HOTWORX franchise unit economics
HOTWORX franchisees run a 24-hour infrared sauna studio where members book virtual-instructor workout sessions on a monthly membership. Across 700 studios open the whole of 2025, revenue averaged $379,298 against $245,276 of costs, leaving profit of $107,306. Costs changes littlewith size, revenue varies 2.1 times across the thirds of the system while total expenses vary 1.2, so every extra membership lands close to the bottom line.
- Primary source
- HOTWORX Franchising, LLC, 2026 Franchise Disclosure Document
- Items read
- Items 5 and 6 for fees; Item 7 for cost to open; Item 19 for sales and any profit figure; Item 20 for the location count
- Population
- 700 of 797 locations
- Our calculations
- Marked on the page with an asterisk. Method
- Last reviewed
- 26 September 2026
Disclosure-based. Not a forecast, not an offer to sell a franchise, and not advice.
Across 700 studios, revenue varies by a factor of 2.1 and total costs vary by 1.2. That gap is the entire business: the top third clears $220,753 of profit and the bottom third clears $9,814, on cost bases of $270,792 and $225,483. Almost everything here is fixed, so every additional member falls nearly whole to the bottom line, and every empty sauna hour costs the same either way.
- Revenue runs from $251,925 to $529,788 across the thirds while total expenses run from $225,483 to $270,792. A $277,863 revenue gap against a $45,309 cost gap produces a 22.5 times difference in profit.
- The bottom third pays $3,160 more rent than the top third. $69,816 against $66,656, 27.7% of revenue against 12.6%.
- Royalty is a flat $695 a month, so it costs the top third 1.24% of revenue and the bottom third 2.64%. $6,587 against $6,648 in dollars.
- Membership revenue is $337,306 from an average 490 members, $57.36 a member a month. Monthly cancellation averages 6.17%, which is 16.2 months of member life.
- The bottom third of first-year studios loses $5,093 on average. Against $172,270 for the top third of the same 149 studios.
How much does a HOTWORX franchise make?
The average HOTWORX unit reported $379,298 of revenue in the 2026 FDD. The brand’s disclosure document discloses revenue and not profit, so what an owner keeps depends on the cost structure set out below. Revenue is not income. Rent, wages, cost of goods and the franchise fees all come out before an owner is paid. The figures for the highest-selling and lowest-selling businesses are below.
Members
Members, cancellation and what one is worth.
| Measure | 700 mature studios | 149 first-year studios | 15 corporate studios |
|---|---|---|---|
| Average members | 490 | 458 | 554 |
| Median members | 456 | 430 | 527 |
| Highest / lowest members | 1,253 / 243 | 718 / 229 | 1,451 / 290 |
| Monthly cancellation, average | 6.17% | 6.48% | 5.81% |
| Monthly cancellation, median | 6.29% | 6.57% | 5.70% |
| Monthly cancellation, high / low | 6.98% / 5.28% | 7.44% / 5.53% | 7.71% / 4.77% |
| Months a member stays, on the average rate | 16.2 | 15.4 | 17.2 |
| Membership revenue per member a month | $57.36 | $55.32 | n/a |
The member counts and cancellation rates are as the brand reported it; the last two rows are marked *.
A member is worth $57.36 a month and stays 16.2 months. That is $929 of lifetime membership revenue on the average rate, or $1,142 at the longest-keeping studio's 5.28% and $821 at the worst-retaining studio's 6.98%. On a cost base that changes by less than a tenth, the 321-point member gap between the average studio and the 1,253-member leader is worth $220,982 a year of membership revenue.
Cancellation runs 6.17% a month at mature studios and 6.48% in the first year. The corporate studios do better still at 5.81%. That first-year figure means a studio replacing 6.48% of its base every month needs roughly 30 new members a month at 458 members just to hold position, before any growth.
The lowest-profit studio in the mature group has 243 members and the highest has 1,253. $163,899 of revenue against $901,879, and a loss of $92,530 against a profit of $554,589. Both pay roughly the same rent, the same royalty, the same virtual instructor fee and similar utilities. The member count is the business.
