Orangetheory Fitness franchise
A franchisee builds and operates a single Orangetheory Fitness studio of roughly 1,750 to 4,800 square feet (typically about 3,100) selling memberships to coach-led group workouts that combine cardio and strength equipment with the OTbeat heart-rate monitoring system, plus branded retail merchandise.
Manager-run permitted Disclosed
- Source
- 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness)
- Document
- FDD 2026, issued 2026-03-31
- Item
- Item 15
- Page
- PDF p. 57
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640671
We do not require, but do recommend, that you (or your Principal Owner) personally supervise your Studio.
Item 15 recommends but does not require that the franchisee or its Principal Owner personally supervise the studio. What is required is a designated full-time, on-premises manager who devotes full working time to day-to-day operations, has completed the franchisor's management training or an approved equivalent, and is not engaged in any other business except passive investments. The manager need not hold equity. Item 1 separately requires the franchisee to designate a single individual Principal Owner responsible for supervising daily operations and empowered to bind the franchisee. Outside management companies and independent consultants may not run the studio without approval.
What stands out
- Total initial investment of $764,577 to $1,104,920 for one studio excluding real estate purchase, with a flat $59,950 initial franchise fee and $182,658 to $237,994 payable to the franchisor or an affiliate.
- Ongoing fees: 8% royalty on Gross Sales, 3% Brand Fund contribution that may rise to 5%, local marketing minimum of the greater of 2% of prior-month sales or $2,500, and a $899 monthly technology fee that compounds 10% a year.
- Item 19 discloses average Total Gross Sales of $802,145 and a median of $750,643 for 1,189 franchised studios over the 12 months to February 28, 2026, with no cost, expense or profit information of any kind.
7 more observations
- The Item 19 population excludes 95 franchised studios that permanently closed during the same 12 months, all of which had been open at least a year, so the averages describe survivors only.
- Franchised studios fell from 1,311 at the end of 2023 to 1,209 at the end of 2025; openings dropped from 53 to 13 a year while exits rose from 23 to 87.
- Transfers to new owners reached 214 in 2025, up from 33 in 2023 and 43 in 2024, and 362 franchisees are listed as having left the system or being out of contact.
- Minimum Performance Standards of $300,000, $350,000 and $400,000 of Gross Sales in years one, two and three-plus; a shortfall triggers a top-up royalty payment and two consecutive misses can cost the territory or the franchise.
- No exclusive territory is granted, though a protected Territory is designated after site approval; the franchisor sets its size and can shrink or remove it on default.
- A trained full-time on-premises manager is required rather than owner-operation, but owners holding 15% or more must personally guarantee, and spouses may be required to sign.
- Purchasing is heavily controlled: roughly 90% of start-up cost and 70% of operating cost is subject to specification, and the franchisor earned $18,105,601, or 16.1% of its revenue, from required franchisee purchases in 2025.
Things to verify
- Read the Item 21 financial statements alongside the cover-page risk notice stating that the franchisor's financial condition calls into question its ability to provide services and support.
- Ask why 95 studios closed permanently during the Item 19 measurement period and why 2025 exits reached 87 against 13 openings; the Exhibit H-2 list of 362 departed franchisees is the place to start calling.
- Item 19 is gross sales only. Build your own model of rent, payroll, royalties, brand fund, technology fees, equipment financing and debt service before assuming anything about owner earnings, and ask current franchisees for real profit and loss statements.
6 more questions
- Test whether the Minimum Performance Standards are realistic for your market: a studio at the fourth-quartile average of $475,979 clears the $400,000 threshold, but the disclosed low was $156,118.
- Confirm the actual Territory boundaries and map before signing, since Item 12 states no exclusive territory is granted and specifies no minimum geographic or population size.
- Price the compounding technology fee and the possible Brand Fund increase to 5% over the full 10-year term, not just year one.
- Ask why 214 studios changed hands in 2025 and at what prices, and whether the 85 signed-but-unopened agreements are still expected to open.
- Confirm the total payable to OTF Sourcing and other designated suppliers, and whether any rebates the franchisor's affiliate receives are passed through.
- Check what remodelling and equipment updating the franchisor will require at the successor-franchise stage, on top of the 50% successor fee.
Category cost placeholders, not a forecast. This snapshot uses the default inputs; the calculator below updates when you edit them.
Evidence confidence: High. This describes source support, not investment quality. AI-extracted and machine-verified where stated; no human line-by-line review. Source and review record.
Read the full research overview
Orangetheory Fitness franchisees build and run a single boutique fitness studio, typically about 3,100 square feet of leased space, selling memberships to coach-led group classes that mix cardio and strength work tracked by the proprietary OTbeat heart-rate system. OTF Franchisor, LLC has been the franchisor since 2019 and became part of Purpose Brands in April 2024; predecessor Ultimate Fitness Group sold Orangetheory franchises from July 2010. The franchisor operates no studios itself, though affiliates own 15.
The money going in is substantial. Item 7 puts the total initial investment for a single studio at $764,577 to $1,104,920 excluding any real estate purchase, of which $182,658 to $237,994 goes to the franchisor or an affiliate. That includes a flat $59,950 initial franchise fee, $245,000 to $418,317 of leasehold improvements and $119,122 to $163,424 of fitness and OTbeat equipment bought from affiliate OTF Sourcing, plus three months of additional funds at $171,239. Continuing fees are an 8% royalty on Gross Sales, a Brand Fund contribution of 3% that can rise to 5%, a local marketing minimum of the greater of 2% of prior-month sales or $2,500, and a $899 monthly technology fee that compounds upward 10% a year. No liquidity or net worth requirement is disclosed in the reviewed source.
Item 19 reports gross sales only. Across the 1,189 franchised studios that traded for the full 12 months to February 28, 2026, average Total Gross Sales were $802,145 and the median $750,643, with 44% at or above the average and a range from $156,118 to $2,870,191. Quartile averages run from $1,205,826 down to $475,979, and average monthly membership was 444. The item discloses no costs, expenses, margin or net income, and it excludes the 95 franchised studios that closed permanently during the same period despite all having been open at least a year.
Item 20 shows a system in retreat. Franchised studios went from 1,281 at the start of 2023 to 1,311, then 1,283, then 1,209 at the end of 2025 — a net loss of 72 over three years, with 2025 alone down 74. Openings fell from 53 to 27 to 13 while exits climbed from 23 to 55 to 87, all recorded as non-renewals or 'ceased operations for other reasons' rather than franchisor terminations. Transfers to new owners jumped to 214 in 2025 from 43 the year before, 362 franchisees appear on the departed list, and 85 signed agreements were still unopened against 15 projected 2026 openings. The cover pages carry state-required risk notices on the franchisor's financial condition, unopened franchises, mandatory minimum payments, required sales performance, spousal liability and Florida-only dispute resolution. Item 3 discloses three concluded matters, one of them a settled 2016 franchisee arbitration against the predecessor.
View ratings and their supporting evidence
Transparent ratings
How these are computedEach dimension is scored 1–5 from published formulas. Missing data yields “Not enough evidence to rate”, never a low score. There is no composite score by design.
How the system has performed, computed from the disclosed Items 7, 19 and 20. Figures a documented material source inconsistency puts in doubt are excluded, and the dimension shows “Not rated”.
Inputs
- Franchised outlets 1281 → 1209 (Item 20, Table 3)
- Thresholds: ≥15% → 5; 5–15% → 4; 0–5% → 3; −5–0% → 2; below −5% → 1
Inputs
- Attrition = (terminations + non-renewals + reacquisitions + ceased-other) ÷ start-of-year franchised units, averaged over 3 fiscal years
- Thresholds: <2% → 5; 2–4% → 4; 4–6% → 3; 6–10% → 2; >10% → 1
Inputs
- AUV $802,145 (disclosed) ÷ midpoint investment $934,749 = 0.86×
- Thresholds: ≥2.0 → 5; 1.5–2.0 → 4; 1.0–1.5 → 3; 0.7–1.0 → 2; <0.7 → 1
How much this brand’s FDD discloses, and how well-supported our data on it is. This measures transparency, not business performance — a strong business that discloses little scores low here and stays unrated above.
Inputs
- Item 19 present (+1)
- Average plus median or a distribution (+1)
- Population 99% of franchised units, clearly described (+1)
- Franchisor Track Record
- Franchising 16 years (since 2010) · 1,224 outlets · Item 3: 3 matter(s) disclosed · Item 4: bankruptcy disclosure present
- Multi-Unit Scalability
- Area Development Agreements are offered for 3, 5 or more studios and have been sold since April 2025. The developer commits to a development schedule and pay… · Manager-run permitted
- Operational Intensity
- Manager-run permitted
Initial investment
FDD Items 5 and 7Format shown: Single Studio franchise — new build in leased premises of approximately 1,750 to 4,800 square feet (typical studio about 3,100 sq ft)
$764,577–$1,104,920 total initial investment. Excludes real estate purchase. Includes 3 months of additional funds.
