The F45 franchise is a training studio which provides exercise training that involves alternating periods of short, intense anaerobic exercise.
The F45 Training system was launched in Australia in 2012 and currently has over 2,200 franchises sold in 63 countries. In the United States F45 began offering franchises in 2015 and now has 469 franchise units and 3 company owned units.
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01:50 Franchise Fee & Initial Investment
02:35 % Averages AUV, EBITDA & Cash-on-Cash Returns
02:53 Protected Area
03:40 How Much Money You Can Get
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F45 is a public company backed by notable investors such as Mark Whalberg and David Beckham. The shares began trading on the New York Stock Exchange on July 15, 2021 under the symbol “FXLV.” F45 received net proceeds from the offering of approximately $279.0 million.
The F45 is uniquely positioned to grow within the Fitness Industry because of the management team behind it. F45 boasts notable investors that are committed to growing the brand internationally and Mark Whalberg is actively helping grow the brand name in the United States. The F45 franchise has also reported that margins can be up to 30%, while the industry average in the fitness sector is 9.6%. They are competing in a $37 billion market with an expected 4.7% growth rate.
While the fitness industry as a whole is facing uncertainty because of COVID-19 and the shift to online home workouts such as Peloton. However, as consumer demand for normal life reemerges and the safety of vaccines, we believe that this competitive fitness model will excel as people want to compete in a live setting against other people. The most comparable company to F45 is Orange Theory. Orange Theory takes on average over 12 years to make your money back compared to F45 franchises which can be under 3 years.
The initial F45 Franchise Fee is $52,000. You have to pay this upfront fee when opening a F45 franchise.
To be considered for a franchisee of an F45 franchise you need to have at least $120,000 in liquid assets.
The estimated total investment necessary to begin operation of a F45 Franchise ranges from $313,200 – $485,100
The following costs are part of the upfront costs included in the initial investment for a F45 franchise
Many of these are one-time fees that are needed to launch the franchise.
Royalty: 7% of Gross Sales or $2,500 per month (whichever is higher)
Brand Fund: 2% of Gross Sales or $200 per month (whichever is higher)
Marketing Fee: $2,500 per month
The Fitness Industry Average has a royalty fee of 6.4% and a marketing fee of 2%, so F45 has slightly higher royalties but makes up for it with large revenues per franchise unit.
F45 does not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets. However, if you are purchasing an existing F45, the company may provide you with the actual records of that F45 franchise.
However, Charlie Payne, Chief Financial Officer, provided some insight into the financials behind a F45 in a press release before their IPO that gave us some insight into how well franchisees can do financially after opening an F45 studio.
“Our nearly 100% franchised model offers compelling economics to both us and our franchisees. Our franchisees benefit from our highly attractive new unit economic model that features a relatively low initial investment, low four-wall operating expenses, and strong returns on investment. A typical F45 franchise requires an initial investment of approximately $315,000, significantly lower than other franchise models. In Year 3 of operation, franchisees produce an average AUV of approximately $359,000; average four-wall EBITDA margins in excess of 30%; and average cash-on-cash returns in excess of 35%. On average, it takes a studio approximately six months and 75 members to reach breakeven.”
You can learn more here: https://www.vettedbiz.com/f45-fitness-franchise/