F45 Training

Item 7 lays out a hefty initial investment of $349,200 to $786,100, covering buildout, equipment, and opening costs for these 2,000 sq ft studios, plus a $60,000 franchise fee. Ongoing fees stack up aggressively: 7% royalty (the greater of 7% gross sales or $2,500 monthly minimum), up to 2% brand fund (or $200/mo minimum), a flat $2,500/mo marketing fee, and $500/mo technology fee—these minimums hit low-volume owners hard compared to typical fitness royalties of 6-8%. Item 19 shines with average gross revenue of $454,320 and median $407,220 from comparable studios, suggesting solid top-line potential if you hit traffic, though medians trail averages indicating some outperformers skew the data.

System health shows contraction from 789 to 751 locations (-5% YoY), with 46 terminations, 16 non-renewals, 52 transfers, and just 24 projected new units—high transfers hint at resale opportunities but flag owner dissatisfaction amid post-pandemic shifts. SBA data is reassuring: 262 loans averaging $276,408 with a low 5.7% default rate, better than many startups. Litigation flags multiple suits over contract breaches, fraudulent inducement, fee disputes, and non-competes, pointing to franchisor-franchisee tensions. For due diligence, the revenue upside tempts but contraction and fee rigidity demand scrutinizing local markets and resale comps before committing.