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

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

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

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

• actual gross sales generated in each calendar month comprising the 2020 calendar year and the first 2 calendar months of 2021 by the only STRIDE studio that was open and operating as of January 1, 2020

Section I – Background Information

13 Things You Need to Know About the STRIDE Franchise

Signs Agreement to Open Seven Denver Area Studios

1.  In mid-May 2021, STRIDE announced that it has signed a new agreement which gives the franchise partner the opportunity to bring seven new studios to the greater Denver area. Backed by boutique fitness curator Xponential Fitness, the treadmill studio franchise seeks to create a welcoming, supportive space where anybody can be a walker or runner. The first of the seven new studios was expected to open its doors in fall 2021 with additional locations soon after. The first two locations are planned to open in the Denver Tech Center and Southeast Aurora.

2.  The Denver deal was signed by brothers Alfonso and Andres Osuna, who will be opening their additional new studios throughout the Denver metro area. While this will be their first franchise business, they own and operate a Colorado-based real estate investment and property management company as well as a digital marketing company in Monterrey, Mexico. They also have past experience managing fitness centers.

3.  Jeff Stokes, president of STRIDE, said, “Colorado has consistently ranked as the fittest state in the union for the last decade and yet, there is no single indoor space dedicated to walking, jogging, and running. We saw such a great opportunity to reach the people of Denver and help fill the void by providing safe, healthy, beautiful spaces where anyone can walk, jog, run and transform.”

4.  In addition to Denver, STRIDE recently announced several other franchise agreements in markets including Chicago; San Diego; Dallas and Austin; Atlanta; Pittsburgh; Phoenix; Jacksonville Beach, FL; and Manhattan Beach and Irvine, CA.

Parent Company Launches Apple Watch Integration to Offer Enhanced Member Experience

5.  In mid-March 2021, Xponential Fitness announced the launch of an upgraded studio experience through the use of Apple Watch technology across all eight of its brands, including STRIDE, Pure Barre, Club Pilates, CycleBar, YogaSix, StretchLab, Row House, and AKT.

6.  This fully-integrated experience allows Xponential members and guests who utilize Apple Watch to view upcoming classes, check in to class, participate in the “Earn Your Watch” challenge, and most notably, track real-time performance data, among other features. Xponential Fitness is excited to bring the Apple Watch integration to its large member base, highlighting its continued leadership within the industry.

7.  Each Xponential brand’s app will integrate directly with Apple Watch allowing users to receive notifications for upcoming classes, moving off a class waitlist, class reminders, and celebration alerts for milestones met. Users will also enjoy contactless check-in, very appropriate in a post-pandemic era. Members will also have the opportunity to earn back their Apple Watch value by participating in the “Earn Your Watch” challenge by taking classes in studio.

8.  Particularly exciting for today’s metrics-focused consumer, each brand’s classes will allow consumers to track and share their personal performance data for classes taken within the studio through the Apple Health app which can also contribute to their daily Activity Rings on Apple Watch. Performance data measured will include time active, calories burned, heart rate, and average BPM.

9.  Sarah Luna, president of Xponential Fitness, said, “Providing a premium member experience remains our top priority across every Xponential Fitness brand. Launching this integration with Apple Watch is an exciting opportunity to offer an enhanced in-studio experience to our high iOS member base, utilizing the incredible technology Apple has built. As our users become increasingly data and goal-oriented, this technology will help us continue to curate the best of the best workout experiences across every vertical of boutique fitness.”

10.  This announcement marks yet another milestone in a breakthrough year for Xponential. In 2020, Xponential launched its proprietary streaming platform GO across all eight of its brands and kicked off partnerships with fitness giants like ClassPass and most recently, national healthcare provider UnitedHealthCare.

Company History

11.  STRIDE was founded in 2017 by Katie Ownbey and Misa Dugally in Pasadena, California. Ownbey and Dugally started STRIDE, which is an indoor treadmill studio, with the goal that clients of all ages and fitness levels could use running and walking as a launchpad for their personal fitness journey. They wanted STRIDE to be accessible to the general public and wanted to challenge people who felt that they could never be runners. At its core, STRIDE aims to do away with any intimidation members might have about taking a fitness class.

12.  The first STRIDE was a hit and Ownbey and Dugally continued to successfully run the business when it caught the eye of Anthony Geisler’s Xponential Fitness in 2019. That year, Xponential Fitness acquired STRIDE and started franchising the concept. Today, there are a few STRIDE locations around the United States and the brand is seeking franchisees around the world.

Entrepreneur’s Franchise 500

13.  STRIDE did not rank on Entrepreneur’s 2022 Franchise 500 list.

Section II – Estimated Costs

• Detailed estimates of STRIDE 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 STRIDE’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:  1
• Net Change:  +1

2020

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  3
• Net Change:  +2

Company-Owned

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:  0
• Net Change:  -1

2020

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

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

• In the chart below in this Item 19, STRIDE discloses the actual Gross Sales generated in each calendar month comprising the 2020 calendar year and the first 2 calendar months of 2021 (each, a “Calendar Month” and collectively, the “Measurement Period”), by the only System Studio (the “Disclosed Studio”) that was open and operating as of January 1, 2020.

