F45 Training Franchise in 2024: Costs, Fee & FDD
Considering investing in F45 Training? Dive into our detailed analysis covering franchise costs, fees, financial challenges, and growth insights. Discover why F45 remains popular despite recent hurdles. Continue reading to learn more!
Table of Contents:
F45 Training is a global fitness franchise founded in 2013 by Rob Deutsch and Adam Gilchrist. The “F” in F45 stands for functional training, a mix of circuit and HIIT-style workouts geared towards everyday movement. The “45” represents the total time of each workout session—45 minutes of intense, heart-pumping exercise. This franchise has revolutionized the fitness industry with its unique approach, combining innovation, technology, and community-driven fitness. Its rapid growth and popularity highlight its significance in the fitness world, making it a sought-after investment opportunity.
At its core, F45 Training offers high-intensity group workouts that are designed to be effective and enjoyable. Each session is led by certified trainers and incorporates elements of cardio, strength, and functional training. The franchise also offers ancillary products like branded apparel, nutritional guidance, and fitness challenges that keep members engaged and motivated. The core market for F45 Training is fitness enthusiasts of all levels, from beginners to athletes, who seek a supportive, community-driven environment to achieve their fitness goals. Its primary customer base includes busy professionals, young adults, and fitness aficionados who crave variety and camaraderie in their workouts.
F45 Training has experienced exponential growth since its inception. Currently, there are over 1,750 locations across more than 45 countries, demonstrating its widespread appeal and robust business model. With a daily customer base that exceeds 500,000 members globally, F45 Training has cemented itself as a leader in the boutique fitness industry. This impressive scale showcases its ability to attract and retain a diverse range of clients, emphasizing the brand’s strength and reliability as a franchise.
Investing in an F45 Training franchise comes with comprehensive support and training programs designed to ensure success. Franchisees receive initial and ongoing training, including marketing support, operational guidance, and access to proprietary workout programs. The franchise also provides robust systems for member management, performance tracking, and community building. Highlights worth mentioning include the brand’s innovative use of technology in workouts, a strong emphasis on community, and a proven business model that appeals to a broad demographic. With such extensive support and resources, franchisees are well-equipped to thrive in the competitive fitness market.
F45 Training Franchise Insights
- F45 Training boasts over 1,750 locations in more than 45 countries, showcasing its global reach and popularity in the fitness industry.
- The franchise serves a daily customer base of over 500,000 members, indicating strong and consistent engagement across its network.
- F45 Training’s workout sessions are meticulously designed by a panel of experts, ensuring that members experience varied, effective, and scientifically-backed fitness routines.
- Franchisees benefit from a streamlined setup process, often getting their studios operational in as little as 3-4 months from signing the agreement.
- The franchise’s unique blend of functional training and HIIT results in 45-minute workouts that can burn up to 750 calories per session, attracting fitness enthusiasts who value time efficiency.
- F45’s use of innovative technology, including daily workout videos and performance tracking, enhances the member experience and keeps workouts fresh and engaging.
F45 Training Franchise Key indicators
Growth YOY (%)
9%
vs industry 5%
Total U.S. Franchised Units
789
3-Year Failure Rate
13%
vs industry 9%
Sales-to-Investment ratio
0.4:1
F45 Recent Financial Challenges
F45 Training has faced notable financial difficulties recently. In 2023, the company experienced significant financial strain, leading to its decision to delist from the public stock exchange. This delisting occurred due to the inability to meet financial regulations and maintain the required stock price levels.
The delisting of F45 Training’s stock was a major indicator of the company’s financial troubles. Additionally, the company faced potential bankruptcy in 2023. These issues arose from a combination of factors, including overexpansion, increased competition in the boutique fitness industry, and challenges in maintaining profitability across its numerous locations.
While these financial issues primarily affect the corporate side of F45 Training, they can also have implications for franchisees. Concerns about the franchisor’s stability might affect investor confidence and potentially impact the overall support and resources available to franchisees.
Despite these challenges, F45 Training continues to operate and support its franchise network. The company is working on restructuring efforts to stabilize its financial situation and ensure long-term viability. For potential franchisees, it is crucial to closely monitor these developments and consider both the risks and opportunities associated with investing in an F45 Training franchise.
Before making an investment decision, conducting thorough due diligence is essential. This includes reviewing the latest financial statements, understanding the franchisor’s restructuring plans, and possibly consulting with existing franchisees to gauge their experiences and outlook.
