ORANGETHEORY Franchise Review (2026): Costs, Fees, Revenue Potential

• Category: Health & Wellness
• Initial Investment: $150,000 to $237,500
• Franchise Fee: $59,950
• Royalty: 8% of Gross Sales
• Marketing / Ad Fee: 3% Brand Fund contribution, currently; may increase up to 5%
• Key additional recurring fees: Minimum monthly local advertising spend of the greater of 2% of prior month Gross Sales or $2,500; technology-related monthly fees indicated at $899
• Number of locations: 1,283 franchised studios at year-end 2024
• Best Fit: Manager-led owner with active oversight rather than a passive investor

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The FDD estimates initial investment at $150,000 to $237,500 for a single studio, with the $59,950 initial franchise fee as a major upfront component. The disclosure also indicates additional funds of $115,744 to $133,744, which suggests a meaningful working-capital and opening-period cash requirement.

This appears to be a mid-range startup cost in absolute terms based on the disclosed range, but the operating model also looks equipment- and staffing-dependent, which can make the practical capital commitment more substantial than the headline franchise fee alone.

Major cost drivers visible in the disclosure include:

• Initial franchise fee
• Additional funds / opening capital
• Equipment-heavy studio setup
• Training-related costs for extra attendees or replacement personnel
• Required local advertising spend and technology-related fees once operating

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Key recurring fees disclosed include:

• Royalty fee: 8% of Gross Sales, paid weekly
• Brand Fund contribution: currently 3% of Gross Sales, paid monthly; may increase up to 5%
• Minimum monthly local advertising spend: greater of 2% of prior month Gross Sales or $2,500
• Technology-related monthly fee: indicated at $899
• Product purchases: typically $4,000 to $6,000 per year
• Cooperative advertising: amount determined by the co-op, if formed
• Conference, training, audit, transfer, renewal, insurance, and late fees: may apply depending on circumstances

Overall, the fee stack is material. The base royalty and brand fund alone total 11% of Gross Sales at current rates, before local advertising, technology, product purchases, and other operating expenses.

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Yes, the FDD includes Item 19 financial performance data, but it reports gross revenue, not profit.

For the 1,256 franchised studios that were open and operating for the full 12 months ended December 31, 2024, the disclosure reports:

Systemwide gross revenue

• Average Gross Revenues: $857,377
• Median Gross Revenues: $807,976
• Range: $195,303 to $3,009,183

By quartile

Top quartile (314 studios)

• Average: $1,286,123
• Median: $1,206,093
• Range: $1,031,738 to $3,009,183

Second quartile (314 studios)

• Average: $911,340
• Median: $906,489
• Range: $808,296 to $1,030,566

Third quartile (314 studios)

• Average: $719,474
• Median: $721,620
• Range: $636,296 to $807,657

Bottom quartile (314 studios)

• Average: $512,572
• Median: $532,683
• Range: $195,303 to $635,460

What the spread suggests

The spread is wide. The top quartile average of $1.29 million is more than double the bottom quartile average of $512,572, and the full system range runs from under $200,000 to just over $3.0 million in gross revenue. That indicates meaningful location-to-location variability.

The sample is large, but it is not all-inclusive. The disclosure states there were 1,283 franchised studios in the system as of December 31, 2024, while the Item 19 table includes 1,256 studios that operated for the full year and excludes 55 studios that permanently closed during 2024. That exclusion matters when interpreting the figures.

The disclosure does not clearly establish whether these Item 19 figures are audited. In any case, gross revenue does not indicate profitability, because it does not show rent, payroll, occupancy, marketing, equipment, financing, or other operating costs.

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• Customer model: B2C fitness studio
• Revenue pattern: Likely recurring member-driven revenue, though the disclosure does not break revenue into membership versus other categories
• Operating format: Physical studio with on-premises management
• Staffing: A full-time, on-premises manager is required; coaches and sales staff are also implied by the training structure
• Operational characteristics: Technology appears significant, and the model appears equipment-heavy

This is not presented as a passive ownership structure. The owner does not have to personally supervise the studio, but the business still requires active oversight and a dedicated manager.

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Advantages

• Item 19 includes revenue data for 1,256 full-year franchised studios, which is a substantial operating sample
• The system had 1,283 franchised studios at year-end 2024, indicating an established franchise base
• Quartile and median figures are disclosed, which helps show revenue dispersion rather than relying on a single average
• The owner is not required to personally supervise the studio if a qualified full-time manager is in place

Considerations

• The recurring fee load is meaningful: 8% royalty + 3% brand fund currently, plus local advertising and technology-related fees
• The territory is non-exclusive, which can limit geographic protection
• Revenue variation is significant across the system, with a wide gap between top and bottom quartiles
• Item 19 excludes 55 studios that permanently closed during 2024, so the reported sample does not include all outcomes
• The model appears operationally intensive, with required on-site management, staffing, training, and equipment needs

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This franchise may fit an owner who is comfortable overseeing a manager-led studio business with ongoing staffing, marketing, and system compliance requirements. It may also fit someone who wants a structured operating model and is prepared for recurring percentage-based fees.

It likely does not fit someone seeking a low-touch or low-complexity business, or someone who needs exclusive territorial protection. It may also be a mismatch for buyers who want a low fixed-cost operating model.

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• The franchise agreement provides for a 10-year initial term, which creates a long commitment period
• Arbitration proceedings are to be held in Palm Beach County, Florida, according to the disclosure’s dispute resolution summary
• Most defaults are curable, but the disclosure also lists non-curable defaults, including certain misrepresentations or omissions
• Brand Fund contributions may increase from 3% up to 5% of Gross Sales, which could raise the ongoing fee burden
• Transfer, renewal, audit, and conference-related charges can add cost beyond the standard royalty and advertising obligations

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ORANGETHEORY presents a studio-based fitness model with a large operating base and a meaningful set of disclosed gross revenue figures. The main tradeoff is that the concept shows substantial revenue potential at some locations, but it also comes with a layered fee structure, high operating involvement, non-exclusive territory, and wide variation in unit-level revenue.

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