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BUSINESS MODEL EBOOK

CONTENTS
Introduction......................................................................................................3

Industry Overview...........................................................................................5

The Competitive Landscape...........................................................................6

How Retro Fitness Stands Out to Customers..............................................9

How Retro Fitness Stands Out for Franchisees........................................10

The Revenue Model.......................................................................................12

Meet the Leadership Team...........................................................................16

Next Steps......................................................................................................18
INTRODUCTION
Retro Fitness is a hometown gym dedicated to building a strong Personalized training, the Retro Blends Smoothie Bar, and
community for our members while providing exceptional return merchandise sales create additional revenue streams.
on investment for our owners. Our fitness franchise has been
recognized as one of the nation’s top franchise opportunities The business model is also simple: Keep everything clean and
by numerous publications, earning write-ups in Forbes, in good working condition, market your business, and build a
Entrepreneur Magazine, Rolling Stone, and The Wall Street community culture within your gym. If you and your team can
Journal as well as appearances on CNN, CBS, and MTV. master these basics, you can thrive. Franchisees fall into two
categories — owner-operators who spend a lot of time in their
For consumers, Retro Fitness is an attractive fitness destination gyms, and investors who hire general managers to handle day-
because of its inclusive community, state-of-the-art equipment, to-day operations. Regardless of which category they fall into,
group fitness classes and personal training, a welcoming top-performing franchisees regularly drop in to ensure the gym
atmosphere, and amenities like massage chairs and tanning. It is is in great shape and the culture is friendly.
a one-stop-shop for anyone looking to improve their health in a
nurturing environment. On the following pages, we provide an overview of the booming
fitness industry as well as the challenges and opportunities
For franchisees, Retro Fitness provides an opportunity to make that exist as the industry evolves. We also examine Retro’s
their community healthier and happier while also generating a recent financial performance and how our business model has
significant return on investment. Thanks to memberships that franchisees well-positioned for continued growth.
start at $19.99 per month, owners enjoy recurring revenue.

3 Retro Fitness Business Model


For consumers, Retro Fitness is an attractive fitness destination because of its
inclusive community, state-of-the-art equipment, group fitness classes and personal
training, a welcoming atmosphere, and amenities like massage chairs and tanning.

4 Retro Fitness Business Model


$32 BILLION
Spending at U.S. health clubs in 2018.
SOURCE: INTERNATIONAL HEALTH, RACQUET AND SPORTSCLUB ASSOCIATION

INDUSTRY OVERVIEW

GROWING DEMAND FOR HEALTH AND WELLNESS OPTIONS DRIVING GROWTH OF THE
FITNESS INDUSTRY

The fitness industry in the United States has enjoyed robust According to data collected by The Halo Group, 65% of
growth for two decades, with a 6.4% compound annual growth people born after 1975 regularly consult either a nutritionist,
rate from 1996 and 2016, according to Piper Jaffray’s January dietitian (58%), or a personal trainer (54%) about their food
2018 Fitness Industry Update. choices. According to the Physical Activity Council, nearly
64% of Millennials and 71% of Gen Z are regularly involved
Strong growth is expected to continue in the $32 billion space in high calorie-burning activities. That compares to 41.6% of
thanks to America’s growing embrace of health and wellness. Baby Boomers.
Millennials and Gen Z, in particular, are expected to drive long-
term growth including a projected 20% increase over the next Notably, overall gym membership growth has been
five years. Among younger generations, America’s obesity consistent — even during recessions. At the same time that
epidemic has driven much higher awareness of the importance the S&P 500 was declining during the depths of the Great
of healthy lifestyles. At the same time, the growth of social media Recession, total gym membership grew from 45.6 million
and “selfie” culture has enhanced people’s motivations to look Americans to 52.2 million from 2008 to 2012, according to
their very best, and provided tools that make it easier for people data from the International Health, Racquet and Sportsclub
to track and share their fitness progress. Association (IHRSA).

