Orangetheory is a particularly popular fitness franchise worldwide – and could be the perfect choice of gym for you if you’re looking to invest in a fitness brand. Only 62% of the UK population exercises weekly, and Orangetheory’s unique scientific method aims to get more people fit by making gym sessions simple, effective, and efficient.
Your choice of fitness franchise depends on a number of factors, as well as your own compatibility with the company and its core tenets. In this article, we closely examine the common requirements, costs, benefits, profitability, and steps of buying an Orangetheory Fitness gym, helping you decide if the franchise is right for you.
Benefits and Opportunities of Becoming an
Orangetheory Fitness franchise owner
The standard Orangetheory Fitness franchise opportunities and benefits include:
• Scientific approach:
Orangetheory gyms rely upon the ‘Orange Effect’ devised by psychologist Ellen Latham, an innovative way of exercising that makes use of technology and community to generate a full-body workout. The workout, which is often mistaken with HIIT, could not be more different and consists of 12 minutes or more of intensive training that will bring the heart to the “Orange Zone” point – at this level, the metabolism accelerates, and you will burn fat and more calories.
The workout consists of 3 types of exercises” rowing, cardio, and strength training.
• Popular brand:
There are over 1,800 Orangetheory Fitness franchises across the world (spread throughout 25 countries) and this could dramatically increase your gym’s name recognition, as well as its success.
• Full training:
The Orangetheory team is unique in its approach to training; they’re happy to coach franchisees and their staff via workshops, certification courses, daily motivational tips for its members, and continuing education opportunities.
• A modern gym studio:
Orangetheory Fitness prides itself on embracing proven fitness trends that are popular with its target audience, further setting up your franchise for long-term success. A typical Orangetheory franchised gym would include a TRX suspension training area, showers & changing areas, free weights areas, Screens monitoring heart rate, rowing machines areas, treadmills, and of course, a reception area.
• Develop your leadership:
The Orangetheory franchise team places an emphasis on master franchisees – providing you with the great opportunity to increase your abilities as a business leader and push your studio toward greatness.
In addition to day-to-day fitness-related training, Orangetheory franchisees are offered a wide range of training is provided to the franchisees in subjects ranging from real estate and sales to operations, strategic and pre-sales training courses.
• Country-based support:
Orangetheory Fitness offers additional support beyond training and always adjusts this to fit the unique requirements and market conditions of each studio’s specific location. Orangetheory franchisees receive support that includes regional & international summits, executive business reviews, launch training, field support, and much more
How does the Orangetheory Fitness franchise model work?
Here are the main considerations for becoming an Orangetheory Fitness franchisee:
1. Orangetheory Fitness franchise requirements
The prerequisites for owning an Orangetheory Fitness franchise are:
• Strong entrepreneurship experience:
The Orangetheory franchise team is not looking for owners who know how to specifically run a gym or fitness studio, but rather for owners with experience in developing business in the retail space generally.
The Orangetheory team assumes that such a franchisee will possess strong skills in recruiting and operating a business, a deep understanding of customer behavior, strong P&L management experience, and a hands-on approach to taking a business off the ground.
• High capital investment:
Orangetheory Fitness franchises require a relatively high investment of £451,000-£1 million per studio; a sum this high could be a significant barrier to ownership, of course. In fact, the Orangetheory Fitness franchise requirements are that investors and owners have a minimum net worth of $1,000,000 and a minimum of $300,000 liquid capital
• Devotion to the brand:
A strong commitment to your Orangetheory Fitness franchise is necessary for it to succeed – this makes it paramount that franchise owners devote a lot of hands-on time to the studio. Orangetheory is particularly focused on bringing on board the right franchisees, both from a net worth perspective and commitment to its brand standards – their unique selling point is emphasized at every step of the application for an Orangetheory franchise, and reinforced through the comprehensive ongoing training provided to both franchisees and staff.
2. Minimum cost/investment to buy and own an Orangetheory Fitness franchise
The cost to buy and own an Orangetheory Fitness franchise is between £451,000 and £1 million depending on the space and general location among other factors. This covers pre-opening and post-opening support as well as equipment, construction, and furniture among other key components of the studio.
