Risk Score
Pending analysis
Investment Range
$343,700 - $781,600
Franchise Fee
$30,000
Min Cash Required
$60,000
Total US Locations
6
Business Summary
FS8 Studios offer group fitness and low impact exercise training through a distinct system. This system includes a specific design, operational standards, quality control, training, and marketing. FS8 franchisees can also offer optional recovery amenities such as cold plunges and infrared saunas to their customers.
Corporate History
FS8 Inc. was incorporated in Delaware in November 2020 and began offering FS8 franchises in the United States in June 2021. The company specializes in franchising and supporting FS8 Studios, which provide group fitness and low impact exercise training. FS8 Inc. is part of a larger corporate family under F45 Training Holdings Inc., also known as FIT House of Brands. FS8 Inc. has international affiliates that also offer FS8 franchises in Australia, Asia, Europe, and the UK, as well as affiliates offering F45 and Vaura branded fitness studios.
Financial Overview
Investment Range
$343,700 - $781,600
Franchise Fee (Low)
$30,000
Franchise Fee (High)
$60,000
Minimum Cash Required
$60,000
Royalty %
7%
Marketing %
2%
Equipment Costs (Low)
$183,500
Equipment Costs (High)
$548,100
Working Capital
$80,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The FDD includes a special risk highlighting that FS8 Inc.'s financial condition, as shown in its financial statements, raises questions about its ability to provide services and support to franchisees. FS8 Inc. has reported significant net losses in the last three years, with a net loss of $567,220 in 2024, $1,547,556 in 2023, and $476,107 in 2022. The company also has negative working capital as of December 31, 2024, with current liabilities exceeding current assets. Its total liabilities significantly outweigh its total assets, leading to a substantial accumulated deficit. The financial statements indicate a reliance on affiliates to advance funds for working capital and operations. Additionally, FS8 Inc. has a full valuation allowance against its deferred tax assets, suggesting it does not expect to realize these assets due to an inability to generate sufficient future taxable income.
Financing Details
FS8 Inc. does not offer any direct or indirect financing to its franchisees, nor does it guarantee any loans or obligations for them. However, FS8 Inc. has a relationship with Swoop Funding, a third-party platform that helps franchisees find financing from various lending institutions. FS8 Inc. can earn a fee equal to 20% of any commission Swoop generates from assisting a franchisee, but FS8 Inc. does not provide the financing itself and is not involved in the terms of the loans.
Performance Metrics
Total US Locations
6
Franchised Units
5
Corporate Units
1
Avg Square Footage
2,650
Franchising Since
2021
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
5
Litigation Summary
FS8 Inc. and its affiliates have been involved in five notable legal matters. One case, Functional HIIT Fitness, LLC v. F45 Training, Inc., et al., filed in January 2022, involved FS8's affiliate F45 Training Incorporated and certain officers, including FS8 Inc.'s Chief Revenue Officer. The lawsuit alleged breach of contract, fraudulent inducement, and violations of franchise investment laws. The Chief Revenue Officer was dismissed from the case in September 2023, and F45 Training Incorporated settled confidentially with the plaintiff in June 2024. Additionally, FS8 Inc.'s affiliate F45 Training Incorporated was subject to two consent orders with the Washington State Department of Financial Institutions. The first, effective October 2022, addressed allegations of untrue statements in FDDs, requiring payments before FDD delivery, and restricting franchisee associations. F45 Training Incorporated paid $15,437.50 and offered rescission to seven franchisees. The second, effective December 2023, concerned inaccurate descriptions of the first consent order in later FDDs, resulting in F45 Training Incorporated paying $2,675 in investigative costs. In August 2023, F45 Training Incorporated also entered a settlement agreement with the Michigan Department of Attorney General regarding alleged unauthorized financial performance representations by its employees, agreeing to pay $95,000 for franchisee compensation and make rescission offers. Lastly, in October 2023, F45 Training Incorporated signed a consent order with California authorities, addressing unlawful financial performance representations and failure to disclose public figure endorsements. F45 Training Incorporated agreed to pay a $152,500 administrative penalty and offer rescission to certain franchisees.
Bankruptcy History
FS8 Inc. has no bankruptcy history to disclose.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, FS8 Inc. franchisees must provide written notice between six and nine months before the initial term ends. They must also refurbish or upgrade their studio to meet current brand standards, ensure they are not in default of their franchise agreement or any other agreements with FS8 Inc. or its affiliates, and pay all outstanding money owed. Franchisees must also maintain the right to their current location, pay a renewal fee, sign a general release of claims, and comply with FS8 Inc.'s then-current qualifications and training requirements. They will also need to sign the then-current form of renewal franchise agreement, which may have different terms than their original contract.
Training & Support Program
Franchisor Assistance
FS8 Inc. provides comprehensive support to its franchisees. Before opening, FS8 Inc. assists with site selection, providing guidelines and analysis, and offers prototypical design plans for the studio. Franchisees receive access to operational manuals, are supplied with an Equipment Pack for their studio, and get a list of approved suppliers. They also undergo an in-person induction seminar in Austin, Texas, and complete an online initial training program. FS8 Inc. provides New Studio Project Management services, covering aspects from site due diligence and architectural design to construction management and equipment logistics. After opening, FS8 Inc. conducts periodic operational evaluations, manages the Brand Fund and Marketing Fee contributions for advertising, and provides ongoing operational advice and updated materials. FS8 Inc. also, at its discretion, makes available merchandise, equipment, and other products for resale, as well as customer systems and programs. Franchisees receive updated lists of approved suppliers and may be offered additional training programs and seminars, though these may incur fees. FS8 Inc. also provides access to proprietary software.
Initial Training Hours
91
Training Location
Austin, Texas and Online/virtual
Ongoing Support
After a FS8 Studio opens, FS8 Inc. provides ongoing support through periodic evaluations of the franchisee's operations. FS8 Inc. manages marketing fee payments for local advertising, administers the Brand Fund, and provides advertising and promotional materials. Franchisees receive ongoing advice and written materials, including access to updated operational manuals, regarding business management and new developments. FS8 Inc. also, at its discretion, makes available merchandise, equipment, and other products for resale, as well as customer systems and programs. Franchisees receive updated lists of approved suppliers and may be offered additional training programs and seminars, though these may incur fees. FS8 Inc. also provides access to proprietary software.
Franchise Requirements
Ideal Candidate Profile
FS8 Inc. seeks franchisees (or their designated Key Person) who will maintain at least a 10% ownership interest in the franchise. The Key Person must be approved by FS8 Inc. and is generally expected to be actively involved, dedicating full time and best efforts to supervising the studio's operations and not engaging in other businesses, unless a General Manager is appointed. Even with a General Manager, the Key Person remains ultimately responsible. Both the Key Person and any General Manager must meet FS8 Inc.'s qualifications and training requirements. Franchisees should also be prepared to ensure their studio has at least three certified trainers.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Full-Time
Territory Type
Protected
Staff Count
4
Territory Size Requirements
FS8 Inc. franchisees are granted a Protected Area that typically covers a population of at least 15,000 people, based on the most recent U.S. census data. The actual size and shape of each Protected Area will vary among franchisees.
Staffing Notes
FS8 Inc. franchisees must staff their studio with at least one Studio Manager to coordinate daily operations and at least three certified trainers at all times. Franchisees are solely responsible for all employment-related decisions, including hiring, firing, compensation, and scheduling. They must ensure their employees maintain good customer relations, provide competent service, and meet any minimum standards outlined in the operational manuals.