Upgrade Labs franchise unit economics
Upgrade Labs franchisees run a 2,800 to 3,200 square foot recovery and performance studio. The fees take 7.5% royalty, 2% to its fund and requires 5% on local advertising, but monthly minimums of $2,500 and $1,500 mean the headline 14.5% only arrives at $900,000 of revenue. The build runs $880,500 to $1,560,500.
- Primary source
- Upgrade Labs Franchise, Inc., 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
- 0 of 5 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.
The headline is 14.5%, 7.5% royalty, 2% fund, 5% local advertising. The minimums underneath it change that: $2,500 and $1,500 a month, which means the headline rate only arrives once the center bills $900,000 a year. At $300,000 the same three charges come to 21.0%.
- The brand fund minimum equals 2% only at $900,000 of revenue. $1,500 a month *, so every center below that figure is paying more than the stated rate.
- The load runs 21.0% at $300,000 and 14.5% at $900,000. *, six and a half points of margin decided entirely by the two minimums.
- The minimum royalty binds below $400,000 of annual sales. $2,500 a month against 7.5% *, so a young center pays a fixed $30,000 a year.
- The build costs $314 to $488 a square foot. $880,500 to $1,560,500 across 2,800 to 3,200 square feet *, among the most capital-intensive studios in this library.
- A temporary demo center must be leased three months before opening. 400 to 1,000 square feet at $3,000 to $5,000, a second lease running alongside the build.
How much does a Upgrade Labs franchise make?
The 2026 FDD for Upgrade Labs does not publish unit revenue in a form that answers this directly. What it does publish is set out below, starting with Headline load: 14.5% of gross sales; Load at $300,000: 21.0%; Where 14.5% starts: $900,000 of revenue; Build a square foot: $314 to $488.
Top performers
What separates the top Upgrade Labs performers
Upgrade Labs publishes no revenue figures, so neither the average nor the spread between locations is disclosed.
Decided before you open
- Capacity, fixed at build.Locations run 2,800 to 3,200 square feet. What you can sell is set by the build, and the build does not change after opening.
- What you spend to open.Opening costs $880,500 to $1,560,500, a 1.8× 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.
- Fees, and where the minimum bites.Fees run about 14.5% of sales. A minimum sits underneath the percentage, so the low-volume location pays the higher effective rate. The brand charges the weakest locations the most. Work out the sales level where the percentage overtakes the minimum and know which side of it you are on, because the answer changes what an extra dollar of sales is worth.
Context you underwrite around
- What the disclosure leaves out.Item 19 publishes no profit or cost data for franchised locations, no median, no performance bands, no attainment figure. Anything below the sales line has to come from the franchisor or from owners you call.
- What the rest of the category shows.Across the 38 Health & Wellness brands in this library that do publish bands, the top group sells 3.1× the bottom at the typical brand, and a median 43% of locations reach their own average *. Assume a spread of that order here until the franchisor shows you otherwise.
The minimums under the rate
Two minimums decide what the rate actually is.
| Annual gross sales | Royalty * | Brand fund * | Local advertising * | Total * | Share of sales * |
|---|---|---|---|---|---|
| $300,000 | $30,000 | $18,000 | $15,000 | $63,000 | 21.00% |
| $400,000 | $30,000 | $18,000 | $20,000 | $68,000 | 17.00% |
| $600,000 | $45,000 | $18,000 | $30,000 | $93,000 | 15.50% |
| $900,000 | $67,500 | $18,000 | $45,000 | $130,500 | 14.50% |
| $1,200,000 | $90,000 | $24,000 | $60,000 | $174,000 | 14.50% |
The 7.5%, 2% and 5% rates and the $2,500 and $1,500 monthly minimums are as the brand reported it and the dollar figures apply whichever is greater at each revenue level, marked *.
The two minimums together cost $48,000 a year. *, a fixed bill regardless of whether the center is full or empty.
