1,000 Units and Counting for Orangetheory Fitness
Orangetheory celebrates the opening of its 1,000th studio, this one in Portland, Oregon. Pictured, left to right, are Kevin Keith, Paul Reuter, Dave Hardy, CEO Dave Long, franchisee Jamie Weeks, Jerome Kern and Dave Carney.
When I met Dave Long at one of Orangetheory’s studios in Houston in November, the fitness franchise had just crossed the 800-unit mark and Long, its CEO, was talking about one week when the brand opened 11 locations, calling it “kinda crazy.” Ranked No. 1 on our 2018 Franchise Times Fast & Serious list of the smartest-growing brands, Orangetheory has kept up the pace, cutting the ribbon last week on its 1,000th location.
The company has more than 500 studios in its development pipeline, and, said Long, “We’re well on our way to our goal of operating 2,500 studios—serving 2.5 million members—by 2020.”
The 1,000th unit opened in Portland, Oregon, the city’s third, and adds to the unit count for franchisee Jamie Weeks. His Honors Holdings owns and operates 52 Orangetheory studios, with 13 more in development, across the U.S. And last year, Weeks signed on as a master franchisee to open 70 studios over the next decade throughout Southern England, including at least 30 studios in London.
Long, who was a VP at Massage Envy while the concept rocketed from 20 stores to 800, told me at that company there was a “relentlessness around the franchise development process” that he’s carried with him to Orangetheory, along with full confidence in the model he saw in action at Massage Envy with real results.
“We are big believers in the area representative model,” Long said. “With that model, it supports us not just for rapid growth, but making it sustainable. There’s a bigger commitment level with the area representatives.”
In purchasing the rights to a specific territory, an Orangetheory area representative solicits and screens prospective franchisees and is paid 40 percent to 50 percent of the initial franchise fees received from franchises sold in their territory. Area reps also receive 33 percent of royalties collected from franchisees in that territory.
In the three-year span from 2014 to 2016, Orangetheory grew its unit numbers by 218 percent and its systemwide sales increased 351 percent. The average gross revenue of franchise studios in operation for more than a year exceeds $1 million, according to the company’s franchise disclosure document, and studios have an average of 751 active members paying anywhere between $59 and $159 per month. Orangetheory also focuses on a robust presale of memberships, signing up anywhere from 400 to 450 members before a location opens.
“We’re able to really leverage that we have busy studios right from the start,” said Long.
Orangetheory’s 1,000 studios are in 49 states and 18 countries.