How much does it cost to open an F45 Training franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening an F45 Training franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening an F45 Training franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a F45 Training below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Establishment Fee | $60,000 | $60,000 |
| Document Preparation Fee | $2,500 | $2,500 |
| Equipment Pack | $100,000 | $100,000 |
| Equipment Pack Taxes | $0 | $15,000 |
| Real Property | $5,000 | $40,000 |
| Architectural Floor Plan Design, Engineering, and Construction/Permit Documents | $10,000 | $20,000 |
| Leasehold Improvements | $1,000 | $300,000 |
| Utility Deposits | $1,000 | $2,000 |
| Exterior and Interior Signage | $5,000 | $10,000 |
| Furniture, Fixtures, Other Equipment | $4,000 | $10,000 |
| Office Equipment and Supplies | $1,000 | $3,000 |
| Computer System | $1,000 | $2,000 |
| Business Licenses and Permits | $1,000 | $3,000 |
| Training Expenses | $1,000 | $2,000 |
| Professional Services | $1,000 | $5,000 |
| Insurance | $1,000 | $4,000 |
| Grand Opening | $25,000 | $25,000 |
| Nutritional Supplements | $3,000 | $3,000 |
| AED | $1,500 | $2,100 |
| F45 Body Fat Scanner | $8,500 | $8,500 |
| Music Licenses | $1,700 | $2,000 |
| Additional Funds | $60,000 | $100,000 |
| Total | $294,200 | $719,100 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open an F45 Training franchise, you generally need to meet the following financial requirements:
- Total Initial Investment The total investment required to open an F45 Training studio ranges from $294,000 to $719,000. This includes costs for equipment, leasehold improvements, initial marketing, and other startup expenses. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid Capital F45 Training typically requires prospective franchisees to have at least $100,000 in liquid assets. Liquid assets are cash or assets that can be quickly converted to cash, such as stocks and bonds.
- Net Worth The required net worth for an F45 franchisee is usually around $300,000. Net worth is the total value of all assets owned minus any liabilities.
These figures provide a general estimate based on available data and industry standards. For the most accurate and up-to-date information, it’s best to contact F45 Training directly or consult with their franchise development team.
How much does an F45 Training franchise owner make?
Calculating the salary of an F45 Training franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of an F45 Training franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
F45 Training Revenue & Gross Sales
From the most recent publicly disclosed financial information from their CFO, Charlie Payne, F45 Training franchises have an average gross sales of $359,000. Of course, franchisee studio performance varies on a per location basis.
Which key factors impact the average revenue performance of F45 Training franchisees?
The performance of U.S. F45 Training franchisee average gross sales revenue is likely influenced by several key factors. Firstly, the brand’s strong emphasis on community and personalized support fosters high member retention and engagement, crucial for consistent revenue. Secondly, F45’s innovative and varied workout programs attract a broad demographic, from fitness newbies to seasoned athletes, ensuring a steady flow of new members. The strategic use of technology, including workout tracking and performance metrics, enhances the member experience and loyalty. Additionally, effective marketing strategies and strong brand recognition help drive member acquisition. Finally, comprehensive franchisee support, including training, operational guidance, and marketing assistance, ensures that franchisees are well-equipped to run successful and profitable studios.
F45 Training Franchise Operational Costs
When opening an F45 Training franchise, it’s essential to consider several key primary ongoing operational costs:
- Rent/Lease The cost of leasing a commercial space for the studio, which can vary significantly depending on location.
- Staff Salaries Wages for trainers, managers, and other staff members, which are crucial for delivering high-quality workouts and maintaining member satisfaction.
- Utilities Expenses for electricity, water, heating, and cooling necessary to keep the studio operational and comfortable for members.
- Marketing and Advertising Ongoing promotional efforts to attract new members and retain existing ones, including digital marketing, local advertising, and promotional events.
- Equipment Maintenance Regular maintenance and replacement of fitness equipment to ensure safety and functionality.
- Technology Fees Costs associated with the proprietary F45 technology platform, including workout programming, performance tracking, and member management systems.
- Supplies and Amenities Costs for cleaning supplies, office supplies, and member amenities such as towels and water.
- Insurance Liability and property insurance to protect the business against potential risks.
These ongoing costs are vital to budgeting and financial planning to ensure the sustainability and profitability of your F45 Training franchise.
F45 Training Franchise Fees
Owning an F45 Training franchise is different from owning an independent, non-franchised business. All franchises tend to charge ongoing fees that franchisees are required to pay to operate. F45 Training requires their franchisees to pay the below fees:
- Royalty Fee This is a monthly fee paid to F45 Training corporate, typically calculated as a percentage of gross sales. For F45 Training, this fee is 8% of the location’s monthly gross sales.
- Advertising and Marketing Fees Franchisees are required to contribute to the marketing fund. The marketing fund contribution is 2% of gross sales.
- Additional Fees There are additional fees for training programs, technology, and other items provided by F45 Training that may be applied.
Understanding these fees is crucial for financial planning and ensuring you are prepared for the costs associated with operating an F45 Training franchise.
