FDD Talk 2021: 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 2021 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 2021 FDD

• Section IV – Number of franchised and company-owned YogaSix outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of YogaSix’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• average monthly gross sales generated in each calendar month comprising the 2020 calendar year, by the franchised YogaSix Studios that were open for at least 12 calendar months (“Disclosed Studios”)

• average monthly gross sales generated in each calendar month comprising the 2020 calendar year, by the Disclosed Studios that were actively providing the Approved Services within their respective Studios (the “Disclosed Studios with Active In-Studio Operations”)

• average monthly gross sales generated in each calendar month comprising the 2020 calendar year, by the remaining Disclosed Studios that were forced to cease in-Studio operations for 1 or more days within the applicable calendar month (the “Disclosed Studios with Interrupted In-Studio Operations”)

Section I – Background Information

13 Things You Need to Know About the YogaSix Franchise

Launches Proprietary 300-Hour Virtual Yoga Teacher Training

1.  In mid-November 2020, YogaSix launched its proprietary 300-Hour Virtual Yoga Teacher Training, the first of which was held from January to June 2021. Led by 3 world-class YogaSix Master Trainers – Christine Kick, Zac Armstrong, and Emilie Porter-Rand – the 300-hour program is designed for both active yoga teachers looking to expand their practical skill set and individuals realizing their passion for yoga and desire to teach.

2.  The virtual training takes place over 12 modules, each of which is divided into three sections. A wide range of topics will be covered and skill sets developed throughout the course of the program including yoga tools, philosophies and methodologies, anatomy, and kinesiology, as well as instructing abilities.

3.  Compared to a typical 200-hour yoga teacher training, YogaSix’s 300-hour program will not only help individuals map where they are in their yoga journeys, but also help them map where they want to go. The total cost for the training is $4,000 and payment plans are available.

4.  Kelly Clifton Turner, ERYT-500 and director of education for YogaSix, said, “We are excited to be launching YogaSix’s first-ever Virtual Yoga Teacher Training in 2021. This incredible program gives our brand a new level of community and credibility. The pandemic cannot stop us from strengthening the mind-body connection and transforming the lives of yoga practitioners and teachers everywhere.”

5.  Along with the virtual training program, YogaSix is also hosting its next traditional 200-Hour Yoga Teacher Training starting in February, for those just beginning their teaching journey. That training costs $2,500, discounted from its usual $3,000 price.

Opens 100th Studio and Flows Past 500 Signed Franchise Agreements

6.  In late March 2021, YogaSix announced that it had opened its 100th studio overall and has surpassed over 500 signed franchise agreements. Even during a challenging year, YogaSix continues to prove its value to consumers, evidenced by growth with 56 new studios opened since the beginning of 2020 and the onboarding of dozens of new franchisees to continue that momentum.

7.  The recently signed franchise agreements will bring YogaSix to a variety of new markets including Houston, Nashville, Las Vegas, Seattle, and Miami. The company also opened its first studio in Saudi Arabia this past year, with more studios to open in Germany and Austria over the next few years.

8.  The 100th studio is owned by Jarrid and Krissy Danburg and marks their first of three studios in the Pittsburgh area. Krissy, a Pittsburgh native and recently certified yoga instructor, has worked 14 years in digital marketing, while Jarrid has over 18 years of professional experience in the NFL and sports and wellness space. The Danburgs reside in McMurray, Pennsylvania and are the parents to 3 amazing kids. They have been practicing yoga for over a decade and always had an interest in building a business together.

9.  Lindsay Junk, president of YogaSix, said, “While yoga has always been popular, the pandemic and other challenges brought on by 2020 have certainly exacerbated the demand for YogaSix’s inclusive and modern take on the practice. It has been exciting and extremely rewarding to see our franchise partners get creative in the face of adversity over the past year, encouraging several new entrepreneurs to join the YogaSix family and continue our yoga revival around the world.”

Company History

10.  YogaSix was founded in 2012 by Bill Koman in St. Louis, Missouri. Koman, who spent most of his career in commercial development as the president of the Koman Group, a real estate company, became passionate about a concept called Haute Yoga after he was diagnosed with lymphoma. He turned to yoga to improve his well-being as he underwent treatment for his lymphoma.

11.  Haute Yoga was started in San Diego by Dino Flacco, and Koman formed a partnership with Flacco to open more locations. After Flacco passed away in 2011, Koman took over the company and rebranded under the name YogaSix.

12.  Koman opened additional locations in San Diego and the Midwest and in 2018, he sold the company to Xponential Fitness, a retail fitness company headed by Anthony Geisler. The company owns several fitness brands including Club Pilates, CycleBar, StretchLab, Row House, and AKT. Under the leadership of Xponential Fitness, YogaSix began franchising. Today, there are around 100 YogaSix studios open in the U.S.

Entrepreneur’s Franchise 500

13.  YogaSix did not rank on Entrepreneur’s 2021 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 2021 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 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

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

2019

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  34
• Net Change:  +34

2020

• Outlets at the Start of the Year:  34
• Outlets at the End of the Year:  77
• Net Change:  +43

Company-Owned

2018

• Outlets at the Start of the Year:  7
• Outlets at the End of the Year:  7
• Net Change:  0

2019

• Outlets at the Start of the Year:  7
• Outlets at the End of the Year:  0
• Net Change:  -7

2020

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

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

• In the initial chart presented in this Item 19, YogaSix discloses the average monthly Gross Sales generated over each calendar month comprising the 2020 calendar year (each, a “Calendar Month”).

• The applicable subset of franchised Studios disclosed for each Calendar Month in all parts of this Item 19 will be those Studios that were open and operating for a period of 12 months as of the start of that Calendar Month (each, an “Applicable Subset”).

