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Ohm Fitness

Ohm Fitness Franchise, LLC
https://www.ohmfitness.com
1-480-797-2854
9525 E. Doubletree Ranch Rd, Unit 104A, Scottsdale, AZ 85258
FDD Version:

How much does Ohm Fitness cost?

Initial Investment Range

$378,500 to $890,000

Franchise Fee

$199,000 to $224,000

The franchise is for an exercise and fitness studio which provide semi-private and group fitness classes utilizing electro muscle stimulation that stimulates muscle growth through a light-weight body suit, resulting in a quicker and more effective alternative to the traditional gym workout.

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Ohm Fitness June 11, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: August 22, 2025

DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.

1

Franchisor Stability Risks

Start Here
Total: 10
5
2
3

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor’s audited financial statements in Exhibit B include a “Substantial Doubt about the Company’s Ability to Continue as a Going Concern” warning from the auditor. This is due to significant recurring net losses (over $2.3 million in 2024) and a members' deficit exceeding $5.1 million. This financial condition raises serious questions about the franchisor's ability to fund its operations and provide promised support to you.

Potential Mitigations

  • An experienced franchise accountant must review the entirety of the financial statements, including all footnotes, to assess the franchisor's viability.
  • Discuss the "going concern" issue directly with the franchisor and have your business advisor help evaluate their plan to achieve profitability.
  • Your attorney should investigate if any state financial assurance requirements, like a surety bond or escrow, apply due to this condition.
Citations: Item 21, FDD Exhibit B

High Franchisee Turnover

High Risk

Explanation

Item 20 and Exhibit E-2 show that several franchisees have already been terminated in this very young system. Financial statement footnotes in Exhibit B reveal active litigation with at least two of these terminated groups, who allege fraud and misrepresentation. The combination of early-stage terminations and serious legal disputes with former franchisees suggests a high level of system turmoil and risk to new investors.

Potential Mitigations

  • Your attorney must carefully review the litigation details in the financial statement footnotes (Note H).
  • It is critical to contact the former franchisees listed in Exhibit E-2 to understand their experiences and reasons for leaving the system.
  • A business advisor should help you weigh the significant risks indicated by this level of early-stage franchisee conflict and turnover.
Citations: Item 20, Item 3, FDD Exhibit B (Note H), FDD Exhibit E-2

Rapid System Growth

High Risk

Explanation

The franchisor is experiencing extremely rapid growth, expanding from zero to 15 open franchises in under two years, with 31 more signed but not yet open as per Item 20. This rapid expansion, combined with the financial instability noted by the auditor (a "going concern" warning), raises concerns about the franchisor's capacity to provide adequate support and training to all its new franchisees.

Potential Mitigations

  • A business advisor can help you assess if the franchisor's support infrastructure seems capable of handling this explosive growth.
  • Ask specific questions of current franchisees, particularly those who opened recently, about the quality and timeliness of the support they received.
  • Your accountant should evaluate whether the franchisor's cash flow issues might be driving franchise sales at the expense of franchisee support.
Citations: Item 20, Item 21, Special Risks

New/Unproven Franchise System

High Risk

Explanation

The franchisor is a new company, having started offering franchises in March 2022 with only two affiliate-owned locations in operation. Item 1 and the "Special Risks" section explicitly note this short operating history. Investing in a new, unproven system carries higher intrinsic risk regarding the viability of the business model, brand recognition, and the franchisor's ability to provide long-term support.

Potential Mitigations

  • Given the newness of the system, consulting with a business advisor to rigorously evaluate the business model's long-term viability is essential.
  • It is crucial to speak with the handful of operational franchisees listed in Item 20 to understand their real-world experience.
  • Your attorney might be able to negotiate more favorable terms, such as reduced royalties or better protections, to offset the higher risk.
Citations: Item 1, Item 2, Item 20, Special Risks

Possible Fad Business

Medium Risk

Explanation

The business model is centered on Electro Muscle Stimulation (EMS) fitness, a specialized and relatively new technology in the fitness market. While innovative, concepts heavily reliant on a single, trendy technology can carry the risk of being a fad. You should consider the long-term consumer demand for this specific type of workout, as your contractual obligations will continue even if market interest wanes.