F45 Training Franchise Earnings
The earnings of an F45 Training franchise owner can vary significantly based on a variety of factors including location, sales volume, operational efficiency, and cost management. However, on average, F45 Training franchise owners can generate significant sales volume with earnings potential.
F45 Training franchisees have an average gross sales of $359,000. Based off of the average gross sales, we can estimate an F45 Training franchisee makes $108,000 in estimated earnings (EBITDA) per year, assuming that the franchisee has had their location in operation for at least 3 years and is an owner-operator in the location. This assumes a 4-wall EBITDA margin of 30%. This means that you can consider the salary of an F45 Training franchise owner to be roughly $108,000 before interest, taxes, depreciation, and amortization (EBITDA).
If the franchisee is semi-absentee, then earnings will be significantly lower based off of the costs of having a hired manager.
How to Open a F45 Training Franchise
Becoming an F45 Training franchisee involves several key steps, from the initial inquiry to the start of operations:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Initial Contact After your inquiry, an F45 franchise representative will contact you to discuss your interest and provide an overview of the franchise opportunity. This is your chance to ask preliminary questions and get a sense of what’s involved.
- Franchise Application If you’re interested in moving forward, you’ll need to complete a formal franchise application. This application will include detailed information about your background, financial status, and business experience.
- Franchise Disclosure Document (FDD) Upon approval of your application, you will receive the Franchise Disclosure Document. The FDD provides comprehensive details about the franchise, including financials, obligations, and expectations. Review this document carefully, and consult with a legal or financial advisor if necessary.
- Discovery Day You may be invited to attend an F45 Discovery Day. This is an opportunity to visit an F45 studio, meet the corporate team, and gain a deeper understanding of the franchise operations and culture.
- Franchise Agreement If both parties decide to proceed, you’ll sign the franchise agreement. This legally binding document outlines the terms and conditions of your franchise relationship with F45 Training.
- Securing Financing Once the agreement is signed, you may need to secure financing to cover the initial investment and startup costs. This could involve personal funds, bank loans, or other financing options.
- Site Selection and Lease Negotiation Work with F45’s real estate team to select an optimal location for your studio. They will assist in negotiating lease terms and ensuring the site meets F45’s standards.
- Studio Build-Out Once the site is secured, the build-out process begins. This includes designing the space, installing equipment, and ensuring the studio adheres to F45’s specifications. You’ll receive support and guidance from F45 throughout this phase.
- Training and Onboarding Before opening, you and your staff will undergo comprehensive training provided by F45. This covers everything from daily operations to marketing strategies and workout programming.
- Pre-Opening Marketing Initiate local marketing campaigns to build awareness and attract potential members before the studio officially opens. F45 provides marketing support and resources to help you generate buzz.
- Grand Opening With the studio ready and staff trained, you’ll host a grand opening event to kick off your operations. This event is an opportunity to showcase your studio, attract new members, and begin building your community.
- Ongoing Support After opening, you’ll continue to receive ongoing support from F45, including marketing assistance, operational guidance, and access to new workout programs and technologies.
Following these steps ensures a structured and supportive journey from initial interest to successful operation of your F45 Training franchise.
Pros & Cons
Pros
Strong Brand Recognition: F45 Training has a well-established global brand with a loyal customer base, which can attract members and build trust quickly.
Comprehensive Support: Franchisees receive extensive support in marketing, operations, training, and technology, helping to ensure a smooth and successful launch and ongoing operation.
Innovative Workouts: F45’s unique, high-intensity workouts are designed to keep members engaged and returning, promoting high retention rates.
Community Focus: The emphasis on community and group training creates a supportive and motivating environment, which is appealing to many fitness enthusiasts.
Rapid Growth: The franchise’s proven business model and scalability have contributed to its rapid expansion and popularity worldwide.
Diverse Revenue Streams: Besides membership fees, franchisees can earn additional income through merchandise sales, nutritional programs, and special events.
Efficient Operations: The 45-minute workout structure allows for multiple sessions throughout the day, maximizing studio usage and member capacity.
Cons
Intense Competition: The boutique fitness industry is highly competitive, with many other brands offering similar high-intensity workouts.
Operational Demands: Running a fitness studio requires a strong commitment to maintaining high standards of service, cleanliness, and member engagement.
Location Sensitivity: Success can be highly dependent on choosing the right location with sufficient demand for boutique fitness services.
Economic Sensitivity: Fitness memberships can be considered non-essential, making them more susceptible to economic downturns and changes in consumer spending.
Fitness Industry Trends: Trends in the fitness industry can change rapidly, requiring franchisees to stay adaptable and continuously innovate to meet evolving member preferences.
Franchisor Finances: The franchisor entity has had financial difficulties as recently as 2023, which means that any potential franchisee needs to consider the risk of a possible bankruptcy of the franchisor which would likely significantly impact operations of franchisee locations.
