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Red Effect Infrared Fitness Franchise Review (2024)
Written by: Patrick Findaro
Red Effect Infrared Fitness Franchise Background
The Red Effect Interval Training workout combines 3 key components: incline trainers, water rowers and functional strength training in state-of-the-art fitness studios enhanced with infrared therapy. It’s a one-of-a kind workout, designed to achieve and maintain heart rates in the target zones that stimulate the metabolism, increase energy and achieve an “after burn” effect that can last up to 36 hours post workout, per Red Effect’s findings
All Red Effect workouts are monitored by the heart rate (which are projected on large monitors). This allows participants to work at their own pace, pushing harder or pulling back so that they can get the most out of their workout and recover faster for the next one.
They offer all sorts of group fitness classes such as: cycling, barre, yoga, kickboxing, circuit training and many more all done in studios that are equipped with infrared therapy though panels.
Management Team(H3)
llie T. Mallad is founder, chairman and CEO of three national franchise brands, Massage Green Spa, RED EFFECT Infrared Fitness, and Stretch Smart Infrared Therapy Centers.
Recognized as an Ernst & Young Entrepreneur of the Year award winner, Mallad made his mark in franchising as one of the fastest-growing Little Caesars franchisees in company history. Mallad went on to parlay his franchising success with 10 additional national brands including Golden Corral, Big O Tires, Arco AM/PM, Applebee’s, Baskin-Robbins, Bruegger’s Bagels, Mobil Oil, Chevron Oil, Ryder Truck and Jiffy Lube.
In 2008, Mallad founded his own company and became a franchisor for Massage Green Spa. In 2016, Mallad launched a second major national franchise, RED EFFECT Infrared Fitness, which is positioned to be a global brand because of the popularity of infrared therapy in multiple countries around the world.
The very experienced management team is ready to help franchisees in all stages of the process, from site selection to ongoing training after the unit is up and running.
Franchise Fitness Industry Analysis
Franchise Strengths
- Fitness and wellness concept that offers a strong sense of community, personalized attention, technology and good energy
- Appeals to a wide range of the population, from young people who want to get in shape to older people that want to be healthy
- Recurrent revenue streams with monthly membership fee structure
- Infrared technology in all studios
Franchise Weaknesses
- Reliant on finding, training, and retaining good coaches to deliver the classes and engage the members
- Operates in a competitive environment with low barriers to entry
Franchise Opportunities
- Brand awareness will continue to grow as the concept expands
- As a boutique concept, able to charge higher pricing than traditional fitness concepts
- Boutique concepts with memberships expanded 74% from 2012 to 2015 (IHRSA)
Franchise Threats
- Operating in a very large, competitive market that is rapidly changing
- Profits can be negatively impacted due to close proximity of a similar competitor
- Potential for change in consumers’ preferred health/fitness regimen
How much is a Red Effect Infrared Fitness?
Red Effect Infrared Fitness Franchise cost ranges from $283,000 to $718,000 according to the 2019 FDD.
Standard studio |
| Item | Estimated Amount (in USD) | When Due | To Whom Payment is to Be Made | |
| Low | High | |||
| Initial Franchise Fee | $45,000 | $45,000 | Upon signing Franchise Agreement | Franchisor |
| Pre-Opening/Grand Opening Advertising | 30,000 | 30,000 | As incurred | Advertising Providers |
| Preo-Opening Sales Coordinator Program Charge | 0 | 13,000 | Before we provide the service | Franchisor |
| Initial Lease Payments | 7,500 | 30,000 | As specified in lease | Landlord |
| Leasehold Improvements and Construction Costs | 50,000 | 210,000 | Before opening as incurred | Our Affliates, Contractors and Suppliers |
| Reception Desk, Retail Displays and Interior Signage | 8,000 | 15,000 | Before opening as incurred | Our Affliates and Suppliers |
| Fitness Equipment and Infrared Saunas | 87,000 | 250,000 | Before opening as incurred | Our Affliates and Suppliers |
| AED and First Aid Equipment and Supplies | 1,500 | 2,000 | Before opening as incurred | Suppliers |
| Exterior Signage | 5,000 | 10,000 | Before opening as incurred | Our Affliates and Suppliers |
| Initial Inventory and Operating Supplies | 6,000 | 15,000 | Before opening as incurred | Our Affliates and Suppliers |
| Audio/Video Equipment, Other Equipment and Supplies | 8,000 | 45,000 | Before opening as incurred | Our Affliates and Suppliers |
| Computer Systems | 4,000 | 6,000 | Before opening as incurred | Suppliers |
| Travel and Living Expenses while Training | 2,000 | 5,000 | Before opening as incurred | Third Parties |
| Insurance Deposits | 1,000 | 2,000 | Before opening as incurred | Insurance Companies |
| Business Licenses, Professional Fees and Miscellaneous Pre-Opening Expenses | 3,000 | 5,000 | Before opening as incurred | Third Parties |
| Additional Funds (3 months) | 25,000 | 35,000 | As incurred | Franchisor, Affiliates, Suppliers and Employees |
| TOTAL | $283,000 | $718,000 |
Executive club |
| Item | Estimated Amount (in USD) | When Due | To Whom Payment is to Be Made | |
| Low | High | |||
| Initial Franchise Fee | $75,000 | $75,000 | Upon signing Franchise Agreement | Franchisor |
| Pre-Opening/Grand Opening Advertising | 40,000 | 40,000 | As incurred | Advertising Providers |
| Preo-Opening Sales Coordinator Program Charge | 0 | 13,000 | Before we provide the service | Franchisor |
| Initial Lease Payments | 20,000 | 40,000 | As specified in lease | Landlord |
| Leasehold Improvements and Construction Costs | 265,000 | 329,000 | Before opening as incurred | Our Affliates, Contractors and Suppliers |
| Reception Desk, Retail Displays and Interior Signage | 11,000 | 18,000 | Before opening as incurred | Our Affliates and Suppliers |
| Fitness Equipment and Infrared Saunas | 310,000 | 345,000 | Before opening as incurred | Our Affliates and Suppliers |
| AED and First Aid Equipment and Supplies | 2,000 | 2,500 | Before opening as incurred | Suppliers |
| Exterior Signage | 5,000 | 12,000 | Before opening as incurred | Our Affliates and Suppliers |
| Initial Inventory and Operating Supplies | 35,000 | 42,000 | Before opening as incurred | Our Affliates and Suppliers |
| Audio/Video Equipment, Other Equipment and Supplies | 45,000 | 50,000 | Before opening as incurred | Our Affliates and Suppliers |
| Computer Systems | 5,000 | 6,000 | Before opening as incurred | Suppliers |
| Travel and Living Expenses while Training | 3,000 | 5,000 | Before opening as incurred | Third Parties |
| Insurance Deposits | 1,500 | 2,000 | Before opening as incurred | Insurance Companies |
| Business Licenses, Professional Fees and Miscellaneous Pre-Opening Expenses | 6,000 | 8,000 | Before opening as incurred | Third Parties |
| Additional Funds (3 months) | 40,000 | 50,000 | As incurred | Franchisor, Affiliates, Suppliers and Employees |
| TOTAL | $863,500 | $1,037,500 |
Royalty | Ad Fund |
| 7% | 1% |
| 7% | 1% |
