2020 Sales Figures and Break-Even Point:
Royalty Fee: 8% of Gross Sales
In 2020 royalty revenues were $46.9 million
Estimated Total Franchise Sales: $586 million
Estimated Average Franchise Revenue: $517,000
1- Based on a midpoint investment of $1,378,500 with estimated profits of $51,800 (10% profit margin) it would take about 27 years to recoup your investment.
2- Based on a midpoint investment of $1,378,500 with estimated profits of $77,711 (15% profit margin) it would take about 18 years to recoup your initial Orange Theory franchise investment.
3- Based on a midpoint investment of $1,378,500 with estimated profits of $103,600 (20% profit margin) it would take about 14 years to recoup your investment.
Orange Theory during 2020 saw a revenue decrease of over 25% and we can conclude that this sharp decrease was due to the spread of COVID-19 and the fact that many gyms and fitness centers were unable to open and operate as normal. While it is still uncertain how the fitness industry will recover, it is important to note the large revenue drop off was caused by locations being forced to close per government orders.
This is just an estimated sales based on the franchisor’s income statement and can vary greatly depending on the length that the particular franchise location has been open and how well the business is run.