OHM Fitness Logo

OHM Fitness

OHM Fitness Franchise, LLC
https://www.ohmfitness.com
1-480-797-2854
15011 N. 75th Street, Suite #2, Scottsdale, Arizona 85260

Initial Investment Range

$373,500 to $2,647,000

Franchise Fee

$174,000 to $589,000

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 May 1, 2024 FDD Risk Analysis

Free FDD Library AI Analysis Date: July 16, 2025

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

1

Franchisor Stability Risks

Start Here
Total: 10
4
2
4

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor, OHM Fitness Franchise, LLC (OHM), is in a precarious financial state. Audited 2023 financials show a members' deficit (negative net worth) of over $2.8M, a net loss of $3.7M, and negative operating cash flow. Note C includes a 'going concern' warning, indicating doubt about its ability to continue operating, stating it depends on future franchise sales for survival. This is also disclosed as a 'Special Risk', signaling a critical threat to its ability to support you.

Potential Mitigations

  • A franchise accountant must conduct a deep analysis of the audited financials, including the 'going concern' note and cash flow statements.
  • Discuss the specific implications of the negative net worth and operating losses on the franchisor's ability to provide promised support with your financial advisor.
  • Your attorney should review the state-specific financial assurance requirements, like the surety bond mentioned for Maryland, to understand their protections.
Citations: Item 21, FDD Exhibit B (Financial Statements, Note C), Special Risks to Consider About This Franchise section

High Franchisee Turnover

High Risk

Explanation

There is a direct contradiction regarding franchisee turnover. Item 20 tables claim zero franchisees have ceased operations, been terminated, or not renewed. However, FDD Exhibit E-2 lists one franchisee who has 'left the system'. In a very small system with only four locations open at the end of 2023, one departure represents a very high turnover rate of 25%. This discrepancy raises concerns about the accuracy of the data and potential franchisee dissatisfaction.

Potential Mitigations

  • Your attorney must press the franchisor for a clear, written explanation of the discrepancy between Item 20 data and the list in Exhibit E-2.
  • It is critical to contact the former franchisee listed in Exhibit E-2 to understand their reasons for leaving the system.
  • A business advisor can help you assess the impact of such a high effective turnover rate on the system's stability.
Citations: Item 20 (Table 3), FDD Exhibit E-2

Rapid System Growth

High Risk

Explanation

The franchisor is planning extremely rapid growth. Item 20 shows 42 franchise agreements were signed with outlets not yet open, and it projects 25 new outlets will open in the next year. This is a significant expansion for a new system that had only four franchised outlets operating at year-end 2023. Given its disclosed financial weakness, this growth may severely strain its ability to provide adequate site selection, training, and ongoing support to all franchisees.

Potential Mitigations

  • A business advisor should help you question the franchisor about their specific plans to scale support infrastructure to handle this rapid expansion.
  • Contacting franchisees who have recently opened can provide insight into the current quality and timeliness of the franchisor's support.
  • Have your accountant review the franchisor’s financial capacity in Item 21 to determine if they can realistically support such growth.
Citations: Item 20 (Table 5), Item 21, FDD Exhibit B

New/Unproven Franchise System

High Risk

Explanation

The franchisor is a new and unproven company, having been formed in 2021 and only starting to offer franchises in March 2022. The franchisor itself has not operated a similar business, and its affiliate has only operated one studio since August 2022. The FDD explicitly highlights this 'Short Operating History' as a special risk, acknowledging that this may make the investment riskier than a franchise in a more established system with a proven track record of success.

Potential Mitigations

  • Engaging a business advisor to perform deep due diligence on the viability of this new business model is essential.
  • It is crucial to speak with the few existing franchisees listed in Item 20 to learn about their experiences with this new system.
  • Your attorney may be able to negotiate more favorable terms in the franchise agreement to help offset the higher risk of investing in an unproven brand.
Citations: Item 1, Item 20, Special Risks to Consider About This Franchise section

Possible Fad Business

Medium Risk

Explanation

The business is centered on Electro Muscle Stimulation (EMS), a fitness modality that is relatively new and niche within the broader U.S. market. While potentially effective, there is a risk that its long-term consumer demand is not as established as more traditional fitness concepts. You should consider the possibility that the concept could be a trend with limited long-term viability, which could impact your business after the initial wave of interest subsides.

