Hydralive Therapy: $629K Average Sales vs. $231K-$341K Franchise Cost

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

Section I – Estimated initial investment (franchise costs) for a Hydralive Therapy franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Hydralive Therapy franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Hydralive Therapy outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Hydralive Therapy franchise opportunity

Section V – Presentation and analysis of Hydralive Therapy’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 actual and average total customers, client square footage, revenue, cost of goods sold, gross profit, operating expenses, net income, franchise fees, and estimated earnings for the 2 affiliate-owned Hydralive Therapy locations that operated for 2 or more years

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

Section I – Hydralive Therapy Franchise Costs

• Hydralive Therapy franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $49,500
• Franchise Location – One Month Rent and Security Deposit:  $4,000 to $7,000
• Leasehold Improvements:  $10,000 to $80,000
• Insurance:  $3,000 to $5,000
• Clinic Supplies:  $19,149 to $25,000
• Computer System, Security Cameras, and Telephones:  $2,000 to $5,000
• Signage:  $1,000 to $4,000
• Utility Deposits and Business Licenses:  $350 to $1,250
• Legal and Accounting:  $0 to $2,500
• Opening Advertising:  $2,500 to $3,000
• Equipment:  $100,000
• Clinic Furniture:  $25,000 to $28,999.98
• Additional Funds – Initial 3 Months:  $15,000 to $30,000
• Total Estimated Hydralive Therapy Franchise Costs:  $231,499 to $341,249.98

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

• Hydralive Therapy’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $49,500
• Continuing License Fee:  starting 90 days after signing the Franchise Agreement, an amount equal to the greater of $500 per month or 8% of your weekly Gross Revenue
• Brand Fund Fee:  1% of Gross Revenue per month. It may be increased up to 2% upon a 30-day written notice.
• Local Advertising Services Fee:  you must spend at least $2,000 each month on advertising mediums that are specifically directed and executed by the Local Advertising Services Program

Section III – Number of Franchised and Company-Owned Hydralive Therapy Outlets

Franchised

2020

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

2021

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

2022

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

Company-Owned

2020

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

2021

• Outlets at the Start of the Year:  3*
• Outlets at the End of the Year:  4*
• Net Change:  +1

2022

• Outlets at the Start of the Year:  4*
• Outlets at the End of the Year:  3*
• Net Change:  -1

*Note: Although Hydralive Therapy does not operate any company-owned locations, its parent operates three similar locations (two in Alabama and one in Georgia), and a fourth location in Milton, Georgia is operated by a licensee.

Section IV – News Updates on the Hydralive Therapy Franchise

• Hydralive Therapy Did Not Rank on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Hydralive Therapy Franchise (Item 19, 2023 FDD)

• During the calendar year 2022, Hydralive Therapy had one franchise location open in Columbus, Georgia.

• Hydralive Therapy’s affiliate K & B Industries, LLC, which has since been acquired 100% by Hydralive Holdings, LLC, effective March 1, 2023, operated two Hydralive locations for two years or more, one in Tuscaloosa, Alabama (opened in 2016) and one in Homewood, Alabama (Birmingham, Alabama metropolitan area, opened in 2018).

• Hydralive Therapy’s parent Hydralive Holdings, LLC also owns a location in Athens, Georgia, and another location in Hoover, Alabama. These locations were not operated by Hydralive Therapy’s parent or a franchisee for a full two years and are therefore not included in the chart below.

• The Unaudited 2022 Financial Statement is for two of Hydralive Holdings, LLC’s locations that operated for two or more years.

• The Homewood location has a cryotherapy machine (your franchise is required to operate an electric cryotherapy machine) and the Tuscaloosa location does not.

• The Homewood location is in a market which is part of a larger metropolitan area, while the Tuscaloosa location is in a small metro area close to the University of Alabama. Each of the two locations was open and operating for a minimum of two years.

Homewood

• Total Customers:  9,703
• Client Square Footage:  3,110
• Year Opened:  2018

Revenue

• Monthly Recurring Membership:  $143,934
• Retail Merchandise Sales:  $2,580
• Treatments:  $668,920
• Total Revenue:  $815,434

Cost of Goods Sold

• Medical Supplies:  $131,665
• Merchant Service Fees:  $21,897
• Retail Products:  $1,207
• Cryo Gas:  $14,638
• Total Cost of Goods Sold:  $169,407

Gross Profit:  $646,027

Operating Expenses

• Software/Web Licensing:  $10,393
• Miscellaneous (Gifts/Repairs):  $5,224
• Liability Insurance:  $7,356
• Marketing and Advertising:  $46,665
• Office Expenses:  $2,945
• Administrative Payroll:  $54,857
• Professional Fees:  $87,864
• Rent:  $46,525
• Utilities:  $7,656
• Total Expenses:  $269,485

