MADABOLIC

Item 7 lays out the financial entry: franchise fee of $50,000 within a total initial investment range of $295,540 to $583,300, covering build-out for these 2,000 sq ft studios focused on group strength training. Ongoing fees hit 6% royalty plus 1.5% brand fund, plus fixed $700 monthly tech and $150 music license—stacking up to about 8% of sales effectively. Item 19 shines here, reporting average gross revenue of $476,872 and median $455,253 for 2024, suggesting many units clear $400K+ without much variance, impressive for a 38-unit system targeting 20-55 year-olds via unlimited memberships and retail upsells. At these levels, after fees and typical gym expenses (often 60-70% COGS), EBITDA could approach 20-25% or $95K-$120K annually, making ROI feasible in 4-6 years.

System health metrics reveal vigor: locations jumped 27% from 30 in 2023 to 38 in 2024, with 22 projected new units signaling franchisor confidence. Just 1 termination and 1 transfer keep churn low, and 17 SBA loans averaging $416,388 indicate lender buy-in despite the moderate size. However, Item 3 flags a pending lawsuit from one franchisee alleging misrepresentations on investment costs, site delays, projections, vendor issues, ops support gaps, and sale interference—red flags for due diligence on real-world execution versus promises.