FDD Talk: Farrell’s eXtreme Bodyshaping 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 Farrell’s eXtreme Bodyshaping franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Farrell’s eXtreme Bodyshaping franchise, based on Item 7 of the company’s 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Farrell’s eXtreme Bodyshaping franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Farrell’s eXtreme Bodyshaping 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 Farrell’s eXtreme Bodyshaping’s 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 for the top third, middle third, bottom third, and all 63 Farrell’s Center franchises that offered and ran four full 10-week Course sessions during the 2019 calendar year

• 2019 average, median, highest, and lowest gross sales for the subset of 9 Farrell’s Center franchises that participated in a test program (which Farrell’s calls the Farrell’s 2.0 Program), which consisted of (a) extensive sales training, (b) charging a trained sales staff to handle member enrollments, rather than the owner or manager, (c) expanding the enrollment period from four three-week periods to open enrollment throughout the year, and (d) increasing membership prices

Section I – Background Information

12 Things You Need to Know About the Farrell’s eXtreme Bodyshaping Franchise

Gives Back to Members and Local Communities

1.  Farrell’s eXtreme Bodyshaping has given back in many ways since it first started in 2001 – beginning with its $1,000 winners every session and the annual $10,000 National Challenge winners. Since Farrell’s inaugural session, the brand has distributed more than $2.2 million to its members.

2.  In addition to giving to its members, Farrell’s eXtreme Bodyshaping also helps the communities where its gyms are located. From the annual Wild Boar Challenge in the brand’s home state of Iowa, to Farrell’s Charity Bracket Challenge, Farrell’s eXtreme Bodyshaping assists and gives to those in need across the US. According to Farrell’s, there isn’t a location that doesn’t hold kick-a-thons for members in need, donate to regional charities, or regularly volunteer and participate in community events.

3.  One major way that Farrell’s franchisees give back is through Farrell’s Charity Bracket Challenge. The Farrell’s Charity Bracket is a way for Farrell’s to aid its local communities and its members. Each Farrell’s location decides on a charity to support, and the charities are placed into brackets. Every round, the public votes for their favorite charity, and the winner gets the grand prize of $5,000. Farrell’s first launched the Charity Bracket in 2017 and that year’s winner was the Altoona Kids Cafe in Altoona, Iowa.

4.  Every year, Farrell’s eXtreme Bodyshaping Corporate sponsors the Wild Boar Challenge, an annual obstacle race that supports the CBC Foundation and Wildwood Hills Ranch. These organizations offer life-changing opportunities and camp programs for at-risk and disadvantaged children in Central Iowa. Farrell’s teams from around the country attend the Wild Boar Challenge to support its cause.

Opens First Location in Florida

5.  Farrell’s eXtreme Bodyshaping continues to grow around the U.S. and one of its newest locations was opened in Oldsmar, Florida in October 2019. Owners and operators of Farrell’s eXtreme Bodyshaping Oldsmar are Julie Ruden and her husband Nicholas.

6.  Several years ago, the Rudens changed their lives when they joined Farrel’s in Iowa. Not only did they lose weight, but they became healthier and happier. Now they are bringing Farrell’s to Florida with the first location to open in the state. According to Ruden, “We wanted other people to feel as good as we feel.”

7.  Farrell’s offers a comprehensive fitness program that combines cardio kickboxing, strength training, nutrition guidance, and motivating coaches. Workout classes are held six days a week in a group setting, so everyone is focused on the same goals and supports each other.

8.  Members begin their Farrell’s transformation with a 10-Week Challenge. Using a variety of metrics to track progress, the member with the biggest transformation will win $1,000. After 10 weeks, members can then become part of Farrell’s Infinite Transformation (FIT) program with the opportunity to participate in additional challenges. Ruden added, “It’s a community. We want to help you reach goals and live your best life.”

Company History

9.  Farrell’s eXtreme Bodyshaping was founded in 2001 by Lance Farrell in Des Moines, Iowa. Farrell has been into fitness his entire life and studied Taekwondo under Master Chin Pak while studying at Iowa State University in 1980. Eventually, Farrell became a Taekwondo teacher and also attended the U.S. Olympic Sports Festival in 1989 and 1991.

10.  After moving to Des Moines, Farrell opened his first fitness studio and he noticed that his students weren’t just transforming their bodies; they were also undergoing mental and spiritual transformations. Using this as motivation, Farrell set out to develop a fitness program that blended the disciplines of martial arts and the principles of healthy living. Farrell developed a 10-Week Challenge program using the art of Taekwondo, the concepts of bodybuilding, and the martial arts culture of accountability.

11.  The success of Farrell’s first students led others to sign up for his classes. Farrell started franchising Farrell’s eXtreme Bodyshaping in 2007. Today, there are Farrell’s eXtreme Bodyshaping gyms across 12 states and counting.

Entrepreneur’s Franchise 500

12.  Farrell’s eXtreme Bodyshaping did not rank on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Farrell’s eXtreme Bodyshaping 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 Farrell’s eXtreme Bodyshaping’s 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:  61
• Outlets at the End of the Year:  60
• Net Change:  -1

2018

• Outlets at the Start of the Year:  60
• Outlets at the End of the Year:  66
• Net Change:  +6

2019

• Outlets at the Start of the Year:  66
• Outlets at the End of the Year:  65
• Net Change:  -1

Company-Owned

2017

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

2018

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

2019

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

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

• As of December 31, 2019, there were 66 Farrell’s Centers in operation, 65 of which were franchised, and one of which was owned and operated by an affiliate and which offered a different mix of products and services than franchised Farrell’s Centers, including martial arts classes and other experimental courses that were not offered by franchised Farrell’s Centers.

• Of the 65 franchised Farrell’s Centers that were open and operating as of December 31, 2019, 63 offered four full 10-week Course sessions during the 2019 calendar year. The remaining two Farrell’s Centers were not operational for the full 2019 calendar year.

• During Farrell’s fiscal year ended December 31, 2019, nine of the 63 franchised Farrell’s centers participated in a test program (which Farrell’s calls the Farrell’s 2.0 Program), which consisted of (a) extensive sales training, (b) charging a trained sales staff to handle member enrollments, rather than the owner or manager, (c) expanding the enrollment period from four three-week periods to open enrollment throughout the year, and (d) increasing membership prices.

• As described below, the nine Centers participating in the Farrell’s 2.0 Program achieved the highest sales levels in the System.

• The following chart is an historical performance representation about the 63 franchised Farrell’s Centers that offered four full 10-week Course sessions during the 2019 calendar year, and the subset of nine franchised Farrell’s Centers that participated in the Farrell’s 2.0 Program in 2019. Excluded from these results are the two franchised Farrell’s Centers that did not operate for the full 2019 calendar year.

Part 1 – Gross Sales for 63 Franchised Centers and Farrell’s 2.0 Centers for Fiscal Year Ended December 31, 2019

• The following chart reflects information about the “Merchandise Gross Sales and Service Gross Sales” achieved by the 63 franchised Centers that offered four full 10-week Course sessions during calendar year 2019 and the subset of nine franchised centers which implemented the new Farrell’s 2.0 enrollment and sales process.

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