YogaSix: $300K Revenue Yet Not the Most Profitable Franchise

One of the fastest growing fitness franchises nowadays, YogaSix has added more than 150 studios in the US alone in just 5 years..! Despite the hype for yoga studios, should you really buy a YogaSix franchise? 

Indeed, you would have to invest an estimated $397,000 to open a new YogaSix studio which would make on average $302,000 in revenue per year. Yet is this a profitable business? Are the profits worth the upfront investment?

Unfortunately we found that YogaSix, despite being one of the fastest growing franchise recently, isn’t the most profitable fitness franchise. 

How much does it really cost to open a YogaSix franchise? How much profits can you realistically make as a franchisee? In this article we are looking at YogaSix and its Franchise Disclosure Document to find out whether you should invest in it. Let’s find out!

Key figures

Franchise fee	$60,000
Royalty fee	7.0%
Marketing fee	2.0%
Investment (mid-point)	$397,000
Revenue	$302,000 per year
Revenue per square foot	$151
Sales to investment ratio	0.8x
Payback period*	9 years
Minimum net worth	$500,000
Minimum liquid capital	$100,000

What is YogaSix?

YogaSix is an American franchise of boutique yoga, health and fitness clubs that promotes modern yoga practices at any skill level.

Its clubs offer a broad range of heated and non-heated yoga classes, sculpt classes, slow flow and deep stretching.

The brand was founded by Bill Koman in 2012 and it is currently part of the Xponential Fitness brand family alongside Stretch Lab, CycleBar, Club Pilates, Pure Barre and others. It is headquartered in Irvine, California.

Its franchising journey began in 2018 and as of today, it has more than 155 franchises globally, with 152 of these in the US.

YogaSix franchises pros and cons

The Pros:

• Quality training: The franchisor offers its franchisees extensive training to acquaint them with the basics of its concept, equipment use, operational aspects and training of its staff. In addition, it helps them carry out a successful grand opening and make sales.
• Marketing strategies: YogaSix helps the franchisee establish and grow a following for their clubs using turnkey marketing plans and resources such as national and regional advertising, social media, influencer marketing and local club promotional campaigns.
• Real estate and site selection: The brand helps its franchisees with site selection, club designs and construction and lease negotiations. Franchisees can identify a viable and competitive business location using the brand’s demographic data analysis.
• Extensive training and ongoing support: The brand has an experienced team and professional management to help franchisees establish and operate their clubs successfully. Franchisees get resources, networks, advice and growth insight from the Xponential and YogaSix professional teams.
• Evolving member experience: The brand is constantly evolving and curating updates to its programming classes and technology. Franchisees can sustain excellent services and facilitate member growth and profitability.
• Third-party financing: The franchisor provides its franchisees with third-party financing for the franchise fee, startup costs, equipment, inventory and payroll.
• Exclusive territory protection: The franchisor provides its franchisees with an exclusive territory to operate in. It does not grant any other franchise or operate competing channels in the agreed-upon area.
• Executive business model: The YogaSix presents a scalable and attractive consumer-oriented concept. Franchisees can leverage low development costs and national vendor networks to establish and run profitable clubs.

The cons:

• Not a part-time business opportunity: The franchise cannot be operated part-time. Franchisees must follow their parent company’s working schedule.
• Not a passive business opportunity: The franchise does not allow absentee ownership. Franchisees must actively participate in decision-making and the operations of their clubs.
• Not a home-based or mobile business: A YogaSix franchise cannot be run from home or a vehicle. Franchisees are required to work from an office space, retail facility or warehouse.
• Competition: Stretch Lab, Club Pilates and Pure Barre.

How much does a YogaSix franchise cost?

You have to invest around $397,036 to open a Yoga Six franchise studio.

This is an average; indeed, it varies based on many factors, such as the location of your studio, its size, market conditions, and other factors.

In addition to the initial franchise fee of $60,000, which you must pay to the franchisor, you would also pay for leasehold improvements, insurance, signage, equipment, training expenses, etc.

YogaSix startup costs

Here’s the full breakdown of startup costs:

Expense	Amount
Initial franchise fee	$60,000
Net leasehold improvements	$105,900 – $266,000
Signage and graphics	$14,000 – $19,000
Fitness equipment package	$2,600 – $10,500
Insurance	$1,100 – $2,500
Bridge Training	$3,000 – $4,500
Additional Funds- 3 months	$15,000 – $20,000
Other	$93,236 – $116,736
Total	$294,836 – $499,236

What is the turnover of a YogaSix franchise?

On average, a Yoga Six franchise makes $302,163 in revenue per year.

This is the average sales per franchised yoga fitness studio for 74 of the 125 franchised yoga fitness studios that were open for all of 2021 (as disclosed in the FDD).

YogaSix franchises are doing very well in terms of revenue growth. Here is a chart showing the monthly average revenue per franchise throughout 2021. As you can see, revenue has been steadily increasing over the year, reaching $32,000 monthly revenue in December 2021.

How profitable is a YogaSix franchise?

We estimate the average YogaSix franchise makes $70,000 in profits per year. That corresponds to a 23% EBITDA margin.

Even though YogaSix has shown strong revenue growth recently, it’s unfortunately not the most profitable fitness franchise we found. Indeed, 23% EBITDA margin is on the lower end vs. other fitness franchises (~28-30% on average).

Profit and loss	Amount	% revenue	Source
Revenue	$302,163	100%	as per FDD
Staff	$(84,606)	28%	industry average
Rent	$(81,000)	27%	as per FDD
Royalty fee	$(27,195)	9%	as per FDD
Marketing	$(9,065)	3%	industry average
Other Opex	$(30,216)	10%	assumption
EBITDA	$70,082	23%

Should you invest in a YogaSix?

So does that mean you should invest in a YogaSix franchise? Profits are only one part of the equation.

Instead, to answer this question we must look at the payback period: how do the profit compare vs. the upfront initial investment?

Unfortunately, we found that YogaSix has a payback period of 11 years on average. In other words, you would need 11 years to repay all creditors (banks) and investors (including yourself) using the profits from the business.

Whilst it’s not necessarily bad, it’s not the best payback among fitness franchises (8 years on average) and therefore not the best franchise investment.

The reason for such a long payback is due to the fact that the investment cost ($397,000) is high vs. the profits you generate on average with a YogaSix franchise.

Note that we used a 12% net profit margin to calculate this payback period, which makes sense given EBITDA is around 23%.

How does it compare vs. other fitness franchises?

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