Strong Brand - Weak Economicssmart_display

This two-location Orangetheory Fitness franchise is listed at $750K, generating about $1.37M in revenue and $236K in cash flow.

On the surface, it looks like a solid franchise opportunity with a strong brand behind it.

But once you break down the numbers, the story changes.

Deal Snapshot

Let’s run it through a standard SBA-style scenario.

Financing Overview

After debt, you’re left with about $126K per year.

That’s decent — but not for what this actually takes to run.

The Reality Check

You’re running two locations with ~30 employees… for $126K.

That’s the disconnect most buyers miss.

Where It Breaks

The margins are weak.

• Low margin: 17.3% vs ~27.7% industry average.
• Franchise constraints: Limited ability to cut costs.
• Fixed expenses: Rent, payroll, and royalties are locked in.

And in a franchise model, fixing margins isn’t easy.

And You’re Paying a Premium

The valuation doesn’t help.

• Overpriced: 3.17x vs ~1.83x industry average.
• Below-average performance: Yet priced above market.
• No upside baked in: You’re paying for the brand, not the numbers.

This is where the deal really falls apart.

The Hidden Risk

Fitness franchises look stable — but they’re not low-risk.

• High default rate: ~5.3% vs ~3.6% overall.
• Member churn: Revenue depends on retention.
• Local competition: New gyms can impact demand.
• Lease exposure: Real estate is not included.

You’re more exposed than it seems.

What This Really Is

This is a brand-driven deal.

• Strong brand
• Weak efficiency
• Premium pricing

You’re paying for recognition — not performance.

BizHub Verdict

This deal scores a 5.4 / 10.

The brand is strong — but the numbers don’t justify the complexity or the price.

Two locations… and still not enough take-home.

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