5 Retro Fitness Business Model


THE COMPETITIVE LANDSCAPE

HIGH-VALUE, LOW-PRICE GYMS AND


BOUTIQUE FITNESS CLUBS ARE POWERING
THE INDUSTRY’S GROWTH

The health club industry’s membership growth has been


primarily driven by two segments:

1. High-value, low-price (HVLP) gyms (of which Retro Fitness


was a pioneer and continues to be a leader)
2. Boutique fitness studios (Club Pilates, Orangetheory Fitness,
and SoulCycle are examples)

According to the IHRSA’s 2018 Health Club Consumer Report,


about 40% of health club members now belong to a HVLP fitness
center. The HVLP business model provides low-cost membership
options that make fitness centers attractive to people eager to
establish and maintain healthy habits.

Boutique fitness clubs tend to market themselves as an elite

+7.7%
business and are priced accordingly ($150/mo for classes, for
instance). They have gained popularity by focusing on specific
fitness trends and providing personalized instruction in a group
training environment that often doubles as a place to form
friendships (and for courtship). On the following pages, we share
an overview of the major industry segments and their strengths
and potential weaknesses as an investment. The increase in year-over-year health club
spending from 2017 to 2018.
SOURCE: INTERNATIONAL HEALTH, RACQUET AND SPORTSCLUB ASSOCIATION
6 Retro Fitness Business Model
QUICK GLANCE AT THE COMPETITIVE LANDSCAPE

LIFESTYLE CENTERS HVLP 1.0

Examples: Equinox, Life Time Fitness, 24 Hour Fitness, LA Fitness Examples: Planet Fitness, Blink Fitness

Space needed: 30,000-120,000 square feet (on the high end, this Space needed: 10,000-20,000 square feet (roughly the size of a
is the size of a Home Depot) Staples store)

Offer to customers: Full assortment of equipment, athletic courts, Offer to customers: Full assortment of equipment
pools, classes, personal training
Pros: Low-cost memberships that drive high enrollment. Lower
Pros: Maximum variety for customers. Higher membership rates. investment thanks to smaller facilities (by cutting out amenities
like pools and courts).
Cons: Very high investment. Membership rates face pressure
from HVLP competitors, hurting margins. Reliance on big boxes Cons: These spaces essentially function as equipment rental.
means less real estate flexibility, which can make it harder to No-frills customer experience means price and convenience are
secure convenient locations. the main points of differentiation. Market shows significant signs
of saturation, which could decrease avg. enrollments and hurt
unit-level profitability. (Club Intel, “U.S. Budget Clubs: A Value
Proposition Becoming Commoditized and Where It goes Next?”)

+6.4%
The compound annual growth rate for the fitness
industry between 1996 and 2016.
SOURCE: PIPER JAFFRAY, “FITNESS INDUSTRY UPDATE,” JANUARY 2018

7 Retro Fitness Business Model


HVLP 2.0 BOUTIQUE CLUBS

Examples: Retro Fitness Examples: 9Round, Barry’s Bootcamp, Pure Barre, Club Pilates, CorePower Yoga,
Orangetheory, SoulCycle
Space needed: 15,000-17,000 square feet
Space needed: 1,000-2,000 square feet
Offer to customers: Full assortment of
equipment, classes, personal training, on- Offer to customers: Full assortment of equipment, classes, personal training, on-site
site amenities amenities

Pros: Low cost memberships paired with Pros: Small spaces reduce overhead and allow clubs to locate very close to
tiered options that add extra value as customers. Customers tend to be younger and spend more. Strong sense of
members become more engaged. Multiple community among members.
upsell opportunities to increase average
revenue generated by each member. Brings Cons: Prices typically range from $150 to $300/month. Services revolve around
together the best of HVLP 1.0 model with group fitness classes and limited space means customers are restricted to set
personalized options such as specialized times and must clear out for the next group. Less variety at any individual boutique
group classes and personal training means customers frequently try different concepts, hurting customer retention.
designed to appeal to people currently This is exacerbated by emerging Web-based intermediaries like ClassPass, which
frequenting boutiques. offer unbooked fitness classroom space to its members at a wide variety of clubs.
While these platforms do fill open slots for club operators, they also encourage
Cons: To differentiate from HVLP 1.0 sampling and threaten to reduce customer loyalty. The intermediaries also pay lower
competitors, it’s imperative to build a sense rates to fill the unbooked slots, which has the potential to erode margins. Many of
of community within the gym. Members — their customers are also members at a gym. While boutique customers currently
particularly younger members — will pay outspend gym members — $66/mo vs $35/mo according to a 2018 report by Piper
more for individualized experiences and Jaffray) — the same report says “53% of boutique members note they would leave
a strong sense of community. Large and their boutique if a similar class were offered at a gym for a lower price.” Club Intel,
small classes are two of the key ways to in its report “U.S. Budget Clubs: A Value Proposition Becoming Commoditized and Where It
deliver this experience. goes Next?”, reports signs of market saturation due to a growing backlog of unopened
locations.

