Risk Score
Pending analysis
Investment Range
$337,720 - $511,455
Franchise Fee
$30,000
Total US Locations
219
Business Summary
CycleBar operates fitness studios that provide indoor cycling classes and other related exercise classes. CycleBar uses designated equipment and incorporates technology like proprietary music and performance metric databases. The studios feature a specific interior design and display procedures as part of the CycleBar system.
Corporate History
CycleBar Franchising SPV, LLC was formed on March 6, 2023. The CycleBar franchise system was initially offered in January 2015 by CycleBar Franchising, LLC (the "Predecessor"). As part of an internal reorganization effective March 15, 2023, CycleBar Franchising SPV, LLC acquired the trademarks and intellectual property related to the CycleBar system from its Predecessor. The current franchisor began selling franchises for CycleBar studios on April 4, 2023, and later acquired existing franchise agreements from its Predecessor by December 31, 2023. The company is a subsidiary of XPOF Assetco, LLC, which is controlled by Xponential Fitness, Inc., a publicly traded company.
Financial Overview
Investment Range
$337,720 - $511,455
Franchise Fee (Low)
$30,000
Franchise Fee (High)
$60,000
Royalty %
7%
Marketing %
2%
Equipment Costs (Low)
$314,100
Equipment Costs (High)
$458,535
Working Capital
$17,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
CycleBar's financial statements are consolidated with XPOF Assetco, LLC, which reported a net loss of $4.476 million for the period from March 6, 2023, to December 31, 2023. The company relies significantly on its Member (Xponential Fitness LLC) and affiliates for operations, including centralized cash collection and management support. The financial statements may not fully reflect standalone operations. A receivable of $11.690 million from the Member is recorded, with no plan for repayment in the foreseeable future, indicating reliance on the parent company's continued support. The auditor's report noted an 'Emphasis of Matter' regarding these related-party transactions, but it did not modify the unqualified opinion on the financial statements.
Financing Details
CycleBar does not offer direct financing. However, it facilitates indirect financing for its franchisees through third-party providers like Amerifund and Navitas for the Fitness Equipment & Initial FF&E Package. These providers offer lease-to-own or comparable arrangements, typically for amounts ranging from $141,000 to $154,000, with terms from 1 to 5 years. Interest rates for these third-party loans can range from 6.9% to 18%. Associated finance charges include documentation and UCC filing fees ($800 to $1,200 for Amerifund) and a 1% origination fee plus documentation fee ($595 to $1,500 for Navitas). CycleBar receives a $500 rebate from Amerifund for each deal they finance and also benefits from these third-party providers sponsoring its annual franchise convention.
Performance Metrics
Total US Locations
219
Franchised Units
218
Corporate Units
1
Avg Square Footage
1,750
Franchising Since
2015
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
5
Litigation Summary
CycleBar has several pending lawsuits involving its parent company and affiliates. Four lawsuits were filed against CycleBar's affiliates and parent company in 2023 and 2024. Two of these, filed in August and November 2023, are from former franchisees of AKT and Yoga Six (affiliate brands of CycleBar's parent), alleging violations of pre-sale disclosure obligations, fraudulent inducement, breach of good faith, and unfair trade practices, seeking rescission and damages. Two additional securities-related lawsuits were filed in February and March 2024 against the publicly traded parent company, Xponential Fitness, Inc., and some of its officers, alleging omissions and misstatements of material facts in public documents, breach of fiduciary duties, and mismanagement. All these pending cases are currently in the initial pleadings stage. In 2018, a lawsuit filed by a former CycleBar franchisee alleging fraudulent misrepresentation was amicably settled, with CycleBar's predecessor acquiring equipment from the franchisee and mutual releases exchanged.
Bankruptcy History
CycleBar has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew a CycleBar franchise, franchisees must agree to a successor franchise agreement that may contain materially different terms, maintain or secure an approved location, remodel their studio to meet current system standards, have substantially complied with the previous agreement, pay a $10,000 renewal fee, provide written notice 90 to 180 days before the current term expires, and sign a general legal release.
