FDD Talk: How Much Does an i9 Sports Franchise Make (Average Revenues and/or Profits)?

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

• Section I – Background information on the i9 Sports franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for an i9 Sports franchise, based on Item 7 of the company’s 2021 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an i9 Sports franchise, based on Items 5 and 6 of the company’s 2021 FDD

• Section IV – Number of franchised and company-owned i9 Sports 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 i9 Sports’ financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2020 average, highest, and lowest revenue for the i9 Sports franchise units open and operating 7 or more venues, 5 to 6 venues, 3 to 4 venues, 1 to 2 venues, and all 142 i9 Sports franchise units open and operating more than 12 months as of December 31, 2020 and operating an average of at least 1 venue for 3 seasons, as well as 2 core sports during the 2020 calendar year

• percent change in total number of registrations achieved each quarter from Q4 2019 to Q1 2021 versus the same quarter in the previous year by the “same set” of 121 full-time i9 Sports franchises that were open and operating more than 12 months as of December 31, 2018 and operating an average of at least 1 venue for 3 seasons, as well as 2 core sports during each calendar year represented

• total registration revenue, team equipment, officiating costs, venue costs, site managers and paid instructors, liability insurance and background checks, royalty fees, national brand fund contributions, total cost, and net registration income obtained from the franchisor’s Approved Supplier price lists as of December 31, 2020, and information as provided by the 1 company-owned location

Section I – Background Information

16 Things You Need to Know About the i9 Sports Franchise

Franchise Owners Experiencing a Massive Surge in Business

1.  In late August 2021, i9 Sports reported that demand for its youth leagues was surging, with summer and fall player registrations up significantly nationwide compared with pre-pandemic numbers from 2019. After more than a year of social distancing and disrupted activities caused by COVID-19, families are racing to enroll their kids in youth sports programs.

2.  Youth sports is not only a multi-billion-dollar industry, but also an economically resilient one. This trend didn’t miss i9 Sports who noted a marked increase in registrations over 2019 figures with substantial growth in the summer and fall registrations specifically. No matter how you look at it, the anecdotal stories about parents wanting to get their children back out in the public space and involved in sports activities seem to be true.

3.  Kim T., an i9 Sports parent from Houston, Texas, said, “After having so many months without activities for our kids, we are so excited to get our kids back to playing sports! i9 Sports makes this possible in many ways but the greatest benefit to our family, which includes three kids who all play soccer, is the back-to-back practice and game on the same day. Without this model, we probably wouldn’t be able to have all three of our kids playing soccer at the same time. Thank you i9 Sports!”

4.  Listed by Entrepreneur magazine on its Franchise 500 list 12 times, i9 Sports was also named a top franchise for under $100,000 in the publication’s 2020 and 2021 Franchise 500. Inc. magazine placed i9 Sports on its list of the 5,000 Fastest-Growing Private Companies for seven years, while Franchise Times has placed the brand in the Top 200+ for 13 years.

Named a Top Franchise Under $100,000 by Entrepreneur Magazine

5.  At the beginning of June 2021, i9 Sports was ranked No. 76 in Entrepreneur’s 2021 Top Franchises Under $100,000. The low-cost, home-based franchise is the perfect opportunity for investors looking for a stable franchise in a booming industry.

6.  The i9 Sports franchise is based on a business model that has proven successful for 18 years. The franchise is based on a simple premise: improve the lives of kids through sports. I9 Sports franchises, located across the country, offer age-appropriate instruction for boys and girls ages 3-14 in flag football, soccer, basketball, baseball, ZIP Lacrosse, and volleyball.

7.  Startup costs for an i9 Sports franchise range from $59,900 to $69,900, and anyone can start their own i9 Sports franchise for as little as $36,500. i9 Sports offers a five-year purchase option that allows franchisees to convert the $24,900 franchise fee into monthly $500 payments, making a new business as affordable as a car payment.

8.  Entrepreneur based its listing on scores the franchises received in its prestigious Franchise 500 ranking, which analyzes brands on more than 150 data points including costs and fees, size and growth, franchisee support, brand strength, and financial strength and stability.

9.  i9 Sports has been franchising for 18 years, and its revolutionary approach is changing the way games are played in youth sports. i9 Sports focuses on providing a fun experience for the young players and convenience for their parents. The brand’s volunteer and part-time labor model, along with its work-from-home setup and inexpensive scalability, make i9 Sports a great low-cost franchise opportunity.

10.  i9 Sports is the first and largest multi-sport provider in the nation that is focused solely on high-quality, community-based youth sports programs. Unlike the highly competitive nature of some travel leagues, i9 Sports emphasizes good sportsmanship, leadership, and other values. Games and practices are held on the same day, saving lots of time for busy families – and helping franchise owners carve out better work-life balance, too.

