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Description
Investment Icon

What is the Initial Investment for an Orangetheory Franchise?

The initial investment for an Orangetheory franchise ranges from $729,352 to $1,628,992. This includes a franchise fee of $59,950. Additionally, potential franchisees should prepare for ongoing costs, including an 8% royalty fee on revenue and a 3% marketing fee. A cash reserve of at least $300,000 and a net worth between $500,000 and $1,000,000 are also required to ensure financial stability during the startup phase.

Fees Icon

What Are the Financial Performance Metrics for an Orangetheory Franchise?

On average, an Orangetheory franchise generates annual revenue of approximately $400,000 per unit, with a median revenue also at $400,000. The breakeven time is around 18 months, and franchisees can expect to see their investment payback within the same timeframe. This financial performance highlights the potential for profitability, making it an attractive option for aspiring franchise owners.

Revenue Icon

What Are the Ongoing Expenses for an Orangetheory Franchise?

Franchisees can expect total operating expenses to average around $56,850 annually. Key expenses include commissions for area representatives at $23,403, management fees at $18,577, and advertising fund expenses at $18,948. Understanding these ongoing costs is essential for effective financial planning and maintaining profitability in the competitive fitness industry.

Breakeven Icon

How Has Orangetheory Grown Over the Years?

Orangetheory has shown consistent growth in its franchised units, increasing from 1,247 in 2021 to 1,311 in 2023. Corporate-owned units have also expanded, from 15 in 2021 to 22 in 2023. This growth reflects the brand's strong market presence and the increasing popularity of its fitness model, providing a solid foundation for potential franchisees looking to join a thriving network.

ORANGETHEORY 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.

Net Worth Required icon The minimum total assets (minus liabilities) you must possess.

i Net Worth Required:

$500,000 - $1,000,000
Investment Payback icon The estimated period to recoup your total investment.

i Investment Payback:

18 Months
Franchise Fee icon The initial fee paid to join the franchise system.

i Franchise Fee:

$59,950
Royalty Fee icon Ongoing percentage of revenue paid to the franchisor.

i Royalty Fee:

8%
Marketing Fee icon Regular contribution toward the franchise’s advertising fund.

i Marketing Fee:

3%
Breakeven Time icon The estimated timeframe to recover your initial costs.

i Breakeven Time:

18 Months
Initial Investment icon The total amount required to launch the franchise.

i Initial Investment:

$729,352 - $1,628,992
Cash Required icon The minimum liquid capital you must have on hand.

i Cash Required:

$300,000
Average Revenue icon The typical yearly revenue generated per franchise location.

i Average Revenue:

$400,000
Median Revenue icon The middle value of yearly revenue among franchise locations.

i Median Revenue:

$400,000
Highest Revenue icon The largest reported annual revenue among franchisees.

i Highest Revenue:

$400,000
Lowest Revenue icon The smallest reported annual revenue among franchisees.

i Lowest Revenue:

$300,000
Industry icon A broad sector defining similar types of franchise businesses.

i Industry:

Fitness Franchises
Category icon A more specific division within the broader industry.

i Category:

Personal Training
Leadership icon The key individuals guiding the franchise’s strategy and growth.

i Leadership:

David Long
Corporate Address icon The official business address of the franchisor’s headquarters.

i Corporate Address:

6000 Broken Sound Parkway, NW, Suite 200 Boca Raton, FL 33487
Funding Year icon Available financing options to help start the franchise.

i Funding Year:

2018
Parent Company icon The main organization that owns the franchise brand.

i Parent Company:

Ultimate Fitness Holdings, LLC

ORANGETHEORY Franchise Unit Growth Summary

A breakdown of corporate, franchised, and total units, with yearly net changes.

The overall number of operating franchise locations.

Total Units i

1333
The number of locations owned by independent franchisees.

Franchised Units i

1311
The number of locations owned and run by the franchisor.

Corporate Units i

22
Units 2021 2022 2023
Total Units 1262 1302 1333
Net Change YoY 40 31
Franchised Units 1247 1281 1311
Net Change YoY 34 30
Corporate Units 15 21 22
Net Change YoY 6 1
Investment About

Initial Investment

The initial investment required to open an Orangetheory franchise ranges from $729,352 to $1,628,992. This includes a franchise fee of $59,950, and potential additional costs for equipment, build-out, and other operational expenses. Aspiring franchisees should prepare for a cash requirement of at least $300,000 and a net worth between $500,000 and $1,000,000 to ensure they can support their business in the early stages.

Potential About

Revenue Potential

Orangetheory franchises have shown promising revenue potential, with average annual revenues per unit reported at $400,000. The revenue figures demonstrate a consistent performance across units, with the lowest annual revenue being $300,000 and the highest also reaching $400,000. This financial stability can be appealing for investors looking for a lucrative business opportunity in the fitness industry.

Metrics About

Royalty and Marketing Fees

Franchisees are subject to an 8% royalty fee based on gross sales, along with a 3% marketing fee. These fees contribute to the ongoing support and brand development that Orangetheory provides. Understanding these costs is crucial for franchisees to manage their financial expectations and ensure profitability.

Fees About

Breakeven and Payback Period

The breakeven time for an Orangetheory franchise is approximately 18 months. This means that franchisees can expect to recover their initial investment in about a year and a half, assuming optimal performance. This relatively quick payback period can be an attractive feature for potential investors.

Breakeven About

Franchise Growth

The Orangetheory brand has experienced consistent growth in its franchise units, increasing from 1,247 units in 2021 to 1,311 units in 2023. This growth indicates a strong demand for the franchise model and a successful expansion strategy, making it an enticing option for new franchisees looking to join a booming fitness community.

Units About

Operational Insights

The average operating expenses for an Orangetheory franchise amount to $56,850 annually, which includes various costs such as commissions, management fees, and advertising expenses. Understanding these operational costs is essential for franchisees to effectively budget and maximize their profitability while maintaining the quality of service and customer experience.

Frequently Asked Questions

The initial investment for an Orangetheory franchise ranges from $729,352 to $1,628,992. This includes the franchise fee, equipment, leasehold improvements, and other startup costs.