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Row House Franchise ProfileFitness Franchises > Specialty Fitness Classes |
What is the Initial Investment for a Row House Franchise?
To open a Row House franchise, the initial investment ranges from $143,395 to $490,695. This includes a franchise fee of $60,000. Potential franchisees should also prepare for ongoing costs, including a 7% royalty fee and a 2% marketing fee. Additionally, you will need a cash reserve of $268,295 to $430,695 to ensure smooth operations during the startup phase. Meeting these financial requirements is crucial for establishing your Row House location successfully.
What Are the Financial Performance Metrics for Row House?
Row House franchises show promising financial performance, with an average annual revenue of $25,547 per unit. The cost of goods sold (COGS) is approximately 31.3% of revenue, resulting in a gross profit margin of 68.7%. Operating expenses are around 39.2%, leading to an EBITDA of 29.5%. With a breakeven time of just 12 months and an investment payback period of 18 months, the potential for profitability is significant for new franchisees.
What Are the Running Expenses for Row House Franchisees?
Franchisees can expect average annual running expenses totaling about $73,895. This includes costs for audio and visual equipment ($31,000), initial marketing spend ($15,000), and the RH University program ($5,000). Other expenses, such as music and technology fees and additional funds for three months of operation, also contribute to the overall budget. Understanding these expenses is essential for effective financial planning and ensuring adequate cash flow.
How Has Row House Expanded in Recent Years?
Row House has experienced steady growth in its franchised units, increasing from 54 in 2020 to 81 in 2022. The total number of units expanded from 71 to 95 during the same period. While the number of corporate units fluctuated, the overall trend indicates a strong demand for Row House's unique fitness offerings. This growth reflects the brand's successful market positioning and the potential for new franchisees to tap into a thriving business model.
Row House Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Row House Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 71 | 79 | 95 |
| Net Change YoY | 8 | 16 | |
| Franchised Units | 54 | 69 | 81 |
| Net Change YoY | 15 | 12 | |
| Corporate Units | 17 | 10 | 14 |
| Net Change YoY | -7 | 4 |
Investment Overview
The Row House franchise offers a low initial investment range of $143,395 to $490,695, making it accessible for aspiring entrepreneurs. The initial franchise fee is set at $60,000, with ongoing royalty and marketing fees of 7% and 2%, respectively. With a cash requirement between $268,295 and $430,695, potential franchisees should ensure they meet the net worth requirement of $300,000 to $500,000 to qualify for ownership.
Financial Performance
Row House franchises demonstrate strong financial potential, with average annual revenue per unit reaching $25,547. The median annual revenue stands at $22,293, while units have reported revenues as low as $1,901 and as high as $54,424. The breakeven time is estimated at 12 months, providing a relatively quick path to profitability, with an investment payback period of approximately 18 months.
Franchise Growth
The Row House franchise has shown impressive growth in recent years. In 2020, there were 54 franchised units, which increased to 69 in 2021 and further to 81 in 2022. This upward trend indicates a strong demand for the brand and a growing network of franchisees, highlighting the potential for future expansion and success within the franchise system.
Corporate Presence
In addition to its franchised units, Row House operates corporate locations, which serve as a model for franchisees. In 2020, there were 17 corporate units, but this number decreased to 10 in 2021 before rising again to 14 in 2022. This fluctuation reflects the brand's adaptability and commitment to maintaining a strong presence in the market while supporting franchisee operations.
Operational Expenses
Franchisees can expect to manage various operational expenses, with annual costs totaling approximately $73,895. Key expenses include audio and visual equipment ($31,000), initial marketing spend ($15,000), and the RH University Program ($5,000). Understanding these costs is crucial for effective financial planning and ensuring the long-term profitability of each franchise unit.
Brand Mission
Row House is dedicated to providing a unique fitness experience that combines community and wellness. The brand's mission focuses on fostering a supportive environment where individuals can achieve their fitness goals while enjoying the camaraderie of fellow members. Through innovative programming and a commitment to quality service, Row House aims to inspire a healthier lifestyle for all its clients.
Frequently Asked Questions
The initial investment for a Row House franchise ranges from $143,395 to $490,695, which includes the franchise fee and other startup costs.