Cyclebar Franchise in 2024: Costs, Fee & FDD
Discover if CycleBar is the right fitness franchise for you with its community focus, flexible business model, and strong support system. Read more here!
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Founded in 2004, CycleBar has grown to become a powerhouse in the boutique fitness industry and the largest indoor cycling brand globally. The brand was designed to bring a welcoming, inclusive, and invigorating workout experience to everyone, no matter their fitness level. CycleBar’s immersive, high-energy classes are hosted in state-of-the-art CycleTheaters, led by specially trained instructors who craft an experience that is as engaging as it is effective. A hallmark of CycleBar is its emphasis on community and its commitment to elevating both body and spirit.
At the heart of CycleBar’s offering are its low-impact, high-intensity indoor cycling workouts, paired with mood-enhancing music (called “CycleBeats”) and performance-tracking metrics through “CycleStat.” These features attract a broad demographic of fitness enthusiasts—from beginners looking for accessible workouts to seasoned athletes seeking a performance-driven challenge. Beyond cycling, the brand fosters a social and communal atmosphere, ensuring that its members feel supported and engaged in their fitness journeys.
With 200+ studios worldwide, CycleBar has cemented itself as a leader in the thriving indoor cycling space. The franchise boasts recognition on Entrepreneur Magazine’s Franchise 500 list for six consecutive years and accolades such as “Fastest-Growing Franchises” in 2021 and 2023. As part of Xponential Fitness, a giant in boutique fitness with over 3,000 locations globally, CycleBar benefits from significant industry expertise and a massive customer base, offering franchisees a competitive edge in this booming market.
CycleBar franchisees gain access to a robust support system, including comprehensive training programs, marketing assistance, and ongoing operational guidance. The brand’s commitment to franchise success is evident in its structured onboarding process, advanced technology platforms, and scalable business model. This combination of innovation, community focus, and unparalleled support makes CycleBar a standout option for those looking to invest in a boutique fitness franchise.
CycleBar Franchise Insights
- CycleBar is the largest indoor cycling brand globally, with 200+ locations and a footprint 3x larger than its nearest competitor.
- Ranked on Entrepreneur’s Franchise 500 for six consecutive years, CycleBar was also named one of the Fastest-Growing Franchises in 2021 and 2023.
- As part of Xponential Fitness, franchisees gain access to a proven support system shared by over 3,000 global locations across multiple fitness verticals.
- CycleBar’s CycleStat metrics and curated CycleBeats playlists enhance the experience with personalized performance data and mood-boosting music.
- The boutique fitness industry is valued at $49 billion globally, and CycleBar leads the indoor cycling niche with an established and expanding market presence.
- Despite its growth, over 60 CycleBar studios closed in the last year, highlighting the importance of location, market fit, and operational excellence for franchise success.
CycleBar Franchise Key indicators
Growth YOY (%)
-15%
vs industry 5%
Total U.S. Franchised Units
218
3-Year Failure Rate
25%
vs industry 9%
Sales-to-Investment ratio
0.8:1
How much does it cost to open a CycleBar franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a CycleBar 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 a CycleBar 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 CycleBar below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $60,000 | $60,000 |
| Initial Training Program Fees | $0 | $0 |
| On-Site Grand Opening Assistance | $0 | $2,500 |
| Travel & Living Expenses While Training | $0 | $2,500 |
| Real Estate/Lease | $25,000 | $35,000 |
| Net Leasehold Improvements | $129,000 | $244,730 |
| Payments in Connection with Fitness Equipment & Initial FF&E Package | $8,600 | $22,700 |
| Signage | $11,000 | $26,905 |
| Additional Operating Supplies and Accessories | $10,000 | $10,000 |
| Pre-Sales and Soft Opening Retail Inventory Kit | $12,000 | $12,000 |
| Computer System, A/V Equipment, and Related Components | $44,900 | $44,900 |
| Business Licenses | $500 | $1,000 |
| Technology and Software Fees | $3,620 | $3,620 |
| Insurance Policies | $1,100 | $2,600 |
| Initial Grand Opening Marketing & Advertising Spend | $15,000 | $15,000 |
| Initial Instructor Training Fee | $5,000 | $5,000 |
| Additional Funds – 3 months | $12,000 | $23,000 |
| TOTAL ESTIMATED INITIAL INVESTMENT | $337,720 | $511,455 |
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 a CycleBar or a similar boutique fitness franchise, you’ll need to meet specific financial requirements, ensuring you have the resources to cover startup costs and sustain operations during the ramp-up period. Here’s a breakdown of the typical capital requirements in this industry:
- Initial Capital Investment The total investment for CycleBar ranges from $338,000 to $511,000, covering studio construction, equipment, technology, and initial inventory. This range can vary based on location, studio size, and market conditions. 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 Assets Franchisees in boutique fitness typically need $125,000 to $150,000 in liquid capital to cover upfront expenses and operational cash flow before the studio becomes profitable (estimate based on industry averages).
- Net Worth Requirement Most franchisors in this space require a minimum net worth of $350,000 to $500,000, ensuring you have the financial stability to manage the investment and access additional capital if needed.
How much does a CycleBar franchise owner make?
Calculating the salary of a CycleBar 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 a CycleBar 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.