8 Retro Fitness Business Model


HOW RETRO FITNESS STANDS OUT TO CUSTOMERS

Retro Fitness helped transform the gym industry as a pioneer of the High-Value, Low-Price (HVLP) movement, which gave millions of
Americans access to state-of-the-art fitness equipment at low monthly membership rates. Retro is now a pioneer of HVLP 2.0, which
combines the benefits of access to state-of-the-art equipment with membership tiers that provide access to group instruction and
personal trainers.

A FIT FOR EVERYONE

By offering two membership tiers, we are able to meet the needs of people just starting their fitness journey and enthusiasts who are
looking to achieve and maintain peak fitness. Additional services are available to all members and provide ancillary revenue for owners.

Core Memberships ($19.99) include: Ultimate Memberships ($29.99) also


• The same top-tier equipment as luxury include:
gyms like Equinox • Group fitness classes. Classes vary by Quality and variety are only part of
• Reciprocity to visit any Retro Fitness location, but include: what makes Retro Fitness stand out.
facility • Group Programs The biggest ingredient is community.
‐ Yoga
The strongest locations are run by
‐ Spin
‐ Zumba managers or owners who welcome
Add-on services available to all • Small Group Training guests, learn about their families,
members include: ‐ Team HIIT and foster a sense of community and
• Personal training • Amenities including tanning, and teamwork among members. This will
• The Retro Blends® Smoothie Bar hydromassage.
• A pro shop that offers nutritional be even more true in the future, since
• Child sitting to make it easier for
supplements and athleisure parents to maintain their workout younger people tend to treat fitness
wear routines (and set a great example for activities as a social opportunity.
their kids) By providing quality, variety and
community, Retro Fitness is positioned
to take advantage of the next evolution
of the fitness industry. 
9 Retro Fitness Business Model
HOW RETRO FITNESS STANDS OUT FOR FRANCHISEES

OUR BUSINESS MODEL OFFERS SEVERAL ADVANTAGES FOR INVESTORS

Join an industry with high, sustainable demand. The fitness industry has been growing for decades, and Millennials and younger
generations are even more avid fitness consumers than those who preceded them. A 2018 survey projected that, based on current
spending, today’s young people will spend more on health and fitness than on college tuition over the course of their lifetime. Moreover,
they report making fitness a high spending priority. Fitness memberships have also been embraced by employers and health insurers
as a way to reduce overall healthcare costs. Many employers and insurers now offers discounts and rebates to encourage people to
improve or maintain their fitness.

Retro is a service leader. Retro Fitness provides a full-service A business that works for you. While our current franchise
gym experience to members while maintaining High-Value, Low- owners come from diverse industries and backgrounds, they
Price (HVLP) positioning. We’re not the cheapest HVLP gym, but are united by a common objective. Each wanted an outstanding
we believe we offer the best value by providing access to state- investment opportunity that would benefit themselves and
of-the-art equipment and amenities as well as group classes and their families, while providing a balance between lifestyle and
personal training. Quality and variety are two major points of business investment. That is one of the primary reasons that
differentiation that help us command a premium over discount only about a third of Retro Fitness owners are owner/operators.
gyms, while sales opportunities help owners generate more The rest leave their trusted General Manager to oversee the day-
revenue per member. This gives Retro Fitness broad appeal. to-day operations of the club, along with staff and the ongoing
assistance of the Retro Fitness support team.
Broad appeal. By combining the best of HVLP gyms and group
classes offered by boutique fitness clubs, Retro Fitness is able Simple business model. The ingredients to a successful gym:
to draw a broad swath of customers without sacrificing profit Keep it clean, keep the equipment maintained, hire and train
margins. friendly people, and listen and respond to your members.

