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How much does Oxygen Yoga & Fitness cost?
Initial Investment Range
$0 to $590,500
Franchise Fee
$127,000 to $133,000
The franchise offered is for the right to operate an “Oxygen Yoga & Fitness” area representative business under which you will develop the geographic area we grant to you by soliciting franchise owners to own and operate “Oxygen Yoga & Fitness” facilities within the Franchised Territory.
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Oxygen Yoga & Fitness April 15, 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.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The financial statements for OYF US Inc. (OYF) show significant financial weakness. The company has a growing stockholder's deficit, reaching over $1 million in 2024, and has experienced substantial and increasing net losses. OYF explicitly flags its undercapitalization as a special risk, noting it may be unable to meet its preopening obligations. This financial condition could jeopardize OYF's ability to support you and maintain the franchise system.
Potential Mitigations
- A franchise accountant should thoroughly analyze the audited financial statements, including all footnotes and year-over-year trends, to assess the company's viability.
- Understanding the implications of the state-required fee deferrals due to weak financials requires a discussion with your franchise attorney.
- Your business advisor can help you assess whether the franchisor has sufficient capital to fulfill its support obligations without relying on new franchise sales.
High Franchisee Turnover
Low Risk
Explanation
No franchisee turnover was identified because the Area Representative (AR) franchise system is new and has no operating history. Item 20 and Exhibit H show that while several AR agreements have been signed, none were operational during the reporting period, and there are no former ARs. While this means no negative turnover data exists, it also signifies a complete lack of an operational track record for the AR program, which is a risk in itself.
Potential Mitigations
- Engaging a business advisor to assess the risks of joining a new system with no operational history is crucial.
- It is important to ask your attorney to help you formulate questions for the franchisor regarding their plans to support their first cohort of Area Representatives.
- An accountant can help you model the financial risks associated with being one of the first franchisees in a new system.
Rapid System Growth
High Risk
Explanation
This franchise system is experiencing rapid growth from a base of zero, with eight Area Representative agreements signed but not yet operational. While growth is the objective, the franchisor's own financial disclosures reveal significant net losses and a stockholder's deficit. Rapidly adding franchisees without a proven support structure or sufficient capital could strain the franchisor's ability to provide the promised training, operational assistance, and marketing support to you and the unit franchisees you recruit.
Potential Mitigations
- In discussions with the franchisor, inquire specifically about the scalability of their support staff and systems to handle the planned growth.
- Your accountant should review the franchisor's financials to determine if they have a credible financial plan to fund the support infrastructure for this growth.
- Contacting other recently signed (but not yet operational) Area Representatives to share insights could be beneficial, and a business advisor can help facilitate this.
New/Unproven Franchise System
High Risk
Explanation
OYF is a new franchisor, incorporated in June 2022 and beginning to offer franchises in August 2023. The FDD discloses a short operating history as a special risk. As confirmed in Item 20 and Exhibit H, there are no Area Representatives with operational businesses, meaning the AR model is entirely unproven in the market. Investing in a new system carries higher risks, as the business model, brand recognition, and franchisor support systems are not yet established.
Potential Mitigations
- A thorough investigation of the management team's prior experience in both the fitness industry and in managing a franchise system should be conducted with your business advisor.
- Your attorney could attempt to negotiate more favorable terms, such as enhanced support commitments, to offset the risks of joining an unproven system.
- Creating conservative financial projections with your accountant is critical, given the absence of any historical performance data for the AR role.
Possible Fad Business
Medium Risk
Explanation
The business is a yoga and fitness studio concept. While the fitness industry is well-established, specific fitness concepts can be subject to trends. You must assess whether the 'Oxygen Yoga & Fitness' model, which includes specialized heat therapy, has long-term, sustainable consumer demand or if it relies on a trend that could fade. Your long-term franchise agreement would outlast a short-term fad, potentially leaving you in a difficult market position.
Potential Mitigations
- A business advisor can help you research the long-term market trends for boutique fitness and specialized yoga concepts.
- Discuss the franchisor's strategy for innovation and evolving the brand to maintain relevance with their management team.
- Your accountant can assist in modeling financial scenarios that account for potential shifts in consumer demand over the life of the agreement.
Inexperienced Management
Medium Risk
Explanation
The management team's experience is primarily with the Canadian parent company, OYF Inc., which has operated since 2011. However, the US franchisor entity, OYF, is very new (2022). While management has industry experience, their specific experience in launching and supporting a franchise system in the United States, particularly an Area Representative network, is limited. This could impact the effectiveness of US-specific support, marketing, and operational guidance.
Potential Mitigations
- In your due diligence calls, ask the franchisor's executives about their specific strategies and resources for the US market.
- Your business advisor should help you assess whether the management team has hired US-based franchise professionals to support the expansion.
- Discussing the quality and relevance of support with the initial US franchisees you will be recruiting will be a key task for you.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD Package. Private equity ownership can be a risk because PE firms often have a shorter investment horizon, which may lead to decisions that prioritize quick returns over the long-term health of the franchise system. This can manifest as cuts in franchisee support, increases in fees, or a premature sale of the brand.
Potential Mitigations
- If you were considering a PE-owned franchisor, researching the firm's history with other franchise brands would be a wise step for your business advisor.
- An attorney should always review assignment clauses to understand how a sale of the franchise system could impact your agreement.
- Speaking with franchisees who have experienced a PE takeover of their system can provide valuable insights.
Non-Disclosure of Parent Company
Medium Risk
Explanation
The franchisor, OYF, is a subsidiary of a Canadian parent company, OYF Inc. While the parent is disclosed, its financial statements are not included in the FDD. Given that OYF is a recently formed entity with significant losses and a stockholder's deficit, the financial strength and commitment of the parent company are material to your risk assessment. Without the parent's financials, you cannot fully evaluate the stability of the overall enterprise backing your franchise.
Potential Mitigations
- It is advisable to have your attorney inquire why the parent company's financials are not included, especially given the US entity's financial state.
- Your accountant should carefully analyze the 'Due to Related Parties' line item on the balance sheet to understand the financial dependency between the entities.
- In discussions with the franchisor, ask about the nature and extent of financial and operational support the parent company is committed to providing.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD Package. A franchisor is required to disclose its business predecessors. Reviewing the history of any predecessors is important because it can reveal inherited issues, such as a history of litigation, bankruptcy, or franchisee failures, which might not be apparent when looking only at the current franchisor entity. An incomplete disclosure could obscure the true track record of the franchise system.
Potential Mitigations
- A careful review of Item 1 with your attorney is important to identify any disclosed predecessors.
- If a predecessor is identified, your business advisor should help you research their history for any red flags.
- An accountant can help compare the predecessor's performance data with the current franchisor's, if available.
Pattern of Litigation
Low Risk
Explanation
The FDD discloses that no material litigation is required to be disclosed in Item 3. While this is a positive finding, it's important to remember that this only covers litigation meeting specific legal disclosure thresholds. It does not mean no disputes exist. General business disputes that do not meet the materiality criteria would not be listed.
Potential Mitigations
- Your attorney should confirm that the 'no litigation' statement appears to be compliant with federal and state disclosure rules.
- When speaking with current and former franchisees, it is a good practice to ask about their experiences with disputes, even if they did not result in litigation.
- A business advisor can help you perform online searches for news articles or other public information about the franchisor to uncover potential issues.
Disclosure & Representation Risks
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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Financial & Fee Risks
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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Legal & Contract Risks
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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Territory & Competition Risks
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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Regulatory & Compliance Risks
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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Franchisor Support Risks
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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Operational Control Risks
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.
Term & Exit Risks
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.
Miscellaneous Risks
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.