In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Rumble franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Rumble 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 Rumble franchise, based on Items 5 and 6 of the company’s 2021 FDD

• Section IV – Number of franchised and company-owned Rumble 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 Rumble’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2019 average, median, high, and low gross sales for the 5 Rumble studios that were (i) open and operating as of January 1, 2019 and operating under the Proprietary Marks from a Signature Footprint, and (ii) operating throughout the 2019 calendar year (collectively, the “2019 Studios”)

• January 2020 and February 2020 average, median, high, and low gross sales for (a) the 2019 Studios, (b) the 3 Studios that opened and commenced providing the Approved Services at some point in 2019 and were open for at least 3 months as of the end of January 2020, and (c) the 6 Studios that were open and providing the Approved Services for at least 3 calendar months as of the end of February 2020 (collectively, the “Disclosed Studios”)

Section I – Background Information

16 Things You Need to Know About the Rumble Franchise

Acquired by Xponential Fitness

1.  In late March 2021, Xponential Fitness announced that it has acquired Rumble, the latest brand added to its portfolio, further highlighting the company’s position as the largest curator of boutique fitness brands in the world. Rumble, a boutique boxing concept, joins the other eight brands under the Xponential Fitness umbrella including Pure Barre, Club Pilates, CycleBar, YogaSix, StretchLab, Row House, AKT, and STRIDE.

2.  Founded in 2017, Rumble delivers 45-minute, 10-round, full-body strength and conditioning workouts crafted around specially designed water-filled, teardrop-style boxing bags. The company was started in the heart of Chelsea in New York City and has since expanded into Los Angeles, Washington, D.C., Philadelphia, Palo Alto, and San Francisco, with a Chicago location coming soon.

3.  In February 2021, Rumble launched Rumble TV, a live and on-demand workout platform, to bring the Rumble experience home with an extensive collection of boxing, HIIT, strength, and running workouts.

4.  Signaling Anthony Geisler’s “return to the ring” after almost 10 years, the acquisition will see Xponential Fitness work quickly to start franchising the concept, leveraging its seasoned team with decades of fitness and franchising expertise. Rumble has massive brand loyalty and widespread appeal partly thanks to attracting top names like Justin Bieber, Selena Gomez, Kendall Jenner, Hailey Baldwin, Jason Derulo, David Beckham, and Kevin Hart to its studios.

5.  Anthony Geisler, CEO of Xponential Fitness, said, “With its premium, world-class boxing experience, cutting-edge virtual workout platform, and celebrity reach, Rumble is a fantastic fit for our robust lineup of industry leaders across boutique fitness. By adding Rumble to the Xponential portfolio, we’re opening up another core modality for our members to help them reach their health and fitness goals within our family of brands, as well as creating opportunity for entrepreneurs to bring this engaging workout to their market.”

6.  Andy Stenzler, co-founder of Rumble, said, “We are thrilled to announce our deal with Xponential. They are certainly the premier franchisor in our industry and thus the perfect partner to bring the Rumble experience across the globe.”

7.  Ashley Camerini, CEO of Rumble, added, “Our loyal Rumble customers will love being part of the amazing family of Xponential brands that will cater to all of their fitness needs. We are looking forward to seeing Rumble grow with such an incredible industry leader.”

Signs Master Franchise Agreement in Australia

8.  In late September 2021, Rumble announced that it has signed a master franchise agreement in Australia. Rumble is the newest brand to join Xponential Fitness, Inc., which is a curator of boutique fitness brands across a variety of verticals. The Australian master franchisee is Box X Operations Pty. Ltd., a subsidiary of Boutique Fitness Studios Pty. Ltd., which is the existing master franchise partner in Australia for Xponential Fitness brands.

9.  Rumble and Box X have also teamed up with former F45 franchise owners and well-known entertainment industry duo, The Stafford Brothers, to promote Rumble in Australia and open their own Rumble studios.

10.  John Kersh, chief international development officer for Xponential Fitness, said, “We are excited to secure another international agreement for Xponential Fitness in Australia with the Boutique Fitness Studios team. Australia is proving to be a major emerging market for boutique fitness, so we know Rumble will be a strong addition to the Xponential brands, CycleBar, Club Pilates and StretchLab, already sparking excitement in the market.”

