What is the primary source of revenue for a Fly Fitness studio?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
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Revenue
The principal source of revenue for a FLY FITNESS studio is membership fees. Monthly and annual fees are usually paid through electronic transfer of funds (EFT). Annual fees are billed to a member once per year, the time of which is dependent on their join date and membership type, as detailed in their membership agreement. A fitness facility will also earn additional revenue through prepaid class packages, prepaid Pilates sessions, beverage sales, boutique sales and cancellation fees.
Breakdown of revenue sources in 2023 from listed corporate outlets in the above chart includes:
- Memberships (contracts) 64%
- Credits (packages/intros) 23.7%
- Boutique 8%
- Penalty fees 2.4%
- Miscellaneous (Beverage, Shoe rentals, etc.) 1.8%
Unlimited monthly memberships make up a substantial portion of our existing corporate outlets. These contracts over recurring monthly revenue priced at $159 per month and require a 30-day cancellation notice, unless otherwise mandated by state or local law.
Notes regarding the above financial performance representation:
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- These results are unaudited.
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- These results represent sales of products and services which will be available for franchisees to sell.
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- As a Fr
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 41–42)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the principal source of revenue for a Fly Fitness studio is membership fees. These fees are typically collected through electronic fund transfers (EFT) on a monthly or annual basis, with the billing cycle dependent on the member's enrollment date and membership type, as specified in their membership agreement. In 2023, memberships accounted for 64% of revenue for corporate outlets. Fly Fitness studios also generate revenue from other sources, including prepaid class packages, prepaid Pilates sessions, boutique sales, beverage sales, and cancellation fees. Credits from packages and introductory offers made up 23.7% of revenue, boutique sales accounted for 8%, penalty fees contributed 2.4%, and miscellaneous sales (beverages, shoe rentals, etc.) made up 1.8%.
Unlimited monthly memberships are a significant revenue driver for existing corporate Fly Fitness outlets. These memberships are priced at $159 per month and require a 30-day cancellation notice, unless state or local laws dictate otherwise. This recurring monthly revenue provides a stable income stream for the studios. However, franchisees should be aware that they will be responsible for royalty fees of 7% of gross revenue and a brand fund contribution fee of up to 2% of gross revenue.
Prospective franchisees should carefully consider the mix of revenue streams and the potential impact of membership pricing and cancellation policies on their studio's financial performance. While the provided data offers insights into the revenue breakdown of corporate outlets, Fly Fitness cautions that individual results may vary, and there is no guarantee that franchisees will achieve similar financial outcomes. It is important to conduct thorough market research and develop a comprehensive business plan to assess the viability of a Fly Fitness franchise in a specific location.