Bottom line
- Total investment $224K – $385K including a $49K franchise fee, 7.0% ongoing royalty.
- Average unit revenue of $596K/year. Estimated payback in 1.4 years.
- Rated MODERATE with a risk score of 59/100. SBA loan default rate of 0.0% across 12 loans (below the industry average).
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 Real Hot Yoga unit return on the cash you put in?
Unlevered ROIC · per unit
54%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Real Hot Yoga units return on equity?
Equity IRR · 5-yr
36.4%
4.72× MOIC
Year-1 DSCR
2.26×
EBITDA ÷ debt service
Equity required
$4.6M
on $13.7M purchase
Total debt
$9.1M
SBA $5.0M + senior + seller note
Overview
About
Real Hot Yoga franchisees operate heated yoga studios offering group classes, personal training, and wellness services to members on monthly or class-pass subscription models. Day-to-day operations include class scheduling, instructor management, facility maintenance of heating systems, membership billing, and community marketing to drive class attendance and retention.
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 · 25 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
Real Hot Yoga presents elevated risk due to going concern status, single-unit system suggesting contraction, absence of financial substantiation (Item 19), and unclear franchisor viability despite reasonable unit-level economics.
Score breakdown · what drove the 59 / 100 rating
- 01HIGHGoing Concern status indicates franchisor financial distress or viability uncertainty
- 02MINOROnly 1 operating unit despite franchise system suggests failed expansion or recent collapse
- 03HIGHNo disclosed litigation history is unusual for yoga/wellness sector with liability exposure
- 04MEDMissing Item 19 financial performance representations limits ability to validate stated averages
- 05MINORHigh initial investment ($223.8K-$385.1K) relative to single operating location suggests unproven model scalability
- 06HIGH7% royalty on $595.9K average revenue = $41.7K annual fee is material but sustainability unclear with going concern status
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
25 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Real Hot Yoga · FDD (2022) PDF