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

• Section I – Estimated initial investment (franchise costs) for a CycleBar franchise, based on Item 7 of the company’s 2022 FDD

• Section II – Initial franchise fee, royalty fee, and marketing fee for a CycleBar franchise, based on Items 5 and 6 of the company’s 2022 FDD

• Section III – Number of franchised and company-owned CycleBar outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD

• Section IV – Background information on the CycleBar franchise opportunity, including relevant news updates

• Section V – Presentation and analysis of CycleBar’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:

• average gross revenue for each calendar month from January 2021 to December 2021 for the franchised CycleBar studios that were: (i) owned and operated by a system franchisee over the entirety of the measurement period; and (ii) operating for at least 12 months beyond their soft opening date as of the end of the calendar month at issue (the “Disclosed Studios”)

• average gross revenue for each calendar month from January 2021 to December 2021 for the Disclosed Studios that scheduled a minimum of 85 classes per calendar month in accordance with CycleBar’s recommended standards and specifications (the “Fully Scheduled Disclosed Studios”)

• average gross revenue for each calendar month from January 2021 to December 2021 for the Disclosed Studios that scheduled less than 85 classes per calendar month, which does not follow CycleBar’s recommended standards and specifications (the “Minimally Scheduled Disclosed Studios”)

• average gross revenue for each calendar month from January 2021 to December 2021 for the Disclosed Studios that had a minimum of 45 bikes available for booking in accordance with CycleBar’s recommended standards and specifications (the “Fully Stocked Disclosed Studios”)

• average gross revenue for each calendar month from January 2021 to December 2021 for the Disclosed Studios that had less than 45 bikes available for booking, which does not follow CycleBar’s recommended standards and specifications (the “Minimally Stocked Disclosed Studios”)

• Section VI – Key ratios, comparables, computations, and analyses for the CycleBar franchise opportunity (exclusive content for Platinum subscribers)

Section I – CycleBar Franchise Costs

• CycleBar franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $60,000
• Initial Training Fee:  $0
• Travel Expenses to Training:  $500 to $2,500
• Real Estate/Lease:  $14,000 to $48,000
• Net Leasehold Improvements:  $112,000 to $189,000
• Furniture, Fixtures, and Equipment Payments for 3 Months:  $11,000 to $21,000
• Signage and Graphics:  $18,000 to $23,000
• Supplies and Accessories:  $10,000
• Retail Inventory Package for Presale and Soft Opening:  $12,000
• Studio Management System:  $18,000
• Audio Visual Equipment:  $55,000
• Business Licenses:  $500 to $1,000
• Technology Fee for 4 Months:  $2,860
• Insurance for 3 Months:  $1,050 to $2,550
• Grand Opening Marketing Budget:  $15,000
• Instructor Boot Camp:  $5,000
• Additional Funds for 3 Months:  $12,000 to $23,000
• Total Estimated CycleBar Franchise Costs:  $346,910 to $487,910

Section II – CycleBar’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• CycleBar’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

• Initial Franchise Fee:  $60,000
• Royalty:  the greater of (i) 7% of Gross Sales or (ii) $1,000 per month
• Brand Development Fund Contributions:  2% of Gross Sales

Section III – Number of Franchised and Company-Owned CycleBar Outlets

Franchised

2019

• Outlets at the Start of the Year:  152
• Outlets at the End of the Year:  193
• Net Change:  +41

2020

• Outlets at the Start of the Year:  193
• Outlets at the End of the Year:  208
• Net Change:  +15

2021

• Outlets at the Start of the Year:  208
• Outlets at the End of the Year:  234
• Net Change:  +27

Company-Owned

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:  5
• Net Change:  +5

2021

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

Section IV – Background Information on the CycleBar Franchise

17 Things You Need to Know About the CycleBar Franchise

Debuts in New York City with Multiple Former Flywheel Locations

1.  In late June 2021, CycleBar announced that it would enter the New York City market for the first time with six studios expected to open over the summer, beginning with a studio in Noho in late June. This expansion was made possible through Xponential’s existing relationship with Palladin Consumer Retail Partners, a Boston-based private equity firm, and their establishment of “PB Metro” in 2019 which is now rebranding six former Flywheel Sports studios that closed permanently in 2020, along with further territory development in the market. This partnership with PB Metro would also bring about one new CycleBar studio in Philadelphia at 1521 Locust Street.