Make lives better. We’re not just in business to make money. We Recurring revenue and multiple revenue streams. Memberships
also relish seeing the difference we make in customers’ lives. We provide recurring revenue. The Ultimate membership allows
and our employees get to watch and encourage people to become
stronger, slimmer and more confident.

10 Retro Fitness Business Model


you to maximize the profitability of memberships and deliver
incredible value to customers by providing group classes.
Personal training options provide upsell opportunities that
deliver tremendous value to customers. The smoothie bar
generates additional high-margin revenue from members
seeking healthy nutrition before and after workouts. And the pro
shop provides supplements and athleisure gear. There are many
ways to serve your customers and make money.

Strong financial results. Retro Fitness clubs have a strong


history of providing solid ROI for franchisees, especially relative
to other franchising categories like restaurants. See the next
section for details. 

TRAILBLAZERS. Retro Fitness helped


transform the gym industry, giving millions of
Americans access to state-of-the-art fitness
equipment at low monthly membership rates.

11 Retro Fitness Business Model


THE REVENUE MODEL PURPOSE. We’re not just in business to
make money. We also relish seeing the
Retro Fitness generates recurring revenue through tier-priced
memberships, and through ancillary sales from a smoothie bar, a
difference we make in customers’ lives.
pro shop and personal training.

The tiered membership model maximizes your membership


rolls — and your profitability — by appealing to a wider variety of
potential customers. Those who are looking to establish a fitness
routine are often attracted to our $19.99/mo Core membership These strategies have helped produce strong financial results.
tier, which provides access to state-of-the-art treadmills, Here’s a look at the financial performance of Retro Fitness
ellipticals, stationary bikes, free weights, machines, and more. locations, as reported in Item 19 of our 2019 Franchise
The lowest price is a great way to get people into your gym, Disclosure Document. We have divided the following charts into
where they can start to work out and discover other options you two sections based on the data used to calculate the results.
have available. At $29.99/mo, Ultimate members gain access
to all gym equipment at the club in addition to unlimited Group
exercise classes such as Spin, Yoga, Barre, and Body Sculpt, plus
tanning, massage chairs, and other amenities. Group training
with Retro Fitness is like being a member at a wide variety of
Boutique Fitness Clubs, but at a lower price and without being
chased out the door once your class is over.

While members are at the gym, franchisees enjoy additional


sales opportunities. The Retro Blends® Smoothie Bar provides
smoothies and juices, which offer members a convenient,
nutritious and refreshing way to recharge. A $19.99 member who
purchases four smoothies in a month has doubled the amount
they spend with you. Likewise, the pro shop offers nutritional
supplements members can buy to use at home, as well as
athleisure wear. Members can also purchase personal training
sessions to work 1-on-1 with fitness experts.

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AVERAGE GROSS SALES, REVENUE PER SQUARE FOOT, AND MEMBERSHIP

As of December 31, 2018, there were 147 franchised Retro Fitness outlets open and in operation. Of those 147 Franchised Outlets, 138
were open the entirety of January 1, 2018 through December 31, 2018. All 138 of these Franchised Outlets were included in the results
displayed in Tables A, B and C following.

TABLE A: AVERAGE GROSS REVENUE* TABLE B: AVERAGE REVENUE PER SQUARE FOOT*
Based on data reported from March 1, 2018 to Feb. 28, 2019. Based on data reported from March 1, 2018 to Feb. 28, 2019

Average Percentile Number of Number of Percentage Revenue Percentile Number of Number of Percentage
Gross Clubs in Clubs in the of Clubs in Per Clubs in Clubs in the of Clubs in
Sales the Stated Percentile Percentile that Square the Stated Percentile Percentile that
Percentile that Attained Attained or Foot Percentile that Attained Attained or
or Exceeded Exceeded the or Exceeded Exceeded the
the Average Average Gross the Average Average Gross
Gross Sales Sales Gross Sales Sales

$2.2 million Top 10% 14 6 43% $142 Top 10% 14 7 51%

$1.7 million Top 25% 35 14 41% $115 Top 25% 35 13 38%

$1.4 million Top 50% 69 24 35% $95 Top 50% 69 25 36%

PROFITABILITY. Retro Fitness clubs have a strong history of providing solid ROI for
franchisees, especially relative to other franchising categories like restaurants.