• For each Calendar Month, STRIDE discloses: (i) the Gross Sales generated by the Disclosed Studio; and (ii) whether the Disclosed Studio was either (a) actively providing the Approved Services throughout that Calendar Month (each, an “Active In-Studio Operations Month”), or (b) forced to cease in-Studio operations for 1 or more days within that Calendar Month (the “Interrupted In-Studio Operations Month”).

• This Item excludes the 3 other franchised Studios that were open as of December 31, 2020, because they were not open for the entirety of the Measurement Period.

• The Disclosed Studio, which is owned and operated pursuant to a Franchise Agreement with the brand’s founder(s), was the only System Studio that was open at the start of the Measurement Period.

• The financial performance representations contained in this Item 19 are historical representations based on past performance of the existing Disclosed Studio, as reported to STRIDE by the owner of the Disclosed Studio. STRIDE has not independently audited these reported figures.

• Only the Disclosed Studio sold these amounts. Your individual results may differ. There is no assurance that you’ll sell as much.

Part 1 – Monthly Gross Sales of Disclosed Studio Over 2020 Calendar Year and First Two Months of 2021

• January 2020 (Active In-Studio Operational Month):  $83,562
• February 2020 (Active In-Studio Operational Month):  $70,014
• March 2020 (Interrupted In-Studio Operational Month):  $36,961
• April 2020 (Interrupted In-Studio Operational Month):  $26,384
• May 2020 (Interrupted In-Studio Operational Month):  $17,981
• June 2020 (Active In-Studio Operational Month):  $17,384
• July 2020 (Interrupted In-Studio Operational Month):  $20,089
• August 2020 (Interrupted In-Studio Operational Month):  $18,873
• September 2020 (Interrupted In-Studio Operational Month):  $15,296
• October 2020 (Interrupted In-Studio Operational Month):  $23,485
• November 2020 (Interrupted In-Studio Operational Month):  $30,488
• December 2020 (Interrupted In-Studio Operational Month):  $21,898
• Full Year 2020:  $382,415

• January 2021 (Interrupted In-Studio Operational Month):  $26,561
• February 2021 (Interrupted In-Studio Operational Month):  $26,594
• January-February 2021:  $53,155

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

• The term “Gross Sales” does not include any amount of revenue the Disclosed Studio may have generated by providing the Authorized Coach Training over the 2020 calendar year and 2021 calendar months disclosed above.

• This chart only shows Gross Sales and is not providing any operating cost or expense information associated with the operation of the Disclosed Studio over the Measurement Period, including:

• (i) COGS, labor, as well as the salary, draw, or other compensation for the owner of each Disclosed Studio;
• (ii) meals and expenses incurred by the owner in connection with promoting the Disclosed Studios;
• (iii) automobile/vehicle expenses;
• (iv) certain taxes and related liabilities;
• (v) cell phone charges for the owner/manager of the Disclosed Studios;
• (vi) recruiting initiatives;
• (vii) fees that might be charged by a third-party provider in connection with payroll processing;
• (viii) certain legal and accounting fees;
• (ix) obtaining required permits and licenses;
• (x) any monthly leasing payments associated with treadmills used at the Studio;
• (xi) dues and subscriptions, professional fees, progression development, and taxes; or
• (xii) miscellaneous costs such as travel expenses and/or uniform expenses (as of the Issue Date of the Disclosure Document, STRIDE does not have any branded-uniform requirements, but STRIDE reserves the right to implement such uniform policies in the future).

• The territory wherein the Disclosed Studio operates is located in Pasadena, California, where the STRIDE brand may have obtained a reputation and garnered some goodwill amongst the relevant target audience (as compared to another region of the United States where there are no Studio locations). This Disclosed Studio has been operating utilizing the Proprietary Marks and System since before STRIDE commenced franchising in February 2019.

• The Disclosed Studio does not have a written Franchise or other License Agreement with STRIDE as of the Issue Date of the Disclosure Document, but this location does utilize the Marks and System in a manner similar to how you will be required to use such intellectual property in the operation of a new Franchised Business, and STRIDE expects and intends to enter into a Franchise Agreement that will govern the Disclosed Studio once STRIDE is able to offer and sell franchises in the area where the Disclosed Studio is located.

• The Disclosed Studio was not required to pay STRIDE or any other party an Initial Franchise Fee or the other initial fees described in Item 5 of the Disclosure Document.

• The Disclosed Studio utilizes a total of 25 treadmills, which is what STRIDE expects and assumes its System franchisees will use when equipping and operating their franchised Studio.

• Certain aspects of the Disclosed Studio are primarily managed on a day-to-day basis by a single individual that is engaged by the Disclosed Studio to manage such matters. 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, STRIDE 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).

• 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. Actual results will vary from Franchised Business to Franchised Business, and STRIDE cannot estimate the results of a particular Franchised Business.

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