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Orangetheory Fitness Franchise ProfileFitness Franchises > Specialty Fitness Classes |
What Are the Initial Investment Requirements for an Orangetheory Fitness Franchise?
To open an Orangetheory Fitness franchise, you should be prepared for a significant initial investment ranging from $729,352 to $1,628,992. This includes a franchise fee of $59,950. Additionally, you will need to have cash available between $150,000 and $250,000, along with a net worth requirement of $500,000 to $1,500,000. Understanding these financial commitments is crucial for your planning and budgeting as you embark on this venture.
What Are the Ongoing Fees and Financial Performance Expectations?
Owning an Orangetheory Fitness franchise comes with ongoing financial responsibilities, including an 8% royalty fee on gross sales and a 3% marketing fee. On average, each unit generates an annual revenue of approximately $400,000, with a breakeven point typically reached in about 15 months. Franchisees can expect a payback period of around 19 months, making it important to have a solid financial strategy in place to manage these costs effectively.
How Many Units Are Currently Operating in the Orangetheory Fitness Franchise?
As of 2023, Orangetheory Fitness has a total of 1,311 franchised units. This marks a steady growth from 1,247 units in 2021 and 1,281 in 2022. Notably, there are no corporate-owned units in 2023, indicating a strong focus on franchising as the primary growth model for the brand. This expansion reflects the brand's increasing popularity and potential for new franchisees.
What Are the Average Financial Metrics for Orangetheory Fitness Franchisees?
The average annual revenue for Orangetheory Fitness franchises is approximately $123,679,000, with a gross profit margin of 84.8%. The cost of goods sold accounts for 15.2% of revenue, while operating expenses are about 46% of total revenue. This data illustrates the financial health and profitability potential of operating an Orangetheory Fitness franchise, making it an attractive option for aspiring entrepreneurs in the fitness industry.
Orangetheory Fitness Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Orangetheory Fitness Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 1260 | 1293 | 1311 |
| Net Change YoY | 33 | 18 | |
| Franchised Units | 1247 | 1281 | 1311 |
| Net Change YoY | 34 | 30 | |
| Corporate Units | 13 | 12 | 0 |
| Net Change YoY | -1 | -12 |
Initial Investment
The initial investment to open an Orangetheory Fitness franchise ranges from $729,352 to $1,628,992. This includes the franchise fee of $59,950, which gives franchisees access to the brand's established systems and support. It's essential for potential franchisees to evaluate their financial capacity to ensure they can cover these costs effectively.
Financial Performance
Orangetheory Fitness units generate an average annual revenue of $400,000, with a median revenue also at $400,000. The lowest annual revenue reported is $300,000, while the highest is $400,000. This consistent performance highlights the brand's ability to attract and retain members, making it a potentially lucrative investment for franchisees.
Franchise Growth
The Orangetheory Fitness franchise has shown steady growth, increasing from 1,247 franchised units in 2021 to 1,311 in 2023. This upward trend indicates a strong market demand for fitness services and the effectiveness of the brand's operational model in expanding its footprint.
Operational Costs
Franchisees should be aware of ongoing operational costs, which include an 8% royalty fee and a 3% marketing fee. These fees are essential for maintaining brand standards and supporting national marketing efforts, ensuring that franchisees benefit from collective brand recognition and customer engagement.
Breakeven and Payback
The average breakeven time for an Orangetheory Fitness franchise is approximately 15 months, with an investment payback period of around 19 months. These metrics are crucial for potential franchisees to understand the timeline for recovering their initial investment, allowing for better financial planning and expectations.
Financial Requirements
To qualify for an Orangetheory Fitness franchise, prospective franchisees need a cash requirement of $150,000 to $250,000 and a net worth of $500,000 to $1,500,000. These financial prerequisites ensure that franchisees have the necessary resources to support their business and navigate the initial stages of operation effectively.
Frequently Asked Questions
The initial investment for an Orangetheory Fitness franchise ranges from approximately $729,352 to $1,628,992. This includes the franchise fee, equipment, and other startup costs.