* Numbers as published in Item 19 of the Retro Fitness 2019 Franchise Disclosure Document. Read Item 19
13 Retro Fitness Business Model in its entirety for important defined terms, assumptions and qualifiers relating to these figures.
AVERAGE EBITDA, RENT
AND LABOR EXPENSE

There were 133 Franchised Outlets that were officially open to


the public and in operation for the entire 2017 calendar year (not
including Outlets in pre-sales during this period). Of these 133
Franchised Outlets, 35 were excluded from the results displayed
in Tables D, E, F & G for the following reasons: (a) 9 were
excluded because they combined locations onto one tax return;
(b) 4 were excluded because they did not send in their 2017 tax
returns; (c) 21 were excluded because they were sold or closed
prior to the date on which we required submission of the 2017
tax returns and the former owners did not submit copies of their
2017 tax returns; and (d) 1 was excluded because their tax return
wasn’t on a calendar year basis.
TABLE C: AVERAGE MEMBERSHIP*
As of Feb. 28, 2019 Information from the tax returns provided for the remaining 98
Franchised Outlets was used to determine the results presented
Average Top Number of Number of Percentage
in Tables D, E, F, and G, which reflect EBITDA.
Number of Percentile Clubs in Clubs in the of Clubs in
Members the Stated Percentile the Percentile
Percentile that Attained that Attained
or Exceeded or Exceeded
the Average the Average
Number of Number of
Members Members
REVENUE STREAMS. Retro Fitness
5,605 Top 10% 14 5 36%
generates recurring revenue through
4,564 Top 25% 35 12 35%
tier-priced memberships, and through
3,785 Top 50% 69 25 36%
ancillary sales from a smoothie bar and
pro shop.
14 Retro Fitness Business Model
RENT AS A PERCENTAGE OF EBITDA, AND PAYROLL AS A PERCENTAGE OF EBITDA.
TABLE D: AVERAGE EBITDA* TABLE E: EBITDA AS A PERCENTAGE OF REVENUE*

Average Percentile Number of Number of Percentage of Average Percentile Number of Number of Percentage
EBITDA* DEFG DEFG Outlets DEFG Outlets EBITDA* (as Outlets in Outlets in of Outlets in
(in dollars) Outlets in that Achieved in Percentile a percentage Percentile Percentile Percentile
Reported Percentile or Exceeded that Achieved of total that Achieved that Achieved
by the the Stated or Exceeded earnings) or Exceeded or Exceeded
DEFG Clubs Average the Stated Reported by the Average the Average
in 2017 EBITDA Average DEFG Outlets EBITDA (as a EBITDA (as a
Federal Tax EBITDA in 2017 percentage percentage
Returns Federal Tax of total of total
Returns yearnings) yearnings)
$527,426 Top 10% 10 2 20%
31% Top 10% 10 3 31%
$401,062 Top 25% 25 11 45%
27% Top 25% 25 8 33%
$307,936 Top 50% 49 19 39%
24% Top 50% 49 20 41%

TABLE F: AVERAGE PAYROLL EXPENSES* TABLE G: AVERAGE RENT EXPENSES*

Total Average Number & Average Number & Total Average Number & Average Number &
Number Payroll Percentage of Payroll as a Percentage Number of Rent Percentage of Rent as a Percentage
of Expense Outlets whose Percentage of Outlets Outlets Expense Outlets whose Percentage of Outlets
Outlets Payroll Expenses of Gross whose Payroll Rent Expenses of Gross whose Rent
Equaled or Sales Expenses Equaled or Sales Expenses
Exceeded the Equaled or Exceeded the Equaled or
Results Stated in Exceeded the Results Stated Exceeded
Column 2 Results Stated in Column 2 the Results
in Column 4 Stated in
98 $263,713 44 (45% of outlets) 23% 49 (50% of Column 4
outlets) 98 $256,115 38 (39% of 22.6% 51 (52% of
outlets) outlets)