The brand fund is the minimum that holds longest. Binding all the way to $900,000 of annual sales *, against $400,000 for the royalty, so most centers pay a fixed fund contribution against 2%.
Local advertising at 5% is the largest percentage charge after the royalty. $45,000 at $900,000 of sales *, and underspending is collected by the brand to spend on your behalf.
A regional cooperative may absorb part of that 5%. Contributions to it reduce the local requirement, so the total stays at 5%.
Fee waivers were granted to zero franchisees last year. So the $65,000 fee is a firm price.
A million-dollar build
Equipment and construction are each about a third of it.
| Item | Low | High | A square foot * |
|---|---|---|---|
| Building work and construction | $300,000 | $650,000 | $107 to $203 |
| Equipment | $300,000 | $520,000 | $107 to $163 |
| Initial franchise fee | $65,000 | $65,000 | n/a |
| Grand opening advertising | $55,000 | $55,000 | n/a |
| Additional funds, three months | $50,000 | $75,000 | n/a |
| Total | $880,500 | $1,560,500 | $314 to $488 |
Every figure is as the brand reported it and the per-square-foot column divides each line by the 2,800 and 3,200 square foot ends of the stated size range, marked *.
Grand opening advertising is $55,000 and fixed. $25,000 in the 60 days before opening and $10,000 in each of the first three months, on top of the ongoing 5% requirement.
Three months of working capital is $50,000 to $75,000. Against a build reaching $1,560,500, 3.2% to 8.5% of the total *.
A project manager costs $18,000 to $20,000 and a real estate broker $3,000 to $5,000. Both required, and both sitting outside the construction line itself.
A two-to-five center development agreement costs $130,000 to $310,000 up front. $65,000 for each of the first four and $50,000 thereafter, credited against each center’s franchise fee.
Two states require the fees to be deferred until the center opens. South Dakota and Virginia, each citing the brand’s financial condition, worth reading alongside the financial statements.
Territory and reservations
A hundred thousand people, with a long list of exceptions.
| Term | Detail |
|---|---|
| Typical size | An area with a population of 100,000 |
| Defined by | Zip codes, streets, landmarks or county lines |
| Protection | Zero other Upgrade Labs center inside it while you comply |
| Reserved to the brand | Other trademarks, e-commerce, mail order, catalog, retail and wholesale, and non-traditional sites, all inside the territory |
| Modification | Only by mutual written agreement |
Every term is as the brand reported it, with non-traditional sites including campuses, hospitals, airports, arenas, casinos and travel plazas.
The territory is fixed once agreed and changeable only by both signatures. Stronger than most in this library, where brands usually reserve unilateral adjustment rights.
Advertising outside the territory is prohibited. Though customers who find you from outside it may be served without restriction, so the boundary limits marketing.
The brand may sell the same services under a different mark inside your area. Which is the widest of the reservations and the one most worth understanding before signing.
A hundred thousand people supports a $900,000 center at $9 a head. *, an useful way to test whether the local market has the model.
The site is chosen from a designated market area when one is still to be found at signing. With the protected territory drawn afterwards, around wherever the site lands.
The network of locations
Five franchised centers, and a brand still building.
| Year | Start | Opened | Terminated | Reacquired | Ceased, other | End |
|---|---|---|---|---|---|---|
| 2023 | 0 | 2 | 0 | 0 | 0 | 2 |
| 2024 | 2 | 4 | 0 | 0 | 1 | 5 |
| 2025 | 5 | 1 | 0 | 1 | 0 | 5 |
| Three years | n/a | 7 | 0 | 1 | 1 | n/a |
Every figure is as the brand reported it, alongside one affiliate-owned center at the end of 2025.
Seven centers opened and two left in three years. *, a system small enough that a single center moves every percentage.
Openings slowed from four to one. And the franchised count held flat at five through 2025, so the pace of development has eased.
Zero centers were terminated. With one reacquired by the brand and one ceasing for other reasons, both in a system of five.