View full investment breakdown — Items 5 & 7
| Initial franchise fee (the named Item 5 fee only) | $59,950 Disclosed
Fee may be reduced at the franchisor's discretion or during marketing promotions; Area Development Agreement pricing (multi-Studio, veteran, existing-franchisee rates) applies only to multi-unit commitments, not a standard single Studio. |
|---|---|
| Other required initial payments to the franchisor (Item 5) |
|
| Total Item 5 payments to franchisor/affiliates | $182,658 Disclosed
Cover page: total investment 'includes $182,658 to $237,994 that must be paid to the franchisor or an affiliate' (covers the franchise fee plus OTF Sourcing purchases, technology setup, and training fees). $237,994 Disclosed
Cover page: total investment 'includes $182,658 to $237,994 that must be paid to the franchisor or an affiliate' (covers the franchise fee plus OTF Sourcing purchases, technology setup, and training fees). |
| Total initial investment — low | $764,577 Disclosed
Total row of the single-Studio Item 7 table, excluding real estate purchase costs. Assumes a leased 1,750 sq ft studio at the low end. |
| Total initial investment — high | $1,104,920 Disclosed
Total row of the single-Studio Item 7 table, excluding real estate purchase costs. Assumes a leased 4,800 sq ft studio at the high end. |
| Midpoint of range | $934,749 Derived
|
| Real estate purchase included? | No — assumes a leased site |
| Additional funds assumed | 3 months |
| Required liquid capital | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness); we do not fill gaps with estimates or third-party figures. The reviewed document states no minimum liquid capital requirement on the cover pages or in Items 1, 5, 7, 10, 11 or 15. |
| Required net worth | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness); we do not fill gaps with estimates or third-party figures. The reviewed document states no minimum net worth requirement. |
The Item 7 range assumes leased premises; buying the site is excluded and the franchisor states the investment would increase substantially if the premises are purchased. Estimates are based on affiliate and franchisee experience opening studios between 2023 and 2025, and the franchisor flags that major metropolitan markets such as New York, San Francisco and Chicago can cost substantially more. Of the total, $182,658 to $237,994 is payable to the franchisor or an affiliate. Three months of additional operating funds are built in. The franchisor offers no direct or indirect financing but has an arrangement with a third-party equipment lender. Under an Area Development Agreement the franchisee commits to at least three studios and pays a Development Fee of $150,000 (3 studios) or $237,500 (5 studios), plus $47,500 per additional studio, in place of the per-studio initial franchise fees; that fee is in addition to the single-studio build costs above. Discounted development pricing is offered to veterans ($135,000 / $213,750) and to existing franchisees of the franchisor or its affiliate brands ($135,000 / $212,500), with $121,500 / $191,250 for existing franchisees who are also veterans.
Item 7 line items (17)
| Expenditure | Low | High |
|---|---|---|
| Initial Fee — Paid to the franchisor on signing the Franchise Agreement. | $59,950 | $59,950 |
| 3 months rent + security deposit — Based on 1,750 sq ft (low) to 4,800 sq ft (high); assumes leased premises and no free-rent period. | $21,492 | $57,312 |
| Architect & design fees | $10,000 | $24,000 |
| Furniture, fixtures & equipment | $10,362 | $18,918 |
| Construction management fees | $0 | $12,500 |
| Office & cleaning supplies | $3,000 | $3,800 |
| Leasehold improvements and construction costs — Covers end-cap, free-standing and in-line studios. Franchisees reported tenant improvement allowances of $0 to $100 per sq ft in the last fiscal year, averaging $28.62 per sq ft. | $245,000 | $418,317 |
| Fitness equipment (incl. installation) and OTbeat System — Bought from the affiliate OTF Sourcing. Low end reflects 8 stations, high end 12 stations. | $119,122 | $163,424 |
| Initial inventory of Orangetheory retail merchandise — Mandatory start-up kit purchased from OTF Sourcing. | $3,315 | $5,850 |
| Interior and exterior signage | $17,666 | $28,436 |
| Technology System — Point of sale, membership management, audio-visual and tablet hardware plus music licensing. | $46,760 | $62,108 |
| Pre-sale and grand opening advertising — Required presale/grand opening program approved by the franchisor. | $36,000 | $45,000 |
| Initial training expenses and Studio/Presales Launch Trainings — Travel and living costs; the high end includes the $2,500 Presales Launch Training fee when the franchisor provides it. | $5,000 | $8,850 |
| Miscellaneous opening costs — Licences and permits, an AED plus CPR/AED training, management software set-up, legal and accounting. | $11,671 | $20,216 |
| Insurance | $4,000 | $5,000 |
| Additional funds — 3 months — Operating capital for the first three months after opening, including technology fees, wages, payroll taxes, utilities and $2,500 per month of local marketing. | $171,239 | $171,239 |
| TOTAL (excluding real estate purchase costs) | $764,577 | $1,104,920 |
Source for every row: the Item 7 estimated-initial-investment table of 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness) (table begins PDF p. 24) — rows inherit the table's citation rather than carrying fifteen identical ones.
Other formats disclosed in Item 7 (1)
| Format | Low | High | Fee |
|---|---|---|---|
| Area Development Agreement — development fee only (3 to 5 Studios), on top of single-Studio costs | $150,000 | $237,500 | — |
Ongoing fees
FDD Item 6Royalty
8% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness)
- Document
- FDD 2026, issued 2026-03-31
- Item
- Item 6
- Page
- PDF p. 19
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640671
8% of Gross Sales
8% of Gross Sales, debited weekly. Gross Sales is broadly defined and includes membership and initiation fees, dues, presale revenue, optional services, non-member charges, merchandise sales and business-interruption insurance proceeds; it excludes sales taxes, refunds and credits. Royalties are owed even if the minimum performance standards are not met.
Brand advertising fund
3%–5% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness)
- Document
- FDD 2026, issued 2026-03-31
- Item
- Item 6
- Page
- PDF p. 19
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640671
Brand Fund contribution currently 3% of Gross Sales, debited monthly, and may be increased by the franchisor to as much as 5% of Gross Sales.
Local marketing
2% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness)
- Document
- FDD 2026, issued 2026-03-31
- Item
- Item 6
- Page
- PDF p. 19
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640671
Minimum monthly local advertising spend is the greater of 2% of the studio's prior-month Gross Sales or $2,500, spent on advertising, promotion and public relations in the territory. Any shortfall may be required to be paid into the Brand Fund. Cooperative contributions count toward this requirement.
Core requirements shown separately; caps, credits and conditions may overlap. Check the full schedule for technology, cooperative, transfer and other charges.