3. Initial Orangetheory Fitness franchise startup fees
Roughly £48,500 of the overall Orangetheory Fitness franchise fees go towards securing the licence to use the brand’s name. The Orangetheory Fitness franchise startup fee also includes initial marketing efforts – which could easily total £30,000. The large initial investment of £451,000 to £1 mill consists of identifying a site, securing its lease, building and developing the site, purchasing the equipment and furniture, and initial stock.
Some of the many costs included in the initial setup of your Orangetheory Fitness franchise include :
• Pre-launch training ($1400 per person) and additional training ($1000 per person)
• Technology fee (one-off $575 management software set up cost)
• OT Beat Fee – one-off set up ($250)
• Equipment & installation – $164, 250 to $233,250
4. Expected Orangetheory Fitness franchise revenue
A successful Orangetheory Fitness franchise’s revenue reaches on average $805,000 ( £630,000), with the overall organisation enjoying £1.45 billion in revenue each year.
5. Costs associated with running an Orangetheory Fitness franchise
Many of the costs are a part of the usual Orangetheory Fitness franchise startup cost, which makes it easier for franchisees to keep track of finances. Staffing costs are unclear but sales team members make around £31,000 each year. Utility costs depend upon location but can be quite significant.
In addition, some of the costs that need considering when opening your Orangetheory Fitness franchise include:
• Royalty fee – 8% of total sales
• Marketing fee – 2%
• Contributions to the Orangetheory Fund – 3%
• Refresher training course – $250 / day / person
• OT Beat Fees – $149 / month
• Technology fee – $899/month
6. Predicted average income/profit of an Orangetheory Fitness franchise owner
After the high initial investment, you could make up to £400,000 each year before expenses or royalties, which can seriously impact your take-home amount. Given the large differences in size and investment, it is estimated that on average the Orangetheory franchise achieves revenue of around £630,000 ($805,000) a year.
The average income of an Orangetheory Fitness franchise owner might be around £60,000, meaning it takes on average 11 years to break even or generate profit.
With that said, gyms are more popular than ever with the UK public so you might see bigger profits than that. According to statistics from Statista, there are more gyms and fitness centres in the UK than ever before – highlighting a real appetite for fitness across the UK.
A look at the Orangetheory Fitness franchise
agreement & policies – main points
The Orangetheory Fitness franchise agreement includes the following main points:
1. Franchisee payments
This agreement elaborates upon the fees which owners pay to the company, including the initial Orangetheory Fitness franchise price. It also sets out the royalty agreements – with a percentage of gross sales (generally 8%) going to the business.
Other costs in your Orangefitness franchise agreement include equipment costs, technology fees, training, signage, marketing costs (pre- and after-launch), royalties, late payment fees, and many more.
2. Brand expectations
A franchising document explains what the brand typically expects from its franchisees, including how involved they should be in company matters. Owning an Orangetheory Fitness franchise means devoting time as well as energy to the brand.
The franchise agreement included violation fees and triggers to avoid situations like owners not fulfilling their responsibilities, or not adhering to Orangetheory Fitness brand standards, and other similar situations.
For example, the interest and late fees are currently set up at 18% annually (+ $100 per week), and non-compliance fees are set to up to $1000 per notice of violation.
3. Orangetheory Fitness training
As part of the franchise agreement, Orangetheory commits to providing comprehensive training to franchise owners and regularly updating this during their tenure.
This section also details which sessions are mandatory for an owner to attend. These are essential for making sure you understand the business and any modern trends that sweep the fitness industry at large.
For example, some of the training provided by the brand to franchisees and their staff include topics ranging from franchise brand standards, real estate, and sales training, to operational, strategic, and in-market training.
What are the Orangetheory Fitness franchise
terms of agreement and renewal?
Due to the high investment necessary to secure an Orangetheory Fitness franchise, these terms last for ten years before the option of renewal. At this point, franchisees can decide whether to commit to their studio for another decade and continue developing it, or they might want to return it to the organisation.
Some of the fees in place to manage this process include:
• Orangetheory Fitness successor franchise fees – 50% of the initial franchise fee for new owners
• Transfer fees for your Orangetheory Fitness franchise – 50% of the initial franchise fee for new franchisees for a control transfer; or 25% of the initial franchise fee for all other transfers.
Is Orangetheory Fitness a good fit for you?
