![This episode is a masterclass on the franchise business model. We cover Orangetheory's origin story, how their tech-enabled concept differentiated the business, and walk through the unit economics for both franchisee and franchisor. <br /><br /><br />I have wanted to do a deep-dive on franchising for a while now and I always knew who the guest would be. I’m joined by a man fully dedicated to all things franchisee and franchisor - the Wolf of Franchises.<br /> <br />For the full show notes, transcript, and links to the best content to learn more, check out the episode page here: https://www.joincolossus.com/episodes/94709594/wolf-orangetheory-a-franchise-hiit<br /> <br /> -----<br /> <br /> This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.<br /> <br /> -----<br /> <br /> Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.<br /> <br /> Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.<br /> <br /> Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt<br /> <br /> Show Notes<br /> [00:00:00] - Introduction<br /> [00:02:55] - [First question] - What makes Orangetheory unique from their competitors<br /> [00:04:47] - Orangetheory’s founder and origin story<br /> [00:06:53] - What it looks like going from an initial concept to a franchise <br /> [00:08:56] - Whether or not early franchises have pricing and adjacent benefits <br /> [00:11:17] - How their franchisee numbers rank compared to their competitors <br /> [00:13:09] - How their location numbers rank compared to their competitors <br /> [00:15:39] - What it would look like applying for and becoming an Orangetheory franchisee<br /> [00:17:52] - How much Orangetheory cares about their franchisees being good operators<br /> [00:20:35] - Upfront franchise fees and other parent company revenue streams <br /> [00:23:15] - How much revenue is actually going back to the Orangetheory parent company<br /> [00:25:41] - Whether or not the parent company helps with upfront costs<br /> [00:28:01] - Overcoming the barrier of up front capital for a franchise <br /> [00:29:33] - Unit economics and business models for fitness instructors <br /> [00:30:53] - Rules of thumb and variables to break even on an Orangetheory franchise<br /> [00:34:04] - The average cash flow generated by a mid-tier Orangetheory franchise <br /> [00:35:16] - Where an owner might have to reinvest their profits into the business<br /> [00:37:14] - Additional marketing and mandatory costs required of an owner <br /> [00:38:47] - How franchisees are protected by new locations <br /> [00:40:47] - The main risks to an ecosystem like Orangetheory over the next five years <br /> [00:44:17] - Key takeaways for operators and investors from Orangetheory’s story<br /><br />#businessbreakdowns #orangetheory #franchisee](https://media.thebusinessprofessor.com/wp-content/plugins/youtube-feed-pro/img/placeholder.png)
This episode is a masterclass on the franchise business model. We cover Orangetheory’s origin story, how their tech-enabled concept differentiated the business, and walk through the unit economics for both franchisee and franchisor.
I have wanted to do a deep-dive on franchising for a while now and I always knew who the guest would be. I’m joined by a man fully dedicated to all things franchisee and franchisor – the Wolf of Franchises.
Show Notes
[00:00:00] – Introduction
[00:02:55] – [First question] – What makes Orangetheory unique from their competitors
[00:04:47] – Orangetheory’s founder and origin story
[00:06:53] – What it looks like going from an initial concept to a franchise
[00:08:56] – Whether or not early franchises have pricing and adjacent benefits
[00:11:17] – How their franchisee numbers rank compared to their competitors
[00:13:09] – How their location numbers rank compared to their competitors
[00:15:39] – What it would look like applying for and becoming an Orangetheory franchisee
[00:17:52] – How much Orangetheory cares about their franchisees being good operators
[00:20:35] – Upfront franchise fees and other parent company revenue streams
[00:23:15] – How much revenue is actually going back to the Orangetheory parent company
[00:25:41] – Whether or not the parent company helps with upfront costs
[00:28:01] – Overcoming the barrier of up front capital for a franchise
[00:29:33] – Unit economics and business models for fitness instructors
[00:30:53] – Rules of thumb and variables to break even on an Orangetheory franchise
[00:34:04] – The average cash flow generated by a mid-tier Orangetheory franchise
[00:35:16] – Where an owner might have to reinvest their profits into the business
[00:37:14] – Additional marketing and mandatory costs required of an owner
[00:38:47] – How franchisees are protected by new locations
[00:40:47] – The main risks to an ecosystem like Orangetheory over the next five years
[00:44:17] – Key takeaways for operators and investors from Orangetheory’s story