* Numbers as published in Item 19 of the Retro Fitness 2019 Franchise Disclosure Document. Read Item 19
15 Retro Fitness Business Model in its entirety for important defined terms, assumptions and qualifiers relating to these figures.
MEET THE LEADERSHIP TEAM

ANDREW ALFANO
TODD SCARTOZZI
CEO
SENIOR VP OF OPERATIONS

Retro Fitness is led by Andrew Alfano, a former Todd Scartozzi joined Retro Fitness in
Senior Vice President for Starbucks who joined 2019 and brings vast executive leadership
Retro after serving as President and COO of an early experience in the gym industry.
education franchise company. Prior to that, Andrew
enjoyed an impressive 16 year career with Starbucks He oversaw the growth of one of Planet
Coffee. Having joined in the late 90’s, he helped grow Fitness’ largest multi-unit operations,
the brand while working his way up to Senior Vice President, U.S. helping private equity group Exaltare Capital grow their
Business. Andrew was one of the key leaders that helped architect the portfolio from 10 gyms to 161 locations.
company’s strategic growth in some of the more high profile, complex
urban markets, specifically Starbucks flagship market of New York. He also served as COO of Gold’s Gym International, where
He was ultimately accountable for over $3.5B in revenue across both he directed sales, marketing, fitness, real estate and
company operated and licensed stores. construction, IT, a call center, and capital improvement
programs. His tenure there saw growth in customer
He then joined his most recent company in 2015, when they were of retention, same-store sales, and EBITDA.
similar size as Retro Fitness. He leveraged existing strengths of the
brand to fuel growth, reorganized and matured the business. A few In addition to his fitness industry experience, he has also
short years later, the brand now boasts of over 400 units open or in served as a leader in the hospitality field, overseeing a
development in both the United States and Europe. private equity firm’s investment in Chase Suites Hotels, and
acting as Senior Vice President of Operations at Omni Hotel
“I love to build brands. Retro Fitness has all the characteristics I love Corporation.
— a compelling value proposition, a strong franchisee base and a brand
following with consumers ripe for growth and expansion. By offering He joined Retro Fitness because, “Andrew is a proven
members everything they love about a big-box gym and bundling it with executive who has built great companies, and Retro Fitness
personalized group classes, niche workout experiences and personal has a huge amount of white space in which it can grow.”
training, Retro Fitness has great potential for its next phase of growth.”

16 Retro Fitness Business Model


MEET THE LEADERSHIP TEAM

ROBBIE SPRECHMAN
VICTOR BAO
CFO
SENIOR VP OF MARKETING

Robbie Sprechman has been CFO for Retro Victor Bao has a broad range of marketing,
Fitness since 2008 and has helped oversee brand, PR and innovation experience, both
the growth of the brand while crafting win-win domestic and internationally, most recently
solutions to drive revenue growth and EBITDA. serving as Chief Marketing Officer of Global
Shopper. Victor worked closely with the
“The fitness industry is a great industry. It’s franchisees and led and developed digital and
outpacing the S&P. It’s one of the best industries to be in right mobile applications that supported all B2C and B2B efforts for
now. And it’s Amazon proof.” Describing how the management the company.
team prioritizes efforts, he said, “We care insanely about
increasing franchisees’ profitability and revenue streams and we Victor started his career with UPS as the International Marketing
care about increasing their engagement. Everything we do goes Manager, and later was the architect of loyalty programs for the
through those filters. If we are talking to a new company, talking automotive industry at Maritz. He worked in London, Paris and
to a new vendor, coming up with a new process, if it doesn’t meet Madrid returning to Miami after 11 years abroad.
any of those three goals, we don’t do it.”
Upon his return to the U.S., Victor led the marketing function
Before joining Retro Fitness, he spent 22 years as CFO/COO for at Club Med where he played a critical role during that brand’s
Noamex Inc., an international clothing wholesaler. He has served transformation. He led the marketing charge for over 70
as CFO for a diverse set of companies: HFS Realty Associates, franchised InterContinental Hotels, and was Head of Marketing
where he oversaw four commercial properties in New York City; at Yamaha Motor Company for its distributors and across multi-
Dynamic Changes Hypnosis Centers, which assisted clients with brand retail stores. Victor was also Head of Marketing and Digital
weight loss and smoking cessation; The Antique Boutique, a New Marketing at Louis Vuitton Moet-Hennessey (LVMH) in a new
York City vintage store that attracted a celebrity clientele; and ecommerce and technology endeavor, the first of its kind for that
Let’s Yo frozen yogurt. brand.

