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FDD Talk 2019: Pure Barre Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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In this FDD Talk post, you’ll learn the following:

  • Section I – Background information on the Pure Barre franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Pure Barre franchise, based on Item 7 of the company’s 2019 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Pure Barre franchise, based on Items 5 and 6 of the company’s 2019 FDD
  • Section IV – Number of franchised and company-owned Pure Barre outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
  • Section V – Presentation and analysis of Pure Barre’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
  • 2018 average, median, highest, and lowest gross sales for the 13 Affiliate Studios; 342 Franchised Studios; and 210 Franchised Studios that are operated from an Authorized Location that is at least 1,500 square feet in size, that were (a) open and operating over the entire Measurement Period (October 1, 2017 to September 30, 2018), and (b) were open and operating without any assignment or transfer of ownership for a period of 18 months ending September 30, 2018

Section I – Background Information

18 Things You Need to Know About the Pure Barre Franchise

Acquired by Xponential Fitness

1.  In late October 2018, Pure Barre was acquired by Xponential Fitness, which is owned by Anthony Geisler and Snapdragon Capital. With the addition of Pure Barre, Xponential Fitness becomes the largest provider of boutique fitness in the world. Pure Barre joins six other Xponential Fitness brands – Club Pilates, CycleBar, StretchLab, Row House, AKT, and YogaSix.

2.  Anthony Geisler, owner and CEO of Xponential Fitness, said, “Pure Barre sets the standard for barre workouts not only in the U.S., but globally as well. The brand is truly best-in-class and it has created a following of enthusiasts that is unmatched anywhere in the boutique fitness space. The addition of Pure Barre to our already robust portfolio of brands enhances our company and establishes Xponential as the number one curator of the best brands in the boutique fitness industry.”

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3.  As part of the Xponential Fitness suite of brands, Pure Barre franchise owners will be backed by Anthony Geisler’s almost two decades of fitness franchising experience and a corporate team that will provide significant support for site selection, build out, marketing, retail, sales, and operations, as well as extensive training.

4.  As part of the transaction, L Catterton, which invested in Pure Barre in 2015, will contribute its investment into the acquisition.

5.  According to Marc Magliacano, a managing partner in L Catterton’s Flagship Buyout Fund, “The clear leader in barre fitness, Pure Barre is an attractive and highly successful lifestyle concept with tremendous growth prospects. We have known Anthony Geisler and his team at Xponential Fitness since he acquired his first concept, Club Pilates, and are truly impressed by the portfolio of brands that Xponential has attracted. This transaction offers us a unique opportunity to foster Pure Barre’s continued success as part of a powerful franchise platform.”

Launches First Brand Campaign With MATTE Projects

6.  At the beginning of September 2018, Pure Barre announced the launch of Pure Effect, its first brand campaign in partnership with creative agency MATTE Projects. The multimedia campaign is the first major brand expression for Pure Barre since the company was founded in 2001. The new campaign celebrates the Pure Effect – a term that embodies the intersection of Pure Barre’s unparalleled technique, community, and empowerment to not just change bodies, but change lives.

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7.  The campaign portrays 10 Pure Barre community members from across the country – studio owners, teachers, and students, all of whom represent the collective strength and power of Pure Barre’s network of over 550,000 dedicated clients. Utilizing bold phrases such as “Pure Willpower” and “Pure Grace,” the campaign’s creative showcases each featured community member’s personal interpretation of the strength and power they have found through the Pure Barre lifestyle.

8.  Christina Russell, CEO of Pure Barre, said, “As the original barre concept and leader in our category, we have always known that Pure Barre has a special impact on our clients that can’t be found elsewhere. What we finally pinpointed as the Pure Effect is something we are so excited to bring to life and celebrate with our community and beyond.”

9.  Pure Effect premiered on Pure Barre’s re-designed website and features a video and corresponding photo stills that live on web and social channels and serve as the core of the company’s digital marketing efforts. In the press release, Pure Barre said that the second phase of the campaign, which was set to roll out sometime in 2019, will come to life in-studio through a re-imagined studio design nationwide.

10.  Brett Kincaid, founder of MATTE Projects, added, “Pure Barre empowers you to achieve goals beyond fitness; through technique and community, it gives you the confidence to become stronger mentally and physically. We were very inspired by this authentic narrative and were excited to have the opportunity to tell this story in a fresh and stimulating way.”

