FREE DOWNLOAD - INDUSTRY RANGES, SOURCED AND DATED
What a studio franchise costs after the entry fee, what the same capital does when you own the brand, and what each route is worth at year ten.
Presented at Club Industry. The model was distributed through the Nautilus US rep network.
Jim Teatum · President, Nautilus Commercial Division
OWNERSHIP ECONOMICS
The ten year arithmetic of a franchised studio against an independently owned one. Industry ranges, no brand names, sources dated.
01 · THE FEE IS THE SMALL NUMBER
PER YEAR, EVERY YEAR, ON A STUDIO GROSSING $1,000,000
Entry fees in this category run roughly $49,500 to $58,000. Published gross revenue across this category runs from roughly $275,000 to over $1,000,000 per studio. The arithmetic below is modeled at the upper end of the published range, $1,000,000 gross per location. That is the figure every brochure leads with, and it is the least significant number in the agreement.
7 to 10 percent of gross, combining royalty, brand fund and required marketing obligations, for as long as you own the business. Royalty and brand fund alone, the portion that leaves your business permanently, runs 7 to 9 percent. The arithmetic below uses 8 percent, the midpoint of that narrower range. Across ten years, fee plus royalties approaches $850,000 on a single location.
02 · WHAT YOU OWN, AND WHAT YOU RENT
FRANCHISED
Brand owned by the franchisor
Royalty continues for the life of the business
Agreement transfers with the sale
Non-compete typically restricts what you do next
Format set centrally, changed centrally
INDEPENDENTLY OWNED
Brand owned outright
The $80,000 stays in the business
Sold clean, to whoever you choose
No restriction on what you build next
Format set by the market you serve
Both routes give you systems. Only one leaves you owning something at the end of it.
03 · WHERE IT COMPOUNDS
A single location is a decision about income. A second and third is a decision about equity, and it is where the two routes separate.
TEN-YEAR COST
ONE STUDIO
THREE STUDIOS
Entry fees
$50,000
$150,000
Royalty and brand fund
$800,000
$2,400,000
TOTAL REMITTED
$850,000
$2,550,000
Illustrative, modeled at $1,000,000 gross per location and a combined 8 percent royalty and brand fund. Actual figures vary by brand, agreement year and location performance. Ranges drawn from public franchise disclosure summaries; source years are named in the report.
Built independently, the same three studios remit nothing and the brand belongs to the operator. That is the difference between running three locations and owning a small chain.
04 · WHAT THIS DOCUMENT CANNOT TELL YOU
The arithmetic above is the category. It is not your rent, your local session rate, your capital position or your market, and those decide whether any of it holds.
That is a specific question about a specific site, and it is what the Feasibility Report answers.
Figures are illustrative and drawn from public sources. Not a franchise offering. Nothing here is legal, tax or financial advice. Consult the current disclosure documents and qualified professionals before any investment decision.