Top performers
What separates the top HOTWORX performers
HOTWORX splits its locations into groups instead of publishing one average. The best group averaged $529,788 a year. The worst averaged $251,925. Both run the same brand, on the same agreement, paying the same fees.
Decided before you open
- Trade area and site.A 2.1× gap between bands is not an operating gap. Catchment, daytime population and what sits next door set the ceiling before the first customer arrives.
- Capacity, fixed at build.capacity is 700 studio floor multiplied by hours multiplied by how full they run. What you can sell is set by the build, and the build does not change after opening.
- What you spend to open.Opening costs $288,890 to $830,380, a 2.9× range inside one brand. The high end usually buys more capacity, so the cheapest build is not always the cheapest route to the top band.
Live operating levers
- Members, the operating driver.This model bills on members. The owner watches how many people join, how many cancel, and what a member spends beyond the plan. It is worth watching every week, because by the time it turns up in a monthly close the quarter is half gone.
- Service and retail mix.Attachment rate on retail, and the share of customers on the higher service tiers, lift what each hour earns without adding an hour or a room. It is the only lever that raises the ceiling without spending capital.
- The first year.This filing shows how a new location builds up, so the ramp can be underwritten from the document rather than assumed. Read two things out of it: the month sales cross the point where costs are covered, and how much cash you fund before that month arrives. Everything before break-even is paid for by you.
Context you underwrite around
- The reporting screen.700 of 797 locations are behind these figures. Locations open less than the full year, brand-owned, or not meeting the reporting criteria are excluded, so the numbers describe locations that cleared that screen, not the system as a whole.
- What the disclosure leaves out.Item 19 publishes no profit or cost data for franchised locations, no median. The brand’s own locations are the only margin signal in the document, and they are run by the people who wrote the playbook.
Profit and loss
700 studios, seventeen expense lines, three thirds.
| Line | Top third | Middle third | Bottom third | All 700 |
|---|---|---|---|---|
| Membership revenue | $470,150 | $315,867 | $225,332 | $337,306 |
| Retail | $59,638 | $39,668 | $26,593 | $41,992 |
| Total sales | $529,788 | $355,535 | $251,925 | $379,298 |
| Wholesale goods purchased | $38,243 | $25,227 | $16,628 | $26,716 |
| Gross profit | $491,545 | $330,307 | $235,298 | $352,582 |
| Wages and taxes | $97,135 | $79,683 | $69,211 | $82,031 |
| Rent | $66,656 | $65,600 | $69,816 | $67,357 |
| Marketing and advertising | $29,723 | $28,864 | $27,051 | $28,548 |
| Utilities | $20,330 | $17,825 | $17,601 | $18,588 |
| Bank charges | $15,403 | $10,451 | $7,762 | $11,211 |
| Royalties | $6,587 | $6,681 | $6,648 | $6,638 |
| Insurance | $6,980 | $6,454 | $6,002 | $6,479 |
| Supplies | $5,523 | $4,347 | $3,235 | $4,370 |
| Telephone and internet | $4,440 | $4,414 | $4,285 | $4,380 |
| Maintenance and repairs | $4,215 | $3,290 | $2,549 | $3,353 |
| Accounting | $2,969 | $2,599 | $2,270 | $2,613 |
| Miscellaneous | $2,651 | $2,208 | $2,365 | $2,408 |
| Travel | $2,417 | $1,702 | $1,500 | $1,874 |
| Virtual instructor fee | $1,897 | $1,890 | $1,961 | $1,916 |
| Point of sale fee | $1,584 | $1,582 | $1,556 | $1,574 |
| Taxes and licenses | $1,497 | $1,219 | $1,233 | $1,316 |
| Staff incentives | $784 | $633 | $440 | $619 |
| Expense totals | $270,792 | $239,443 | $225,483 | $245,276 |
| profit | $220,753 | $90,865 | $9,814 | $107,306 |
| profit share of revenue | 41.7% | 25.6% | 3.9% | 28.3% |
| Median profit | $194,828 | $89,276 | $16,288 | $89,566 |
As the brand reported it, reordered by size of the all-700 column. The profit share row is marked *, dividing filed profit by filed revenue.
