FDD Talk: Iron Tribe Fitness 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 Iron Tribe Fitness franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for an Iron Tribe Fitness franchise, based on Item 7 of the company’s 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an Iron Tribe Fitness franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Iron Tribe Fitness outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of Iron Tribe Fitness’ financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2019 average, median, highest, and lowest gross sales, cost of goods sold, labor costs, occupancy costs, and gross sales less certain costs for the 5 affiliate-owned, 25 franchised, and 30 affiliate-owned and franchised Iron Tribe Fitness facilities that were open and operating during the entire calendar year 2019

Section I – Background Information

21 Things You Need to Know About the Iron Tribe Fitness Franchise

Stays Open Virtually During Ongoing COVID-19 Pandemic

1.  In late March 2020, just as the COVID-19 pandemic took off in the United States, Iron Tribe Fitness announced that its coaches were working around the clock via 24/7 social media access, streaming live workouts, video calls, and daily text messages and emails to ensure their members still received top-notch fitness and nutrition guidance. Forrest Walden, founder and CEO of Iron Tribe, advised that now more than ever, it is important that members stick with their health and wellness plans.

2.  Walden said, “Just because we can’t see our gym communities face to face doesn’t mean we can’t still deliver a premier service that allows members to see improvement in their overall health. We created a private Facebook group for all 5 of our Birmingham locations that has been booming with live workouts, recipes and daily interactions between coaches and clients. We also created a private membership site where we put all of the videos, recipes and workouts live for easy access.”

3.  Walden also took his plan one step further and temporarily opened each of his five Birmingham gyms so members could borrow workout equipment of their choice as long as coronavirus quarantine orders stayed in place. Rowers, bikes, kettlebells, battle ropes, and more were dispersed throughout the city and got good use in local garages, basements, and wherever else members could set up a makeshift gym.

4.  Stan Felton, a longtime member at the Homewood gym, wrote in the Facebook group, “I am amazed at the stuff I’ve seen on this group page. Hats off to every coach from basically every location doing all they can to help everyone at home like they should be. This is why we value this community so much.”

5.  Amid rising fear and uncertainty, Walden added that establishing a consistent at-home workout regimen can produce considerable benefits. For those looking to stick to a daily routine and maintain – or improve – their current fitness level, Walden listed the following top recommendations:

• Wake up at your usual time each day and try to workout when you normally would. This helps create a sense of normalcy and consistency.
• Challenge yourself by using household items to add weight to your workouts.
• Find an accountability partner that will encourage you to complete your workouts each day.
• Call, text, or communicate through social media to check in on each other.
• Consider downloading a mobile app like MyFitnessPal to track your daily caloric intake.

6.  As a way to open up all of the brand’s fitness resources, Iron Tribe created a Facebook group that anyone – even non-members – can join. There, group members will get exclusive access to workouts, nutritional guidance, daily accountability, and more.

7.  “We’re so excited to roll this out and serve more people in the Birmingham area and beyond,” Walden concluded. “Though these are strange times, I’m confident we can make a positive impact on others through health and wellness. Our mission is ‘To Create Fitness Communities That Change Lives,’ and nothing – not even Coronavirus – will stop that.”

Launches 21-Day Virtual Challenge

8.  In early April 2020, Birmingham-based Iron Tribe Fitness temporarily closed its five physical locations due to the ongoing COVID-19 pandemic, but the gym was still committed to making sure its members – and anyone in Alabama – could improve their overall health and fitness. Weeks after taking its fitness services totally online during the pandemic, Iron Tribe expanded its innovative, accessible approach even further. Iron Tribe Fitness launched a 21-Day Virtual Challenge that was available to anyone, anywhere, 100% for free.

9.  In a statement, Forrest Walden, founder and CEO of Iron Tribe Fitness, explained that the decision to offer the no-cost program was simple. Walden said, “Right now, people are seeking motivation to stay healthy, improve their fitness and boost their immune system. This program offers just that and so much more. We received such great feedback about our online workouts from our current clients that we knew we needed to offer them to more people. Right now, people are seeking motivation to stay healthy, improve their fitness and boost their immune system. This program offers just that and so much more.”

10.  Iron Tribe’s 21-Day Virtual Challenge gave participants access to daily online workouts that required no equipment and could be tailored to any fitness level – plus customized meal plans and a personal accountability coach who could answer all questions and monitor progress along the way. The goal, Walden said, was for challengers to complete the three-week program with more energy, a fitter physique, and enhanced motivation to continue on their journey toward better health.

11.  “We host challenges like this all the time and have people lose an impressive amount of weight,” Walden remarked. “These workouts are thoughtfully written and designed to deliver maximum results. Also, the meal plans are super easy to follow. Our team customizes each meal template to make sure challengers get the most out of their daily nutrition.”

12.  He added that Iron Tribe coaches provide a wealth of resources for challengers. Just because gyms’ doors are closed, Walden noted, does not mean coaches are not still connecting and engaging with members. “Our coaches will be checking daily meals and making sure challengers complete their workouts,” he concluded. “Once participants sign up, they’ll be a part of our community – reaping all the benefits that come with it!”

