With over 1,300 locations around the globe and almost one million members, Orangetheory Fitness is a popular boutique fitness studio that offers franchising opportunities for prospective business owners.
If you’ve considered starting a fitness business from scratch but would prefer joining an established brand with a proven business model and a solid customer base, then joining the Orangetheory franchise could be the right move.
Keep reading to learn more about how you can open your own Orangetheory franchise, as well as costs, training opportunities, and more.
How to Start an Orangetheory Fitness Franchise
If you’re planning on opening an Orangetheory franchise of your own, you’ll first need to fill out this quick application to learn more about Orangetheory Fitness Master Franchising, area development, and franchise opportunities. All you’ll need to do is provide some basic information about yourself, what region you’re located in, and how and when you would like to be contacted by a representative of the company who will dive deeper into the next steps.
Unfortunately, Orangetheory franchising opportunities are competitive. According to the company, due to their rapid growth mixed with strong demand from existing franchise owners, development opportunities are limited. In 2019, less than 0.1% of people who inquired about franchising opportunities were given the chance to proceed. Of course, there are other fitness franchise opportunities you can explore, as well.
When you open an Orangetheory franchise, you’ll make money in a few different ways. Selling different membership tiers, classes, and products such as clothing and apparel are all potential revenue sources for franchise owners. But before you can start raking in the dough, it’s important to understand what it costs to open a franchise, what your funding options are, and what type of training and ongoing support you can expect to receive. Keep reading to learn more about what it’s like to actually open an Orangetheory Fitness franchise.
1. Orangetheory Franchise Costs
There are two main types of Orangetheory franchise costs you can expect to incur if you choose to become a franchise owner: initial investments and ongoing fees. Let’s break each of these down further so you can decide if joining this franchise is within your budget.
- Net-worth requirement: $500,000
- Liquid cash requirement: $150,000
- Initial franchise fee: $59,950
- Overall initial investment: $576,022 to $1.5 million
- Ongoing royalty fee: 8%
- Ad royalty fee: 2%
- Monthly advertising fee: up to $4,000
- Annual refresher course fee per person: $250
- Annual conference cost per person: $1,000
Alongside these fees and expenses that are more specifically related to getting set up as an Orangetheory franchise, you’ll need to cover your basic operating costs such as staff, equipment, rent, etc.—hence the net-worth and liquid cash requirements all franchise owners must meet. It’s worth noting that if a franchise makes less than a certain level of gross sales for the year, the difference in revenue must be made up in fees.
2. Funding Options
As previously shown, opening an Orangetheory franchise can be quite costly. If you need some help in the funding department to make your dreams a reality, you may want to check out your different franchise financing options. The following funding options may be able to help you get the cash you need to start your business.
- Startup business loans: This specific type of loan is ideal for new business owners. You may be able to qualify for an SBA microloan or a small business grant. Generally, SBA microloans have lower interest rates and offer longer repayment terms, but because of these benefits, obtaining this type of funding is rather competitive.
- Business line of credit: Taking out a business line of credit, instead of a loan, can be a flexible funding solution for many business owners. You’ll be approved for a set credit limit, but you’ll only pay interest on the funds you actually use. Once you repay this amount, your credit limit typically resets to the original balance and you can draw from it again and again.
- Business credit cards: If used responsibly, a business credit card can act as a low-interest loan. In some cases, you may qualify for a business credit card with a 0% introductory APR. This means you won’t have to pay any interest until the introductory period ends. Meaning, if you can pay your balance off in time, you’ll essentially have an interest-free loan on your hands to help fund larger upfront costs.
- Equipment financing: Because a fitness studio requires a lot of pricey equipment, you may qualify for equipment financing. With equipment financing, the purchased equipment serves as collateral, making it easier to qualify for than a traditional loan.
Orangetheory Fitness also has relationships with third-party sources that can offer funding to help cover these initial startup costs.