A $277,863 revenue gap produces a $210,939 profit gap because the cost gap is only $45,309. Top third against bottom third: 2.1 times the revenue, 1.2 times the cost, 22.5 times the profit. That is as clean a demonstration of operating leverage as any filing in this category produces. It cuts both ways, a studio losing members loses margin at the same rate.
The bottom third pays more rent than the top third in actual dollars. $69,816 against $66,656. So the lowest-selling studios are in the most expensive boxes, and rent moves from 12.6% of revenue at the top to 27.7% at the bottom. This is the highest-selling argument in the table for walking away from a lease.
Wages is the one large line that scales, and it scales gently. $97,135 at the top third against $69,211 at the bottom, 40% more cost for 110% more revenue, which is 18.3% of revenue against 27.5%. A studio that is open 24 hours with virtual instruction has a staffing minimum it has to cover whatever the membership does.
Retail is 11.1% of revenue and holds that share across every third. $59,638, $39,668 and $26,593 against wholesale goods of $38,243, $25,227 and $16,628, a gross profit on goods of 35.9%, 36.4% and 37.5%. It is the one line here that behaves like a normal variable business, and it tracks membership.
Utilities are $18,588 and changes littlebetween thirds. $20,330, $17,825, $17,601, 3.8% of revenue at the top and 7.0% at the bottom. Heating saunas around the clock is a fixed cost. On the bottom third it is larger than the entire disclosed profit of $9,814.
Fees and what it costs to open
A flat royalty and a percentage advertising requirement.
| Group | Revenue | Royalty as the brand reported it | Royalty share | Marketing as the brand reported it | Marketing share |
|---|---|---|---|---|---|
| Top third | $529,788 | $6,587 | 1.24% | $29,723 | 5.6% |
| Middle third | $355,535 | $6,681 | 1.88% | $28,864 | 8.1% |
| Bottom third | $251,925 | $6,648 | 2.64% | $27,051 | 10.7% |
| All 700 | $379,298 | $6,638 | 1.75% | $28,548 | 7.5% |
The revenue, royalty and marketing figures are as the brand reported it; the share columns are marked *.
A flat $695 monthly royalty costs the bottom third twice what it costs the top third. 2.64% against 1.24% of revenue. That is the opposite of every percentage royalty in this category. It is genuinely favourable to a higher-selling owners. Grow from $251,925 to $529,788 and the brand's own fee stays exactly where it is.
The advertising requirement halves once monthly net transfers reach $30,000. That is $360,000 a year of membership draft, roughly the all-700 membership revenue of $337,306, so the average studio is close to the threshold. Below it the requirement is the greater of $2,000 a month or 10% of sales; above it, 5%. On the bottom third's $251,925 that is the difference between $27,051 and about $12,600.
Marketing is 10.7% of revenue at the bottom third and 5.6% at the top. $27,051 against $29,723 in dollars, so the lower-selling studio spends almost as much in cash and twice as much as a share. Because the requirement is written as a minimum.
What it costs to open.
| Line | Low | High |
|---|---|---|
| Sauna, software and workout equipment | $121,510 | $194,000 |
| Building work | $50,330 | $277,260 |
| Other required purchases from third parties | $30,400 | $121,600 |
| Additional funds, three months | $35,500 | $54,500 |
| Wholesale goods and inventory | $20,000 | $20,000 |
| Initial franchise fee | $19,950 | $19,950 |
| Real estate deposit and rent | $0 | $47,760 |
| Loan packaging fees and closing costs | $0 | $25,000 |
| Design, engineering and architect fees | $1,200 | $22,700 |
| Professional fees | $0 | $15,850 |
| Insurance, utilities, phone and internet | $0 | $19,800 |
| Printing, marketing and advertising | $10,000 | $10,000 |
| Initial training travel | $0 | $2,500 |
| Total | $288,890 | $830,380 |
As the brand reported it, except one grouped line, which is marked *: insurance with utilities, phone and internet service.
The saunas are the largest line and the one that stays fixed whatever else you trim. $121,510 to $194,000 of sauna, software and workout equipment, 42% of the low total. Building work swing $226,930 on top of that, and they are the line that decides whether the build lands at $288,890 or $830,380.
