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Teagas, an evolving company intelligence platform, has streamlined investment research processes, providing quick access to public financial data and qualitative insights through their SaaS platform, attracting investment from firms like Positive Sum. Teagas offers expert calls and modern tools for comprehensive company analysis, aiming to set a new standard in investing research.
Orange Theory, a pioneer in integrating technology into fitness in 2010, revolutionized the boutique group fitness experience by monitoring heart rates and caloric burn during workouts. Known for their 'orange zone' concept, focusing on post-workout caloric burn, Orange Theory's tech-driven workout classes differentiated them in the industry, attracting a loyal customer base.
Orange Theory's success lies in strategic franchise partnerships, with early franchisees playing crucial roles in shaping the brand's growth. The franchise business model emphasizes customized expert calls, financial data access, and qualitative insights, offering a 360-degree company analysis. This collaborative ecosystem ensures alignment between franchisors and franchisees for sustained success.
For emerging franchises like Orange Theory, balancing expansion without oversaturation and maintaining profitability are essential. National marketing campaigns, strategic territory allocations, and customer-focused growth strategies are key for sustainable success. Lessons from successful franchises like Chick-fil-A highlight the importance of consistent customer value and franchisee profitability for long-term growth.
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
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