Uses Closures to Renovate Physical Spaces, Expand Member Experience

13.  In late May 2020, Forrest Walden, founder and CEO of Iron Tribe Fitness, said the decision to temporarily close its gyms was met with a mix of emotions. “This is something none of us saw coming,” Walden said. “Everything was changing by the hour, and we knew we had to put a plan in place fast to ensure our 1,200+ members in Birmingham continue to get the high-quality experience they’re used to and deserve.”

14.  Thanks to the brand’s commitment to delivering a consistent experience to its current members, and launching a virtual membership option, Iron Tribe Fitness had not needed to lay off any of their coaches. In fact, Walden said, the gym has used this time to invest its dollars back into its gyms by doing a complete rebranding and renovation. According to Walden, “We’ve chosen to double down on our physical spaces and client experience during this time of shut down. We can’t wait to welcome our members back to a completely renovated gym.”

15.  On March 17, Iron Tribe, like many other area gyms, hosted its first online workout through Facebook Live. From there, the online Iron Tribe experience grew to include several online classes a day, a private Facebook group that now has close to 1,000 members, and a virtual membership that expands outside of Birmingham.

16.  Despite its five gyms remaining closed at the time of the press release (the gym has diligently followed CDC recommendations and abided by state mandates), Walden said the brand has continued to grow and reach more members of the community. “Simply put, we’ve decided to pivot,” Walden said. “We’ve ramped up our online experience and scaled that experience so others can experience our gym virtually.”

17.  Watching other gyms close, Walden says, has not been easy. As a 20-year veteran of the fitness industry, Walden has worked as both a personal trainer, a small-group instructor, and now a business owner. Fitness, Walden says, has always been a rapidly-changing industry. Add in an unprecedented pandemic, and it’s easy to see how many would suffer.

18.  “It’s heartbreaking to see other gyms close for good,” he said. “This means there are countless people who are no longer receiving the fitness and nutritional training they need to improve their lives.” As for the future, Walden says nothing is ever for certain except for one thing. “We will always adapt,” he said. “Tomorrow is not guaranteed and there will always be obstacles to overcome before reaching your goals. We will continue to strive to create fitness communities that change lives in and around Birmingham, no matter what.”

Company History

19.  Iron Tribe Fitness was founded in 2010 by Forrest Walden in Birmingham, Alabama. The idea for Iron Tribe Fitness was inspired by Walden, his wife, and two friends trying to get in shape in 2008. The group hated traditional big-box gyms as well as repetitive workouts on DVD, so they developed their own fitness and nutrition program. Just 23 days later, they all felt much healthier and wanted to share this fitness program with others.

20.  The Iron Tribe Fitness program features 45-minute HIIT (High Intensity Interval Training) group classes that are fun and paired with one-on-one personal coaching. Walden began franchising the Iron Tribe Fitness concept in 2012 and there are now locations in more than 40 cities across 15 states.

Entrepreneur’s Franchise 500

21.  Iron Tribe Fitness did not rank on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Iron Tribe Fitness franchise costs, based on Item 7 of the company’s 2020 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Iron Tribe Fitness’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

• Outlets at the Start of the Year:  33
• Outlets at the End of the Year:  29
• Net Change:  -4

2018

• Outlets at the Start of the Year:  29
• Outlets at the End of the Year:  29
• Net Change:  0

2019

• Outlets at the Start of the Year:  29
• Outlets at the End of the Year:  26
• Net Change:  -3

Company-Owned

2017

• Outlets at the Start of the Year:  8
• Outlets at the End of the Year:  8
• Net Change:  0

2018

• Outlets at the Start of the Year:  8
• Outlets at the End of the Year:  5
• Net Change:  -3

2019

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  5
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

• This Item sets forth historical revenue and certain operating expense information for (a) the 25 franchised Facilities (“Franchised Facilities”), and (b) 5 affiliate-owned Facilities (“Affiliate Facilities”), all of which operate under the Proprietary Marks (collectively, the “Disclosed Facilities”). No franchised or affiliate-owned outlets open and operating for the entire Measurement Period were omitted from this Item 19.

• The table below contains the Gross Sales as well as the cost of goods sold (“COGS”), occupancy cost, and labor expense information of the Disclosed Facilities during calendar year 2019 (the “Measurement Period”).

• A number of factors will affect the success of your franchise. These factors include the current market conditions, the type of market in your franchise area, the location of your franchise area, the competition, and your ability to operate the franchise.

• The table below presents the following information for the 25 Franchised Facilities and 5 Affiliate Facilities over the Measurement Period: (i) the Gross Sales, (ii) the COGS, Labor Costs, and Occupancy Costs, (iii) the Sum of Certain Costs, and (iv) the Gross Sales Less Certain Costs.

Affiliate Facilities (5 Facilities)

Gross Sales