2017

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  0
• Net Change:  -1

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

• In this Item 19, CycleBar discloses the average “Gross Revenue” generated during the 2017 calendar year (the “Measurement Period”) amongst: (i) the 61 franchised Studios that were open and operating over the entire Measurement Period (the “Franchisee-Owned Disclosed Studios”); and (ii) the subset of 5 Franchisee-Owned Disclosed Studios that were open during the entire Measurement Period and were operated in accordance with a new CycleBar membership model developed and implemented in 2016 (“Franchisee-Owned Disclosed Studios – New Membership Model”).

• For the purposes of this Item 19, a Studio is deemed “open and operating” during the period preceding the soft-opening when it is actively selling memberships, even though the Studio is not offering all of the Approved Services during that period.

• All new Studios opened under CycleBar’s current form of Franchise Agreement and the 2018 Disclosure Document will be operated in accordance with this new membership model.

• This Item 19 excludes the 63 Studios that opened at some point in 2017 because they were not open and operating throughout the entire Measurement Period.

• Accordingly, the financial performance representations contained in this Item 19 are historical representations based on past performance of existing Studios. The following representations are based on sales information obtained via the Studios’ respective POS Systems.

• The term “Gross Revenue” means the total revenue generated by a given Disclosed Studio over the Measurement Period, including all revenue generated from the sale and provision of any and all Approved Services at, from, or otherwise through, that Studio.

• The term “Gross Revenue” does not include any amount of revenue the Disclosed Studios may have generated by providing CycleBar University (because the Covered Studios did not offer and generate revenue from the provision of CycleBar University in the manner contemplated in the Disclosure Document).

Franchisee-Owned Disclosed Studios