A $19,950 franchise fee is the smallest meaningful line in the table. Less than the $20,000 of opening inventory and less than the $35,500 minimum working capital. Combined with a flat $695 monthly royalty, this is a franchisor taking its money from equipment supply.
Three months of additional funds is $35,500 to $54,500. Against a pre-sale that averages 111 days and brings in $26,181, and a first-year cost base of $243,478, about $20,290 a month. The reserve and the pre-sale together cover roughly three months of that. That is why the pre-sale membership count is the number that decides the first year.
The network of locations.
| Year | Franchised start | Opened | Reacquired by franchisor | Ceased for other reasons | Franchised end | Company | Total |
|---|---|---|---|---|---|---|---|
| 2023 | 405 | 171 | 0 | 0 | 576 | 6 | 582 |
| 2024 | 576 | 141 | 0 | 5 | 712 | 7 | 719 |
| 2025 | 712 | 95 | 9 | 1 | 797 | 15 | 812 |
As the brand reported it.
407 studios opened in three years and six left. 171, 141 and 95 openings against five departures in 2024 and one in 2025, with zero terminations across the period. That is an exceptionally low departure rate, and it sits beside a bottom third of the mature system earning $9,814 and a bottom third of first-year studios losing money.
Openings have halved, from 171 to 95. The system is still adding roughly two studios a week. The 149 first-year studios are the 2024 group finishing their first full year. Each new group enters the averages at $352,781 against $379,298, which holds those averages down while the network keeps growing.
First year
What the first full year looks like.
| Line | Top third | Middle third | Bottom third | All 149 |
|---|---|---|---|---|
| Membership revenue | $407,725 | $289,989 | $212,661 | $304,068 |
| Retail | $66,095 | $47,850 | $31,860 | $48,714 |
| Total sales | $473,820 | $337,839 | $244,520 | $352,781 |
| Wages and taxes | $93,660 | $82,056 | $72,151 | $82,693 |
| Rent | $65,189 | $61,107 | $68,261 | $64,829 |
| Marketing and advertising | $30,150 | $29,434 | $27,471 | $29,029 |
| Utilities | $18,406 | $18,303 | $19,479 | $18,724 |
| Expense totals | $261,716 | $237,559 | $230,909 | $243,478 |
| profit | $172,270 | $72,714 | −$5,093 | $80,535 |
| profit share of revenue | 36.4% | 21.5% | −2.1% | 22.8% |
| Median profit | $156,338 | $71,377 | −$176 | $72,161 |
As the brand reported it, showing the largest expense lines from a table that has the same seventeen categories as the mature one. The profit share row is marked *.
The bottom third of first-year studios loses $5,093 on average. On $244,520 of revenue against $230,909 of costs, and its median is a loss of $176. So about half that group sits at or below break-even after a full year of trading. Against a build costing $288,890 to $830,380, that is the real downside case.
A first-year studio averages $352,781 and a mature one $379,298. A gap of $26,517, or 7.5%, and on profit $80,535 against $107,306. So most of what a studio will ever earn, it earns in its first full year. The maturity premium here is one quarter of the first year's own profit.
First-year studios pay $64,829 of rent against mature studios' $67,357. Nearly identical, as are marketing at $29,029 against $28,548 and utilities at $18,724 against $18,588. Almost the entire cost base arrives fully formed on day one. Is why the bottom third of a first-year group can be underwater at a revenue level the top third turns into $172,270.
Before the first draft.
96 studios ran a pre-sale in 2025, averaging 111 days and 314 memberships. The median pre-sale lasted 84.5 days and sold 294 memberships, generating an average $26,181 of revenue from discounted enrollment fees and retail, with a median of $22,846. Every location ran one before opening.
The best pre-sale sold 837 memberships and the lowest-selling 198. Grand Island, Nebraska took $79,015.83 on those 837; a studio in Davenport, Florida took the highest revenue at $81,012 on 609 memberships. Brentwood, Tennessee sold the fewest at 198. Richmond, Texas took the least revenue at $3,982. Against a first-year average membership base of 458, a 314-member pre-sale is roughly two-thirds of the year-one base signed before the doors open.
