Number of Cyclebar Franchises Opened/Closed
Overall, the number of studios that are being added to the Cyclebar franchise system is growing, but at a declining rate over the last year. For example, in 2019 there was a net change of 41 units being added to the franchise system from the previous year, but in 2020 only 15 units were added.
A likely reason for this is the COVID-19 pandemic, which essentially shut down fitness centers for a period of time and slowed down economic growth. However, it seems that Cyclebar is making a comeback in 2021, as according to their FDD they are projecting 26 new outlets being opened this year.
One thing to be wary of when looking at unit numbers is the possibility that they are manufactured by the franchisor opening up an abnormal amount of franchises in order to cover up the many failures and closures occurring in their system. However, this does not seem to be the case for Cyclebar, because in 2020 they reacquired 5 of their existing franchises, compared to the 15 that they were able to open.
Conclusion
Cyclebar is a fitness franchise concept that comes with its pros and cons. Their profit model, like many fitness franchises, tends to fluctuate based on the season. Furthermore, the lower end of their studios make a negative gross profit, meaning that they are losing money before operating costs. This is especially troubling for investors who are looking to take out loans in order to invest in their franchise or business.
However, at the same time the Cyclebar franchise system appears to be growing significantly based on their numbers of units that have opened/closed over the past three years. They are able to retain a positive net number of units, indicating a low likelihood of the franchise failing.
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