2.  The initial six NYC CycleBar locations are in:

• Noho – 51 Astor Place, New York, NY
• Flatiron – 39 W. 21st Street, New York, NY
• Upper East Side – 201 E. 67th Street, New York, NY
• NoMad – 420 Park Ave S., New York, NY
• Tribeca – 415 Greenwich St., New York, NY
• Williamsburg – 173 North 3rd Street, Brooklyn, NY

3.  Anthony Geisler, CEO of Xponential Fitness, said, “After years of being a staple in the boutique cycling industry, we are excited CycleBar has reached the Big Apple with the help of Palladin. With a devoted population of riders in NYC and a pent-up demand for local neighborhood boutique fitness, the time could not be better for us to debut our high-energy, rhythm-based workout to such a fitness-focused market in the United States.”

4.  This announcement continues the ongoing partnership between Xponential and Palladin, led by Xponential’s EVP of franchise development Jason Losco, which began with Palladin’s 2019 formation of PB Metro and subsequent expansion of sister brand Pure Barre throughout NYC. There are currently 16 open Pure Barre studios in the greater New York market owned by PB Metro, with an additional 12 licenses to be developed over the next three years.

5.  In addition to converting the six Flywheel locations to CycleBar studios in NYC, the partnership with PB Metro gives the group the right to develop 23 more CycleBar studios in the NY metro market over the next five years. Two of these locations will introduce dual concepts, with both a CycleBar studio and a Pure Barre studio in the same building.

6.  Rob Fioretti, managing director of Palladin, commented, “We are excited to grow our partnership with Xponential as we begin to grow the CycleBar brand and continue to expand the Pure Barre brand in New York and other regions. With the exclusive rights to develop both concepts in our territory, our Pure Barre and CycleBar studios will be the premier boutique fitness platform in this area offering clients a truly unique studio fitness experience.”

7.  “We are thrilled to watch Xponential’s continued expansion,” said Mark Grabowski, managing partner at Snapdragon Capital Partners who backs Xponential Fitness and its brands. “The transaction will establish CycleBar’s footprint in one of the most important markets for boutique fitness, and we are excited for CycleBar to enter the New York market.”

Celebrates Opening of 250th Studio

8.  In early March 2022, CycleBar announced that it has opened its 250th studio. Since being acquired by Xponential Fitness in 2017, CycleBar’s trajectory has been tremendous, further heightened by the boom in the popularity of indoor cycling during the pandemic. The milestone 250th studio, owned by Beth Russo, opened recently in Parker, CO. To celebrate as the 250th location, the Parker studio gave away ten memberships worth $250 to lucky guests at random during its grand opening week.

9.  “We are thrilled to see the passion and interest for boutique cycling across the country, especially after the pandemic,” said Trevor Lucas, president of CycleBar. The COVID-19 pandemic resulted in a heightened awareness of indoor cycling and its incredible impact on both physical and mental health. CycleBar, which offers all of these benefits plus an unmatched sense of community in its franchised locations, continues to ride this wave.

10.  Along with the Parker studio, the company has opened new franchises in Maynard, MA; Fairview, TX; Houston, TX; Waterford, CT; Grand Rapids, MI; Midlothian, VA; and O’Fallon, MO.

Partners with CELSIUS to Fuel Riders Across the Country

11.  In mid-May 2022, CycleBar announced that it has partnered with Celsius Holdings, Inc., making CELSIUS the official energy drink of CycleBar. Riders can now stay active and energized in and out of the CycleTheater with CELSIUS drinks available for purchase across CycleBar studios. “Riding at CycleBar is a high-energy workout like no other, so we wanted to find a beverage partner that could match that level of energy, and CELSIUS was a natural fit,” said Trevor Lucas, president of CycleBar.

12.  Whether someone is a seasoned indoor cycling veteran or has never been on a bike before, CycleBar is passionate about making every rider feel welcomed, empowered, and energized after every class. World-class instructors motivate and enlighten riders, helping them find community and achieve their fitness goals in state-of-the-art CycleTheaters, accompanied by adrenaline-pumping CycleBeats playlists. A variety of class types, including Connect, Performance, Classic, Empower, and Xpress, ensure that there is a way for everyone to get active.