Questions we get asked
Questions owners ask.
What should a studio be billing?
Across 700 studios open all of 2025, average total sales was $379,298, $337,306 of membership and $41,992 of retail. By third the averages were $529,788, $355,535 and $251,925. The 149 studios in their first full year averaged $352,781. The highest-selling mature studio turned $901,879 and the lowest-selling $163,899; in the first-year group the range was $696,487 to $147,932.
What does the cost structure look like?
At the all-700 average: wholesale goods $26,716, wages and taxes $82,031, rent $67,357, marketing and advertising $28,548, utilities $18,588, bank charges $11,211, royalties $6,638, insurance $6,479, supplies $4,370, telephone and internet $4,380, maintenance $3,353, accounting $2,613, miscellaneous $2,408, virtual instructor fee $1,916, point of sale $1,574, taxes and licenses $1,316, travel $1,874 and staff incentives $619, total expenses $245,276. That leaves profit of $107,306, or 28.3%, with a median of $89,566. The key feature is how little that total moves: $225,483 at the bottom third against $270,792 at the top, on revenue that differs by 2.1 times.
What does the brand cost in total?
A flat royalty of $695 a month at current rates, with studios on older agreements paying $550 or $595. A virtual instructor fee of $20 a sauna a month plus a diet application fee. A point of sale fee. And an annual convention fee of $790 for two attendees. Local advertising is required at the greater of $2,000 a month or 10% of gross monthly revenue, falling to 5% once monthly net electronic funds transfer reaches $30,000. As the brand reported it, royalties cost 1.24% of revenue at the top third and 2.64% at the bottom. Opening costs $288,890 to $830,380 outside California and New York, including a $19,950 franchise fee.
How many members does a studio need?
The average mature studio has 490 members producing $337,306 of membership revenue, which is $57.36 a member a month. The median is 456, the highest 1,253 and the lowest 243. Monthly cancellation averages 6.17%, so a member stays about 16.2 months; first-year studios run 6.48% and average 458 members. Pre-sale matters: the 96 studios in pre-sale during 2025 averaged 314 memberships sold over 111 days before their first draft. Is roughly two-thirds of a first-year membership base signed before opening.
Who does bookkeeping for a HOTWORX franchise?
Three things shape the close here. First, this is an almost entirely fixed cost base. So contribution per member beats a percentage-of-revenue benchmark. At $57.36 a month against costs that move $45,309 across a $277,863 revenue range, the marginal member is worth close to its full value. A monthly variance report built on percentages will hide that. Second, the required local advertising spend steps between 10% and 5% at $30,000 of monthly net electronic funds transfer. Makes net EFT an operating metric with a direct cash consequence, tracked monthly. Third, membership revenue is drafted monthly with cancellations running above 6%. So billed, collected, failed and canceled need to be four separate numbers reconciling to the member count, measured on month-end actives so the benchmark holds. Averan provides bookkeeping, controller, and fractional CFO support for franchise owners and has Certified QuickBooks ProAdvisors on the team.
- No median. Only an average is published, which a few large locations can lift on their own.
- No profit figure. The filing reports sales and not earnings, so what an owner keeps is not disclosed.
- No cost lines. Wages, rent and cost of goods are not broken out, so margin cannot be rebuilt from the document.
Questions worth putting to HOTWORX
The filing answers what it answers. These are the gaps an owner or a buyer should close directly.
- What do locations at the median spend on wages and rent as a share of sales? The filing reports sales only.
- What separates the highest-selling locations from the lowest: trade area, years open, size, or the owner?
- How long does a new location take to reach the average you publish, and what does the build-up look like month by month?
- What do the fees add up to as a share of sales at the average location, once minimums and technology charges are counted?
- How many HOTWORX locations closed, were sold, or changed hands last year, and why?
Run your own numbers.
The Franchise Finance Diagnostic runs the same checks on your own numbers. It scores where you stand and compares you with Item 19 of your brand’s FDD. It works out what one location earns and spends, and builds a 13-week cash forecast. Checks whether you are ready to open another one. It is free and it runs in your browser.
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