View all recurring fees and conditions
| Royalty | 8% of gross sales Disclosed
8% of Gross Sales, debited weekly. Gross Sales is broadly defined and includes membership and initiation fees, dues, presale revenue, optional services, non-member charges, merchandise sales and business-interruption insurance proceeds; it excludes sales taxes, refunds and credits. Royalties are owed even if the minimum performance standards are not met. 8% of Gross Sales, debited weekly. Gross Sales is broadly defined and includes membership and initiation fees, dues, presale revenue, optional services, non-member charges, merchandise sales and business-interruption insurance proceeds; it excludes sales taxes, refunds and credits. Royalties are owed even if the minimum performance standards are not met. |
|---|---|
| Advertising / brand fund | 3%–5% of gross sales Disclosed
Brand Fund contribution currently 3% of Gross Sales, debited monthly, and may be increased by the franchisor to as much as 5% of Gross Sales. Brand Fund contribution currently 3% of Gross Sales, debited monthly, and may be increased by the franchisor to as much as 5% of Gross Sales. |
| Required local marketing | 2% of gross sales Disclosed
Minimum monthly local advertising spend is the greater of 2% of the studio's prior-month Gross Sales or $2,500, spent on advertising, promotion and public relations in the territory. Any shortfall may be required to be paid into the Brand Fund. Cooperative contributions count toward this requirement. Minimum monthly local advertising spend is the greater of 2% of the studio's prior-month Gross Sales or $2,500, spent on advertising, promotion and public relations in the territory. Any shortfall may be required to be paid into the Brand Fund. Cooperative contributions count toward this requirement. |
| Technology / software | $899/month Disclosed
Technology Fee of $899 per month plus a one-time $575 management software set-up fee. Billing starts when the management software account opens for membership presales, typically about five months before the studio opens. The monthly fee is subject to a 10% annual increase, compounded and cumulative, so a skipped year can be recovered later. It covers management software, the intranet, the learning system, mobile app, reporting, billing, video and music platforms, CRM and site-selection tools. Technology Fee of $899 per month plus a one-time $575 management software set-up fee. Billing starts when the management software account opens for membership presales, typically about five months before the studio opens. The monthly fee is subject to a 10% annual increase, compounded and cumulative, so a skipped year can be recovered later. It covers management software, the intranet, the learning system, mobile app, reporting, billing, video and music platforms, CRM and site-selection tools. |
| Advertising cooperative | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness); we do not fill gaps with estimates or third-party figures. The franchisor may establish regional cooperatives; contributions are set by the cooperative with no stated minimum or maximum, so no amount is disclosed. Each studio gets one vote and the franchisor states it and its affiliates do not currently control a majority of votes in any cooperative. |
| Transfer fee | 50% (see basis) Disclosed
50% of the then-current initial franchise fee for a Control Transfer, and 25% of the then-current initial franchise fee for all other transfers (except transfers to an entity formed to operate the studio). A Control Transfer includes transferring the agreement, the studio or substantially all its assets, a 20% or greater interest in the franchisee entity, or any interest that changes control. 50% of the then-current initial franchise fee for a Control Transfer, and 25% of the then-current initial franchise fee for all other transfers (except transfers to an entity formed to operate the studio). A Control Transfer includes transferring the agreement, the studio or substantially all its assets, a 20% or greater interest in the franchisee entity, or any interest that changes control. |
| Renewal fee | 50% (see basis) Disclosed
Successor franchise fee equal to 50% of the then-current initial franchise fee for new franchisees, payable before the successor term begins, together with other renewal conditions. Successor franchise fee equal to 50% of the then-current initial franchise fee for new franchisees, payable before the successor term begins, together with other renewal conditions. |
| Royalty + ad fund (% of sales) | 11% Derived
|
Fee schedule (25 fees; 22 verified against the source, 3 single-pass)
Every recurring, conditional and one-time fee found in this FDD's Item 6 table (plus mandatory recurring costs disclosed in Items 7/11), each cited to its page and carrying its verification status: verified means two independent readings agreed or a tie-break re-inspection of the page decided it; single-pass means one reading captured it and it has not been independently confirmed (permitted only for fees that cannot move modeled economics — see the materiality rule). Amounts marked “not stated” are charged at then-current rates the FDD does not quantify and are never modeled as $0.
| Fee | Amount | Frequency | Mandatory | Verification | Cite | Notes |
|---|---|---|---|---|---|---|
| Royalty Fee | 8% of gross sales | weekly | Yes | verified (2-pass) | Item 6, p. 19 | Owed even if minimum Performance Standards are not met. |
| Brand Fund Contributions | 3%–5% of gross sales | monthly | Yes | verified (2-pass) | Item 6, p. 19 | Franchisor may increase (to a cap of 5%), decrease, defer or suspend contributions at its discretion. |
| Minimum Monthly Local Advertising Spend | $2 (min $2,500/monthly) | monthly | Yes | verified (tie-break) | Item 6, p. 19 | Payable within 10 days of receipt of an invoice; any deficiency may be required to be contributed to the Brand Fund. Co-op contributions count toward this requirement. This entry is the TOTAL local advertising requirement. Item 6 p.19 says 'Co-op contributions count toward your required local advertising spend', so cooperative-advertising must carry overlaps_with: local-advertising (as Pass B has it) and this entry carries none. |
| Cooperative Advertising (Co-op) Contribution | Not stated | varies | No | verified (2-pass) | Item 6, p. 19 | Mandatory only if a Co-op is established in the franchisee's area; contributions credited dollar-for-dollar against the local advertising requirement. |
| Successor Franchise Fee | 50% of other | one time | No | verified (2-pass) | Item 6, p. 19 | Payable only if/when the franchisee renews via a successor franchise, subject to other renewal conditions. |
| Transfer/Assignment Fee | Tiered (base 50%) | one time | No | verified (tie-break) | Item 6, p. 19 | Payable before consummation of the transfer or sale; other conditions to transfer apply. Same Item 6 row that Pass B filed under id 'transfer-fee'. |
| Interest and Late Fees | $18 | varies | No | verified (tie-break) | Item 6, p. 20 | Payable on all overdue amounts and reports; interest runs from the date of non-payment or underpayment. Item 6 Note (1) also permits debiting 150% of the last Royalty Fee and Brand Fund Contribution if Gross Sales are not reported. |
| Audit Expenses | Not stated | per event | No | verified (tie-break) | Item 6, p. 20 | Only payable if you understate any payment owed to the franchisor by more than 2%. |
| Additional Initial Training/Participants | $1,000 | per event | No | verified (tie-break) | Item 6, p. 20 | Only for new or replacement personnel who must attend the Initial Training Program after the Studio opens, or for attendees beyond the maximum number the franchisor permits; travel and living expenses are additional. Distinct from Refresher Training Fees ($250/day/person, same page). |
| Refresher Training Fees | $250–$500 | per event | No | verified (tie-break) | Item 6, p. 20 | Payable only when the franchisor periodically requires the franchisee (or Principal Owner) and/or the Studio manager to attend supplemental or refresher training. |
| Conference Fees | $600–$1,500 (min $1,600/annual) | annual | Yes | verified (tie-break) | Item 6, p. 20 | Attendance at the Convention and the training summit is currently required; travel and living expenses are additional and at the franchisee's expense. The per-event expectations the FDD quotes are 2025 figures, which are stale relative to the disclosure year. Calculator audit 2026-09-03: amount_type is 'variable' with no minimum object, so the requires_assumption engine branch (src/lib/economics.ts) finds no numeric seed - the percent path needs amount_type==='percent' and the fixed-floor path needs amount_type==='fixed' or a minimum object - and this mandatory annual fee silently drops into 'undisclosed' instead of being computed. (p. 20; "Currently, we require attendance at our Convention (which we expect will be less") |
| On-Site Evaluation Fees | Not stated | per event | No | verified (tie-break) | Item 6, p. 21 | Payable only if the franchisor determines that on-site evaluations are or become excessive. |
| Insurance Costs | Not stated | per event | No | verified (tie-break) | Item 6, p. 21 | Payable only if the franchisee fails to obtain or maintain required insurance coverage and the franchisor elects to obtain or maintain coverage for it. Same Item 6 row that Pass B filed under id 'insurance-force-placed'. |
| Product and Other Promotional Item Purchases | $5,000–$11,000 (min $5,000/annual) | annual | Yes | verified (2-pass) | Item 6, p. 21 | Franchisee is required to make additional product purchases from designated/approved suppliers; a not-yet-implemented automatic-ship program could increase this. Calculator audit 2026-09-03: Same gap as conference-fees: amount_type 'variable' with no minimum object means the engine finds no seed and this mandatory, clearly-disclosed cost is never added to the modeled total. (p. 21; "Typically $5,000 to $11,000 per year, but may vary based on your purchases and i") |
| Advertising Collateral | $1,000–$5,000 | annual | No | verified (2-pass) | Item 6, p. 21 | Only payable if the franchisee requests multiple copies of advertising materials from the franchisor. |
| Technology Fee | $899 | monthly | Yes | verified (2-pass) | Item 6, p. 21 | |
| OTbeat Fees | $149–$500 | monthly | Yes | verified (tie-break) | Item 6, p. 22 | Begins on opening of the Studio; the OTbeat System must be purchased from the franchisor's affiliate. Item 6 adds that 'additional technology fees may be incurred from time to time', which is open-ended and not quantified. |
| Non-Compliance Fee | Not stated | per event | No | verified (tie-break) | Item 6, p. 22 | Assessed at the franchisor's discretion; due 10 days after notice of violation. |
| Management Fee | Not stated | varies | No | verified (tie-break) | Item 6, p. 22 | Only if the franchisee is in default, fails to maintain the Studio to the franchisor's standards, or fails to have a trained manager on staff. Interacts with the Item 15 requirement to have a trained manager on premises. |
| Indemnification | Not stated | varies | No | single-pass | Item 6, p. 22 | Owed only when franchisee actions cause a covered loss to the franchisor or its affiliates. [Listed by one verification pass only (A); not independently confirmed.] |
| Costs and Attorneys' Fees | Not stated | varies | No | single-pass | Item 6, p. 22 | Owed only if the franchisor prevails in enforcing the Agreements. [Listed by one verification pass only (A); not independently confirmed.] |
| Liquidated Damages (ADA) | $10,000 | one time | No | verified (2-pass) | Item 6, p. 22 | Payable only if the Area Development Agreement is terminated with Studios still undeveloped. |
| Performance Standards royalty shortfall | Not stated (min $24,000/annual) | annual | Yes | verified (tie-break) | Item 6, p. 23 | Payable within 10 days of invoice only for a year in which the Performance Standards are missed; also triggers a mandatory written business plan, and two consecutive misses allow loss of protected territory rights or termination. Year 1 runs from the date the Studio first opens for member workouts, not the calendar year. |
| OTbeat one-time setup fee | $250–$500 | one time | Yes | verified (tie-break) | Item 6, p. 22 | Payable once, on opening of the Studio, when the OTbeat System is purchased from the franchisor's affiliate. |
| Presale/Grand Opening Program | $36,000–$45,000 (min $36,000) | one time | Yes | single-pass | Item 11, p. 40 | Does not count toward any other advertising obligation, so it stacks on top of the minimum monthly local advertising spend. [Listed by one verification pass only (B); not independently confirmed.] Confirmed by the Item 7 table (p.24). |
Item 6 also imposes audit costs if reported payments are understated by more than 2%, on-site evaluation costs if evaluations become excessive, insurance premiums plus a $100 administrative fee if required coverage lapses, and indemnification and enforcement costs. A distinct financial obligation sits in Item 6 note 2: minimum Performance Standards of $300,000 of Gross Sales in year one, $350,000 in year two and $400,000 in year three and after. Missing a standard requires the franchisee to pay the franchisor the difference between royalties actually paid and royalties that would have been due at the standard, plus an approved improvement plan; missing it two years running can cost the protected territory or the franchise itself.