Potential Mitigations

  • Engage a business advisor to research the long-term market trends and scientific validation for EMS-based fitness training.
  • Investigate the success and longevity of similar EMS concepts in other, more mature markets to gauge potential sustainability.
  • Question the franchisor on their plans for innovation and adaptation should the core EMS trend fade.
Citations: Item 1

Inexperienced Management

Medium Risk

Explanation

Item 2 indicates that while the key executives have prior franchise experience, it is primarily with a concept in a different industry (beauty/waxing). Their direct, hands-on experience operating this specific, technology-driven EMS fitness model is limited to the two affiliate-owned studios opened since August 2022. This may impact their ability to provide nuanced operational guidance specific to the OHM Fitness business.

Potential Mitigations

  • A business advisor can help you assess if the management team's previous franchise success is likely to translate to this different industry and model.
  • When speaking with current franchisees, specifically inquire about the quality and relevance of the operational support provided by the management team.
  • Investigate the backgrounds of the broader support and training team for direct fitness and EMS industry experience.
Citations: Item 2, Item 1

Private Equity Ownership

Low Risk

Explanation

This risk was not identified. The FDD does not indicate that the franchisor is owned or controlled by a private equity firm. In some cases, PE ownership can lead to a focus on short-term profits over the long-term health of the franchise system. It's generally a good practice to understand the ownership structure of any franchisor.

Potential Mitigations

  • During due diligence, it is wise to ask the franchisor about any anticipated changes in ownership structure with help from your attorney.
  • A business advisor can help you understand the potential implications of different ownership structures on a franchise system.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified, as Item 1 of the FDD clearly states that the franchisor does not have a parent company. In situations where a franchisor is a subsidiary, the financial health and influence of the parent company can be a critical factor in the franchisee's success, making its disclosure important.

Potential Mitigations

  • Your attorney should always verify the corporate structure disclosed in Item 1 to ensure there are no undisclosed controlling entities.
  • An accountant can help assess the financial stability of the franchisor as a standalone entity.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified, as Item 1 of the FDD states the franchisor has no predecessors. When a franchisor has acquired the system from a predecessor, it is important to investigate the predecessor's history for any signs of trouble, such as litigation or high franchisee turnover, as these issues could be inherited.

Potential Mitigations

  • Your attorney can help confirm the franchisor's history and ensure no predecessor information has been omitted.
  • A business advisor can assist in researching the background of the brand and its founders, even if no formal predecessor is listed.
Citations: Not applicable

Pattern of Litigation

High Risk

Explanation

While Item 3 claims no disclosable litigation, the financial statement footnotes in Exhibit B (Note H) reveal two significant, recent legal disputes. Former franchisees (Franklin and Kapneck) are pursuing claims for fraud, misrepresentation, and breach of contract, seeking millions in damages. This pattern of serious allegations from multiple early franchisees is a critical red flag about the franchisor's practices and system health.

Potential Mitigations

  • A franchise attorney must meticulously review the details of the litigation disclosed in the financial footnotes.
  • You should strongly consider the serious nature of these allegations as part of your overall risk assessment with your business advisor.
  • It is imperative that you attempt to contact the former franchisees involved in these lawsuits to understand their perspectives.
Citations: Item 3, FDD Exhibit B (Note H)
2

Disclosure & Representation Risks

Total: 15
4
1
10

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

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3

Financial & Fee Risks

Total: 10
4
5
1

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

4

Legal & Contract Risks

Total: 16
5
7
4

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

5

Territory & Competition Risks

Total: 5
3
2
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

6

Regulatory & Compliance Risks

Total: 10
6
3
1

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

7

Franchisor Support Risks

Total: 4
1
2
1

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

8

Operational Control Risks

Total: 12
5
6
1

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

9

Term & Exit Risks

Total: 18
8
7
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

10

Miscellaneous Risks

Total: 2
1
1
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.