How Orangetheory Fitness built a $1,000,000,000 empire

Yahoo Finance sat down with Orangetheory’s CEO, Dave Long, to find out how a boutique fitness studio became a behemoth with $1 billion in sales in 2018.

“Orangetheory has always been a science-backed workout.” Long said. “The classes are about an hour long, but within that hour, we're monitoring your heart rate and we're looking to help push our members to get that twelve or more minutes in what we call the orange zone.

“That's 84% of your maximum heart rate or more.”

Orangetheory’s classes offer various forms of unique high-intensity interval training (HIIT) developed by Ellen Latham, who founded the company in 2010.

Long highlighted how humans beginning a day with a good workout can have positive effects throughout the day.

“They get an endorphin release,” he said. “A lot of times that will lead to them making other good lifestyle choices.”

It turns out appealing to clients of all abilities is good business: Orangetheory has nearly 800,000 members who work out at more than 1,100 locations across 49 states and 20 countries. And each Orangetheory franchise hosts, on average, more than 5,000 workouts per month. That’s approximately 66 million classes a year.

Orangetheory was recently listed as No. 25 on Entrepreneur magazine’s Franchise 500. Long expects the rapid growth to continue. He’s forecasting 2,500 studios and 2.5 million members worldwide in the next 5 years.

‘Fitness, for me, provides two huge benefits: the energy and also the calming effect’

As of March 2019, the total investment necessary to begin operating an Orangetheory studio can range from $563,529 to $999,121. The disparity is determined in part by location, square footage, and amenities.

So, with so many franchises and so much money, how does Long manage the stress of running a ‘boutique’ billion-dollar fitness company?

“Fitness, for me, provides two huge benefits: the energy and also the calming effect,” Long said amid the various workouts around him and bubblegum-pop remixes pumping out of carefully hidden speakers.

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