Financial performance (Item 19)
What the franchisor actually disclosedWho is represented: The 1,189 franchised Orangetheory studios that were open and operating for the whole 12-month period ended February 28, 2026. The franchisor states 1,201 franchised studios were in the system on February 28, 2026, and that a further 95 franchised studios permanently closed during the period — all of which had been open at least 12 months — and those closed studios are excluded. Two studios temporarily closed in 2025 because of storm damage are included. The earliest of the reported studios opened in 2011 and the latest in 2025. Affiliate-owned studios are not included.
Qualifications: The figures are gross sales, not earnings: the franchisor states plainly that the numbers do not reflect cost of sales, operating expenses or any other costs that must be deducted to reach net income. Nothing in Item 19 shows rent, payroll, royalties, the brand fund contribution, technology fees or debt service, all of which are substantial for this format. The data came from information franchisees reported to the franchisor rather than from audited statements. The reported population excludes the 95 franchised studios that permanently closed during the measurement period even though all had been open at least 12 months, so the averages describe surviving studios only and are likely higher than they would be if closures were included. Affiliate-owned studios are excluded. The measurement period ends February 28, 2026, three months after the December 31, 2025 fiscal year end used in Item 20, so the Item 19 and Item 20 populations do not line up exactly. The quartile counts are not stated; the population share of the system shown here is our arithmetic on the disclosed 1,189 of 1,201 franchised studios open on February 28, 2026. Percentages were rounded to the nearest whole percent and dollar amounts to the nearest dollar.
View full Item 19 disclosure and tables
Item 19 is a historical gross sales representation covering 1,189 franchised studios that traded for the full 12 months to February 28, 2026. Average total Gross Sales were $802,145 and the median was $750,643, with 44% of studios at or above the average. The spread is wide: the top quartile averaged $1,205,826 and the bottom quartile $475,979, and individual studios ranged from $156,118 to $2,870,191. A second table reports average monthly member counts of 444 system-wide, from 630 in the top quartile to 284 in the bottom. What Item 19 does not do is show what an owner keeps: there are no costs, no expenses, no margin and no net income anywhere in the item, and the 95 studios that closed permanently during the same 12 months are left out of the population.
| Metric | Subset | Value | Units | Period | Cite |
|---|---|---|---|---|---|
| Total Gross Sales — all reporting franchised studios 44% of units met or exceeded 518 of 1,189 studios met or exceeded the average. | All reporting franchised studios Average | $802,145 | 1,189 | 12 months ended Feb 28, 2026 | FDD p.65 |
| Total Gross Sales — all reporting franchised studios | All reporting franchised studios Median | $750,643 | 1,189 | 12 months ended Feb 28, 2026 | FDD p.65 |
| Highest total Gross Sales of any reporting franchised studio | All reporting franchised studios High | $2,870,191 | 1,189 | 12 months ended Feb 28, 2026 | FDD p.65 |
| Lowest total Gross Sales of any reporting franchised studio | All reporting franchised studios Low | $156,118 | 1,189 | 12 months ended Feb 28, 2026 | FDD p.65 |
| Total Gross Sales — top quartile by Gross Sales 33% of units met or exceeded The FDD does not state how many studios are in each quartile; it reports that 98 studios (33%) in this quartile met or exceeded the quartile average. Quartile range: $976,652 to $2,870,191. | Top quartile Quartile avg. | $1,205,826 | n/s | 12 months ended Feb 28, 2026 | FDD p.65 |
| Total Gross Sales — second quartile by Gross Sales 48% of units met or exceeded 142 studios (48%) in this quartile met or exceeded the quartile average. Quartile range: $750,932 to $975,601. | Second quartile Quartile avg. | $857,849 | n/s | 12 months ended Feb 28, 2026 | FDD p.65 |
| Total Gross Sales — third quartile by Gross Sales 48% of units met or exceeded 143 studios (48%) in this quartile met or exceeded the quartile average. Quartile range: $592,602 to $750,643. | Third quartile Quartile avg. | $670,024 | n/s | 12 months ended Feb 28, 2026 | FDD p.65 |
| Total Gross Sales — fourth quartile by Gross Sales 57% of units met or exceeded 169 studios (57%) in this quartile met or exceeded the quartile average. Quartile range: $156,118 to $592,502. | Fourth quartile Quartile avg. | $475,979 | n/s | 12 months ended Feb 28, 2026 | FDD p.65 |
| Median total Gross Sales — top quartile | Top quartile Quartile median | $1,136,849 | n/s | 12 months ended Feb 28, 2026 | FDD p.65 |
| Median total Gross Sales — second quartile | Second quartile Quartile median | $855,427 | n/s | 12 months ended Feb 28, 2026 | FDD p.65 |
| Median total Gross Sales — third quartile | Third quartile Quartile median | $668,456 | n/s | 12 months ended Feb 28, 2026 | FDD p.65 |
| Median total Gross Sales — fourth quartile | Fourth quartile Quartile median | $493,135 | n/s | 12 months ended Feb 28, 2026 | FDD p.65 |
| Average monthly member count — all reporting franchised studios 44% of units met or exceeded A member is counted once per month if they attend at least one class and hold a membership agreement with that studio; class participants without an agreement and fitness-aggregator visitors are excluded. 526 studios (44%) were at or above the average. | All reporting franchised studios Average | 444 | 1,189 | 12 months ended Feb 28, 2026 | FDD p.66 |
| Median monthly member count — all reporting franchised studios | All reporting franchised studios Median | 425 | 1,189 | 12 months ended Feb 28, 2026 | FDD p.66 |
| Highest monthly member count of any reporting franchised studio | All reporting franchised studios High | 1,390 | 1,189 | 12 months ended Feb 28, 2026 | FDD p.66 |
| Lowest monthly member count of any reporting franchised studio | All reporting franchised studios Low | 105 | 1,189 | 12 months ended Feb 28, 2026 | FDD p.66 |
| Average monthly member count — top quartile by Gross Sales 43% of units met or exceeded Quartiles are the same Gross Sales quartiles used in Section A. 129 studios (43%) were at or above this average. | Top quartile Quartile avg. | 630 | n/s | 12 months ended Feb 28, 2026 | FDD p.66 |
| Average monthly member count — second quartile by Gross Sales 49% of units met or exceeded 145 studios (49%) were at or above this average. | Second quartile Quartile avg. | 477 | n/s | 12 months ended Feb 28, 2026 | FDD p.66 |
| Average monthly member count — third quartile by Gross Sales 53% of units met or exceeded 157 studios (53%) were at or above this average. | Third quartile Quartile avg. | 386 | n/s | 12 months ended Feb 28, 2026 | FDD p.66 |
| Average monthly member count — fourth quartile by Gross Sales 54% of units met or exceeded 162 studios (54%) were at or above this average. | Fourth quartile Quartile avg. | 284 | n/s | 12 months ended Feb 28, 2026 | FDD p.66 |
System health (Item 20)
Outlets, openings, exits and transfers by fiscal year · U.S. onlyView detailed Item 20 tables and source notes
| Fiscal year | Start | Opened | Terminated | Not renewed | Reacquired | Ceased — other | End | Transfers | Company-owned (end) |
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 1,281 | 53 | 0 | 1 | 0 | 22 | 1,311 | 33 | 22 |
| 2024 | 1,311 | 27 | 0 | 8 | 0 | 47 | 1,283 | 43 | 15 |
| 2025 | 1,283 | 13 | 0 | 26 | 0 | 61 | 1,209 | 214 | 15 |
Disclosed 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness), Item 20, Tables 1–3 (PDF p. 67). The franchisor operates no studios itself; the non-franchised column is Affiliate-Owned Studios. Franchised counts moved from 1,281 at the start of 2023 to 1,209 at the end of 2025, a net loss of 72 studios over three years, with the decline accelerating: +30 in 2023, -28 in 2024 and -74 in 2025. Openings fell from 53 to 27 to 13 while exits rose from 23 to 55 to 87. No studios were terminated by the franchisor in any of the three years and none were reacquired by the franchisor; the exits are recorded as non-renewals (1, 8, 26) and 'ceased operations - other reasons' (22, 47, 61). Table No. 3 arithmetic foots to the Table No. 1 franchised totals in each year. Transfers to new owners jumped from 33 in 2023 and 43 in 2024 to 214 in 2025, concentrated in Georgia (39), Texas (35), Virginia (22), South Carolina (17) and Massachusetts (14). Exhibit H-2 lists 362 franchisees who left the system during 2025 or who had not communicated with the franchisor within 10 weeks of the issuance date. All tables are broken out by U.S. state and the District of Columbia.