Potential Mitigations

  • Independent market research should be conducted with a business advisor to assess the long-term consumer demand for EMS fitness in your specific area.
  • Ask the franchisor about their long-term strategy for innovation and evolving the business model to maintain relevance beyond current trends.
  • Your financial advisor can help you evaluate the business model's resilience to shifts in fitness trends and economic conditions.
Citations: Item 1

Inexperienced Management

Medium Risk

Explanation

The management team has prior experience in franchising with other brands like European Wax Center, which is a positive factor. However, Item 2 does not indicate that the key executives have direct prior experience in operating an EMS-specific fitness business. While their general franchise experience is valuable, their lack of specific experience with this particular business model could present challenges in providing nuanced operational guidance and support for this niche concept.

Potential Mitigations

  • A business advisor can help you assess how management's prior franchise experience translates to this specific fitness model.
  • In discussions with the franchisor, inquire how they are bridging any gaps in their EMS-specific operational expertise.
  • Speaking with existing franchisees about the quality and relevance of the operational guidance provided by management is highly recommended.
Citations: Item 1, Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. Private equity ownership can sometimes lead to a focus on short-term profits over the long-term health of the franchise system. This might manifest as reduced support, increased fees, or pressure to use affiliated vendors. The franchisor does not appear to be owned by a private equity firm.

Potential Mitigations

  • It is still prudent to have your attorney verify the full ownership structure of the franchisor entity.
  • Engaging a business advisor to research the background and reputation of the franchisor's principals can provide additional insight.
  • Ask your accountant to review the financial statements for any signs of significant debt or shareholder structures that might resemble private equity influence.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD. The franchisor entity, OHM Fitness Franchise, LLC, appears to be a standalone company, and Item 1 does not disclose any parent company. When a franchisor is a subsidiary, the financial health of the parent can be material, and its non-disclosure could hide risks. That does not seem to be the case here.

Potential Mitigations

  • Your attorney can conduct a corporate records search to confirm the ownership and affiliate structure of the franchisor.
  • In your due diligence calls, you can ask the franchisor to confirm it has no undisclosed parent or controlling entity.
  • An accountant's review of the affiliate disclosures in Item 1 and the related party transactions in Item 21 is a good practice.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD. Item 1 clearly states that the franchisor has no predecessors. This means the company did not acquire the franchise system from a prior entity. Therefore, there is no hidden history of litigation, bankruptcy, or franchisee turnover associated with a predecessor that you need to be concerned about.

Potential Mitigations

  • Although no predecessors are listed, asking the franchisor about the origin of the business concept and system is still a valuable due diligence step.
  • Your attorney can confirm the franchisor's corporate history to ensure no predecessor entities have been omitted from the disclosure.
  • A business advisor can help you research the industry to see if similar concepts have existed under different names or ownership.
Citations: Not applicable

Pattern of Litigation

Low Risk

Explanation

This risk was not identified in the FDD. Item 3 discloses that there is no litigation against the franchisor that requires disclosure. A pattern of lawsuits, especially from franchisees alleging fraud or misrepresentation, can be a major red flag about a franchise system. The absence of such litigation is a positive sign, though it should be viewed in the context of the franchisor's very short operating history.

Potential Mitigations

  • Your attorney can conduct an independent public records search for litigation involving the franchisor or its principals as a final verification step.
  • It is wise to ask current and former franchisees about any disputes they may have had, even if they did not result in litigation.
  • A business advisor can help you understand typical litigation levels in comparable franchise systems.
Citations: Not applicable
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
5
3
2

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

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4

Legal & Contract Risks

Total: 16
3
6
7

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
2
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.

6

Regulatory & Compliance Risks

Total: 10
4
3
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.

7

Franchisor Support Risks

Total: 4
2
1
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
6
4
2

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
6
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.

10

Miscellaneous Risks

Total: 2
2
0
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.