FDD Talk: YogaSix Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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

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

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

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

• average gross revenue generated from July 1, 2017 through June 30, 2018 (the “Measurement Period”) by the 6 Existing Studios that (a) were operated in a substantially similar manner to the Franchised Business under YogaSix’s then-current Marks throughout the Measurement Period, and (b) continue to operate in that manner as of the Issue Date of the 2018 Disclosure Document

• actual and average gross revenue, estimated royalty, cost of sales – third-party vendors, labor expense, rent, merchant account services, office supplies, general supplies, computer and Internet expenses, repairs and maintenance, security, utilities, bank service fees, cleaning, insurance premiums, total cost of sales and certain operating expenses, and total revenue less cost of sales and certain operating expenses for the 6 Existing Studios during the Measurement Period

Section I – Background Information

11 Things You Need to Know About the YogaSix Franchise

Acquired by Xponential Fitness

1.  In early August 2018, YogaSix, which had seven locations at the time, announced that it had been acquired by Xponential Fitness. YogaSix is the seventh fitness brand now under the Xponential umbrella and YogaSix is the first yoga brand owned by the company. Xponential’s other brands are Club Pilates, CycleBar, StretchLab, AKT, Row House, and Pure Barre.

2.  Anthony Geisler, CEO of Xponential Fitness, said, “Adding YogaSix to Xponential Fitness was a perfect fit for our portfolio as it is a great complement to our already robust suite of brands. Up until this point, primarily San Diego and Midwestern consumers have had the opportunity to experience YogaSix, and we now look forward to expanding the brand through franchising across the country.”

Opens First Location in New Mexico

3.  As YogaSix continues to expand across the United States, the brand has been opening locations in new markets. In early February 2019, YogaSix opened its first studio in New Mexico in the city of Albuquerque. At the time of the press release, the studio was still in its soft opening phase with an official grand opening slated for sometime in March.

4.  YogaSix Albuquerque is owned and operated by husband-and-wife team Brian and Jessica Rule. Brian Rule is president of Blake’s Lotaburger, while Jessica Rule has a background in fitness training. Jessica said, “We are excited to bring YogaSix to Albuquerque to breathe new life into the wellness and yoga scene. No matter what your background, yoga can be beneficial, be that physical, mental or spiritual, and YogaSix makes the practice so accessible for everybody. We think the new studio will perfectly complement the health and fitness offerings in the area, while bringing something new to local residents.”

Best Classes for Beginners

5.  YogaSix understands how overwhelming it can be to choose a yoga class for the first time, so the brand’s blog highlights the classes that are best for beginners. According to YogaSix, the following classes are great at easing in new students:

• Slow Flow – Slow Flow classes are the perfect way to learn essential basic yoga postures. According to the blog, the slower pace of this class gives people time to really pay attention to their alignment and learn how each posture feels. The instructors really encourage students to use their breath as they flow through the movements, which helps to deepen their connection to each posture. Slow Flow is a must for students new to yoga.

• Deep Stretch/Restorative – The Deep Stretch class consists entirely of floor postures and is perfect if you’re new to yoga, if you’re recovering from an injury, or if you’ve had a tough workout or even just a tough day. Students spend several minutes in each posture to open and stretch tight muscles, and the warm room and relaxed pace can loosen anyone up.

• Hot Yoga – YogaSix’s Hot Yoga classes combine a slightly faster yoga flow with balance challenges and targeted core work – all done in rooms heated to 100+ degrees Fahrenheit. These classes still focus on essential basic yoga postures but are slightly more challenging than Slow Flow or Deep Stretch.

• Y6 Sculpt – YogaSix’s Y6 Sculpt classes provide the perfect combination of yoga, strength training, and cardio. These classes are designed to keep people moving, so they’re great for anyone looking to mix up their yoga routine.

• Unheated Power Flow – Last summer, YogaSix added an Unheated Power Flow class to its schedule. These classes move at a slightly faster pace and are more challenging than the true beginners classes like Slow Flow. They’re great for anyone who has been practicing yoga for a while and is ready for a new challenge. Unheated Power Flow is also the perfect class for anyone who works out regularly and is already athletically inclined.

Company History

6.  YogaSix was founded in 2012 by Bill Koman in St. Louis, Missouri. Koman, who is the son of a former NFL linebacker, had spent most of his career in commercial development as president of the Koman Group, a real estate company. However, Koman changed directions when he started doing yoga and meditating while he was fighting lymphoma. Koman said that yoga was a “good distraction” and helped him take his mind off his cancer. After overcoming his lymphoma, Koman turned his passion for yoga into a business after identifying a need for higher-quality and consistent yoga studios.

7.  Koman launched YogaSix as an upscale hot yoga studio concept – both heated and unheated classes are offered. After opening the first location near his home in St. Louis, Koman opened a second YogaSix studio in San Diego, California, where he lives for part of the year. Over the next few years, YogaSix expanded into a few more markets, including Chicago, Illinois; Milwaukee, Wisconsin; and Columbus, Ohio.

8.  In 2018, YogaSix was acquired by Xponential Fitness, which owns other boutique fitness brands. Xponential Fitness CEO Anthony Geisler said that the company plans to further expand YogaSix’s presence in the United States through franchising.

9.  YogaSix currently has five locations in San Diego, two in St. Louis, three in Chicago, one in Ohio, one in Milwaukee, and one that just opened in Albuquerque. The brand will open one corporate studio in Yorba Linda at the end of March 2019.

10.  YogaSix has already sold 54 locations with an additional 50 pending and is projecting to have more than 300 locations open in the next couple of years. YogaSix is looking to expand across suburban areas, metropolitan areas, and major cities.

Entrepreneur’s Franchise 500

11.  As a newer franchise, YogaSix has yet to appear on Entrepreneur’s Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of YogaSix 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 YogaSix’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:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2016

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

2017

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

Company-Owned

2015

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  6
• Net Change:  +1

2016

• Outlets at the Start of the Year:  6
• Outlets at the End of the Year:  6
• Net Change:  0

2017

• Outlets at the Start of the Year:  6
• Outlets at the End of the Year:  7
• Net Change:  +1

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

Part 1 – Average Gross Revenue Amongst Existing Studios Over Measurement Period

• In Part 1 of this Item, YogaSix discloses the average “Gross Revenue” generated from July 1, 2017 through June 30, 2018 (the “Measurement Period”) by the 6 Existing Studios that (a) were operated in a substantially similar manner to the Franchised Business under YogaSix’s then-current Marks throughout the Measurement Period, and (b) continue to operate in that manner as of the Issue Date of the 2018 Disclosure Document.

• YogaSix and the owner of the Existing Studios expect and intend to enter into franchise agreements that will govern the operation of these Studios once YogaSix is able to offer/sell franchises where the Existing Studios are located.