Orangetheory Fitness Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$613,000

-

$1,645,000

LOCATIONS

1298

Tanya

Updated

May 2, 2024

Is

Orangetheory Fitness

a franchise?

Yes,
Orangetheory Fitness
currently
accepts
franchise
applications

Owned by Ultimate Fitness Holdings LLC, Orangetheory Fitness is an American boutique fitness studio franchise founded in 2007 by exercise physiologist Ellen Latham in Fort Lauderdale, Florida.

Orangetheory Fitness operates contemporary fitness studios offering members access to exercise equipment, including cardio and strength equipment, and other related services and ancillary merchandise related to the Orangetheory concept.

The franchise is headquartered in Boca Raton, Florida. It began franchising in 2010 and currently has more than 1,500 studios in 50 states in the US and 25 countries worldwide.

How many

Orangetheory Fitness

franchises

are there?

In 2022, there were
1298
outlets in
the United
States, of which
1277
are franchises, and
21
are corporate-owned.

What are the

Orangetheory Fitness

franchise

fees?

Advertising fee

4.00%

Initial Franchise Fee

For the Orangetheory Fitness franchise, you are required to pay an initial franchise fee of $59,950 when you sign the Franchise Agreement. This fee is not refundable and is charged uniformly to all franchisees. The Initial Franchise Fee constitutes a significant part of the initial investment in the franchise and is used for services provided by the company to the franchisees prior to the opening of the studio and throughout the term of the franchise agreement.

Royalty Fee

As a franchisee, you are obligated to pay a royalty fee of 8% of Gross Sales. This fee is due weekly and is a recurring expense throughout the operation of your franchise. The royalty fee is a common practice in franchising, where the franchisor receives a percentage of the franchisee's revenue.

Brand Fund Contributions (Marketing Fee)

The Brand Fund Contributions, which can be considered as the marketing fee, are currently set at 3% of Gross Sales but may be increased up to 5% of Gross Sales. These contributions are due monthly and are used for marketing and promotional activities.

Other Notable Fees

While the exact amounts and percentages for the initial franchise fee, royalty fee, and marketing fee are not provided in the excerpts, there are other fees mentioned:

  1. Fitness Equipment Maintenance: A monthly contract cost between $300 and $800 for equipment maintenance.
  2. Additional Assistance: If requested, additional site selection and/or development guidance may be provided, with fees ranging from $2,500 to $5,500.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

Orangetheory Fitness

franchise?

It costs between
$613,000
and
$1,645,000
to start a
Orangetheory Fitness
franchise.
Type of Expenditure Amount
Initial Fee $59,950 to $59,950
Travel and Living Expenses During Training $1,200 to $4,800
Deposit for Leasehold $0 to $60,000
Rent (one month) $3,360 to $38,000
Leasehold Improvements and Construction Costs $250,000 to $1,000,000
Fitness Equipment (including installation) and OTbeat™ Start-Up System $164,250 to $233,500
Technology - Software Licensing Fee (3 months) $3,272 to $3,272
OTbeat Fee (3 months) $697 to $697
Fitness Equipment Maintenance $900 to $2,400
Initial Inventory of Orangetheory® Fitness Retail Merchandise $4,000 to $6,000
AED and First Aid Equipment/Training $1,000 to $5,000
Exterior Signage $5,000 to $14,000
Technology System $70,000 to $98,500
Pre-Sale and Grand Opening Advertising $30,000 to $40,000
Presales Training Program $0 to $4,900
Business Licenses/Miscellaneous Opening Costs $1,000 to $3,000
Insurance $3,500 to $5,000
Additional Assistance $0 to $5,500
Additional Funds - 3 Months $15,000 to $60,000
Total $613,129 to $1,644,519

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Orangetheory Fitness

provide

training

to its

franchisees?

Yes,
Orangetheory Fitness
provides
training

Initial Training Program

The initial training program is conducted online and may include portions provided via e-learning modules through Orange University, the franchise's learning management software system.

The training covers a wide range of subjects, including an introduction to Orangetheory Fitness, the role of the owner, fitness operations, continuity and compliance, retail, marketing, presales, and business intelligence. The training schedule may change throughout the year, but as of the date of the disclosure document, it occurs every month.

Studio Launch Training

This training is provided at no charge for up to eight fitness coaches and four sales associates. It includes online modules and on-site training at the franchisee's studio. Fitness coaches must pass the OTFit certificate training to participate as group fitness coaches.

There may be a reasonable fee for additional trainees beyond the initial eight fitness coaches and four sales associates, currently set at $1,400 per person per session.

Does

Orangetheory Fitness

provides

territory

protection?

Orangetheory Fitness Franchise does not provide exclusive territory protection.

Can a

Orangetheory Fitness

franchise

be run as

a passive

investment?

The franchise cannot be run as a passive investment.

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