• For purposes of this Item 19, YogaSix will refer to the franchised Studios disclosed for a given Calendar Month in Part 1 of this Item as the “Disclosed Studios” for that Applicable Month.

• In addition to disclosing the monthly Gross Sales information amongst the Applicable Subset of all Disclosed Studios for each Calendar Month, this Item discloses the same Gross Sales information for each Calendar Month amongst:

• (i) the Applicable Subset of Disclosed Studios that actively provided the Approved Services via in-Studio operations throughout the Calendar Month at issue without interruption (the “Studios with Active In-Studio Operations”); and

• (ii) the remaining Disclosed Studios in that same Calendar Month’s Applicable Subset that were forced to cease or suspend in-Studio operations for 1 or more days during that Calendar Month (the “Studios with Interrupted In-Studio Operations”).

• The below charts in Item 19 only exclude: (i) YogaSix’s affiliate-owned Studio(s); and (ii) with regards to a given Calendar Month comprising the 2020 calendar year, any franchised Studio that was not open for 12 or more calendar months as of the start of that Calendar Month.

Part 1 – Average Gross Sales Amongst the Applicable Subset of All Disclosed Studios for Each Calendar Month Comprising the Measurement Period

• January 2020:  $67,263 (7 studios)
• February 2020:  $62,380 (7 studios)
• March 2020:  $27,758 (8 studios)
• April 2020:  $5,269 (13 studios)
• May 2020:  $7,503 (13 studios)
• June 2020:  $16,117 (14 studios)
• July 2020:  $18,993 (15 studios)
• August 2020:  $18,416 (16 studios)
• September 2020:  $20,331 (18 studios)
• October 2020:  $19,616 (20 studios)
• November 2020:  $23,182 (25 studios)
• December 2020:  $16,915 (30 studios)
• Total 2020:  $303,743

Part 2 – Average Gross Sales Reported by the Applicable Subset of Disclosed Studios with Active In-Studio Operations for Each Calendar Month Comprising the Measurement Period

• January 2020:  $67,263 (7 studios)
• February 2020:  $62,380 (7 studios)
• March 2020:  N/A (N/A)
• April 2020:  N/A (N/A)
• May 2020:  $16,778 (4 studios)
• June 2020:  $16,877 (13 studios)
• July 2020:  $20,505 (8 studios)
• August 2020:  $21,571 (9 studios)
• September 2020:  $21,466 (17 studios)
• October 2020:  $20,549 (19 studios)
• November 2020:  $24,549 (14 studios)
• December 2020:  $19,656 (19 studios)
• Total 2020:  $291,594

Part 3 – Average Gross Sales Reported by the Applicable Subset of Disclosed Studios with Interrupted In-Studio Operations for Each Calendar Month Comprising the Measurement Period

• January 2020:  N/A (N/A)
• February 2020:  N/A (N/A)
• March 2020:  $27,758 (8 studios)
• April 2020:  $5,269 (13 studios)
• May 2020:  $3,381 (9 studios)
• June 2020:  $6,231 (1 studio)
• July 2020:  $17,264 (7 studios)
• August 2020:  $14,359 (7 studios)
• September 2020:  $1,044 (1 studio)
• October 2020:  $1,882 (1 studio)
• November 2020:  $21,441 (11 studios)
• December 2020:  $12,181 (11 studios)
• Total 2020:  $110,810

• The term “Gross Revenue” means the total revenue generated by a given Disclosed Studio over the Measurement Period, including all revenue generated from the sale and provision of any and all Approved Services at, from, or otherwise through, that Studio.

• “Gross Revenue” (i) excludes sales tax (that Studio owner must pay directly to the appropriate taxing authority), and (ii) does not account for revenue the Disclosed Studios may have generated by providing the Teacher Training Program.

• When reviewing this Item 19 and evaluating the franchise offering generally, it is particularly important to note the following characteristics of Existing Studios described in this Item 19 (as compared to a new Franchised Business):

• a. Each of the Disclosed Studios utilizes the Marks and System in a manner similar to how you will be required to use such intellectual property in the operation of the Franchised Business that is being offered under the Disclosure Document;

• b. Certain of the more mature Disclosed Studios did not incur the various other pre-opening costs and expenses over the Measurement Period that you are likely to incur in connection with the development of a new Franchised Business because such Disclosed Studios were all open and operating for some time as of the date the Measurement Period commenced; and

• c. Some aspects of certain Disclosed Studios are primarily managed on a day-to-day basis by a single individual that manages such matters for both locations. While this engagement would be similar to you engaging a “Designated Manager” or other third party to assist in managing certain aspects of your Franchised Business, YogaSix does not expect that you will be engaging such a third party at the outset of operating your new Franchised Business (unless you are a multi-unit owner).

• This Item 19 does not disclose or discuss any of the operating costs and expenses that will be incurred in connection with the establishment and ongoing operation of a Franchised Business, nor does it account for amortization, depreciation, tax liabilities, and/or costs associated with debt services (if and as applicable).

• The revenues and expenses of your business will be directly affected by many factors, such as:

• (a) your Designated Territory’s geographic location and population demographics;
• (b) advertising effectiveness based on market saturation;
• (c) whether you operate the business personally or hire a third party to serve as your Designated Manager;
• (d) your product and service pricing;
• (e) vendor prices on materials, supplies, and inventory;
• (f) personnel salaries and benefits (life and health insurance, etc.);
• (g) insurance costs;
• (h) weather conditions;
• (i) ability to generate customers;
• (j) customer loyalty;
• (k) employment conditions in the market; and
• (l) the efforts you and your personnel put into your Franchised Business.

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