11.  One of the things that makes i9 Sports stand out in the marketplace is the company’s values. Multiple sports offerings allow kids to participate in sports sampling, which research has shown to be better for both athletic performance and overall childhood development. A safe environment for learning, having fun, and participating in team sports is one that encourages children to stick with it. i9 Sports hopes to change the troubling statistic that states 70% of kids drop out of sports by age 13 because it’s no longer fun.

12.  The name “i9 Sports” means “i to the 9th power,” representing the 9 key differences in its approach to youth sports: imaginative, innovative, interactive, integrity-driven, impassioned, inspirational, instructional, insightful, and inclusive.

Company History

13.  i9 Sports was founded in 2003 by Frank Fiume in Tampa Bay, Florida. Before starting a sports franchise for children, Fiume ran a men’s softball league. Fiume felt that many sports leagues were “disorganized and marred by hypercompetitiveness.” He wanted to run things better and his softball league was a success.

14.  In 1996, Fiume moved to Tampa Bay to start his family and he began to wonder if his softball league concept could be applied to youth sports. After doing some research, Fiume found that youth sports was plagued by the same problems as adult sports leagues. Fiume set out to fix things and developed a program for flag football in 1998.

15.  The flag football program was such a success that Fiume sold his softball league and teamed up with franchise industry experts to launch i9 Sports. Over the next decade, i9 Sports expanded around the United States. In 2016, Fiume sold i9 Sports to his employees, but he still serves as a director on the company’s board.

Entrepreneur’s Franchise 500

16.  i9 Sports ranked No. 455 on Entrepreneur’s 2022 Franchise 500 list.

Section II – Estimated Costs

• Detailed estimates of i9 Sports 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 i9 Sports’ 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:  129
• Outlets at the End of the Year:  142
• Net Change:  +13

2019

• Outlets at the Start of the Year:  142
• Outlets at the End of the Year:  158
• Net Change:  +16

2020

• Outlets at the Start of the Year:  158
• Outlets at the End of the Year:  172
• Net Change:  +14

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:  1
• Net Change:  0

2020

• 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, 2021 FDD) and Analysis

Part 1 – Average Registration Revenue of Franchise Units

• Part 1 sets forth information regarding the registration revenues achieved by i9 Sports’ 142 full-time i9 Sports franchises that were: (i) open and operating more than 12 months as of December 31, 2020; and (ii) operating an average of at least 1 venue for 3 seasons, as well as 2 core sports during the 2020 calendar year (a season is defined as a distinct period of time during which 1 or more separate programs or leagues are operated).

• Part 1 excludes the following: (i) 16 franchises that were not open more than 12 months as of December 31, 2020; (ii) 1 franchise that was part-time only; (iii) 3 franchises that were not yet operating via one of the above standards; and (iv) 10 franchises that completed Phase I Training and were actively taking registrations as of December 31, 2020, but had not yet held their first season opening day.

• Tables 1 through 4 detail the Average Registration Revenue of the entire group over the Measurement Period based upon the average number of unique playing locations (reported as a distinct address) operated in 2020 over the course of 4 seasons (the “Venue”).

• Table 5 details the Average Registration Revenue of the entire group over the Measurement Period.

Table 1 – Franchise Units Open and Operating 7 or More Venues as of December 31, 2020 (9 Franchise Units)

• Highest Revenue of All Franchise Units in This Group:  $1,032,157
• Average Revenue of Top 20% of Franchise Units:  $887,802
• Average Revenue of Top 40% of Franchise Units:  $771,980
• Average Revenue of Top 60% of Franchise Units:  $707,899
• Average Revenue of Top 80% of Franchise Units:  $620,601
• Average Revenue of All Franchise Units in This Group:  $559,176
• Revenue for the Lowest 20% in This Group:  $344,186
• Revenue for the Lowest 40% in This Group:  $373,272
• Revenue for the Lowest 60% in This Group:  $388,392
• Revenue for the Lowest 80% in This Group:  $465,283
• Lowest Revenue of All Franchise Units in This Group:  $339,276

Table 2 – Franchise Units Open and Operating 5 to 6 Venues as of December 31, 2020 (25 Franchise Units)

• Highest Revenue of All Franchise Units in This Group:  $619,491
• Average Revenue of Top 20% of Franchise Units:  $568,199
• Average Revenue of Top 40% of Franchise Units:  $472,342
• Average Revenue of Top 60% of Franchise Units:  $420,221
• Average Revenue of Top 80% of Franchise Units:  $376,747
• Average Revenue of All Franchise Units in This Group:  $334,864
• Revenue for the Lowest 20% in This Group:  $167,333
• Revenue for the Lowest 40% in This Group:  $206,828
• Revenue for the Lowest 60% in This Group:  $243,212
• Revenue for the Lowest 80% in This Group:  $276,530
• Lowest Revenue of All Franchise Units in This Group:  $129,577

Table 3 – Franchise Units Open and Operating 3 to 4 Venues as of December 31, 2020 (59 Franchise Units)