Source data notes (15) — inconsistencies found in the FDD itself during verification
Our verification re-reads every table. Where the FDD's own printed tables disagree, we document the discrepancy rather than silently "fixing" it. Classes: B = arithmetic error in the source's derived column; C = the printed tables genuinely disagree; D = a legitimate definitional difference (e.g., transfers netted, explained by a footnote); E = unresolved ambiguity. Figures a material C/E issue puts in doubt are excluded from our derived metrics, scores and rankings.
- [D/minor] Table No. 2 2025: Pass A: transfers of franchised Studios jumped from 43 (2024) to 214 (2025), ~5x, concentrated in Georgia (39), Texas (35), Virginia (22), South Carolina (17), Massachusetts (14) and Oregon (12), with no narrative explanation in the FDD. — Not a discrepancy. I re-summed every state row of Table No. 2 (p.67-p.68): 33 (2023), 43 (2024) and 214 (2025), matching the printed Total rows exactly. The spike is a genuine disclosed figure, and Item 20 simply carries no narrative for it; nothing in the tables contradicts it.
- [E/minor] Table No. 3 2025: Pass A: the 'Ceased Operations - Other Reasons' column is never defined in Item 20, so it cannot be confirmed whether relocations, brand conversions or affiliate reacquisitions are netted into it. — Genuinely unresolvable from the document: Item 20 gives no definition or footnote for that column, and the only inference available is indirect (see the New York 2025 affiliate reacquisition below, which must sit inside it). The printed TOTAL rows are unaffected and are corroborated by Table No. 1, so this touches the composition of exits, not their count.
- [D/minor] Item 19 vs Table No. 1 2025: Pass A: Item 19 reports 1,201 franchised Studios as of February 28, 2026 (p.64) while Item 20 Table No. 1 reports 1,209 franchised at December 31, 2025 (p.67) - an apparent 8-unit gap. — Different as-of dates, not a conflict. Item 20 states at its head that 'All numbers are as of December 31 of the applicable year' (p.67); Item 19 measures the 12 months ended February 28, 2026 (p.64). A net -8 over two months is consistent with the 2025 exit run-rate. The unit count the site should use is the Item 20 TOTAL of 1,209.
- [D/minor] Table No. 3: Pass B: all three Table No. 3 TOTAL rows foot exactly and the year-over-year carry-forward is clean. — Independently confirmed on p.73. 1281+53-0-1-0-22=1311 (2023); 1311+27-0-8-0-47=1283 (2024); 1283+13-0-26-0-61=1209 (2025); and each year's end equals the next year's start. I also re-summed all 51 jurisdiction rows for each year and they equal the printed TOTAL row in every one of the seven columns. No issue.
- [D/minor] Table No. 1 vs Tables No. 3 and No. 4: Pass B: Table No. 1 agrees with Table No. 3 on franchised counts and with Table No. 4 on affiliate-owned counts for every year, and the Total Studios rows add correctly. — Confirmed. Franchised 1281/1311, 1311/1283, 1283/1209 (p.67 vs p.73); affiliate-owned 21/22, 22/15, 15/15 (p.67 vs p.73); 1209+15=1224 total at end of 2025. The TOTAL-row figures the site uses are cross-corroborated, which is why every issue below is scored minor.
- [D/minor] Table No. 2: Pass B: Table No. 2 state rows sum exactly to the printed totals for all three years (33, 43, 214). — Confirmed by re-summing all 35 state rows for each year (p.67-p.68). No issue.
- [D/minor] Table No. 3 vs Table No. 4 2025: Pass B: Table No. 3 reports 0 'Reacquired by Franchisor' in every state and year, yet Table No. 4 records one New York Studio 'Reacquired From Franchisee' by an affiliate in 2025. — A definitional difference the document itself explains, not a contradiction. Item 20's opening line (p.67) states: 'We do not operate any Studios. Our affiliates operate the "Affiliate-Owned Studios" described in this Item 20.' Table No. 4 (p.73) shows New York 2025: start 1, Reacquired From Franchisee 1, Closed 1, end 1. The franchisor itself reacquired nothing, so the Table No. 3 column is literally correct at 0. The unit is absorbed in New York's 2025 'Ceased Operations-Other Reasons' of 3 (p.71: 80+1-0-0-0-3=78), which is why that column overstates true closures by one unit in 2025. TOTAL rows unaffected.
- [A/minor] Table No. 3 2024: Pass B: the footnote '* 7 of these outlets were acquired from our affiliate' is printed under the Table No. 3 totals but, per Pass B, no asterisk appears anywhere in the table body. — Pass B extraction error. The asterisk is in the table body: Table No. 3, Florida 2024, 'Studios Opened' is printed as '8*' (p.70: 'Florida 2024 100 8* 0 1 0 5 102'). It is corroborated by Table No. 4 (p.73), where Florida 2024 shows 'Studios Sold to Franchisee' = 7. Correct reading: of the 8 Florida Studios opened in 2024, 7 were acquisitions from the affiliate rather than new construction, so the 2024 system TOTAL of 27 openings contains 7 conversions - relevant to any 'new openings' metric, though the printed total of 27 is right.
- [E/minor] Table No. 3: Pass B: terminations are reported as exactly zero in every state for all three years while 'Ceased Operations-Other Reasons' absorbs 22/47/61 units and non-renewals 1/8/26; Item 19 reports 95 permanent closures, so a zero-termination presentation understates involuntary exits. — Unresolvable from the document. The zeros are consistently printed and the TOTAL rows still foot and reconcile to Table No. 1, so there is no arithmetic or extraction error; but with no definition of 'Ceased Operations-Other Reasons' and no footnote, whether terminations were truly zero or were reclassified into that column cannot be determined. Total exits per year are firm at 23/55/87 (0+1+0+22, 0+8+0+47, 0+26+0+61); only their split between voluntary and involuntary is in doubt.
- [D/minor] Table No. 3: Pass B: the franchised base shrank in 2024 (-28) and 2025 (-74, a 5.8% decline), with openings falling 53 -> 27 -> 13 and exits rising 23 -> 55 -> 87. — Confirmed, no discrepancy. Exits computed as terminations + non-renewals + reacquired + ceased-other: 23 (2023), 55 (2024), 87 (2025); net change 53-23=+30, 27-55=-28, 13-87=-74, matching Table No. 1's +30/-28/-74 exactly. 74/1283 = 5.8%. The direction of growth is not in doubt.
- [D/minor] Table No. 2 vs Table No. 3 2025: Pass B: 214 transfers in 2025 is ~17% of the franchised base, concentrated in states that show few or no exits in Table No. 3, so it is ownership churn rather than closure. — Confirmed as a real, internally consistent figure: 214/1283 = 16.7% of start-of-year franchised units. Transfers are not an exit event and are correctly excluded from Table No. 3's status columns (a transferred Studio stays franchised), which is why Table No. 3 still foots. No double counting between the two tables.
- [D/minor] Table No. 5 2026: Pass B: Table No. 5 shows 85 franchise agreements signed but not open against only 15 projected new franchised openings in 2026, a 5.7x backlog, with Texas (19), Florida (12) and Ohio (9) largest. — Confirmed. Re-summed Table No. 5 (p.74): signed-but-not-open state rows total 85 and projected new franchised Studios total 15, both matching the printed TOTALS row; projected affiliate-owned openings are 0. The two columns measure different things (cumulative backlog vs one-year projection), so the ratio is a signal, not an inconsistency.
