Risk Score
Pending analysis
Investment Range
$358,900 - $986,000
Franchise Fee
$10,000
Total US Locations
10
Business Summary
Modo Yoga International, Inc. franchises the right to operate yoga studios under the name Modo Yoga. These studios offer hot yoga classes to the public. Each Modo Yoga studio is named after its territory, such as 'Modo Yoga Seattle.' The brand also develops and sells proprietary merchandise including yoga apparel, equipment, and accessories. Modo Yoga emphasizes a 'green, clean, hot yoga series' designed to stretch, strengthen, tone the muscles, detoxify the body, and calm the mind.
Corporate History
Modo Yoga International, Inc. was formed on September 25, 2012, as a British Columbia corporation. The company began offering franchises in 2013. Its former affiliate, Moksha Yoga Inc., operated licensed Moksha Yoga studios in Canada from 2004 to 2018 and in the United States from 2008 to 2012. Beginning in September 2013, all Moksha-licensed studios in the U.S. were rebranded as Modo Yoga and converted to Modo Yoga International, Inc.'s Franchise Agreement. Modo Yoga International, Inc. now acts as the franchisor for these former licensees. Moksha Yoga Inc. was dissolved in October 2018. In December 2023, Remora EQ Limited Partnership acquired Modo Yoga International, Inc., and its co-founders are transitioning out of business operations in 2024.
Financial Overview
Investment Range
$358,900 - $986,000
Franchise Fee (Low)
$10,000
Franchise Fee (High)
$25,000
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$270,000
Equipment Costs (High)
$795,650
Working Capital
$32,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Modo Yoga International, Inc. exhibits significant financial challenges with negative working capital in both 2022 and 2023, along with substantial accumulated deficits. As of October 31, 2022, the company had current assets of $189,861 and current liabilities of $472,179, resulting in negative working capital of $282,318. Its accumulated deficit was $772,006. These trends continued into the unaudited statements for October 31, 2023, showing current assets of $105,149, current liabilities of $457,012, and an even larger negative working capital of $351,863, with an accumulated deficit of $812,259. While the auditors did not issue a 'going concern' qualification in their opinion for the audited financials, the financial statements indicate these challenging financial conditions.
Financing Details
Modo Yoga International, Inc. does not offer any direct or indirect financing to its franchisees. This includes not guaranteeing any notes, leases, or other financial obligations for franchisees.
Performance Metrics
Total US Locations
10
Franchised Units
10
Corporate Units
0
Avg Square Footage
4,000
Franchising Since
2013
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
1
Litigation Summary
Modo Yoga International, Inc. reported one past legal matter. In August 2013, Modo Yoga and its former affiliate, Moksha, entered into a consent order with the state of Minnesota. This order addressed the offering and selling of an unregistered franchise, which violated state law. As part of the consent order, Modo Yoga was required to cease offering or selling franchises in Minnesota until proper registration was approved, offer rescission to the affected licensed studio in Minnesota, and pay a $1,000 civil penalty to the State of Minnesota. All these requirements have been fully satisfied, and the matter is now closed. Modo Yoga has no other litigation required to be disclosed.
Bankruptcy History
Modo Yoga International, Inc. has no bankruptcy history to disclose.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
Modo Yoga International, Inc. franchisees have the option to renew their franchise agreement for one additional 5-year term if they meet several conditions. Franchisees must provide written notice of their intent to renew between 6 and 9 months before the current term expires. They cannot be in default of any material agreement with Modo Yoga International, Inc. or its affiliates and must have paid all outstanding monetary obligations. Franchisees and any guarantors must sign a general release, as permitted by law, and pay a renewal fee of $5,000. A valid lease for the Studio premises for the renewal term must be provided, and the Studio must be updated to meet Modo Yoga International, Inc.'s then-current standards at the franchisee's expense, which may involve modifications or renovations. Franchisees must sign Modo Yoga International, Inc.'s then-current franchise agreement, which could include different fees or territory terms. Additionally, franchisees must not have received three or more default notices within any 24-month period during the current term, and they and their employees must complete any specified additional training. Finally, franchisees must meet the current qualification standards for new franchisees.
Training & Support Program
Franchisor Assistance
Modo Yoga International, Inc. provides several forms of assistance to its franchisees. Before a studio opens, Modo Yoga International, Inc. offers consultation on site selection, reviewing proposed locations for factors like zoning, demographics, traffic, and rent, and requires approval of the lease. It also provides reasonable assistance with the studio opening and a grand opening marketing campaign, which is at the franchisee's expense. Modo Yoga International, Inc. gives written specifications for furniture, fixtures, signage, and equipment, along with supplier criteria. After opening, Modo Yoga International, Inc. loans franchisees a copy of its confidential Operations Manual, provides specifications and quality control standards for supplies, and offers advice and consultation on studio development and operations. Additional training programs are also provided as needed. Franchisees are required to license business management software for scheduling and reservations from a designated supplier, which Modo Yoga International, Inc. has online access to for monitoring accuracy. The company also administers a Brand Fund, to which franchisees contribute 2% of Gross Revenues weekly, used for system-wide advertising, marketing, and brand promotion. Modo Yoga International, Inc. may provide promotional materials and sales training. Franchisees can use their own marketing materials if they comply with brand standards. Modo Yoga International, Inc. reserves the right to implement discount or gift certificate programs that all franchisees may be required to participate in.
Initial Training Hours
232
Training Location
Online/virtual
Ongoing Support
Modo Yoga International, Inc. offers ongoing support through various channels after a studio opens. Franchisees are loaned a copy of the proprietary and confidential Operations Manual, which includes mandatory specifications and operating procedures. The franchisor provides ongoing advice and consultation on studio development and operation. Franchisees and their personnel are required to attend additional training or retraining programs as specified by Modo Yoga International, Inc., and annually, at least one owner must attend the Annual General Meeting (AGM), or watch recordings if unable to attend. Directors and officers are also required to complete specific Modo Yoga teacher training courses within four years of opening. The Brand Fund, fueled by a 2% weekly contribution of Gross Revenues, is used by Modo Yoga International, Inc. for system-wide advertising, marketing, and brand promotion, including employing consultants, developing promotional materials, and compensating employees for related work. The franchisor also provides sales training and printed materials. Modo Yoga International, Inc. operates a website and may permit or require franchisees to participate in social media, subject to guidelines. Franchisees are required to license and maintain business management software for scheduling and reservations, to which Modo Yoga International, Inc. has online access for monitoring.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Hands-On
Territory Type
Protected
Territory Size Requirements
Modo Yoga International, Inc. defines its franchise territories based on the population density of the area. For populations up to 150,000, the territory has a 7.45-mile radius. In areas with 150,000 to 300,000 people, the radius is 6.21 miles. For populations between 300,000 and 500,000, the territory is a 4.97-mile radius. In areas with 500,000 to 700,000 residents, the radius is 3.72 miles, and for populations over 700,000, it's 3.10 miles. Modo Yoga International, Inc. may adjust these radii larger for low-density areas or smaller for high-density areas on a case-by-case basis.
Staffing Notes
Modo Yoga International, Inc. requires the franchisee or a designated Primary Person (or persons) to be actively involved in the day-to-day operation and management of the studio for the first year. After this initial period, the studio may be managed by a full-time Manager, who must successfully complete all required training. Modo Yoga International, Inc. reserves the right to require the franchisee or an acceptable individual to resume full-time operations if the Manager is deemed inadequate. Franchisees are responsible for hiring, training, and compensating all studio employees, and must maintain an adequate number of staff to ensure customer satisfaction. All mandatory classes offered at the studio must be taught by certified Modo Yoga teachers.