11. Matt Gordin, CEO of Boutique Fitness Studios Pty. Ltd., is very confident in Rumble. “We are certain that Australians will embrace the results-oriented workout and immersive customer experience at Rumble studios,” said Gordin.

Company History

12.  Rumble was founded in 2016 by Noah Neiman, Eugene Remm, Andy Stenzler, and Anthony DiMarco in New York City. The four entrepreneurs, who come from very different backgrounds, saw an opening niche for a trendy boxing fitness studio brand. While there have been boxing gyms in New York for years, Rumble’s clean aesthetic that’s mixed with street art appeals to a different audience than traditional boxing gyms.

13.  Rumble studios also offer body weights and dumbbells. The workout is a 45-minute, 10-round, full-body strength-training and conditioning workout crafted around specially designed water-filled, teardrop-style punching bags. There is also floor space for strength training.

14.  After an initial round of investment from Great Oaks Venture Capital, Laconia Ventures, Irving Investors, Hertz Lichtenstein & Young, memBrain, Equinox, and &vest, Rumble opened more locations around New York. A few more locations were opened in California and Washington, D.C.

15.  In 2021, Rumble was acquired by Xponential Fitness, the parent company of boutique fitness brands like Pure Barre, Club Pilates, and CycleBar. Xponential Fitness has now started franchising Rumble for national expansion.

Entrepreneur’s Franchise 500

16.  Rumble did not rank on Entrepreneur’s 2022 Franchise 500.

Section II – Estimated Costs

• Detailed estimates of Rumble franchise costs, based on Item 7 of the company’s 2021 FDD.

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

• Detailed information on Rumble’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:  0
• Net Change:  0

2020

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

Company-Owned

2018

• Outlets at the Start of the Year:  2
• 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:  12
• Net Change:  +7

2020

• Outlets at the Start of the Year:  12
• Outlets at the End of the Year:  13
• Net Change:  +1

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

• Part 1 of this Item 19 discloses the average and median Gross Sales generated amongst the operation of the 5 Studios that were (i) open and operating as of January 1, 2019 and operating under the Proprietary Marks from a Signature Footprint, and (ii) operating throughout the 2019 calendar year (collectively, the “2019 Studios”), over the 2019 calendar year.

• Part 2 of this Item 19 discloses the average and median monthly Gross Sales, as well as related Gross Sales information, generated amongst the operation of (a) the 2019 Studios, (b) the 3 Studios that opened and commenced providing the Approved Services at some point in 2019 and were open for at least 3 months as of the end of January 2020, and (c) the 6 Studios that were open and providing the Approved Services for at least 3 calendar months as of the end of February 2020, over each of those first 2 months in the 2020 calendar year that took place before the COVID-19 pandemic forced the closure of all of the foregoing Studios (collectively, the “Disclosed Studios”) in mid-March 2020.

• From mid-March 2020 through the Issue Date of the current Disclosure Document, the Disclosed Studios remained closed for in-Studio operations and provision of the Approved Services.

• The Disclosed Studios were opened and operated by a single affiliate of Exponential Fitness’s predecessor (RH) throughout both the 2019 and 2020 calendar years and, as such, are disclosed as “affiliate-owned” Studios in Item 20 of the Disclosure Document.

• In March 2021, RH entered into a form of franchise agreement with this affiliate to govern the operation of these existing Studio operations as a “Franchised Business” moving forward as part of an isolated and single transaction and offer that was only made to that affiliate operator (the “Isolated Related-Party Award”). Exponential Fitness then acquired and assumed all of RH’s rights, title, and interest in and to these franchise agreements as part of the Acquisition Transaction.

• Over the relevant Measurement Periods (and as of the Issue Date of the current Disclosure Document), the Disclosed Studios operated from a premises that now serves as their respective Authorized Locations under the applicable franchise agreements using a Signature Footprint.

• As such, the historical financial performance reported to Exponential Fitness by the (single) owner of all the Disclosed Studios is only providing information regarding Studio operations from a Signature Footprint – and nothing in this Item 19 does, or should be construed to, provide historical information regarding the operation of a franchised Studio from a Boutique Footprint.

• As of the Issue Date of the current Disclosure Document, there are no System Studios operating from a premises with such a Boutique Footprint. Only the Disclosed Studios that operate from a Signature Footprint have sold this much. There is no assurance that you will sell as much in connection with the operation of your Franchised Business.