When you join a franchise, one of the main advantages is that you’ll receive plenty of training to make sure your business is a success. The better your franchise does, the more money Orangetheory makes, so there is plenty of motivation for them to set you up for success. You can expect the following training to take place to ensure you’re up to speed on best practices before you open your doors.
- On-the-job training: 36 hours
- Classroom training: 33 hours
If you haven’t opened an Orangetheory franchise before, you’ll have to undergo initial training to learn how to properly operate your studio. The initial training spans over four days and takes place at Orangetheory’s headquarters in Boca Raton, Florida, with some training done digitally.
You’ll also receive studio launch training from a more local representative, which will guide you through sales, operations, and “OTFit” certification training. You can receive this training at no charge, for a max of eight fitness coaches and four sales associates. An initial presales training program must also take place before you can begin selling memberships. This sales training lasts four days and takes place onsite at the specific franchise location or nearby at an area representative’s certified training facility.
Training is ongoing and you may have to attend or send select staff members to future trainings through conferences or supplemental and refresher training programs, such as the annual Orangetheory conference.
4. Ongoing Support
One of the main benefits of joining any franchise is the support you’ll receive from the franchisor to help ensure your franchise is a success and to develop your own skills as a business owner. As an Orangetheory franchise owner, you’ll receive ongoing support long after your initial training ends.
Ongoing support includes:
- Newsletter updates
- Meetings and conventions
- Toll-free support line
- Grand opening assistance
- Online support
- Proprietary software
- Franchisee intranet platform
- Security and safety procedures
- Field operations
- Site selection
- Purchasing co-ops
When it comes to marketing and advertising your franchise, you’ll receive specific support to help get the word out about your business.
Marketing support includes:
- Ad templates
- National media pushes
- Regional advertising pushes
- Website development
- Email marketing
- Social media
- Loyalty program and app
- Co-op advertising
Pros and Cons of Opening an Orangetheory Franchise
Like any franchise—in the fitness industry and otherwise—there are both pros and cons associated with opening an Orangetheory Fitness franchise. It’s worth carefully considering both the positive and negative aspects of this particular franchise before choosing to proceed.
- You’ll receive ample training and support from Orangetheory corporate regarding important business decisions and practices relating to: sales, fitness, real estate, technology, operations, marketing, equipment, construction, and design.
- Your business will be a part of a well-known brand that has over 1,800 franchises throughout 27 countries.
- This business model is designed around small studio spaces that work for large groups, meaning you can potentially make a lot of bang for your buck.
- Orangetheory franchise opportunities are hard to come by, as typically less than 0.1% of applicants have the opportunity to open a franchise.
- The initial investment associated with just opening a franchise can reach almost $1.5 million.
- You’re required to hire 12 employees in order to open your studio.
- You have to commit to an initial franchise term of 10 years.
- Franchisees can only offer the products, services, and classes that the franchisor has approved in writing, limiting your flexibility.
- You are also required to offer whatever products, classes, or services that are required by the franchisor.
The Bottom Line
At the end of the day, there are both pros and cons associated with opening an Orangetheory Fitness franchise. That being said, opening one of these franchises can be super profitable, which is why it’s a very competitive franchise opportunity. If you can get your foot in the door and can cover the Orangetheory Fitness franchise costs, then you may just be in business.
Be sure to take your time researching the company, reviewing the franchise disclosure document (FDD), and talking to current and previous Orangetheory franchisees to get a real sense of whether this business model is right for your budget, interests, and needs. And if you ultimately decide that Orangetheory is not the best option for you, consider our list of the best franchise opportunities instead.
- Orangetheory.com. “Open Your Own Studio”
Jacqueline DeMarco is a small business owner and freelance writer and editor based in Southern California. She has written on everything from finance to travel for publications including LendingTree, SoFi, MagnifyMoney, LearnVest, Northwestern Mutual, and Apartment Therapy, among others.