17 Retro Fitness Business Model


NEXT STEPS RIGHT PERSON. RIGHT OPPORTUNITY.
We look forward to learning about
OUTLINE OF THE PROCESS FOR BECOMING you and your goals, and determining
A RETRO FITNESS OWNER if Retro Fitness is a good fit for what
I hope you have found this eBook helpful as you evaluate Retro
you’re looking to accomplish. We’ll
Fitness as a business opportunity. Here’s a look at our process: work with you to make sure you receive
STEP 1: INITIAL CALL the information needed to make an
We’ll make a brief introduction and ask some initial questions informed decision.
to determine if your desired territory is available and if you are
likely to be financially able to make the investment. Assuming the
answer is “yes,” we will schedule a webinar with you and share
our Franchise Disclosure Document (FDD).

STEP 2: FDD REVIEW


The FDD is a document regulated by the Federal Trade
Commission. It is not a contract. Instead, it serves as a summary
of key information about the franchise system and the legal
relationship between the franchisor and franchisee. If it’s your
first time reading an FDD, you are likely to have many questions.
Take note of anything that is unclear or that gives you concerns.
We’ll discuss these questions during our next conversation.

STEP 3: WEBINAR AND Q&A


This is a 45- to 60-minute meeting that provides a detailed look
into the brand and what makes it work, including an overview of
what is offered to consumers and the support the brand provides
to franchisees. We will also answer your questions about the
webinar and about the FDD.

18 Retro Fitness Business Model


STEP 4: APPLICATION STEP 8: FRANCHISE AGREEMENT SIGNED
Before we begin booking meetings with the rest of the support You are now officially a Retro Fitness franchisee! A call with the
team, you’ll need to submit a Franchise Application and Personal Franchise Concierge will help set the next steps. It is typically
Financial Statement. Neither document creates any obligations 8-12 months from the day you sign to the day you open your
for you. Instead, they allow us to perform due diligence by gym. Much of that time is devoted to scouting the best location
completing a background check and credit check on candidates. and negotiating the lease. Actual construction takes about
This is an important step we take to protect the brand and the 3-4 months. As construction is going on, you will begin pre-
investment of existing franchisees. sales, which allows you to open your doors with an existing
membership base.
STEP 5: REAL ESTATE REVIEW
This webinar with the real estate team focuses on your preferred
area(s). We will discuss the real estate requirements, site
selection process, and answer your questions about securing a
great location.

STEP 6: DISCOVERY DAY


You will be invited to meet the corporate team at the home office
in West Palm Beach. The half-day meeting includes presentations
from department heads and a mutual interview process. You will
get a deep dive into our vision for where the brand is headed and
how we will get there.

STEP 7: FINAL QUALIFICATION


If the executive team agrees that you are likely to thrive as a
Retro Fitness owner, you will be offered a Franchise Agreement.

19 Retro Fitness Business Model


QUESTIONS? YOU CAN REACH US AT 732-431-0062.
WE LOOK FORWARD TO SPEAKING WITH YOU!

Revenue numbers in this document are also published in Item 19 of the Retro Fitness 2019 Franchise Disclosure
Document. Read Item 19 in its entirety for important defined terms, assumptions and qualifiers relating to these
figures. Franchise offering made by prospectus only, view our Franchise Disclosure Document for details.