Net Income:  $376,542

• Royalty (8%):  $67,235
• Brand Fund (1%):  $8,154

Estimated Earnings:  $303,153 (37.2%)

Mid-Level Practitioner* (where applicable):  $23,600

Tuscaloosa

• Total Customers:  6,009
• Client Square Footage:  3,200
• Year Opened:  2016

Revenue

• Monthly Recurring Membership:  $84,145
• Retail Merchandise Sales:  $4,245
• Treatments:  $355,571
• Total Revenue:  $443,961

Cost of Goods Sold

• Medical Supplies:  $81,874
• Merchant Service Fees:  $17,135
• Retail Products:  $2,310
• Cryo Gas:  $0
• Total Cost of Goods Sold:  $101,319

Gross Profit:  $342,642

Operating Expenses

• Software/Web Licensing:  $10,393
• Miscellaneous (Gifts/Repairs):  $5,490
• Liability Insurance:  $7,356
• Marketing and Advertising:  $37,001
• Office Expenses:  $2,149
• Administrative Payroll:  $32,065
• Professional Fees:  $68,010
• Rent:  $45,850
• Utilities:  $5,758
• Total Expenses:  $214,072

Net Income:  $128,570

• Royalty (8%):  $35,517
• Brand Fund (1%):  $4,440

Estimated Earnings:  $88,613 (20.0%)

Mid-Level Practitioner* (where applicable):  $17,700

Average

• Total Customers:  7,856
• Client Square Footage:  3,155

Revenue

• Monthly Recurring Membership:  $114,040 (18.1%)
• Retail Merchandise Sales:  $3,143 (0.5%)
• Treatments:  $512,246 (81.3%)
• Total Revenue:  $629,698 (100.0%)

Cost of Goods Sold

• Medical Supplies:  $106,770 (17.0%)
• Merchant Service Fees:  $19,516 (3.1%)
• Retail Products:  $1,759 (0.3%)
• Cryo Gas:  $7,319 (1.2%)
• Total Cost of Goods Sold:  $135,363 (21.5%)

Gross Profit:  $494,335 (78.5%)

Operating Expenses

• Software/Web Licensing:  $10,393 (1.7%)
• Miscellaneous (Gifts/Repairs):  $5,357 (0.9%)
• Liability Insurance:  $7,356 (1.2%)
• Marketing and Advertising:  $41,833 (6.6%)
• Office Expenses:  $2,547 (0.4%)
• Administrative Payroll:  $43,461 (6.9%)
• Professional Fees:  $77,937 (12.4%)
• Rent:  $46,188 (7.3%)
• Utilities:  $6,707 (1.1%)
• Total Expenses:  $241,779 (38.4%)

Net Income:  $252,556 (40.1%)

• Royalty (8%):  $50,376 (8.0%)
• Brand Fund (1%):  $6,297 (1.0%)

Estimated Earnings:  $195,883 (31.1%)

• *Note: Certain states may require that a physician or a mid-level practitioner consulting with a physician (Nurse Practitioner or Physician Assistant) provide initial consultations that are good for one year to each new Hydralive client. The costs for which are included above for reference.

• Some outlets have sold this amount. Your individual results may differ. There is no assurance that you will sell as much.

• Many factors, including location, management capabilities, local market conditions, and other factors, are unique to each clinic location and may significantly impact the financial performance of the clinic.

• You should conduct an independent investigation of the costs and expenses you will incur in operating your franchised Hydralive Clinic. Many factors, including location, management capabilities, local market conditions, and other factors, are unique to each business and may significantly impact the financial performance of your franchise business. Actual results vary from Clinic to Clinic and Hydralive Therapy cannot estimate the results of any particular franchise.

• Historical costs do not necessarily correspond to future costs because of factors such as pandemics, inflation, changes in minimum wage laws, rising fuel cost, location, financing, construction costs, lease related costs such as rent, CAM charges, taxes, interest, insurance, and utilities vary from franchise business to franchise business. All information should be evaluated in light of current market conditions including such cost and price information as may then be available.

• The term “Gross Revenue” means all revenue you derive from operating the Hydralive Clinic, including, but not limited to, all amounts received at or away from the Clinic Site from any activities or services whatsoever including any that are in any way associated with the Marks, the System, and whether from cash, check, barter, credit or debit card, or credit transactions, including memberships and the redemption value of gift certificates redeemed regardless of whether such gift certificates are issued by the Clinic or someone else; but excluding (1) all federal, state, or municipal sales, use, or service taxes collected from customers and paid to the appropriate taxing authority and (2) customer refunds, adjustments, credits, and allowances actually made by the Clinic.

• Gross Revenue also includes revenues from any service and sale of products bearing or associated with the Marks.

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