Bottom line
- Total investment $297K – $490K including a $40K franchise fee, 7.0% ongoing royalty.
- Average unit revenue of $633K/year. Estimated payback in 8.3 years.
- Rated MODERATE with a risk score of 63/100. SBA loan default rate of 0.0% across 4 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 Ritual Hot Yoga unit return on the cash you put in?
Unlevered ROIC · per unit
35%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Ritual Hot Yoga units return on equity?
Equity IRR · 5-yr
36.0%
4.65× MOIC
Year-1 DSCR
2.28×
EBITDA ÷ debt service
Equity required
$4.7M
on $13.9M purchase
Total debt
$9.2M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate hot yoga studios offering heated group fitness classes, typically managing membership sales, class scheduling, instructor hiring/training, and facility operations. Day-to-day responsibilities include member retention, marketing, instructor management, and maintaining studio facilities while paying 7% of gross revenue to the franchisor.
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 · 15 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
Ritual Hot Yoga presents CAUTION-level risk: extremely limited franchise network (5 units), thin profit margins after royalties, and unproven scalability despite high startup capital requirements.
Score breakdown · what drove the 63 / 100 rating
- 01MINOROnly 5 units in system with 100% YoY growth suggests extremely small franchise network and unproven scalability
- 02MINORNet income of $47,288 on $633,015 revenue (7.5% net margin) is razor-thin after 7% royalty obligation, leaving minimal profitability
- 03MINORHigh initial investment range ($297k-$490k) paired with modest unit count indicates franchisor may be reliant on franchise fees for revenue rather than proven unit economics
- 04HIGHNo disclosed going concern statement is positive, but microscopic unit base (5 locations) provides insufficient performance data to validate model
- 05MINORFranchise fee of $40,000 represents 13.5-23.6% of total startup cost, typical for new/unproven systems rather than established brands
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
18 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Ritual Hot Yoga · FDD (2025) PDF