Risk Score
Pending analysis
Investment Range
$880,600 - $1,534,900
Franchise Fee
$35,000
Min Cash Required
$20,000
Total US Locations
8
Business Summary
Pause operates wellness studios that provide a unique blend of services focused on stress reduction, athletic recovery, and overall health optimization. Pause studios offer various therapies such as flotation, vitamin infusion, cold plunge/contrast, sauna, LED red-light, compression, and NAD+ therapy. Cryogenic therapy and other related services and products may also be included, all delivered in a clean, modern, and safe environment.
Corporate History
Pause Franchisor Inc. was formed as a Delaware corporation in January 2022, and it began offering franchises for its wellness studios in July 2022. Although Pause Franchisor Inc. does not operate any of its own studios, its affiliates have been operating Pause studios since August 2016 in Los Angeles, California. These affiliate-owned locations have expanded to five studios in the Los Angeles area, with the most recent opening in December 2023. The company has developed a unique system for operating wellness studios.
Financial Overview
Investment Range
$880,600 - $1,534,900
Franchise Fee (Low)
$35,000
Franchise Fee (High)
$60,000
Minimum Cash Required
$20,000
Royalty %
7%
Marketing %
1%
Equipment Costs (Low)
$190,000
Equipment Costs (High)
$407,000
Working Capital
$45,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Going concern qualification
Financial Health Notes
Pause Franchisor Inc.'s financial statements indicate that the company has faced consistent operating losses and negative cash flows since it started. These financial challenges raise significant questions about Pause Franchisor Inc.'s ability to continue operating as a viable business and to provide the necessary services and support to its franchisees. The financial statements do not include any adjustments that might be required if the company were unable to overcome these uncertainties.
Financing Details
Pause Franchisor Inc. does not offer any direct or indirect financing to its franchisees. Additionally, Pause Franchisor Inc. does not guarantee any franchisee's notes, leases, or other financial obligations.
Performance Metrics
Total US Locations
8
Franchised Units
3
Corporate Units
5
Avg Square Footage
3,000
Franchising Since
2022
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Pause Franchisor Inc. has no litigation to report in Item 3 of its FDD.
Bankruptcy History
Pause Franchisor Inc. has no bankruptcy history to report in Item 4 of its FDD.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Pause franchisees must meet several conditions. They need to have fully complied with all terms of their current Franchise Agreement throughout its term. Franchisees are also required to make necessary capital expenditures to ensure their studio aligns with Pause's current system standards. All financial obligations owed to Pause Franchisor Inc. or its affiliates and suppliers must be satisfied. Additionally, franchisees cannot be in default of any agreement with Pause Franchisor Inc. or its affiliates/suppliers. They must provide written notice of their intent to renew between 12 and 6 months before the current agreement ends. At renewal, franchisees will need to sign Pause Franchisor Inc.'s then-current franchise agreement, which may have significantly different terms, and they must meet current franchisee qualifications and agree to any new training requirements. A general release of claims against Pause Franchisor Inc. is also required, along with a renewal fee of $10,000.
Training & Support Program
Franchisor Assistance
Pause Franchisor Inc. provides franchisees with comprehensive assistance both before and after their studio opens. Prior to opening, Pause Franchisor Inc. offers an initial training program, guidance on ordering initial inventory, equipment, and signage, and general opening support. It assists with site selection guidelines and approves the chosen location, provides prototypical plans and design specifications, and offers information on approved products, services, and suppliers. Pause Franchisor Inc. also reviews the franchisee's lease. Once the Pause studio is operational, ongoing support includes periodic assistance with marketing, management, and supplier relationships. Franchisees receive updates to the operations manual, ongoing training, and their marketing materials are subject to Pause Franchisor Inc.'s approval. The franchisor administers a system-wide advertising fund, conducts periodic visits (announced or unannounced) for compliance and quality checks, and designates and modifies the required point-of-sale (POS) system. Additionally, Pause Franchisor Inc. holds mandatory periodic conferences to discuss sales, training, and operational procedures.
Initial Training Hours
90
Training Location
Online or Pause Headquarters in Los Angeles, CA or franchisee's location
Ongoing Support
Pause Franchisor Inc. provides ongoing support to its franchisees through various means. This includes periodic assistance with marketing, management, and key suppliers, often delivered through field representatives who may visit the Pause studio. The franchisor offers additional and ongoing training as needed, holds mandatory periodic conferences to discuss various business aspects like sales techniques and operational standards, and provides franchisees with modifications to the operations manual. Pause Franchisor Inc. also conducts announced or unannounced visits to Pause studios to ensure compliance with the franchise agreement and perform quality assurance audits.
Franchise Requirements
Ideal Candidate Profile
Pause Franchisor Inc. is looking for franchisees who will designate an Operating Principal, an individual who owns at least 5% of the franchisee entity and will dedicate full-time effort to the business's daily supervision and operations. If the Operating Principal cannot commit full-time, then the franchisee must hire an approved full-time Manager with suitable qualifications to oversee daily administrative operations. Ideal candidates should possess strong business acumen, relevant industry experience, and a suitable job history.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Supervisory
Territory Type
Non-Exclusive
Territory Size Requirements
Pause Franchisor Inc. defines each Designated Territory based on either a three-mile radius from the approved studio location or an area with a population of approximately 100,000 residents, whichever is smaller. The exact size and boundaries of the territory are determined by Pause Franchisor Inc. using mapping services and consider factors such as natural boundaries, local demographics, and whether the location is in an urban, suburban, or rural area. In urban settings, the territory might be a more restricted radius to encompass the 100,000-resident population.
Staffing Notes
Pause Franchisor Inc. requires that each Pause studio be under the active, full-time management of either the franchisee's Operating Principal or an approved full-time Manager, in addition to Authorized Care Providers who have completed the necessary training for administering services. The Operating Principal must hold at least a 5% ownership stake in the franchisee entity. The franchisee is responsible for recruiting, hiring, training, and supervising all non-medical employees, as well as managing their payroll and related benefits. For medical services, the Pause studio must employ or contract with Authorized Care Providers who are appropriately licensed and certified in the state where the business operates.