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ORANGETHEORY Franchise ProfileFitness Franchises > Personal Training |
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.
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.
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.
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.
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 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 | 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 |
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.
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.
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.
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.
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.
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.