- [D/minor] Item 19 vs Item 20: Pass B: Item 19 counts 1,201 franchised Studios and 95 permanent closures for the 12 months ended February 28, 2026, against Item 20's 1,209 franchised at December 31, 2025 and 87 total 2025 exits. — Different measurement periods, not a conflict: Item 19's window is the 12 months ended February 28, 2026 (p.64) while Item 20 is calendar 2025 (p.67). Item 19's 95 also counts only permanent closures of franchised Studios, whereas Item 20's 87 is every exit type. Derived closure and attrition metrics must be built from Item 20's 87, not by mixing the two.
- [D/minor] Item 20 narrative / Exhibit H-2 2025: Pass B: Exhibit H-2 lists 362 franchisees who left the system or have not communicated within 10 weeks, far more than the 87 outlet exits recorded for 2025. — The Item 20 narrative on p.74 defines the broader population explicitly: franchisees 'who had a Studio terminated, cancelled, not renewed, or otherwise voluntarily or involuntarily ceased to do business ... or who have not communicated with us within 10 weeks of the issuance date'. The 362 count therefore includes current, non-communicating franchisees and cannot be read as an exit count. No table figure is affected.
- [D/minor] Item 20 (all tables): Pass B: Item 20 does not separate U.S. from international outlets; the tables are presented by state only, so the TOTAL rows were read as the whole system. — Correct handling, and the scope is unambiguous: every data row in Tables No. 2 through No. 5 is a U.S. state or the District of Columbia (51 jurisdiction rows per year in Table No. 3), so the printed TOTAL rows are U.S. totals. International Orangetheory Studios simply are not disclosed in Item 20, so the TOTAL rows are the correct basis for the site's unit, growth and attrition metrics; they should not be described as global system counts.
Company-owned outlets (Table 4)
| Year | Start | Opened | Reacquired from franchisee | Closed | Sold to franchisee | End |
|---|---|---|---|---|---|---|
| 2023 | 21 | 1 | 0 | 0 | 0 | 22 |
| 2024 | 22 | 0 | 0 | 0 | 7 | 15 |
| 2025 | 15 | 0 | 1 | 1 | 0 | 15 |
Read: How to read Item 20.
Ownership and operations
Items 11, 12, 15, 17Manager-run permitted Disclosed
- Source
- 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness)
- Document
- FDD 2026, issued 2026-03-31
- Item
- Item 15
- Page
- PDF p. 57
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640671
We do not require, but do recommend, that you (or your Principal Owner) personally supervise your Studio.
Item 15 recommends but does not require that the franchisee or its Principal Owner personally supervise the studio. What is required is a designated full-time, on-premises manager who devotes full working time to day-to-day operations, has completed the franchisor's management training or an approved equivalent, and is not engaged in any other business except passive investments. The manager need not hold equity. Item 1 separately requires the franchisee to designate a single individual Principal Owner responsible for supervising daily operations and empowered to bind the franchisee. Outside management companies and independent consultants may not run the studio without approval.
View operating requirements, territory and contract term
| Owner involvement (Item 15) | Manager-run permitted Disclosed
Item 15 recommends but does not require that the franchisee or its Principal Owner personally supervise the studio. What is required is a designated full-time, on-premises manager who devotes full working time to day-to-day operations, has completed the franchisor's management training or an approved equivalent, and is not engaged in any other business except passive investments. The manager need not hold equity. Item 1 separately requires the franchisee to designate a single individual Principal Owner responsible for supervising daily operations and empowered to bind the franchisee. Outside management companies and independent consultants may not run the studio without approval. Item 15 recommends but does not require that the franchisee or its Principal Owner personally supervise the studio. What is required is a designated full-time, on-premises manager who devotes full working time to day-to-day operations, has completed the franchisor's management training or an approved equivalent, and is not engaged in any other business except passive investments. The manager need not hold equity. Item 1 separately requires the franchisee to designate a single individual Principal Owner responsible for supervising daily operations and empowered to bind the franchisee. Outside management companies and independent consultants may not run the studio without approval. |
|---|---|
| Initial training | The Initial Training Program runs four days, currently held quarterly online through live and recorded sessions and/or in person at the franchisor's Boca Raton, Florida headquarters, with about 22.75 classroom hours covering owner role, fitness, operations, compliance, hiring, marketing, presales, software, real estate, construction, equipment and finance. All owners who sign the Franchise Agreement, including the Principal Owner, must attend; up to two more people such as the studio manager or lead trainer may attend management and operations portions if space allows. Three trainees are trained at no charge and each additional, repeat or replacement trainee costs $1,000 per session. Before opening there is also Studio Launch Training covering sales, operations and fitness programming for up to eight fitness coaches and four sales associates, and, for a first studio, Presales Launch Training that all owners and studio employees must attend. Disclosed
Studio Launch Training and Presales Launch Training are free if delivered by an area representative in the market; if the franchisor delivers them it may charge up to $5,000 for its trainers' travel and lodging and $2,500 for Presales Launch Training. The franchisee pays its own people's travel and living expenses. The program is led by a UFG senior manager with more than eleven years at the brand. |
| Multi-unit / development options | Area Development Agreements are offered for 3, 5 or more studios and have been sold since April 2025. The developer commits to a development schedule and pays the whole Development Fee at signing: $150,000 for 3 studios, $237,500 for 5, and $47,500 for each additional studio. Veterans pay $135,000 / $213,750 / $42,750, existing franchisees of Orangetheory or the affiliated Anytime Fitness, Basecamp Fitness, The Bar Method and Waxing the City brands pay $135,000 / $212,500 / $42,500, and existing franchisees who are also veterans pay $121,500 / $191,250 / $38,250. The Development Fee replaces the per-studio initial franchise fees and is credited against them; it is fully earned when paid and non-refundable. The first Franchise Agreement is signed at the same time as the development agreement, and later studios use whatever form of franchise agreement is current at the time. The development agreement cannot be renewed and the franchisee has no right to terminate it. Disclosed
Failing the development schedule can trigger termination of the development agreement and the franchise agreements with no refund, plus liquidated damages of $10,000 per undeveloped studio. The Franchise Agreement and the development agreement carry cross-default provisions. |
| Territory (Item 12) | Item 12 opens by stating the franchisee will not receive an exclusive territory under either agreement and may face competition from other franchisees, from outlets the franchisor owns, and from other channels or competing brands the franchisor controls. In practice a limited protection follows site approval: the franchisee first gets a non-exclusive Site Selection Area and must secure an accepted site within four months, after which the franchisor designates a Territory and inserts a description and map into the agreement. Within that Territory the franchisor and its affiliates will not operate or license another studio under the marks, except in Limited Access Locations such as hotels, hospitals, universities, military bases, office complexes, apartment buildings and private clubs. No minimum geographic or population size is specified, and the franchisor sets the boundaries using population, traffic, competitors and demographics. Protected rights survive unchanged while the franchisee is in compliance, but on default the franchisor may shrink the Territory or remove the protection. Disclosed
Territorial protection is also tied to the minimum Performance Standards in Item 6: missing them two years running lets the franchisor end protected territory rights, reduce the Territory, or terminate the franchise. The studio may not be relocated without written consent. Area Development Agreements come with a separate Development Territory that is protected only while the development schedule is met and that expires as individual studio territories are set. |
| Initial term | 10 years Disclosed
10 years from the effective date of the Franchise Agreement, extendable by mutual agreement to no more than 11 years to align with the site agreement. Area Development Agreement terms typically run 1 to 5 years depending on the number of studios. |
| Renewal | The franchisor does not renew the Franchise Agreement; it grants the right to acquire a successor franchise for one additional consecutive 10-year term on its then-current form of agreement, which may differ materially from the current form. Conditions include six months' notice, repairing and updating equipment, remodelling the premises, being free of breaches with the franchisor and its affiliates, keeping the right to occupy the premises, having satisfied all monetary obligations, accepting territorial changes, paying a successor franchise fee of 50% of the then-current initial franchise fee, signing a general release, and completing any required retraining. Area Development Agreements cannot be renewed or extended. Disclosed
|
| Staffing | The franchisee must employ a full-time, on-premises studio manager who devotes full working time to the studio and is not engaged in any other business. Pre-opening Studio Launch Training is sized for up to eight fitness coaches and four sales associates attending one session, which indicates the scale of the opening team the franchisor plans for, and the Item 7 additional funds figure covers three months of wages and payroll taxes including pay during the pre-opening training period. Disclosed
The reviewed document does not state required headcount, operating hours, or a staffing model beyond the manager requirement and the training class sizes; the eight coaches and four sales associates figure is a training capacity, not a stated staffing requirement. |