If you’re trying to determine if Orangetheory Fitness is the right franchise for you, here are the main factors to consider:
1. The target market of the average Orangetheory Fitness franchise
Orangetheory Fitness mainly focuses on delivering a diverse range of short group sessions that maximise every member’s time as well as the benefits they receive. This means the brand is best for time-poor individuals who enjoy a sense of community, potentially working professionals too busy for extensive workouts.
The Orangetheory Fitness franchise model is very different from a Pure Gym or Anytime Fitness model, mainly due to its high initial investment, and longer break-even point expectations (11 years on average). As such, an Orangetheory Fitness franchisee must possess strong entrepreneurship skills, leadership, people management, and a great understanding of its target audience’s behaviour.
By contrast, a Pure Gym franchise owner, for example, focuses on acquiring a large membership base at low-cost memberships, hence the franchisee’s skills are mainly focused on close control of P&L, staffing levels, cost control, and similar.
2. Is an Orangetheory Fitness franchise right for your chosen location?
With this focus on busy employees, you can situate the studio near a town centre – which means members can easily visit the gym on their way to or from work. Since Orangetheory prices are typically higher than average (at around £119 monthly), you might target more-affluent areas.
3. Other factors to consider when deciding whether owning an Orangetheory Fitness franchise is right for you
As the owner of an Orangetheory Fitness franchise, you may benefit from the brand’s name recognition – with eight prestigious studios in England alone. You’ll also have to independently hire (and manage) a large team to provide the full Orangetheory Fitness experience.
The most important factor to consider as an investor, when taking an Orangetheory Fitness franchise, is the longer period taken to break even against other franchises in the market. If you are in it for the long term, an Orangetheory Fitness franchise will be a good option to consider.
Process of taking an Orangetheory Fitness franchise
The steps for opening an Orangetheory studio are as follows:
1. Choose your brand
Every fitness franchise offers plenty of benefits, but you must check each one to make sure the one you have in mind is the right fit for you. With the relatively high Orangetheory Fitness franchise cost and longer-term breakeven point, this due diligence will be essential.
2. Apply online & connect with an Orangetheory franchise rep
3. If the conversation matches both your and the brand’s expectations – submit a formal application
4. Time for Orangetheory Fitness franchise team to carry out their eligibility checks
Given the express requirements of Orangetheory Fitness on particular types of investors and franchisees, a complete check is carried out before moving to the next step in the process – this includes funding, owner background, brand fit assessment, and more.
5. Business plan
Assuming the potential of the Orangetheory Fitness franchisee past the due diligence checks, they are asked to submit a comprehensive business plan.
6. Sign the Orangetheory Fitness franchise agreement
After the application’s approval, you will receive a franchise agreement, which also includes the cost to open an Orangetheory Fitness franchise.
7. Identify the site for your Orangetheory Fitness franchise, and sign the lease
8. Prepare to open the studio
In the run-up to construction, you need to attend franchise training to ensure you can effectively represent the Orangetheory Fitness organisation. After construction begins, it’s time to recruit staff and begin advertising the new studio across the local area for maximum attendance.
9. Launch the studio
Conclusion
Whilst Orangetheory Fitness franchises usually require relatively high fees, the correct location and demographics, combined with a unique proposition and alternative to traditional gyms, could easily be a great match for an experienced gym investor.
FAQs
1. How to start an Orangetheory Fitness franchise
• Check the franchise’s requirements to see if you would be a suitable owner.
• Contact the Orangetheory Fitness team and complete an official application.
• Submit a business plan and sign the franchise agreement upon its approval.
• Select a good location and pay the requisite fees, possibly with financial aid.
• Attend Orangetheory’s comprehensive training and begin to hire your staff.
• As construction is underway, start marketing your studio and its launch day.
• Open your franchise and begin serving the local community’s fitness needs.
2. How much does owning an Orangetheory Fitness franchise cost?
Orangetheory franchises usually have a minimum of at least £451,000, and it’s entirely possible the investment will even reach £1 million. You also require full-staff teams to take care of marketing, front-of-house, coaching, and more – each salary costs the business at least £24,000 yearly.
3. Is an Orangetheory Fitness franchise profitable?
Whilst a high initial investment might make a strong profit seem unlikely at first glance, an Orangetheory Fitness franchise owner’s average profit can also be quite high. This generally requires 400–500 members – though the prestige of this brand combined with your own marketing can help you reach this goal in months.