11.  Also in September, Pure Barre celebrated the opening of its 500th studio, marking a 35 percent annual growth rate and 4x ownership of market share in the category. Additionally, the brand said it was introducing resistance-based training with Pure Reform, a new total body workout that will round out the current class offering, delivering complete cross-training benefits under one roof.

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Company History

12.  Pure Barre was founded in 2001 by Carrie Rezabek Dorr in Birmingham, Michigan. Dorr is a dancer, choreographer, and fitness guru who opened her first studio in the basement of an office building. Building the business from scratch, Dorr initially had no clients, staff, and the studio had no signage or bathroom. However, people quickly became interested in the workout classes that Dorr was offering and her business grew through word of mouth.

13.  The Pure Barre workout was developed by Dorr herself and is a total body workout that uses the ballet barre to perform small, isometric movements, which burn fat, sculpt muscles, and create long, lean physiques.

14.  According to Dorr, she never had any intention of turning Pure Barre into a franchise. Dorr was mainly focused on fine tuning the Pure Barre technique, but more and more people kept asking how they could get the technique in their city. Eventually, Dorr gave in to the requests when she came across someone who was a good fit to run another studio.

15.  Dorr gave out about 10 to 12 licenses for the Pure Barre technique before moving the company’s headquarters to California and developing a franchising program. Dorr began franchising Pure Barre in 2009 and locations started popping up around the West Coast.

16.  Over the next few years, Pure Barre continued to expand across the United States and Dorr stayed active with the company until 2015. Following a two-year break, during which Pure Barre continued to grow, Dorr returned to the company in 2017 as “Chief Barre Officer.” In this new role, Dorr is responsible for building out the company’s world-class training team and introducing a range of innovative techniques.

17.  In the fall of 2018, Pure Barre was acquired by Xponential Fitness, which is also the parent company of Club Pilates, CycleBar, StretchLab, Row House, AKT, and YogaSix. There are now Pure Barre studios across the United States and a few in Canada.

Entrepreneur’s Franchise 500

18.  Pure Barre ranked No. 267 on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

  • Please click here for detailed estimates of Pure Barre franchise costs, based on Item 7 of the company’s 2019 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on Pure Barre’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2016

  • Outlets at the Start of the Year:  265
  • Outlets at the End of the Year:  343
  • Net Change:  +78

2017

  • Outlets at the Start of the Year:  343
  • Outlets at the End of the Year:  420
  • Net Change:  +77

2018

  • Outlets at the Start of the Year:  420
  • Outlets at the End of the Year:  459
  • Net Change:  +39

Company-Owned

2016

  • Outlets at the Start of the Year:  14
  • Outlets at the End of the Year:  14
  • Net Change:  0

2017

  • Outlets at the Start of the Year:  14
  • Outlets at the End of the Year:  14
  • Net Change:  0

2018

  • Outlets at the Start of the Year:  14
  • Outlets at the End of the Year:  13
  • Net Change:  -1

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

  • This Item 19 discloses the historical financial information regarding the Studios over the measurement period commencing October 1, 2017 and ending September 30, 2018 (the “Measurement Period”).
  • Specifically, the chart below first discloses the average, median, highest, and lowest “Gross Sales” generated amongst the franchised and affiliate-owned Studios, respectively, that were (a) open and operating over the entire Measurement Period, and (b) were open and operating without any assignment or transfer of ownership for a period of 18 months ending September 30, 2018 (the “Disclosed Studios”).
  • For purposes of this Item, Pure Barre will refer to (a) Disclosed Studios that are owned and operated by its affiliate(s) as “Disclosed Affiliate Studios,” and (b) franchised Disclosed Studios as “Disclosed Franchised Studios,” during the Measurement Period.
  • The final row in the chart below discloses the average Gross Sales generated amongst the Disclosed Franchised Studios that are operated from an Authorized Location that is at least 1,500 square feet in size, which is what Pure Barre expects you to locate and secure consistent with its standard franchise offering and the Approved Services and Approved Products you will be offering and providing at your franchised Studio.
  • Of the 493 Studios that were open and operating as of September 30, 2018, Pure Barre excluded 138 Studios because they were not open and operating without any ownership change or assignment for 18 months as of September 30, 2018.
  • This information was provided to Pure Barre by the respective owners of the Representative Studios (except for the company-owned Studios). Pure Barre has not audited this information or independently verified this information.
  • Some Studios have sold this amount. Your individual results may differ. There is no assurance that you’ll sell as much.

Disclosed Affiliate Studios

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