In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the 9Round franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a 9Round franchise, based on Item 7 of the company’s 2019 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a 9Round franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned 9Round outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of 9Round’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- average number of members as of December 31, 2018 for the top third, middle third, and bottom third of the 458 franchised 9Round Centers that were in operation for the full 12-month period ending December 31, 2018
- average number of members as of December 31, 2018 for the top third, middle third, and bottom third of the 6 affiliate-owned 9Round Centers that were in operation for the full 12-month period ending December 31, 2018
- average number of members as of December 31, 2018 for the top third, middle third, and bottom third of the 464 franchised and affiliate owned 9Round Centers that were in operation for the full 12-month period ending December 31, 2018
Section I – Background Information
13 Things You Need to Know About the 9Round Franchise
Celebrates 10th Anniversary and Record Year in 2018
1. To kick off 2019, 9Round reflected on 2018, which was the company’s 10th year in business and also a historic year of record expansion. In 2018, 9Round celebrated 202 grand openings with 40 of those new locations outside of the United States and Canada. In addition, the company confirmed deals for expansion domestically into Maine and internationally into Argentina, India, Guatemala, and Singapore.
2. Shannon Hudson, founder and CEO of 9Round, said, “This was an incredible year of growth for 9Round as we continued to expand on an international stage. In 2018 we celebrated our 10th anniversary, surpassed more than 770 locations worldwide and grew our system to more than 3,500 trainers helping members become ‘stronger in 30 minutes’.”
3. Other highlights for the year included:
- International expansion into South America with the first Argentinian location opening;
- Grand openings of the first women-only 9Round studios in Kuwait and Dubai;
- Introduction of a full supplement line including 9Round Protein, 9Round Protein Bars, 9Round Energy, 9Round Pre-Workout, and 9Round Women’s Support;
- The launch of the 9Round app, offering members easy access to their online member portal, which includes nutritional guidance, fitness tips, goal tracking, and more;
- New online video-based operations and sales training modules for 9Round Certified Trainers;
- A new ERP system for business analysis and inventory tracking purposes; and
- Inclusion in top industry rankings, such as Entrepreneur magazine’s Franchise 500 and Top Franchises for Veterans, Inc. magazine’s Inc. 5000, Club Industry’s Top Health Clubs, South Carolina’s 25 Fastest-Growing Companies, and more.
4. Hudson added, “We have even bigger plans for 9Round as we enter 2019. This past year has positioned our award-winning network to reach more than 1,000 gyms by 2020.”
Expands to the Republic of Ireland
5. In mid-March 2019, 9Round finalized plans for future development in the Republic of Ireland. The Republic of Ireland’s inaugural 9Round location is projected to open in the city of Cork before the end of 2019. Development of 9Round in Ireland and across Europe is being led by Lift Brands, 9Round’s business partner and the master license holder behind more than 75 international 9Round locations to-date.
6. Shannon Hudson, founder and CEO of 9Round, said, “With our experienced partner, Lift Brands, leading this development, the Republic of Ireland shows promise for successful 9Round expansion in a number of ways. Due to the country’s strong fitness market, booming economy and dedicated combat sports history, I am confident that our kickboxing-themed workouts will resonate well with residents.”
7. The master franchisee intends to continue growing 9Round’s presence in the Republic of Ireland, actively recruiting prospective franchisees throughout Cork, Dublin, and the rest of the Republic of Ireland. 9Round’s presence in Europe doubled last year, with the brand’s first grand opening in Scotland standing out as one of its most noteworthy expansion highlights of 2018. In 2019, 9Round’s network in the UK is expected to double yet again and its first opening in Belfast, Northern Ireland is forthcoming.
8. According to Jon Cottam, managing director of Lift Brands in Europe, “We are entering an extremely exciting era for development of 9Round in Europe. We doubled 9Round’s UK estate last year and are projected to do so again in 2019, which gives us a great foundation for continued European expansion. As we work toward our goal of developing several hundred more units throughout Europe, we are seeking the best single and multi-unit operators in the UK, Republic of Ireland, Spain and Benelux as well as master franchisees in other key European markets.”
9. 9Round was founded in 2008 by Shannon Hudson and his wife Heather in Greenville, South Carolina. Shannon was a retired kickboxer who had earned the title of IKF Light Middleweight Kickboxing World Champion and Heather was also passionate about fitness.
10. At the time, the Hudsons were already running a karate school, but they wanted to start a new business even though the Great Recession of 2008 had just hit. The Hudsons developed a short but effective workout and founded 9Round on the idea that people do not need to spend more time in a gym, they just need more focus and intensity.
11. The Hudsons used the first 9Round gym to test their 30-minute, kickboxing circuit workout and prove that the program worked. As the only two employees, Shannon and Heather personally implemented, tested, and revised every process and piece of equipment, from the gloves and heavy bags that would be used, to pad drills and the music that was played.
12. After only about one year, the Hudsons sold that first 9Round location to a member of the gym and began franchising the 9Round concept. Over the next few years, 9Round continued to grow and by 2012, there were 100 locations across the country. Today, there are 9Round gyms in 42 states and 16 countries.
Entrepreneur’s Franchise 500
13. 9Round ranked No. 112 on Entrepreneur’s 2019 Franchise 500 list and also appeared on the magazine’s Fastest Growing Franchises list this year at No. 20.
Section II – Estimated Costs
- Please click here for detailed estimates of 9Round franchise costs, based on Item 7 of the company’s 2019 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on 9Round’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 270
- Outlets at the End of the Year: 385
- Net Change: +115
- Outlets at the Start of the Year: 385
- Outlets at the End of the Year: 490
- Net Change: +105
- Outlets at the Start of the Year: 490
- Outlets at the End of the Year: 576
- Net Change: +86
- Outlets at the Start of the Year: 4
- Outlets at the End of the Year: 6
- Net Change: +2
- Outlets at the Start of the Year: 6
- Outlets at the End of the Year: 7
- Net Change: +1
- Outlets at the Start of the Year: 7
- Outlets at the End of the Year: 7
- Net Change: 0
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
Historic Membership Numbers as of December 31, 2018 for the 464 9Round Centers in Operation for the Full 12 Months of 2018
- As of December 31, 2018, there were 770 9Round Centers operating in 16 countries. Of these 770 Centers, 583 were in the United States across 41 states. In the United States, 7 Centers are operated by the franchisor’s affiliates and 576 are franchised locations.
- Of these 583 U.S. Centers, 464 (458 franchised and 6 affiliate-owned) were in operation for the full 12-month period ending December 31, 2018.
Part 1 – 458 Franchised Centers
- The chart below reflects historical membership information concerning the 458 Franchised Centers that were open and operating for at least the full 12-month period ending December 31, 2018.
Centers With Top 33% Membership Counts (151 Centers)