• Highest Revenue of All Franchise Units in This Group:  $669,076
• Average Revenue of Top 20% of Franchise Units:  $385,312
• Average Revenue of Top 40% of Franchise Units:  $314,969
• Average Revenue of Top 60% of Franchise Units:  $275,545
• Average Revenue of Top 80% of Franchise Units:  $240,136
• Average Revenue of All Franchise Units in This Group:  $207,356
• Revenue for the Lowest 20% in This Group:  $78,970
• Revenue for the Lowest 40% in This Group:  $107,915
• Revenue for the Lowest 60% in This Group:  $133,565
• Revenue for the Lowest 80% in This Group:  $161,921
• Lowest Revenue of All Franchise Units in This Group:  $36,005

Table 4 – Franchise Units Open and Operating 1 to 2 Venues as of December 31, 2020 (49 Franchise Units)

• Highest Revenue of All Franchise Units in This Group:  $256,216
• Average Revenue of Top 20% of Franchise Units:  $197,376
• Average Revenue of Top 40% of Franchise Units:  $159,961
• Average Revenue of Top 60% of Franchise Units:  $135,530
• Average Revenue of Top 80% of Franchise Units:  $115,039
• Average Revenue of All Franchise Units in This Group:  $98,196
• Revenue for the Lowest 20% in This Group:  $32,507
• Revenue for the Lowest 40% in This Group:  $44,061
• Revenue for the Lowest 60% in This Group:  $55,599
• Revenue for the Lowest 80% in This Group:  $72,765
• Lowest Revenue of All Franchise Units in This Group:  $17,680

Table 5 – All Franchise Units Open and Operating for More Than 12 Months as of December 31, 2020 (142 Franchise Units)

• Highest Revenue of All Franchise Units in This Group:  $1,032,157
• Average Revenue of Top 20% of Franchise Units:  $482,828
• Average Revenue of Top 40% of Franchise Units:  $369,815
• Average Revenue of Top 60% of Franchise Units:  $304,822
• Average Revenue of Top 80% of Franchise Units:  $255,229
• Average Revenue of All Franchise Units in This Group:  $214,435
• Revenue for the Lowest 20% in This Group:  $48,348
• Revenue for the Lowest 40% in This Group:  $79,648
• Revenue for the Lowest 60% in This Group:  $110,239
• Revenue for the Lowest 80% in This Group:  $148,514
• Lowest Revenue of All Franchise Units in This Group:  $17,680

Part 2 – Quarterly Registration Growth vs. Prior Year

• The following table details the quarterly registration growth of the “same set” of franchise units beginning October 1, 2019 (pre-pandemic) through March 31, 2021 (most current reporting period) to reflect the pandemic’s impact on i9 Sports’ year-over-year customer registrations.

• The information presented reflects the percent change in the total number of registrations achieved each quarter versus the same quarter in the previous year by the “same set” of 121 full-time i9 Sports franchises that were open and operating more than 12 months as of December 31, 2018 and operating an average of at least 1 venue for 3 seasons, as well as 2 core sports during each calendar year represented.

• The table excludes i9 Sports franchises that were: (i) not operating via one of the standards above; (ii) part-time; (iii) company-owned; (iv) new units outside the “same set” of 121; and (v) 1 unit that ceased actively taking registrations during the measurement period.

• Q4 2019:  11%
• Q1 2020:  -15%
• Q2 2020:  -51%
• Q3 2020:  -36%
• Q4 2020:  -30%
• Q1 2021:  29% (10% vs. 2019)

Part 3 – Percentage of Registration Revenue of Costs

• The following chart sets forth information as provided by i9 Sports’ 1 company-owned location and team equipment costs derived from i9 Sports’ Approved Supplier or “Preferred Vendor” (a term i9 Sports used in prior years) price list as of December 31, 2020, and presents the percentage of registration revenue of certain costs for: (i) team equipment; (ii) officiating costs; (iii) venue costs; (iv) site managers and paid instructors; and (v) liability insurance and background checks.

• Part 3 only includes information from i9 Sports’ company-owned location because i9 Sports did not collect this information for its franchises for the 2020 calendar year.

• Total Registration Revenue:  $262,458.00 (100.0%)
• Team Equipment:  $30,425.51 (11.6%). Team equipment includes team jerseys, flag belts (flag football only), game balls, sportsmanship and participation medals, trophies, and coaches’ t-shirts.
• Officiating Costs:  $16,759.06 (6.4%)
• Venue Costs:  $36,986.90 (14.1%)
• Site Managers and Paid Instructors:  $39,533.73 (15.1%)
• Liability Insurance and Background Checks:  $6,257.95 (2.4%)
• Royalty Fees:  $19,684.35 (7.5%)
• National Brand Fund Contributions:  $3,300.00 (1.3%)
• Total Cost:  $152,947.50 (58.3%)
• Net Registration Income:  $109,510.50 (41.7%)

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