Risk Score
Pending analysis
Investment Range
$373,500 - $885,000
Franchise Fee
$45,000
Total US Locations
6
Business Summary
OHM Fitness Franchise, LLC offers franchises for OHM Fitness® Studios, which are exercise and fitness studios. These studios provide semi-private and group fitness classes featuring electro muscle stimulation (EMS) through a lightweight body suit. This technology aims to stimulate muscle growth, offering a quicker and more effective alternative to traditional gym workouts. Each OHM Fitness® Studio also includes red light therapy recovery rooms.
Corporate History
OHM Fitness Franchise, LLC was organized as a Wyoming limited liability company on June 3, 2021. The company began offering OHM Fitness® franchises and area representative franchises in March 2022. OHM Fitness Franchise, LLC does not engage in any other business besides franchising its fitness concept. While OHM Fitness Franchise, LLC has not operated a studio itself, its affiliate, OHM 001, LLC, opened one OHM Fitness® Studio in Scottsdale, Arizona, in August 2022. The company's principals have prior experience owning and operating other fitness franchises.
Financial Overview
Investment Range
$373,500 - $885,000
Franchise Fee (Low)
$45,000
Franchise Fee (High)
$49,000
Royalty %
6%
Marketing %
1%
Equipment Costs (Low)
$127,500
Equipment Costs (High)
$510,000
Working Capital
$47,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion, Going concern qualification
Financial Health Notes
The audited financial statements for OHM Fitness Franchise, LLC as of December 31, 2023, reflect a net loss of approximately $3,763,000 and negative cash flows from operations of about $1,527,000. The company also had an accumulated deficit of approximately $2,876,000 at the end of 2023. These factors raise substantial doubt about OHM Fitness Franchise, LLC's ability to continue as a going concern, as noted by the auditors. The company's continued operation is dependent on its ability to sell more Area Development Agreements and franchises and to open new franchised locations. Management anticipates generating enough cash flow to cover costs and achieve positive cash flows in 2024.
Financing Details
OHM Fitness Franchise, LLC does not offer any direct or indirect financing to its franchisees. Additionally, the company does not guarantee any notes, leases, or other financial obligations that franchisees may incur.
Performance Metrics
Total US Locations
6
Franchised Units
4
Corporate Units
2
Avg Square Footage
1,925
Franchising Since
2022
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
OHM Fitness Franchise, LLC has no litigation to disclose. Item 3 of its Franchise Disclosure Document states that no litigation is required to be disclosed, indicating a clean legal record for the company.
Bankruptcy History
OHM Fitness Franchise, LLC has no bankruptcy history to report. Item 4 of its Franchise Disclosure Document states that no bankruptcy is required to be disclosed.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their OHM Fitness® Studio franchise, franchisees must provide written notice to OHM Fitness Franchise, LLC between 180 and 270 days before the current term expires. Franchisees and their owners must not be in default under their agreement or any other agreements with the franchisor or its affiliates. They are required to sign the franchisor's then-current form of franchise agreement and all related documents, as well as a general release. Additionally, franchisees must remodel or upgrade their studio to meet current brand standards and maintain the right to occupy their premises under their lease. Any other reasonable actions requested by the franchisor must also be completed.
Training & Support Program
Franchisor Assistance
Before opening, OHM Fitness Franchise, LLC licenses the necessary marks, approves the location, build-out, and design of the facility. The franchisor provides access to its confidential Brand Standards Manual, delivers the initial startup package (inventory, operating supplies, OHM® EMS body suits, and uniforms), and offers an initial training program for the managing owner, managers, and instructors. A representative will also provide up to five days of on-site assistance for the grand opening. Franchisees receive their own local webpage and any implemented membership programs. During operation, OHM Fitness Franchise, LLC offers ongoing guidance and recommendations, periodic training programs, maintains a corporate website listing franchisees, and manages a marketing fund. It may also develop new retail items, negotiate purchase agreements for discounted prices, and hold national or regional conferences.
Initial Training Hours
34
Training Location
Corporate headquarters in Scottsdale, Arizona
Ongoing Support
OHM Fitness Franchise, LLC provides ongoing guidance and recommendations to franchisees on improving marketing and operations. It offers periodic refresher or additional training courses, which are mandatory for managing owners, managers, and instructors. The franchisor maintains the OHM® corporate website, which lists all franchisees in good standing. It also establishes and implements the Marketing Fund to promote the brand. OHM Fitness Franchise, LLC may develop new retail items, negotiate purchase agreements for discounted prices, and optionally purchase items in bulk to resell to franchisees at cost plus a markup. The franchisor may also hold periodic national or regional conferences to discuss business issues and may create a franchise advisory council to gather suggestions.
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
Limited
Territory Size Requirements
OHM Fitness Franchise, LLC defines its franchisee territories based on specific demographic criteria. Each territory is designed to include approximately 10,000 households with an annual household income of at least $75,000.
Staffing Notes
OHM Fitness Franchise, LLC requires franchisees to determine appropriate staffing levels to comply with the franchise agreement and system standards. Franchisees can hire, train, and supervise employees. It is mandatory that only successfully trained instructors provide exercise training services at the studio. All instructors must obtain and maintain certification by the American Council on Exercise (ACE) and the National Academy of Sports Medicine (NASM), or equivalent. The managing owner can hire a manager to assist with daily on-site management, but the managing owner must still supervise the manager to ensure proper studio operation.