Risk and legal observations
Items 3, 4, 8, 15, 17 — summarized neutrallyLitigation: 3 matter(s) disclosed Disclosed · Bankruptcy: Disclosure present Disclosed
View legal disclosures, restrictions and guarantees
| Litigation (Item 3) | 3 matter(s) disclosed Disclosed Item 3 lists three matters, all concluded. One involves the Orangetheory system: a 2016 American Arbitration Association case brought by a franchisee and its owners against predecessor Ultimate Fitness Group and an individual over a Mesquite, Texas location, alleging the territory demographics did not meet the stated criteria and asserting breach of contract, unjust enrichment and a Florida deceptive trade practices claim. The franchisor's predecessor denied the allegations; the parties settled on terms that let the claimants transfer their studio to an approved buyer, with $34,200 reimbursed and transfer fees waived, and the arbitration was dismissed with prejudice in January 2017. The other two are 2009 state regulatory matters concerning affiliate The Bar Method entities, both about selling a franchise without registration: an Illinois Attorney General action resolved by consent decree with a permanent injunction, a rescission offer and $5,000 in penalties and costs, and a New York Assurance of Discontinuance with a rescission offer and a $2,500 payment. Neither operator accepted rescission. Both Bar Method matters pre-date the April 2024 transaction that made those entities affiliates of this franchisor. The item states no other litigation is required to be disclosed. |
|---|---|
| Bankruptcy (Item 4) | Disclosure present Disclosed One matter, involving an officer rather than the franchisor. Thomas Leverton, chief executive of parent companies Purpose Brands Holdings, LLC and Purpose Brands Intermediate, LLC, was chief executive of CEC Entertainment, Inc. from July 2014 to February 2020. About four months after he left, in June 2020, CEC Entertainment and its debtor affiliates filed for Chapter 11 protection in the Southern District of Texas. The plan of reorganization was confirmed in December 2020 and the debtors were discharged that same month. No bankruptcy of the franchisor or its predecessors is disclosed. |
| Personal guaranty | Required Disclosed
Every owner holding 15% or more of the legal or beneficial interest must personally guarantee the franchisee's obligations, and the franchisor may require owners below 15% to do the same. It may also require the guarantor's spouse to sign the Owner's Guaranty. Under an Area Development Agreement every individual with any direct or indirect ownership interest, and their spouse, must sign a Personal Guaranty and Agreement to be Bound. The cover pages carry a state-required spousal liability risk notice. |
| Non-compete | During the term the franchisee and its owners, and on request their immediate family and household members and executives, officers and directors, may not own, manage, work for, advise, lend to, lease to or otherwise support any Competitive Business, interfere with vendor relationships, divert business from the system, or act against the goodwill of the marks. Competitive Business is defined broadly as any athletic or fitness centre, health club, gym, exercise or aerobics facility, indoor or outdoor boot-camp style programme, or similar business offering fitness training through classes, trainers or equipment, plus any entity that franchises or licenses such businesses and any business where confidential information could be used against the franchisor. After expiry or termination the same restriction runs for two years within a 10-mile radius of the franchisee's studio and within a 10-mile radius of any other studio in operation or under development on the date the agreement ends. Disclosed
The 10-mile radius attaches to every other studio in operation or under development, not only the franchisee's own site, so the restricted area can be large in a developed market. The franchisor may also require owners and their family or household members to sign separate non-disclosure and non-competition agreements as a condition of the franchise. |
| Transfer restrictions | All transfers need the franchisor's approval. A transfer includes assigning the agreement or any interest in it, the licence to the marks and system, the studio or substantially all its assets, or any interest in the ownership or control of the franchisee entity. Conditions include paying all amounts owed to the franchisor and its affiliates, not being in default, signing a general release, paying the transfer fee, and staying bound by post-term obligations; the buyer must meet the franchisor's criteria, assume all obligations, pay an acceptable purchase price, complete training, renovate or modernise the studio and sign the then-current form of Franchise Agreement. The transfer fee is 50% of the then-current initial franchise fee for a Control Transfer and 25% for other transfers. The franchisor holds a right of first refusal, exercisable within 30 days of notice, to buy the interest on the same terms offered by a third party, and the same right applies on an owner's death or disability. On death or disability the interest must be transferred to an approved person within a reasonable time not exceeding six months. Disclosed
The franchisor's own right to assign the agreement is unrestricted. Item 20 records 214 transfers in 2025 against 33 in 2023 and 43 in 2024. |
| Termination / non-renewal | The franchisee can terminate only if the franchisor fails to cure its own default within 30 days of written notice, or shows reasonable evidence of a good-faith effort where a cure takes longer; there is no right to terminate an Area Development Agreement. The franchisor cannot terminate without cause, but the cure periods are short: five days for non-payment of amounts owed or missing reports, five days to obtain required insurance, and 30 days for other breaches. A long list of defaults is not curable at all, including failure to find a site and sign a lease in time, failure to open by the mandatory opening date, abandonment or loss of the site, misrepresentations to the franchisor, criminal conduct affecting the studio or the marks, misuse of confidential information, three defaults within any 12 months, repeated late payment of suppliers, insolvency, blocking the franchisor's access to accounting systems or revoking its electronic funds transfer authority, and failure to achieve the Performance Standards for two consecutive years. On termination or expiry the franchisee must stop operating, de-identify, hand over phone numbers, domains and social accounts, refund or assign member agreements, and the franchisor has an option to buy the studio, including leasehold rights, at fair market value. Disclosed
The Franchise Agreement and Area Development Agreement cross-default, and a default under an agreement with an affiliate or a designated vendor can also be a non-curable default. Under the lease addendum the franchisor may take possession of the premises if the franchise is terminated. |
| Supplier restrictions (Item 8) | Purchasing is tightly controlled. The franchisor estimates that items and services it requires be bought from it, its affiliates, designated suppliers or to its specifications account for about 90% of the total cost of equipping and stocking a new studio and about 70% of the cost of operating one. Affiliate OTF Sourcing is the only approved supplier of fitness equipment, free weights and cardio equipment, the proprietary OTbeat heart-rate monitors, straps and pods, certain branded retail merchandise and promotional items, and certain printed promotional materials. The franchisor itself is the only approved supplier of the management software and other required software. Designated or approved suppliers must also be used for marketing materials, many build-out materials including lighting, rubber flooring, lockers, tile, fixtures, paint and the reception desk, music licences, membership key tags and the mandatory retail start-up kit, and for architects and construction contractors. In the fiscal year ended December 31, 2025 the franchisor earned $18,105,601 from required purchases by franchisees, which it states was 16.1% of its total revenue of $112,755,606. OTF Sourcing separately earned $44,132,565 from required purchases plus $1,839,787 in supplier rebates, with rebates ranging from 1% to 18% of item price. Disclosed
The franchisor and its affiliates may keep all supplier rebates and allowances without restriction. It is not part of any purchasing cooperative and has negotiated no purchase arrangements as of the issuance date. It may in future require automatic monthly shipments of designated products at the franchisee's cost. Required insurance includes general liability of $1m per occurrence / $2m aggregate and professional liability of $1m per occurrence / $3m aggregate with specific sexual misconduct sub-limits. |
| Dispute resolution | All disputes go to binding arbitration under American Arbitration Association rules, subject to applicable state law. Arbitration is held exclusively in the county of the franchisor's headquarters, currently Palm Beach County, Florida. Actions for injunctive relief must be brought in the state or federal courts with jurisdiction over Palm Beach County, although the franchisor may also seek injunctive relief where the franchisee resides or the studio is located. Florida law governs, without regard to Florida conflict-of-laws rules. Disclosed
The cover pages carry a state-required out-of-state dispute resolution risk notice warning that arbitrating or litigating in Florida may cost more and may push a franchisee toward a less favourable settlement. |
- Minimum Performance Standards apply from year one: $300,000 of Gross Sales in year one, $350,000 in year two and $400,000 in year three onward. Missing a standard requires paying the franchisor the royalty shortfall as though the standard had been met, plus an approved improvement plan; missing two consecutive years permits loss of protected territory rights, reduction of the territory, or termination of the franchise.
- The cover pages carry a state-required risk notice stating that the franchisor's financial condition, as reflected in its Item 21 financial statements, calls into question its ability to provide services and support to franchisees.
- The cover pages carry a state-required risk notice about unopened franchises; Item 20 Table No. 5 shows 85 franchise agreements signed as of December 31, 2025 where the studio had not opened, against only 15 projected openings for 2026.
- Franchised studios declined for two consecutive years, from 1,311 at the end of 2023 to 1,209 at the end of 2025, while openings fell from 53 in 2023 to 13 in 2025 and exits rose from 23 to 87.
