AR Workshop
Formerly known as Workshop (Fitness)
Bottom line
- Total investment $134K – $230K including a $35K franchise fee.
- Average unit revenue of $128K/year (median $120K).
- Rated STRONG with a risk score of 53/100. SBA loan default rate of 0.0% across 32 loans (below the industry average).
- System contracting at -20.8% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one AR Workshop unit return on the cash you put in?
Unlevered ROIC · per unit
8%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 AR Workshop units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$230K
on $1.2M purchase
Total debt
$921K
SBA $0.6M + senior + seller note
Overview
About
AR Workshop franchisees operate DIY craft studios where customers create and customize personalized wood and home décor items using on-site tools, equipment, and design technology. Day-to-day operations involve managing class scheduling, equipment maintenance, material inventory, customer service, and driving walk-in/event-based traffic through retail-style retail locations.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 30 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
AR Workshop presents meaningful risk due to declining unit count, undisclosed profitability metrics, prior regulatory action for non-compete violations, and unclear unit economics relative to investment requirements.
Score breakdown · what drove the 53 / 100 rating
- 01MEDUnit count declined 7.3% YoY (115 units), indicating system contraction and potential market saturation or franchisee dissatisfaction
- 02MEDNo Item 19 (Average Net Income) disclosed — inability to verify profitability claims; average revenue of $127,875 may not support stated investment range of $134,312-$229,708
- 03HIGHLitigation history: Assurance of Discontinuance with Washington AG regarding illegal non-compete provisions suggests franchisor compliance issues and potential governance concerns
- 04MEDRoyalty structure floor of $500/month ($6,000 annually) is aggressive given average revenue; at lower end, this represents 4.7% effective royalty on disclosed average
- 05MINORHigh franchise fee ($35,000) relative to initial unit economics — fee represents 26-38% of total investment but profitability unclear
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
99 numbers
One-time purchase · CSV download · Validation questions included
FDD download
AR Workshop · FDD (2024) PDF