Business Breakdowns
Episode 94 Orangetheory Fitness: A Franchise HIIT
Business Breakdowns

Episode 94: Orangetheory Fitness: A Franchise HIIT

Business Breakdowns

Episode 94

Orangetheory Fitness: A Franchise HIIT

The Wolf of Franchises is an analyst and author. We cover Orangetheory's origin story, how their tech-enabled concept differentiated the business, and walk through the economics for both franchisee and franchisor.

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[00:02:55] - [First question] - What makes Orangetheory unique from their competitors

[00:04:47] - Orangetheory’s founder and origin story

[00:06:53] - What it looks like going from an initial concept to a franchise 

[00:08:56] - Whether or not early franchises have pricing and adjacent benefits 

[00:11:17] - How their franchisee numbers rank compared to their competitors 

[00:13:09] - How their location numbers rank compared to their competitors 

[00:15:39] - What it would look like applying for and becoming an Orangetheory franchisee

[00:17:52] - How much Orangetheory cares about their franchisees being good operators

[00:20:35] - Upfront franchise fees and other parent company revenue streams 

[00:23:15] - How much revenue is actually going back to the Orangetheory parent company

[00:25:41] - Whether or not the parent company helps with upfront costs

[00:28:01] - Overcoming the barrier of upfront capital for a franchise 

[00:29:33] - Unit economics and business models for fitness instructors 

[00:30:53] - Rules of thumb and variables to break even on an Orangetheory franchise

[00:34:04] - The average cash flow generated by a mid-tier Orangetheory franchise 

[00:35:16] - Where an owner might have to reinvest their profits into the business

[00:37:14] - Additional marketing and mandatory costs required of an owner 

[00:38:47] - How franchisees are protected by new locations 

[00:40:47] - The main risks to an ecosystem like Orangetheory over the next five years 

[00:44:17] - Key takeaways for operators and investors from Orangetheory’s story

Orangetheory Fitness: A Franchise HIIT

Introduction

Matt
This is Matt Reustle, and today, we are breaking down the fitness franchise Orangetheory. I had wanted to do a deep-dive on franchising for a while now, but I always knew who the guest was going to be. I'm joined by a man fully dedicated to all things, franchisee and franchisor, and that is The Wolf of Franchises.

We talked through the origin story of Orangetheory and the tech-enabled concept that helped differentiate them during that massive boutique group fitness boom we have in the 2010s. Wolf also walked me through the economics for both the franchisees and the franchisor. And throughout the conversation, he compared it to how the rest of the franchise ecosystem works, so non-Orangetheory franchises as well.

A very helpful primer, I would say, for franchises in general. If you're in any way curious about franchises, I think you'll enjoy this episode. And if you do, make sure to check out Wolf's work at wolfoffranchises.com. It is exactly the type of niche, dedicated content that I love. You'll learn everything you want to know about franchises, and you'll learn things that you didn't know you wanted to know about franchises. So I hope you enjoy this conversation and this breakdown of Orangetheory.

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