13.  These pillars of movement, energy, and community align perfectly with the CELSIUS brand. When combined with exercise, CELSIUS’ energy drink formula is clinically proven to boost metabolism and help consumers burn body fat. Whether someone is seeking an extra boost for their workout or a delicious pick-me-up to hustle through the workday, CELSIUS ensures that they stay active and focused on their goals.

14.  “We couldn’t be more thrilled to partner with CycleBar on a national level,” said Bryan Alesiano, vice president of sales for CELSIUS. “The CELSIUS brand perfectly aligns with what each and every CycleBar studio stands for – an active community with the collective desire to achieve more out of life.”

Company History

15.  CycleBar was founded in 2004 by Bill Pryor and his sister Alex Klemmer in Boston, Massachusetts. Pryor and Klemmer recognized that indoor cycling classes were becoming increasingly popular. They wanted to offer classes at a more affordable rate than other brands, while still providing an effective workout. This strategy paid off and Pryor and Klemmer began opening more CycleBar studios around the Boston area to meet demand.

16.  Over the next decade, Pryor and Klemmer continued to successfully run CycleBar. In 2015, Pryor and Klemmer began franchising the CycleBar concept. Within the first 10 months of launching franchising, CycleBar signed over 200 new studios. CycleBar expanded rapidly over the next few years and in 2017, the company was acquired by Xponential Fitness, owner of several boutique fitness brands including Club Pilates, StretchLab, Row House, Pure Barre, YogaSix, AKT, and STRIDE. Today, there are CycleBar locations all across the United States.

Entrepreneur’s Franchise 500

17.  CycleBar ranked No. 496 on Entrepreneur’s 2022 Franchise 500 list.

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the CycleBar Franchise (Item 19, 2022 FDD)

• In Part 1 of this Item, CycleBar discloses the average monthly Gross Revenue generated in each calendar month comprising the 2021 calendar year (each, a “Calendar Month” and collectively, the “Measurement Period”) amongst the franchised Studios that were: (i) owned and operated by a System franchisee over the entirety of the Measurement Period; and (ii) operating for at least 12 months beyond their soft opening date as of the end of that Calendar Month (the “Disclosed Studios”).

• In Part 1, the Applicable Subset for a given Calendar Month excludes any Studio that was not open for at least 12 months beyond its soft opening date as of the end of that Calendar Month (the “Excluded Studios”).

• In Part 2 of this Item, CycleBar discloses two different charts. The first chart (Part 2A) discloses the average monthly Gross Revenue generated during the Measurement Period amongst Disclosed Studios that scheduled a minimum of 85 classes per Calendar Month in accordance with CycleBar’s recommended standards and specifications (the “Fully Scheduled Disclosed Studios”).

• The second chart (Part 2B) discloses the average monthly Gross Revenue generated during the Measurement Period amongst Disclosed Studios that scheduled less than 85 classes per Calendar Month, which does not follow CycleBar’s recommended standards and specifications (the “Minimally Scheduled Disclosed Studios”). The Excluded Studios are excluded from Part 2 of this Item 19.

• In Part 3 of this Item, CycleBar discloses two different charts. The first chart (Part 3A) discloses the average monthly Gross Revenue generated during the Measurement Period amongst Disclosed Studios that had a minimum of 45 bikes available for booking in their Studio in accordance with CycleBar’s recommended standards and specifications (the “Fully Stocked Disclosed Studios”).

• The second chart (Part 3B) discloses the average monthly Gross Revenue generated during the Measurement Period amongst Disclosed Studios that had less than 45 bikes available for booking, which does not follow CycleBar’s recommended standards and specifications (the “Minimally Stocked Disclosed Studios”). The Excluded Studios are excluded from Part 3 of this Item 19.