Affiliate-owned centers went to zero and then back to one. So the brand has returned to operating alongside its franchisees.
The cost estimates rest on the affiliate’s own experience. Which is the only operating history behind a build of up to $1,560,500.
Questions we get asked
Questions an owner asks.
What does the brand take?
The greater of $2,500 a month or 7.5% of gross sales in royalty, the greater of $1,500 a month or 2% to the brand fund. 5% of gross sales spent on local advertising. The headline total is 14.5%.
When does 14.5% actually apply?
At $900,000 of annual sales, on our reading. Below that the minimums govern: the royalty minimum binds under $400,000 and the fund minimum under $900,000. So a center at $300,000 pays 21.0% and one at $600,000 pays 15.5%.
What does it cost to open?
$880,500 to $1,560,500 for a center of 2,800 to 3,200 square feet, $314 to $488 a square foot on our reading. Equipment is $300,000 to $520,000 and construction $300,000 to $650,000, with a fixed $55,000 of grand opening advertising on top.
What is the demo center?
A temporary space of 400 to 1,000 square feet that you must lease and open about three months before the center itself, at an estimated $3,000 to $5,000. It runs alongside the main build and needs written approval of its location.
How big is the territory?
Typically an area holding 100,000 people, described by zip codes, streets, landmarks or county lines. It can only be changed by mutual written agreement, which is unusually firm, but the brand reserves e-commerce, other trademarks and non-traditional sites inside it.
Is the fee negotiable?
Fee waivers or reductions were granted to zero franchisees in the last fiscal year. A two-to-five center development agreement prices the first four at $65,000 each and the rest at $50,000.
Is there anything unusual in the state addenda?
Yes. South Dakota and Virginia both require the brand to defer collection of all initial fees until the center opens, each citing the brand's financial condition. That is worth reading alongside the financial statements before committing.
Which two numbers should run monthly?
Gross sales against $400,000 and $900,000 a year, because those are the two points where a minimum gives way to a rate. Members against capacity. Because a build of this size needs utilization.
- No revenue figures. The filing makes no financial performance representation, so there is no disclosed sales number for any location.
- 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.
- No range. The filing does not show the highest and lowest locations, so the spread inside the system is unknown.
- No attainment figure. The filing does not say how many locations reached the average it publishes.
- No ramp. The filing does not show how a new location builds up, so the first-year curve has to be assumed.
Questions worth putting to Upgrade Labs
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 did the highest and lowest locations sell last year, and what explains the gap?
- How long does a new location take to reach the average you publish, and what does the build-up look like month by month?
- At what level of sales do the minimum charges stop applying and the percentage take over?
- How many Upgrade Labs 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.
Launch the diagnostic →Which side of $900,000 are you on?
A structured review of your unit economics, cash forecast. Reporting, built around minimums worth $48,000 a year, a headline rate that only arrives at $900,000. A build of up to $488 a square foot.
Request the reviewthe franchise library, all 243 brands · how franchise unit economics work · running the books across several locations · what Averan does for franchise owners
Upgrade Labs reads against the rest of the recovery, sauna & cryo group: beem Light Sauna · HOTWORX · Pause Studio · Perspire Sauna Studio · Restore Hyper Wellness · SweatHouz. The recovery, sauna & cryo guide compares all of them on the same figures.
Questions owners ask next
The figures above raise these, and each one is answered on its own page.
- At what level of sales does a minimum fee stop costing me more than the percentage?How royalty, ad fund and minimums actually work on a monthly statement.
- How much cash do I fund before a new location covers its own costs?A 13-week forecast for the months before break-even.
- My payroll percentage keeps climbing. Is that a payroll problem?Usually it is a revenue problem wearing a payroll costume.
- What should I be looking at every week?The handful of numbers that move before the P&L does.
- Do I need a bookkeeper, a controller, or a CFO?What each one owns, and the point at which the next one pays for itself.