If you’re considering opening a fitness franchise, Rick Mayo (Alloy Founder and CEO), compares the Alloy Franchise vs. Orangetheory Franchise and describes what makes these two franchises different. In this article, we compare the two fitness franchise competitors and whether it’s the right franchise opportunity for you.
You’re considering purchasing a fitness franchise and are unsure where to begin. They’re NOT all created equal. That’s a topic we’ve been highlighting over the past few months, as we’ve compared popular fitness franchises to our offering – Alloy Personal Training. In each post, we’ve looked at things like services, demographics, and startup costs and compared each consideration to Alloy.
This blog is no different. In this post, we’ll compare Alloy Personal training to Orangetheory to help you decide which option is right for you.
Alloy vs Orangetheory Comparison
What Fitness Services Are Provided?
Orangetheory
Orangetheory focuses on group training in a class setting. Most classes have about 24-26 participants.They build their workouts based on five heart rate zones: resting, easy, challenging, uncomfortable, and all out. A typical Orangetheory Fitness workout is about 55-60 minutes and includes both cardiovascular- and strength-training intervals broken up into blocks with breaks in-between.
Coaches guide members through each heart rate zone, providing real-time instruction on when to push it and when to pull it back. The goal of each workout is to spend at least 12 minutes with your heart rate in “the orange zone” (uncomfortable). The idea is this boosts metabolism, burns calories, and helps you burn fat.
Orangetheory offers a pre-set menu of exercises (although they shift them daily) so members can focus on different muscles and goals. Everyone in the class does the same workout. The class includes work on the treadmill, the indoor water-rower and the weight-room floor with various equipment. They split participants into two groups, with one group beginning on the treadmills and one group beginning on the indoor water-rowers.You must wear an Orangetheory-issued heart rate monitor during class, which collects data and measures heart rate. During the class, participants can watch everyone’s heart-rate on big TV displays in the studio and see how many calories they are burning throughout the class.
Alloy
The main thing that differentiates Alloy from Orangetheory is that Alloy focuses on personal training.
While Orangetheory specializes in a group training model, Alloy actually provides personalized fitness prescriptions for each individual person. The ratio is 1 personal training coach to 6 people. This allows the coach to still deliver one-on-one personalization while the very small group creates additional motivation and support.This also allows the cost to be less than one-on-one personal training when sharing time with the other clients. The average cost is about $30 per Alloy session vs one-on-one personal training can be $75 – $100 per session.
This focus on high-quality, truly tailored personal training allows Alloy to cater to the Active Aging population (people over the age of 55) who want to be in the best shape of their lives.
Members won’t find pre-set workouts with “options.” Instead, they’ll get custom-designed personal- and small-group training options created by experienced personal trainers.
Initial Investment
Orangetheory
When it comes to owning a franchise, Orangetheory has some staunch franchising candidate requirements. According to Orangetheory’s website, all interested candidates must “be able to provide required capital and dedicated studio management support.”
Additionally, candidates must meet the following requirements:
- Both individual and group investors must have entrepreneurial experiences.
- Owners and operators must work onsite in the franchise, which makes absentee ownership impossible.
- Franchise owners must have a minimum of $350k in liquid capital with a minimum of $1 million in net worth.
Finally, Orange Theory provides strict requirements for ideal fitness studio spaces, with minimum size requirements, location requirements, and frontage minimums. Orangetheory locations usually run around 2,800 sf. The average number of memberships an Orangetheory location will need is around 751 members. That is a lot of members sharing a 2,800 sf facility.
Alloy
Compared to Orange Theory, Alloy offers flexible startup requirements, making owning an Alloy franchise more accessible for many people.
Currently, interested investors must have a net worth of at least $300k and must be able to invest a minimum of at least $125k.
When franchise owners invest in an Alloy location, they’ll receive ample support to find a location and establish a successful business. There are 2 size options with a recommended number of members to be profitable. One model is 1,500 square feet with 130 members and the other model is 2,500–3,000 square feet and 250 members. With the Alloy vs Orangetheory comparison, as you can surmise, having a smaller membership like Alloys allows the staff to keep a cleaner facility, as well as provide a more personalized personal training atmosphere, and less competition for equipment and facilities.
Demographics
Orangetheory
Orangetheory caters to gym-goers between the ages of 25-45, with their largest cohort being females between the ages of 25-49. Baby Boomers are underrepresented at Orange Theory.
Alloy
Alloy wants to give founders the best possible chance of success, and it pays close attention to demographic metrics to ensure this. Before Alloy moves ahead into a new location, Alloy’s extensive support network first identifies whether its target market is present in the area.
Specifically, the team is looking for mature, Active Aging clients between the ages of 40-69 with a household income of at least $100,000 annually.
Alloy also pays attention to radius size, which refers to the distance clients have to drive to get to the gym. Over the years, Alloy has found that most people want to drive two miles or less to get to their workout facility. As such, Alloy strives to establish locations that work for its clients and help ensure successful franchises.
When it’s time for a new franchise owner to go live, Alloy works closely with real estate partners to find the perfect facility and complete any needed build-outs. They also have a pre-sale period to start the facility out profitably with a full membership.
Revenue
Orangetheory
Someone can currently find Orangetheory studios in 49 states and 18 countries. There are over 1,000 franchises in the US and another 150 internationally.
Orangetheory charges franchisees a royalty fee of 8% of gross sales and a marketing fee of 2% of gross sales. In 2020, the chain reported royalty revenues of $46.9 million, and total franchise sales of $586 million.
On average, it takes about 15 years for Orangetheory franchise owners to recoup their initial investment.
Orangetheory membership prices can vary from $59 per month(4 classes) to unlimited classes at $169 per month. Their membership retention rate is much lower than Alloy’s at 76%. Orangetheory locations typically have an average of 751 active members paying anywhere between $59 and $159 per month.
Alloy
Alloy is proud to have some of the highest retention rates of 97%, client longevity of over 3 years, and highest revenue-per-member numbers in today’s fitness industry. Typically, an Alloy studio only needs 130 members, then they have a waiting list above that number.
Alloy has mastered an excellent program by intentionally keeping things boutique. Alloy recently awarded its 50th franchise and now has locations in 12 states, including Montana, Tennessee, Florida, South Carolina, North Carolina, Georgia, Ohio, Texas, Utah, Nevada, Michigan, and Missouri.
To continue growing and dominating the fitness space in the coming years, Alloy is working on new franchise development deals. Pre-sales for the new franchises remain strong and promising, and Alloy continues to hold nationwide franchise discovery days – which is great news for interested investors.
The Verdict: Alloy vs. Orangetheory
So what about Alloy vs Orangetheory? Both Alloy and Orangetheory are big names in the fitness industry. While both offer group training, Alloy focuses more on the individualized one-on-one personal training model, with a maximum of 6 in a group. Alloy caters to active-aging populations with more discretionary income that can support a higher income model with fewer members.
Orangetheory, on the other hand, caters to a much younger clientele and larger group training classes where everyone does the same workout. and uses biometric data to encourage members to compete against one another during workouts.
Ultimately, Orangetheory offers a larger group-centric workout, while Alloy’s experienced personal training coaches work with people one-on-one to help them crush their fitness goals.
This creates a more tailored, boutique experience that won’t go out of style any time soon.
Article by: Rick Mayo
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