Orangetheory Fitness Franchise Costs & Fees

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Description

Year Business Began: 2010Franchising Since: 2010Headquarters: Boca Raton, FloridaEstimated Number of Units: 730Franchise Description: The franchisor is Ultimate Fitness Group, LLC. Orangetheory Studios are health and fitness studios that offer members access to exercise equipment, including cardio and strength equipment, in a simple, contemporary atmosphere characterized by its signature, energizing orange color scheme and trade dress. The franchisor offers franchises to qualified individuals and entities to develop and operate fitness studios under a comprehensive system it and its affiliates have developed.Training Overview: If the Franchise Agreement relates to their first Orangetheory Studio, franchisees, along with all signatories on the Franchise Agreement (or their managing owner, who must be a signatory on their Franchise Agreement) must successfully complete the initial training program to the franchisor’s satisfaction before the Studio opens to the public. The current initial training program lasts 5 days and is presently conducted at the franchisor’s headquarters in Boca Raton, Florida. Portions of initial training may be provided via online “e-learning” modules through Orange University, the franchisor’s Learning Management Software System. The franchisor or its representative (Area Representatives) will also provide Studio Launch Training at no charge for up to 4 fitness coaches. This includes 36 hours of onsite training at the franchisee’s Studio, or a designated Studio, in the weeks leading up to the Studio’s opening. The franchisor may require franchisees, their owners, their managers and other employees to attend additional, periodic or refresher training programs and seminars at the times and locations it designates or through e-learning modules available on Orange University.Territory Granted: The Franchise Agreement grants franchisees the right to operate a single Orangetheory Studio at a specific location that they select and the franchisor approves, in its sole discretion. The approved site must be located within a defined geographic area (no fixed radius) (the Territory) that the franchisor will determine based on various market and economic factors, such as population, traffic flow, presence of businesses, location of competitors (including other Orangetheory Studios), demographic and other market conditions. The Territory may be defined based on geographic boundaries, streets or other criteria, as the franchisor determines appropriate. The franchisor will not approve a Territory that encompasses less than 7,500 Qualified Households, which is determined using a third party consumer analytics report based on metrics provided by the franchisor. A “Qualified Household” is a household with a minimum combined income of $75,000, however, incomes may be adjusted by the franchisor to reflect different markets. As long as franchisees are in compliance with the Franchise Agreement, the franchisor will not operate, or grant to others the right to operate, an Orangetheory Studio the physical premises of which is located within the Territory, except that it may operate, or authorize others to operate, Orangetheory Studios within hotels, motels or resorts located in the Territory, as long as such Studios only provide services to guests of the Hotel.Obligations and Restrictions: The franchisor does not require, but does recommend, that franchisees (or their managing owner) personally supervise the Studio. Franchisees must designate a full-time, on-premises manager who (a) devotes his or her full working time and best efforts to the day-to-day, on-premises operations of the Studio, (b) has satisfactorily completed the management training program, and (c) is not engaged in any other business endeavor (except passive investments which do not interfere with his or her duties as manager). Franchisees must conduct the business operated at the Studio as required by the Manuals and the Franchise Agreement. All products and services must conform to the franchisor’s standards and specifications. Franchisees must offer all products and services that the franchisor periodically requires for Orangetheory Studios.Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If franchisees meet requirements, they can renew for 1 additional consecutive term of 10 years.Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease or obligations. Investment Tables: Estimated Initial Investment Name of Fee Low High Initial Franchise Fee $42,500 $49,500 Travel and Living Expenses During Training (for all attendees) $1,200 $4,800 Deposit for Leasehold $12,000 $30,000 3 Month’s Rent $18,000 $45,000 Leaseholds Improvements and Construction Costs $200,000 $560,000 Reception Desk, Retail Display Wall and all Interior Logo Signage $11,500 $14,500 Fitness Equipment (including installation) and OT Beat Start-Up System $93,108 $111,913 Fitness Equipment Maintenance Contract $900 $1,500 Initial Inventory of Orangetheory Fitness Retail Merchandise $4,000 $6,000 AED and First Aid Equipment/Training $1,000 $5,000 Exterior Signage $5,000 $7,000 Audio/Video System, Other Equipment and Supplies $20,500 $25,500 Computer System $14,000 $18,000 Pre-Sale and Grand Opening Advertising $30,000 $40,000 Pre-Sale Coordinator Program $0 $3,900 Business Licenses/Miscellaneous Opening Costs $1,000 $4,000 Insurance $3,500 $5,000 Additional Funds – 3 months $25,000 $50,000 ESTIMATED TOTAL (Excluding real estate purchase costs) $488,405 $994,360 Other Fees Type of Fee Amount Royalty Fee 8% of Gross Sales. Brand Fund Contributions Currently 1% of Gross Sales; maximum 3% of Gross Sales. Local Advertising Minimum amount that the franchisor designates, which will be between $2,500 – $4,000 per month. Cooperative Advertising As determined by Cooperative. Successor Franchise Fees 25% of then-current initial franchise fee for new franchisees. Transfer/Assignment Fee 25% of then-current initial franchise fee for new franchisees. Relocation Fee Fee equal to the franchisor’s costs and expenses. Interest and Late Fees Lesser of 18% per annum or the highest rate permitted by law, plus $35 per week or portion of a week that the payment or report is overdue. Audit Expenses Fee equal to the cost of audit, including any charges of independent accountants, travel expenses and per diem personnel charges. Additional Training Reasonable fee, currently $1,000 per person per session. Refresher Training Fee $250 per day per person trained. Annual Conference Up to $1,000 per person. Annual Training Summit Up to $500 per person. On-Site Evaluation Fees The franchisor’s costs and expenses in connection with the on-site evaluation. Insurance Premiums Amount of unpaid premiums, plus an administrative fee. Products Purchases Varies. Technology-Software License Fees Approximately $399-$749 per month, plus a $575 MindBody Online setup fee Toll Fees Approximately $149-$449 per month (currently $149 per month). Non-Compliance Fee Up to $1,000 per notice of violation. Product/Supplier Approval Costs Reasonable cost of inspection or testing plus actual cost of laboratory fees, professional fees and travel and living expenses of the franchisor’s personnel. Management Fee 5% of Gross Sales plus the franchisor’s reasonable costs and expenses. Costs and Attorney’s Fees Will vary under circumstances. Indemnification Will vary under circumstances. Operations Manual Replacement Charge $250 The above information has been taken from the FDD of Orangetheory Fitness. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
Type of Fee Amount
Royalty Fee 8% of Gross Sales.
Brand Fund Contributions Currently 1% of Gross Sales; maximum 3% of Gross Sales.
Local Advertising Minimum amount that the franchisor designates, which will be between $2,500 – $4,000 per month.
Cooperative Advertising As determined by Cooperative.
Successor Franchise Fees 25% of then-current initial franchise fee for new franchisees.
Transfer/Assignment Fee 25% of then-current initial franchise fee for new franchisees.
Relocation Fee Fee equal to the franchisor’s costs and expenses.
Interest and Late Fees Lesser of 18% per annum or the highest rate permitted by law, plus $35 per week or portion of a week that the payment or report is overdue.
Audit Expenses Fee equal to the cost of audit, including any charges of independent accountants, travel expenses and per diem personnel charges.
Additional Training Reasonable fee, currently $1,000 per person per session.
Refresher Training Fee $250 per day per person trained.
Annual Conference Up to $1,000 per person.
Annual Training Summit Up to $500 per person.
On-Site Evaluation Fees The franchisor’s costs and expenses in connection with the on-site evaluation.
Insurance Premiums Amount of unpaid premiums, plus an administrative fee.
Products Purchases Varies.
Technology-Software License Fees Approximately $399-$749 per month, plus a $575 MindBody Online setup fee
Toll Fees Approximately $149-$449 per month (currently $149 per month).
Non-Compliance Fee Up to $1,000 per notice of violation.
Product/Supplier Approval Costs Reasonable cost of inspection or testing plus actual cost of laboratory fees, professional fees and travel and living expenses of the franchisor’s personnel.
Management Fee 5% of Gross Sales plus the franchisor’s reasonable costs and expenses.
Costs and Attorney’s Fees Will vary under circumstances.
Indemnification Will vary under circumstances.
Operations Manual Replacement Charge $250