This is Matt Reustle and today we are breaking down the fitness franchise, Orangetheory. I have wanted to do a deep-dive on franchising for a while now and I always knew who the guest would be. I’m joined by a man fully dedicated to all things franchisee and franchisor - the Wolf of Franchises.
We talked through the origin story of Orangetheory and the tech-enabled concept that helped differentiate them during the boutique group fitness boom. Wolf walks me through the economics for both the franchisees and the franchisor – and he helps compare this to the rest of the franchise system throughout the conversation.
If you’re in any way curious about franchises – I think you’ll enjoy this episode. And if you do, make sure to check out Wolf’s work at wolfoffranchises.com – it’s the exact type of niche dedicated content that I love. Enjoy this breakdown of Orangetheory.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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Show Notes
[00:02:55] - [First question] - What makes Orangetheory unique from their competitors
[00:04:47] - Orangetheory’s founder and origin story
[00:06:53] - What it looks like going from an initial concept to a franchise
[00:08:56] - Whether or not early franchises have pricing and adjacent benefits
[00:11:17] - How their franchisee numbers rank compared to their competitors
[00:13:09] - How their location numbers rank compared to their competitors
[00:15:39] - What it would look like applying for and becoming an Orangetheory franchisee
[00:17:52] - How much Orangetheory cares about their franchisees being good operators
[00:20:35] - Upfront franchise fees and other parent company revenue streams
[00:23:15] - How much revenue is actually going back to the Orangetheory parent company
[00:25:41] - Whether or not the parent company helps with upfront costs
[00:28:01] - Overcoming the barrier of up front capital for a franchise
[00:29:33] - Unit economics and business models for fitness instructors
[00:30:53] - Rules of thumb and variables to break even on an Orangetheory franchise
[00:34:04] - The average cash flow generated by a mid-tier Orangetheory franchise
[00:35:16] - Where an owner might have to reinvest their profits into the business
[00:37:14] - Additional marketing and mandatory costs required of an owner
[00:38:47] - How franchisees are protected by new locations
[00:40:47] - The main risks to an ecosystem like Orangetheory over the next five years
[00:44:17] - Key takeaways for operators and investors from Orangetheory’s story
