CycleBar

Item 7 lays out the financial entry: franchise fee of $60,000 plus total initial investment from $337,720 to $511,455, covering buildout, equipment, and training for 2,000-3,000 sq ft studios. Ongoing fees bite at 7% royalty on gross sales, 2% brand/ad fund, and a flat $715 monthly technology fee. Item 19 provides the earnings snapshot across mature studios: average gross revenue of $32,398 with a median of $29,141—figures that appear monthly given the boutique model, translating to potentially $388K annually average but underscoring wide variance and pressure to hit membership targets of 300-500 per studio.

System health metrics from Items 20 and 21 reveal turbulence: franchise locations dropped 16% from 258 in 2022 to 218 in 2023, with only 1 corporate unit. Terminations stayed low at 1, but 26 transfers signal owner churn, alongside 28 projected new units for optimism. SBA data impresses with 143 loans averaging $473,113 and a solid 6.3% default rate, aiding financing. However, litigation notes flag pre-sale disclosure issues and fraud claims by affiliate brand franchisees against Xponential entities, warranting scrutiny. For investors, the revenue-to-investment ratio looks thin amid contraction, demanding strong local markets to outperform medians.