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How much does Pilates Addiction cost?
Initial Investment Range
$238,697 to $931,547
Franchise Fee
$399,057 to $752,908
We offer franchises for the operation of fitness studios offering Pilates and other specialized exercise classes using designated equipment and related products and services.
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Pilates Addiction May 6, 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 franchisor is a new entity with no financial history. The guarantor, Sequel Brands Holdings, LLC, is also a startup with no operating history, providing only an audited balance sheet showing a $1 million cash infusion. This lack of a financial track record for both the franchisor and its guarantor presents a significant risk regarding their ability to provide long-term support, invest in the brand, and fulfill their obligations to you.
Potential Mitigations
- An accountant should assess the adequacy of the guarantor's capitalization relative to the franchisor's support obligations.
- Your attorney should review the enforceability and terms of the parent company guarantee.
- Discuss the franchisor’s financial stability and capitalization plan with your business advisor.
High Franchisee Turnover
Low Risk
Explanation
The FDD package does not indicate a history of high franchisee turnover in Item 20. High turnover can be a major red flag in franchise systems, often signaling issues with profitability, franchisor support, or the business model. A stable system generally has low rates of failure and franchisee exits. While this specific risk is not present in the data, the system is new and small, so this should be monitored.
Potential Mitigations
- Scrutinizing the Item 20 tables for any signs of instability in future FDDs with your accountant is a wise precaution.
- It is essential to speak with current and former franchisees to understand their satisfaction levels and reasons for any departures.
- Your attorney can help you formulate questions to ask about system health during due diligence.
Rapid System Growth
Low Risk
Explanation
This risk was not identified, as the FDD does not show a history of rapid system expansion that might strain the franchisor's resources. For many systems, explosive growth can sometimes lead to diluted franchisee support, inadequate training for new units, and a decrease in overall quality control. This is a factor to monitor as a franchise system matures.
Potential Mitigations
- Should the franchisor begin to expand rapidly, inquiring about their plans to scale support infrastructure would be a prudent step to take with your business advisor.
- Discussing the quality of support with franchisees in a rapidly growing system is a key due diligence step.
- An accountant can help evaluate if the franchisor's financials support their growth plans.
New/Unproven Franchise System
High Risk
Explanation
Pilates Addiction is a new franchisor, formed in 2025, that has never operated a studio itself. It is rebranding a small predecessor system. Key operational manuals are still under development. Investing in a new, unproven system carries higher risks related to the viability of the business model, the effectiveness of support systems, and the potential for unforeseen operational challenges. There is no established franchisee performance history for the new brand.
Potential Mitigations
- A business advisor should help you conduct extensive due diligence on the management team's direct experience in this specific industry.
- Speaking with franchisees from the predecessor system is critical to understand the core business.
- Your attorney might be able to negotiate more franchisee-favorable terms to offset the higher risk.
Possible Fad Business
Medium Risk
Explanation
The business operates in the competitive boutique fitness market. While Pilates is an established exercise form, the specific branding and business model are new. The long-term sustainability and consumer demand for this particular studio concept in a market with many fitness options could present a challenge. You will face competition from other national and local fitness studios, which may affect your market share and profitability.
Potential Mitigations
- Engaging a business advisor to research the local competitive landscape and long-term market trends for boutique Pilates studios is recommended.
- You should evaluate the franchisor's plans for innovation and brand differentiation to maintain relevance over time.
- Creating a detailed business plan with your accountant is crucial to assess financial viability.
Inexperienced Management
High Risk
Explanation
While the management team has franchising experience from other systems, Item 3 discloses they are currently defendants in multiple lawsuits from their time at another franchisor, Xponential Fitness. These lawsuits, filed by former franchisees and investors, include allegations of fraud and misrepresentation. This history, though not involving Pilates Addiction directly, may be a significant concern when evaluating the management team's practices and your potential future relationship with them.
Potential Mitigations
- A thorough review of the litigation detailed in Item 3 with your franchise attorney is absolutely essential.
- You should consider the nature of the allegations and how they might reflect on management's approach to franchising.
- Speaking with franchisees from the management team's prior systems could provide valuable insight.
Private Equity Ownership
Low Risk
Explanation
The FDD package does not indicate that the franchisor is owned by a private equity firm. When PE firms own franchise systems, their typical focus on short-term returns can sometimes conflict with the long-term health of the brand and its franchisees. This may manifest as reduced support, increased fees, or a quick sale of the franchise system.
Potential Mitigations
- Investigating the ownership structure and long-term strategy of any parent company with your business advisor is always a prudent step.
- You should ask the franchisor about their long-term vision for the brand.
- Reviewing the assignment clause in the franchise agreement with your attorney helps clarify what happens if the system is sold.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified, as the franchisor clearly discloses its parent and guarantor entities in Item 1 and provides financial statements for the guarantor. In some cases, a franchisor might be a thinly capitalized subsidiary of a larger parent. Failure to disclose that parent or provide its financials could hide risks related to the overall financial stability and backing of the franchise system.
Potential Mitigations
- Your attorney should always confirm the corporate structure and identify all parent and affiliate companies.
- When a parent company provides a guarantee, it's important for your accountant to review that parent's financial statements.
- A discussion with your business advisor can help assess the parent's commitment to the franchise.
Predecessor History Issues
Medium Risk
Explanation
The franchisor acquired the assets of a predecessor, "WundaBar Franchising Inc." The financial performance data in Item 19 is based entirely on these predecessor studios operating under a different brand. The FDD explicitly states that the impact of the new "Pilates Addiction" brand on performance is unknown. This means the historical data may not be a reliable indicator of your potential future results under the new brand identity and system.
Potential Mitigations
- It is critical to discuss the transition from the old brand to the new one with your business advisor.
- Speaking with the two existing franchisees who are undergoing this rebranding is essential for due diligence.
- Your accountant should help you assess the Item 19 data with a high degree of caution.
Pattern of Litigation
High Risk
Explanation
Item 3 discloses that the franchisor's key executives are defendants in multiple pending lawsuits from their time at a previous franchisor, Xponential Fitness. The allegations made by franchisees and investors in those cases include fraud, misrepresentation, and violations of franchise and securities laws. This pattern of litigation involving the management team, even if related to a prior company, represents a significant risk and warrants careful consideration of their business practices.
Potential Mitigations
- A comprehensive review of the specific allegations in all the lawsuits disclosed in Item 3 with your franchise attorney is imperative.
- It would be wise to ask your attorney to research the public records of these cases for more detail.
- This history should be a major topic of discussion during your due diligence calls with other franchisees.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Purchase the complete risk review to see all 102 risks across all 10 categories.
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
Purchase the complete risk review to see all 102 risks across all 10 categories.
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.