Training & Support Program
Franchisor Assistance
CycleBar provides extensive assistance to its franchisees, starting with pre-opening support. This includes guidance on site selection, lending an operations manual, providing specifications for studio layout and design, and supplying a list of approved suppliers for equipment, furnishings, and signs. CycleBar also consults on establishing a pre-sales phase and an opening support program. For training, CycleBar offers an Initial Training Program for the owner or operating principal and a Designated Manager, typically lasting 2 to 3 days at its corporate headquarters in Irvine, CA, with no tuition fee for initial attendees. Instructors must complete an online/remote Instructor Bootcamp, which is approximately 26.5 hours long and costs $5,000 for initial instructors, or $350 for subsequent instructors. Upon request, CycleBar may provide discretionary on-site grand opening assistance for a $2,500 fee. Ongoing support includes specifying and approving equipment and suppliers, offering continuing advisory assistance, managing the Brand Development Fund for marketing, and potentially requiring franchisees to attend up to five days of additional/refresher training annually (without charge if required by CycleBar, but fees apply if requested by the franchisee or for remedial training). Franchisees must use CycleBar's designated computer system, including POS/inventory, audio-visual equipment, and studio management software, and must maintain and upgrade this system as required, allowing CycleBar access to data.
Initial Training Hours
24
Training Location
Corporate headquarters in Irvine, CA
Ongoing Support
After opening, CycleBar provides ongoing support to its franchisees through various channels. CycleBar specifies or approves equipment and suppliers for the studio and offers continuing advisory assistance and information as needed. Franchisees may receive additional or refresher training, up to five days annually, at a designated facility; this training is provided without charge if mandated by CycleBar. However, if a franchisee requests additional training or if remedial training is necessary due to non-compliance, fees may apply. CycleBar manages the Brand Development Fund, to which franchisees contribute, for system-wide marketing and advertising campaigns. Franchisees also receive guidance on local marketing activities and are required to participate in the Opening Support Program and potential regional cooperatives. CycleBar requires franchisees to maintain and upgrade a designated computer system and software, including a POS/inventory system and audio-visual package, and reserves the right to access the data from these systems.
Franchise Requirements
Ideal Candidate Profile
CycleBar seeks a franchisee who, if an entity, designates an Operating Principal with authority to act on its behalf and guarantees performance. While personal supervision of the studio is recommended, it is not strictly required, as franchisees may appoint an approved Designated Manager to handle daily operations. Both the Operating Principal (if not personally supervising) and any Designated Manager must complete specific initial training modules to the franchisor's satisfaction. Beyond these structural and training requirements, the FDD does not explicitly outline preferred personal characteristics, industry background, or years of experience for an ideal candidate.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
absentee-allowed
Territory Type
limited
Territory Size Requirements
CycleBar grants a designated territory around the approved studio location. This territory typically covers a maximum of 50,000 people within approximately a two-mile radius. However, if the studio is located in a major metropolitan downtown area or a similar central business district, the territory may still contain up to 50,000 people but could be limited to a smaller geographic area, ranging from a two-block to two-mile radius, at CycleBar's discretion. The boundaries of these territories can be defined using zip codes, streets, landmarks, or county lines, or delineated on a map. Population data for territory determination may come from territory mapping software or public sources like the U.S. Census Bureau.
Staffing Notes
CycleBar requires all instructors providing approved services at a studio to complete the proprietary Instructor Bootcamp, a 26.5-hour training program. Franchisees must ensure at least one Authorized Instructor is on-site at all times the studio is open. The franchisee, or an approved Designated Manager, must complete specific initial training modules to manage day-to-day operations. Franchisees are solely responsible for all aspects of employee management, including hiring, discipline, wages, and compliance with applicable labor laws. CycleBar reserves the right to terminate the agreement if unapproved instructors are used and may charge a non-compliance fee for such violations. CycleBar also reserves the right to specify the minimum number of Authorized Instructors required at the studio during operation.