FDD Talk: AKT (Anna Kaiser Technique) 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 AKT franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for an AKT franchise, based on Item 7 of the company’s 2018 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an AKT franchise, based on Items 5 and 6 of the company’s 2018 FDD

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

• average and median gross revenue generated from April 1, 2017 through March 31, 2018 (the “Measurement Period”) by the only 2 AKT Studios that were open and operated (i) by the founder of the AKT brand over the entire Measurement Period, and (ii) utilizing the mark AKT and certain System components (the “Disclosed Studios”)

• actual and average gross revenue, estimated royalty, cost of sales – third-party vendors, labor expense, rent, merchant account services, general supplies, computer and Internet expenses, repairs and maintenance, security, utilities, total cost of sales and certain operating expenses, and total revenue less cost of sales and certain operating expenses for the 2 Disclosed Studios during the Measurement Period

Section I – Background Information

12 Things You Need to Know About the AKT Franchise

Acquired by Xponential Fitness

1.  In late March 2018, Xponential Fitness announced that it had acquired AKT and has added the company to its growing list of fitness brands, which includes Club Pilates, CycleBar, Pure Barre, Row House, StretchLab, and YogaSix. Backed by Xponential Fitness, AKT will be the first dance-based fitness concept to scale on a global level. At the time of the announcement, AKT had a few studios open in New York City, East Hampton, Los Angeles, and Connecticut.

2.  Anna Kaiser, founder of AKT, said, “At AKT, we want our members to become the strongest, most confident version of themselves and my goal is to pair the personalization of a private trainer with the energy and community of a fitness boutique. My mission has always been to bring this new model of fitness to a wider audience, which is why I am thrilled to partner with Xponential Fitness and expand AKT throughout the nation.”

3.  Anthony Geisler, CEO of Xponential Fitness, added, “The addition of AKT to our suite of brands is a milestone not only for our company but the fitness industry as a whole as we will be the first to scale a dance-based fitness concept globally. Anna has created an ultra-popular concept in AKT and we look forward to expanding the brand through franchising and bringing its one-of-a-kind workout to the masses.”

Launches First-to-Market Franchise Opportunity

4.  In early September 2018, AKT announced the launch of its first-to-market franchise opportunity with growth plans to open 500 new studio locations by 2021. Anna Kaiser, founder of AKT, said, “The decision to franchise AKT was motivated by the opportunity to provide a completely unique, results-driven and life-changing fitness experience to thousands of people across the nation. This desire has and will continue to be at the forefront of AKT’s strategic growth and with the help of Xponential Fitness’ team that has grown some of the largest fitness franchises in the world, I am confident together we will create a franchise powerhouse with unlimited potential.”

5.  Developed in New York City by international fitness expert and celebrity-trainer Anna Kaiser, AKT’s popularity has grown rapidly to meet marketplace demand. The brand’s unique fitness technique strengthens the body and mind through a hybrid program that combines dance with functional training.

6.  Through a customized mixture of its four core modalities (toning, dance, interval training, and circuit training), the AKT program is truly comprehensive, providing members with all aspects of their fitness needs in one workout.

7.  With a vibrant studio atmosphere, celebrity roster, limitless On Demand digital presence, and highly engaged social following, AKT is both a community-first brand and a best-in-class fitness experience.

8.  According to Anthony Geisler, CEO and founder of Xponential Fitness, “When comparing AKT to other boutique fitness concepts, nothing even comes close to matching the experience. As we prepare for momentous growth, we are committed to fulfilling AKT’s founding vision of offering an unparalleled fitness experience. We look forward to growing the brand with passionate partners that will be able to take advantage of AKT’s sophisticated business model and unit-level economics.”

9.  To aid in its nationwide growth, AKT is currently seeking qualified franchise partners with a passion for fitness and who exhibit strong leadership skills and business acumen. Backed by Xponential Fitness’ 25 years of fitness franchising experience, AKT offers potential franchisees the opportunity to capitalize on a turnkey concept in an emerging market with tremendous support, infrastructure, and knowledge. The total investment range to open an AKT franchise is $346,100 to $487,000.

Company History

10.  AKT (Anna Kaiser Technique) was founded in 2013 by international fitness expert Anna Kaiser in New York City. Kaiser was also a professional dancer, choreographer, and celebrity trainer. Using her many years of experience, Kaiser developed a training program that combines circuit training, HIIT, strength, toning, dance cardio, Pilates, and yoga for a full body workout. This is the foundation of AKT, which has become very popular, especially with celebrities, within just a few years.

11.  In 2018, with just a few locations open, AKT was acquired by Xponential Fitness, which owns several other fitness brands, including Club Pilates, CycleBar, StretchLab, Pure Barre, YogaSix, and Row House. Under Xponential Fitness’ leadership, AKT started franchising in the fall of 2018.

Entrepreneur’s Franchise 500

12.  As a new franchise, AKT has yet to rank on Entrepreneur’s Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of AKT 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 AKT’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:  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:  2
• Net Change:  +1

2017

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

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

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

• In Part 1 of this Item, AKT discloses the average “Gross Revenue” generated from April 1, 2017 through March 31, 2018 (the “Measurement Period”) by the only 2 Studios that were open and operated (i) by the founder of the AKT brand over the entire Measurement Period, and (ii) utilizing the mark AKT and certain System components (the “Disclosed Studios”).

• Three pop-up Studios that are operated by the founder of the AKT brand on a temporary basis, and, accordingly, are closed for most of the year, were excluded from this Item 19.

• The Disclosed Studios are operated using the Proprietary Marks and System and continue to be owned by the founder of the AKT brand. AKT and the owner of the Disclosed Studios expect and intend to enter into franchise agreements that will govern the operation of these Studios once AKT is able to offer/sell franchises where the Disclosed Studios are located.