When the first Orangetheory studio appeared on the scene in 2010, its business model was a work in progress. It claimed that it offered “the best one-hour workout in the country”—a unique regimen predicated, it said, on the science of Excess Post-Exercise Oxygen Consumption (EPOC).
“For the first couple of years, we focused on our pilot,” says CEO Dave Long. “We were very raw in terms of systems and marketing, and we were bootstrapping everything. The core of the product existed, and we knew that people loved it, but we were only about 80% of the way there.”
By 2012, Long says, management had perfected its training systems, and was able to spend more time on-site with franchisees. “That’s just one of the steps we took to make the product—and our ability to deliver it—more consistent across the spectrum. We knew that, once we got that right, we’d take off.”
In 2013, Long and Orangetheory saw the growth trajectory snap upwards. While it had opened 20 locations in 2012, it managed to welcome in approximately 50 in 2013. The first truly explosive year was 2017, which saw the launch of 294 new units.
Now, with nearly 1,000 studios in 49 states and 17 countries, the company expects to continue growing at a similarly brisk pace, primarily in California and Texas.
Last year, Orangetheory had system-wide revenues of $739 million, and this year, it confidently expects to hit $1 billion.
Remarkably, not one location has closed since the brand’s inception.
Reinforcing Infrastructure that Will Handle Explosive Growth
Looking back, Long reflects, “You’re never really prepared for the things that really fast growth brings. But, because of the time we spent getting everything right with our pilot, and with our early franchised facilities, we were really dialed into our systems. We invested in our structure in advance, and were disciplined about developing strong field training teams, and a good support structure at our corporate headquarters.”
One modification, in particular, has made it easier to manage large rollouts.
Orangetheory now has an area developer in every market it enters. The developer, in fact, is a team that helps franchisees with new studio openings and ongoing support, which encompasses everything from marketing, to training, to compliance issues. The teams are supplemented by a robust e-learning platform, which contains modules defining and describing every position in the club.
“The area developers are our ‘feet on the street,’ ” Long says. “These coordinated field teams make large-scale openings much easier.”
Long also attributes the company’s ability to continue growing quickly to what he calls “a relentless focus on operational excellence,” and a strong focus on real estate development.
“We have a very large real estate team that works with every conceivable global market,” he says. “If there’s a trade area out there that’s viable for an Orangetheory club, and someone wants to open it—we’ll be there. We’re very serious about getting ahead of the real estate curve for our current and future franchisees. This year, for example, we sent 15 people to the RECon Global Retail Real Estate Convention in Las Vegas, and took three to four meetings a day with brokers, landlords, and owners.
“That’s how important it is for us to make sure we don’t miss out on a single location!”