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

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

• January 2021 (184 Studios):  $24,727
• February 2021 (186 Studios):  $25,631
• March 2021 (186 Studios):  $29,731
• April 2021 (186 Studios):  $30,277
• May 2021 (188 Studios):  $33,019
• June 2021 (191 Studios):  $33,399
• July 2021 (193 Studios):  $34,404
• August 2021 (195 Studios):  $30,807
• September 2021 (196 Studios):  $29,507
• October 2021 (197 Studios):  $29,033
• November 2021 (199 Studios):  $35,778
• December 2021 (200 Studios):  $29,912

• Total Annual Gross Revenue (January 2021 to December 2021):  $366,225
• Average Monthly Gross Revenue (January 2021 to December 2021):  $30,519

Part 2A – Average Gross Revenue Amongst the Applicable Subset of All Fully Scheduled Disclosed Studios for Each Calendar Month Comprising the Measurement Period

• January 2021 (142 Studios):  $28,835
• February 2021 (139 Studios):  $29,859
• March 2021 (160 Studios):  $32,643
• April 2021 (156 Studios):  $33,256
• May 2021 (160 Studios):  $36,165
• June 2021 (169 Studios):  $35,673
• July 2021 (168 Studios):  $36,792
• August 2021 (169 Studios):  $33,154
• September 2021 (152 Studios):  $32,679
• October 2021 (159 Studios):  $31,772
• November 2021 (156 Studios):  $40,215
• December 2021 (147 Studios):  $33,729

• Total Annual Gross Revenue (January 2021 to December 2021):  $404,772
• Average Monthly Gross Revenue (January 2021 to December 2021):  $33,731

Part 2B – Average Gross Revenue Amongst the Applicable Subset of All Minimally Scheduled Disclosed Studios for Each Calendar Month Comprising the Measurement Period

• January 2021 (42 Studios):  $10,836
• February 2021 (47 Studios):  $13,128
• March 2021 (26 Studios):  $11,810
• April 2021 (30 Studios):  $14,787
• May 2021 (28 Studios):  $15,039
• June 2021 (22 Studios):  $15,934
• July 2021 (25 Studios):  $18,359
• August 2021 (26 Studios):  $15,550
• September 2021 (44 Studios):  $18,549
• October 2021 (38 Studios):  $17,570
• November 2021 (43 Studios):  $19,681
• December 2021 (53 Studios):  $19,326

• Total Annual Gross Revenue (January 2021 to December 2021):  $190,569
• Average Monthly Gross Revenue (January 2021 to December 2021):  $15,881

Part 3A – Average Gross Revenue Amongst the Applicable Subset of All Fully Stocked Disclosed Studios for Each Calendar Month Comprising the Measurement Period

• January 2021 (2 Studios):  $28,900
• February 2021 (1 Studios):  $54,632
• March 2021 (1 Studios):  $62,232
• April 2021 (3 Studios):  $51,979
• May 2021 (3 Studios):  $51,083
• June 2021 (4 Studios):  $46,538
• July 2021 (13 Studios):  $49,629
• August 2021 (15 Studios):  $43,014
• September 2021 (16 Studios):  $41,902
• October 2021 (16 Studios):  $40,630
• November 2021 (16 Studios):  $54,023
• December 2021 (19 Studios):  $37,608

• Total Annual Gross Revenue (January 2021 to December 2021):  $562,170
• Average Monthly Gross Revenue (January 2021 to December 2021):  $46,848

Part 3B – Average Gross Revenue Amongst the Applicable Subset of All Minimally Stocked Disclosed Studios for Each Calendar Month Comprising the Measurement Period

• January 2021 (182 Studios):  $24,681
• February 2021 (185 Studios):  $25,475
• March 2021 (185 Studios):  $29,555
• April 2021 (183 Studios):  $29,921
• May 2021 (185 Studios):  $32,726
• June 2021 (187 Studios):  $33,118
• July 2021 (180 Studios):  $33,305
• August 2021 (180 Studios):  $29,789
• September 2021 (180 Studios):  $28,405
• October 2021 (181 Studios):  $28,007
• November 2021 (183 Studios):  $34,183
• December 2021 (181 Studios):  $29,104

• Total Annual Gross Revenue (January 2021 to December 2021):  $358,269
• Average Monthly Gross Revenue (January 2021 to December 2021):  $29,856

• 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.

• The term “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.

• The “Average Gross Revenue” figure was calculated by taking the sum of all the Gross Revenue generated by the Disclosed Studios and dividing that amount by the number of Disclosed Studios in the appropriate subset at issue.

• When reviewing this Item 19 and evaluating CycleBar’s 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 incurred 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, CycleBar 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).

Section VI – CycleBar Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️