CycleBar Revenue & Gross Sales
CycleBar’s recent revenue performance reflects the potential for steady returns in the boutique fitness industry. The median gross sales for its studios reached $349,689. While performance varies by location and market conditions, this figure highlights the strong demand for indoor cycling and the brand’s ability to attract and retain loyal customers through its immersive fitness experiences.
Which key factors impact the average revenue performance of CycleBar franchisees?
The performance of U.S. CycleBar franchisee median gross sales is influenced by several key factors. One significant contributor is the brand’s strong positioning in the boutique fitness market, offering a unique, high-energy experience that appeals to a broad demographic. CycleBar’s community-focused environment fosters member loyalty, driving repeat visits and consistent revenue streams. Additionally, the use of advanced technology like performance metrics and curated playlists enhances the customer experience, increasing engagement and satisfaction. The operational support provided by Xponential Fitness, including marketing, training, and streamlined processes, ensures franchisees can effectively attract and retain members. Lastly, location plays a pivotal role, as studios in high-traffic or fitness-conscious areas tend to see higher customer acquisition and retention rates.
CycleBar Franchise Operational Costs
When opening a CycleBar franchise, understanding the primary ongoing operational costs is crucial to effectively manage your budget. These costs will directly impact your day-to-day operations and overall financial performance.
- Lease and Utilities Studio rent and utilities are significant expenses, especially in prime, high-traffic locations.
- Staff Salaries Payment for instructors, front desk staff, and potential studio managers is a recurring cost to maintain quality service.
- Equipment Maintenance Regular upkeep of bikes and audio-visual systems ensures a premium customer experience and minimizes downtime.
- Marketing and Promotions Ongoing local marketing efforts, including events and digital advertising, are necessary to attract and retain members.
- Supplies and Amenities Items like towels, water, cleaning products, and other studio essentials add up over time.
By keeping a close eye on these operational expenses and optimizing where possible, you can maintain smooth operations and focus on growing your member base.
CycleBar Franchise Fees
When opening a CycleBar franchise, it’s important to factor in the ongoing fees that come with operating your studio. These fees play a vital role in maintaining the franchise’s competitive edge, supporting marketing efforts, and providing valuable resources to franchisees. Below is a breakdown of these fees and their benefits:
- Royalty Fee Set at 7% of gross sales, this fee provides access to CycleBar’s proven operational systems, brand recognition, and ongoing support to ensure your studio runs smoothly.
- Brand Development Fund Contribution At 2% of gross sales, this fee helps fund nationwide and regional marketing campaigns, driving awareness and traffic to your studio while enhancing the overall brand image.
- Additional Fees Periodic charges for training programs, proprietary technology, and other resources ensure your studio stays up to date with industry trends and operational improvements.
Understanding these fees and incorporating them into your business plan allows you to leverage CycleBar’s robust support system while building a sustainable and successful studio.
CycleBar Franchise Earnings
The earnings of a CycleBar franchise owner can vary based on factors like studio location, membership volume, operational efficiency, and cost control. With hands-on leadership, franchisees can closely monitor expenses and drive customer engagement to maximize returns.
Based on recent data, the median gross sales for a CycleBar studio are approximately $349,689, with owner-operators earning an estimated $63,000 annually. This represents an 18% operating profit margin. Active management not only helps optimize operations but also fosters a sense of community, which is crucial in the boutique fitness market. These figures underscore the financial potential of CycleBar, especially for franchisees committed to delivering an exceptional customer experience and maintaining efficient business practices.
How to Open a CycleBar Franchise
Becoming a CycleBar franchisee involves a structured process designed to ensure alignment between you and the brand, setting you up for success. From your initial inquiry to the grand opening of your studio, each step provides the necessary knowledge and resources to build a thriving business. Here’s an overview of the process:
- 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).
- Introductory Call Participate in a detailed call to explore the brand’s values, business model, and financial requirements, ensuring it aligns with your vision.
- Discovery Day Attend a Discovery Day at the headquarters or a local studio to meet the leadership team and experience the brand firsthand.
- Approval Process After completing the application, background checks, and interviews, you’ll receive approval to move forward as a franchisee.
- Site Selection and Lease Negotiation Work with CycleBar’s real estate team to identify and secure the ideal location for your studio.
- Training and Onboarding Participate in comprehensive training programs covering operations, marketing, and studio management.
- Studio Build-Out Collaborate with the CycleBar team to design and construct your state-of-the-art studio, including the installation of bikes and technology.
- Pre-Opening Marketing Launch pre-opening marketing campaigns to generate buzz and build a founding member base.
- Grand Opening Open your studio to the public with the support of CycleBar’s operational and marketing teams.
Pros & Cons
Pros
Established Brand: CycleBar is a well-known name in boutique fitness, with over 200 studios worldwide and a proven business model backed by Xponential Fitness.
High Demand for Boutique Fitness: The indoor cycling industry continues to grow, appealing to health-conscious consumers who value group workouts and community experiences.
Tech-Enhanced Experience: Features like CycleStat metrics and curated playlists create a unique, immersive fitness experience that attracts and retains members.
Cons
Studio Closures: Over 60 CycleBar studios closed in the past year, suggesting market challenges in some areas.
Competitive Market: The boutique fitness industry is saturated, with competitors like SoulCycle and Peloton offering similar experiences.
Location-Dependent Success: Studio performance heavily relies on choosing a high-traffic, fitness-conscious area, which may increase lease costs.
Economic Sensitivity: Fitness memberships are often considered discretionary spending, making the business more vulnerable during economic downturns.