Part 1 – Average, Median, and Other Gross Sales Generated Amongst 2019 Studios (With Signature Footprint) Over the 2019 Calendar Year

2019 Studios (5 Studios Total)

• Average Gross Sales:  $4,025,258
• Median Gross Sales:  $4,070,210
• High Gross Sales:  $5,597,484
• Low Gross Sales:  $2,453,033
• Number of Studios That Met or Exceeded Average:  2 (or 40%)

Part 2 – Average, Median, and Other Gross Sales Generated Amongst Each Defined Subset of Disclosed Studios With Signature Footprint Over Each of the First 2 Calendar Months, Respectively, of the 2020 Calendar Year

January 2020

Studios 3-12 Months Old (3 Total)

• Average Gross Sales:  $162,553
• Median Gross Sales:  $132,881
• High Gross Sales:  $239,458
• Low Gross Sales:  $115,320
• Number of Studios That Met or Exceeded Average:  1 (or 33%)

Studios 12+ Months Old (5 Total)

• Average Gross Sales:  $377,915
• Median Gross Sales:  $374,185
• High Gross Sales:  $506,691
• Low Gross Sales:  $226,424
• Number of Studios That Met or Exceeded Average:  2 (or 40%)

February 2020

Studios 3-12 Months Old (6 Total)

• Average Gross Sales:  $192,371
• Median Gross Sales:  $182,129
• High Gross Sales:  $318,558
• Low Gross Sales:  $114,221
• Number of Studios That Met or Exceeded Average:  3 (or 50%)

Studios 12+ Months Old (5 Total)

• Average Gross Sales:  $355,081
• Median Gross Sales:  $331,698
• High Gross Sales:  $485,598
• Low Gross Sales:  $211,826
• Number of Studios That Met or Exceeded Average:  2 (or 40%)

• The term “Gross Sales” means the total revenue generated by the Disclosed Studios over each Measurement Period, which was derived from the following: (i) sale of class packages; (ii) revenue received in connection with ClassPass sales; (iii) the offer and sale of retail merchandise; and (iv) private training and events held at the Disclosed Studio at issue.

• The Disclosed Studios primarily offered and sold the Approved Services (boxing fitness training and classes) via the sale of class packages, but Rumble expects that the Disclosed Studios will commence offering and selling the Approved Services also utilizing a membership model at some point by the start of the next calendar year (2022) (if not sooner).

• New Franchised Businesses will be authorized (and, if Rumble determines appropriate, required) to offer and sell the Approved Services utilizing both methods in accordance with System standards.

• All of the Disclosed Studios were opened and are still being operated by an operating entity that is (i) owned and/or managed by the Rumble brand founder(s), and (ii) an affiliate of Exponential Fitness’s predecessor (RH). As such, the Disclosed Studios were operated and/or managed over the relevant measurement periods by a single owner and its Designated Managers (and/or Designated Operators) by a company with experience in multi-Studio operations.

• The Disclosed Studios are locations that were opened at different times throughout 2017 (2 total), 2018 (3 total), and 2019 (7 total) calendar years. As such, the (a) 2019 Studios were open and operating for at least some period of time prior to the commencement of the 2019 calendar year disclosed in Part 1 of this Item, and all Disclosed Studios were open and operating prior to the 2 calendar months of 2020 disclosed in Part 2 (January and February 2020, respectively).

• The Disclosed Studios were all open and operating prior to Exponential Fitness’s acquisition of the franchise system from its predecessor (RH). They did not enter into franchise agreements with RH until March 2021 (after the relevant time periods discussed and covered in Item 20 and elsewhere in the Disclosure Document).

• Rumble does not yet have historical performance information to share regarding the operations of a System Studio from a Boutique Footprint – and Rumble does not provide any such information or financial performance representation regarding the operation from a Boutique Footprint in this Item above.

• The analysis above in this Item does not contain any information concerning the operating costs and expenses that you will incur in operating your Franchised Business. Operating costs and expenses may vary substantially from business to business.

• Expenses and costs, as well as the actual accounting and operational methods employed by a franchisee, may significantly impact profits realized in any particular operation. 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 and/or Designated Operator;
• (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;
• (l) the efforts you and your personnel put into your Franchised Business; and
• (m) whether you determine and commit to develop, open, and operate your Franchised Business from a Signature Footprint or Boutique Footprint.

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