Top Reasons Why Not to Buy Orangetheory Franchise

For the last few years, Fitness has been a booming sector. Every age and gender is jumping on board. Starting with fad diets, exercising, and everything in between, people are interested in staying healthy to keep up in today’s society. One such fitness brand that has attempted to capitalize on this demand is Orangetheory Franchise.

With its new advanced equipment, natural science, and practical results, it became prevalent quickly. However, when you delve deep to reassure your investment plan in Orangetheory Franchise opportunity, you may see certain flaws in there.

The Whole Technology Behind Orangetheory is Effective Only to Some Extent.

Many unhappy franchisees have complained that their heart rate monitoring equipment doesn’t work; the distance sensors don’t work; the calories burned counter doesn’t work. The treadmills are faulty. Additionally,  the centralized software is usually down.

Apart from the program and equipment, which are deeply flawed, the franchise also has many problems. For instance, the franchise fee for Orangetheory is notably higher than the usual rate of franchise payments. The franchisees must also pay the company a fixed amount even if they are not generating enough sales from their centers.

Risk Factors Associated with Orangetheory Franchise opportunity are

• Franchise Fees
• Initial Investment
• Future Expenses
• Training
• Franchisee Support
• The Orangetheory Fitness Business Model
• The Orangetheory Fitness Business Opportunity

Orangetheory Professionals: The Fitness Mantra

An Orangetheory professional center offers professional workouts to its members in either group or personal training sessions. The OTF franchisor, the wholly-owned subsidiary of Ultimate Fitness Group, has a membership base of 1 million people in more than 1300 locations spread across 21 countries worldwide.

Their workouts are based on the science of excess post-exercise oxygen consumption, EPOC.

The recent workout sessions by Orangetheory incorporate exercise equipment, strength and cardio equipment, heart rate monitors, and other related equipment and merchandise to help members achieve Fitness and health.

The initial investment of an Orangetheory Franchise

The initial costs involved in opening an Orangetheory fitness studio are relatively high. Expect to invest anywhere from $488,000 to $1 million, depending on the size and equipment you need. Rent, interior design work, and the cost of workout equipment will take up most of your budget. Ongoing fees are going to be another expense head.

To apply for a franchise opportunity, franchisees need to have a net worth of over $500,000 and liquid assets of $150,000.

Ongoing Expenses of an Orangetheory Franchise

Orangetheory franchisees must pay a royalty of 8% and a brand fund contribution of 1% on the gross revenue. Also, if the franchisees are below the targeted sale for a year, they have to compensate for the fee difference.

Why You Should Not Take An Orangetheory Franchise:

Orangetheory Fitness, founded in Florida in 2010, has expanded to over 1225 locations in the United States and Canada. The franchise provides high-intensity indoor rowing and treadmill workouts that burn up to 1,000 calories per 60-minute session. Orangetheory Fitness was named the fastest-growing franchise in the U.S.

But this growth rate is not exactly synonymous with a sound business model. Fransmart has researched the business model of Orangetheory with the analysis of their franchise system, franchisee complaints, industry trends to bring to your notice the problems relating to owning the franchise.

#1 The Theory is Excellent, But the Work is Not:

Though Orangetheory programs are based on human science, their actual benefit is still hard to derive—their exercises and regime run on the science of excess post-exercise oxygen consumption for effective results. The problem is that the heart monitor needs to plug into your body to execute the workout session effectively.

Now, this process is not only extraordinarily inconvenient but also deeply flawed. Firstly, working out with so many cables attached to your body is quite uncomfortable. Secondly, the heart rate monitor technology does not work correctly with the equipment that the centers use.

Hospitals or medical facilities require a 12 point cable attached to your body for heart rate reading; anything less than that cannot give you the correct number.

The Orangetheory centers are accused of manipulating the readings to give the customers a sense of satisfaction from their workouts.

#2 Long Time To Break Even

Based on the financial statements of the Orangetheory company, it may take you at least eight years to recoup your investment. And that is the best-case scenario when you hope for a high 20% ROI per month.

Since the average profit margin of the fitness industry is 9.8%, it may very well take you a total of 15 years to recover your investment.

These figures are disappointing and reasons for not buying the OTF franchise.

#3 Unreasonable Demands of the Orangetheory Company regarding Payments of Fees

The Orangetheory franchise contract requires that a franchisee pays the company a 9% fee in the gross sale. This is a pretty high fee rate compared to any industry with increased competition. But what is more unbelievable is that the franchise has to compensate for the fee when its sale is less than expected. This will lead to a two-way loss for the franchisees. Many franchise owners may find the Orangetheory franchise model not friendly or in their interest.

#4 High Membership Cost:

The membership for an Orangetheory center is costly, making it of up class category hence is niche. Even among the class of people who can afford to take the membership, many prefer to opt for the less expensive plans than the whole and high price plans. The centers could never run for long if the customers do not see value in it. Hence every franchisee feels immense pressure in selling membership and providing the value for money treatment to their members.

Conclusion:

When you analyze the working of the Orangetheory franchise system, it’s clear that this company wants to take advantage of the trend while it can. Still, sustainability is undoubtedly a question to ask!!

Sources:

https://howtostartanllc.com/business-ideas/Orangetheory

https://www.franchising.com/Orangetheoryfitness/

https://www.dailydot.com/debug/Orangetheory-fitness-problem/

https://www.vettedbiz.com/buying-an-orange-theory-franchise/