- Item 19 excludes 95 franchised studios that permanently closed during the 12 months to February 28, 2026, all of which had been open at least 12 months.
- Transfers of studios to new owners rose from 33 in 2023 and 43 in 2024 to 214 in 2025, and Exhibit H-2 lists 362 franchisees who left the system in 2025 or who had not been in contact within 10 weeks of the issuance date.
- The Technology Fee of $899 per month is subject to a compounding 10% annual increase, and unused prior-year increases may be caught up later, so the recurring technology cost can rise faster than 10% in a given year.
- The franchisor may increase the Brand Fund contribution from 3% to 5% of Gross Sales, which together with the 8% royalty and the 2% or $2,500 minimum local spend would take mandated marketing and royalty payments to 15% of Gross Sales.
- An independent franchisee association, Team Orange Independent Franchise Council, Inc., asked to be listed in the disclosure document alongside the franchisor-established Franchise Advisory Council.
Summaries are neutral paraphrases of the cited document and are not legal advice. Read the full Items in the current FDD and consult a franchise attorney.
Illustrative unit economics
Model estimateModel estimate — not disclosed by the franchisor, not a forecast. Fee lines below come from this brand's verified FDD fee schedule and are computed exactly as disclosed (each line shows its arithmetic). Operating-cost ratios are category placeholders we chose — every one is editable and labeled assumption. Results are illustrative arithmetic, not expected returns. Every figure here belongs to one of five labeled categories — disclosed inputs, model assumptions, unmodeled mandatory fees, user-editable assumptions, and exclusions — defined in our methodology.
| Line (annual) | Downside | Base | Upside |
|---|---|---|---|
| Revenue (AUV basis) | $475,979 | $802,145 | $922,467 |
| − Cost of goods / supplies assumption | $23,799 | $40,107 | $46,123 |
| − Payroll (excl. owner) assumption | $166,593 | $280,751 | $322,863 |
| − Occupancy assumption | $85,676 | $144,386 | $166,044 |
| − Other operating expenses assumption | $66,637 | $112,300 | $129,145 |
| − Royalty Fee disclosed 8% of gross sales = $64,172 |
$38,078 | $64,172 | $73,797 |
| − Brand Fund Contributions disclosed 3% of gross sales = $24,064 |
$14,279 | $24,064 | $27,674 |
| − Minimum Monthly Local Advertising Spend assumption $30,000/yr (seeded from the disclosed floor) |
$30,000 | $30,000 | $30,000 |
| − Conference Fees assumption $1,600/yr (seeded from the disclosed floor) |
$1,600 | $1,600 | $1,600 |
| − Technology Fee disclosed $899/month × 12 = $10,788 |
$10,788 | $10,788 | $10,788 |
| − OTbeat Fees disclosed $149/month × 12 = $1,788 |
$1,788 | $1,788 | $1,788 |
| = Modeled operating result before the items below (EBITDA-style) | $36,740 | $92,189 | $112,643 |
| − Manager compensation assumption | $60,000 | $60,000 | $60,000 |
| = Modeled result after manager compensation | −$23,260 | $32,189 | $52,643 |
| − Illustrative debt service assumption | $105,949 | $105,949 | $105,949 |
| = Illustrative pre-tax cash flow — before taxes, capital expenditures and unmodeled fees | −$129,209 | −$73,761 | −$53,306 |
| Modeled operating margin | 7.7% | 11.5% | 12.2% |
This modeled result is not owner income. It excludes: income taxes; capital expenditures and equipment-replacement reserves; working-capital needs; ramp-up losses; owner-specific costs; one-time and per-event fees (transfer, renewal, audit). It is illustrative arithmetic on stated assumptions, not a promise or forecast of what a franchisee earns.
Counted inside the operating-cost assumptions, not as separate fees:
- Product and Other Promotional Item Purchases (Item 6, p. 21): $5,000/yr (seeded from the disclosed floor) — this is a required purchase that is cost of goods, covered by the COGS % assumption; make sure that assumption is at least this large
Overlap control: Performance Standards royalty shortfall is a floor on “Royalty Fee” ($24,000/yr) — already exceeded at this revenue, so not an additional charge.
Every figure in this table is a model estimate built on the disclosed fee schedule plus labeled assumptions. Excluded: income taxes, owner draw, working-capital swings, capital expenditures, ramp-up losses in year one, one-time and per-event fees (transfer, renewal, audit), and the undisclosed-amount fees listed above. Read AUV vs. EBITDA vs. owner income before using this.
Sources and provenance
Primary source: 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness) · issued 2026-03-31. Find the FDD at Wisconsin Department of Financial Institutions — Franchise Registration Search. We cite source pages and do not redistribute PDFs.
View all sources, provenance and verification notes
| Document | Obtained from | Dates | Status |
|---|---|---|---|
| 2026 Franchise Disclosure Document — OTF Franchisor, LLC (Orangetheory Fitness) Registry file 640671 · 388 pages Cover states Issuance Date: March 31, 2026. Wisconsin registration effective 3/31/2026, status Registered. No amendment date appears on the cover; this is the newest document available in the registry. | Wisconsin Department of Financial Institutions — Franchise Registration Search | Issued 2026-03-31 Retrieved 2026-08-29 | Newest available at retrieval |
AI-assisted extraction from the archived FDD text, independently machine-verified against the cited source (two passes plus tie-break); not human-reviewed. Extracted 2026-08-29. Last updated 2026-09-05. AI-assisted extraction independently machine-verified against the cited source document (2026-09-02): two independent AI reading passes plus tie-break re-inspection of every disagreement; 73 of 77 material fields confirmed (69 with the exact page citation re-confirmed), 0 corrected, 0 unresolved, 4 confirmed not disclosed. No human has reviewed this profile. Fiscal year covered: FY2025 (Dec 31, 2025). See how we use AI and verify data.
Fields flagged as uncertain (6)
- franchisor.business_since — Item 1 does not state when the first Orangetheory studio began operating. We used 2010 because Item 1 says predecessor Ultimate Fitness Group offered and sold Studio franchises from July 2010; Item 19 separately notes the earliest studio in its population opened in 2011.
- franchisor.franchising_since — set to 2010 on the same basis. The current franchisor entity, OTF Franchisor, LLC, began offering unit franchises only in March 2019 and area development franchises in April 2025.
- item19.population_share_of_system — 99 is our arithmetic (1,189 reporting studios divided by the 1,201 franchised studios the FDD says existed on February 28, 2026), not a disclosed figure. Measured against the December 31, 2025 franchised count of 1,209 it would be about 98%.
- item19.metrics quartile entries — population_count is null because the FDD does not state how many studios sit in each quartile; only the number and percentage meeting or exceeding each quartile average are given.
- fees.cooperative — recorded as not_disclosed with a null value because the FDD describes cooperatives but sets no minimum or maximum contribution.
- investment.alternative_formats[0].franchise_fee — left null because the Area Development table's only line item is the Development Fee itself, which is the same as the total ($150,000 for 3 studios to $237,500 for 5).
Extraction notes (8)
- Document is the Wisconsin-registered FDD issued March 31, 2026, registration effective 3/31/2026, status Registered. No amendment is noted on the cover, so is_current is true.
- The non-franchised outlet column in Item 20 is Affiliate-Owned Studios, not franchisor-owned; the franchisor states it operates no studios. We mapped these to company_owned because the schema has no separate affiliate category, and flagged it in units.note.
- Item 20 Table No. 3 arithmetic foots exactly in all three years and agrees with the Table No. 1 franchised totals, and Table No. 1 year-end counts carry forward correctly to the next year's start.
- Item 19 measures the 12 months to February 28, 2026 while Item 20 measures fiscal years to December 31, so the two populations are three months apart and should not be reconciled directly.
- headline_auv is annual gross sales per franchised studio as disclosed, so no annualization was needed and item19.annualized_auv is omitted.
- No liquidity or net worth requirement appears anywhere in the reviewed text; both are recorded as not_disclosed rather than inferred.
- Item 3 includes two 2009 state regulatory matters concerning The Bar Method entities, which became affiliates only in April 2024 and are a different brand; they are counted in the total of three but distinguished in the summary.
- This FDD covers one concept only. Item 1 describes sister brands (Anytime Fitness, Waxing the City, The Bar Method, Basecamp Fitness) that are franchised by separate affiliates and are not part of these counts.
We do not host or redistribute FDD PDFs. Search the registry linked above by franchisor name to obtain the document. Found an error? Report a correction with the field and the primary source.
Compare Orangetheory Fitness
Other fitness & wellness franchises: Anytime Fitness, Club Pilates, F45 Training, Planet Fitness. See all →