From the filed FDD — automated extraction, check the source
2025 FDD
SBA-eligible · directory code S2031 since 2017
HOTWORX
HIIT & group training studios · parent company: not identified
HOTWORX offers 30-minute virtually-instructed workouts inside infrared saunas, combining heat with exercise (yoga, cycling, isometrics) for recovery and calorie burn. Members access the studio 24/7 on a recurring membership. A franchisee runs a studio of infrared sauna units, selling and managing memberships.
HOTWORX net unit count grew 98.5% over 2022–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. Most numbers on this page come from that document; others come from federal SBA loan records and labor and census data, each labelled with its source:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened, transferred and left the system, the main basis for our verdict, which rates how strong the disclosed record is, or says when the system is too new, the filing too old, or the disclosure too thin to judge.
Our rating · opinion
Strong disclosed record
Enough units and history to judge, and the operating record is good. Units grew 99% (2022–2025: 409 → 812); the fiscal 2025 exit rate was 0.1%, below the 1.8% median across 5 comparable systems (hiit & group training studios). SBA loans to its franchisees approved FY2017–2020 charged off far less often than franchise loans of the same years (0 vs about 4.7 expected, 0×).
Exit rate · fiscal 2025
0.1%
vs 1.8% median across 5 comparable systems (hiit & group training studios)
Cost to open
$289K–$830K
Item 7 total investment range
SBA loan losses · vs same-year loans
0×
0 of 47 charged off vs ~4.7 expected
Market density · Texas
Typical density
10% thinner than the national average
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Data as of 2026-10-29. Figures come from HOTWORX's public FDD filings (latest: MN 2025, extracted 2026-07-23) and SBA FOIA loan records (through FY2026), extracted by us and possibly containing errors. The rating is our opinion, not investment, legal, or tax advice. Franchisor or owner and see something wrong? Report a correction — we review every request.
Buying an existing HOTWORX? Transfer fee $10,000–$19,950, resale record and asking-price check →
What each source says
FDD record · SBA loans · model · auditor
The sources broadly agree, and the verdict follows the FDD's operating record.
FDD record · Item 20
Strong operating record
Units grew 99% (2022–2025: 409 → 812); exit rate 0.1% (fiscal 2025) vs 1.8% median.
SBA loans · vs same-year loans
Far fewer defaults than expected (0×)
0 charge-offs among 47 resolved loans approved FY2017–2020; about 4.7 expected.
Modeled risk
Lower risk
The brand's own loan record contradicts this prediction; the record leads.
Auditor opinion · Item 21
Clean opinion
Unqualified audit, 2025 FDD. Says nothing about franchisee results.
Behind the verdict
the record, factor by factor · Item 20
latest consecutive years · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness · shown, not counted in the verdict
Systemwide units
2022–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 1 of 712 franchised outlets left the system — an exit rate of 0.1% (fiscal 2025), vs a 1.8% median across 5 comparable systems (hiit & group training studios). An exit is not a failure: this counts terminations, non-renewals and "ceased — other reasons" as reported, and excludes transfers to new owners.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Outlets at start | 236 | 409 | 582 | 719 |
| Opened | 172 | 171 | 141 | 95 |
| Transfers | 13 | 27 | 37 | 40 |
| Terminations | 0 | 0 | 0 | 0 |
| Non-renewals | 0 | 0 | 0 | 0 |
| Reacquired by franchisor | 0 | 0 | 0 | 9 |
| Ceased — other reasons | 0 | 0 | 5 | 1 |
| Outlets at end | 409 | 582 | 719 | 812 |
| Net change | +173 | +173 | +137 | +93 |
The franchisor's own finances
FDD ITEM 21 · AUDITED STATEMENTS · 2025 FDD
KPMG LLP gave an unmodified (clean) opinion on the statements in the 2025 FDD; revenue rose 50% from FY2023 to FY2025 and it reported a net loss in FY2024.
This is the company selling the franchise, not any franchisee. A clean opinion means the statements are fairly presented — not that the business is healthy.
Audit opinion
Unmodified (clean) opinion
KPMG LLP
Revenue · FY2025
$13.6M
extracted · not cross-checked
Net income · FY2025
$4.4M
extracted · not cross-checked
Where FY2025 revenue came from
20% royalties
initial-fee share not extracted
Show the statement figures ↓Hide the evidence ↑
| Fiscal year | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Total revenue | $9.1Mextracted · not cross-checked | $12.1Mextracted · not cross-checked | $13.6Mextracted · not cross-checked |
| Royalty revenue | $2.6Mextracted · not cross-checked | $3.4Mextracted · not cross-checked | $2.7Mextracted · not cross-checked |
| Net income (loss) | $3.7Mextracted · not cross-checked | −$770Kextracted · not cross-checked | $4.4Mextracted · not cross-checked |
The lender's view
SBA 7(a)/504 loan outcomes · compared with franchise loans of the same years
Banks have made 534 SBA-backed loans to HOTWORX franchisees since 2017. Of the 47 approved FY2017–2020 that have resolved, 0 charged off — where about 4.7 would be expected for franchise loans made in the same years. That is 0× the expected rate: these loans defaulted far less often than comparable franchise loans.
All-time, 2 of 130 resolved loans charged off (1.5%). That raw figure mixes every approval year since 2017 — loans made in 2006–08 failed at several times the rate of loans made in 2010–13 across all franchises — so it is shown as evidence, not as the score. 76% of the brand's loans have not resolved yet.
0×
0 of 47 resolved (FY2017–2020) vs ~4.7 expected
1.5%
2 of 130 resolved, every approval year
—
charged-off $ ÷ approved $, defaulted loans
$370,198
what recent franchisees borrowed
—
shown with 10+ defaults
102 vs 38
distinct banks still lending
Charge-off rate by loan approval year (%) · dashed line = all franchise loans that year
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO HOTWORX BY SBA FRANCHISE NAME/CODE · RESOLVED = CHARGED-OFF + PAID-IN-FULL · EXPECTED = SAME-YEAR RATE ACROSS ALL SBA FRANCHISE LOANS, LOANS ≥ ~6 YEARS OLD
The owner's side of the deal
FDD × federal loan record
A typical HOTWORX buyer since 2020 borrowed $370K through SBA — about $55K a year in debt service. Against the brand's own disclosed median unit revenue of $354K, that is 15.5% of the revenue the business takes in, before rent, staff pay, equipment, and royalty.
This estimate is computed by software from the brand's public filings and any inputs you enter. No CPA prepared it for you and no assurance is provided on it. Actual results will differ, and the differences may be material.
Who finances it
The Huntington National Bank
23.8% of this brand's loans
That lender charges off 10.0% of its resolved SBA loans to other franchise brands in the FOIA file, vs 14.8% nationally — a read on that lender's portfolio mix, not a finding about the bank.
Who buys it
65.8%
borrowers with no other franchise SBA loan on record
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators have charged off less often than brands sold mostly to newcomers (see methodology).
Does experience help here?
+2.5pp
multi-unit vs single-unit owners
Owners of multiple units default at 3.6%; single-unit owners at 1.1% (each on 15+ resolved loans, owners identified by borrower-name matching).
Computed from 534 SBA 7(a)/504 loans matched to HOTWORX by SBA franchise code in the SBA FOIA file. Debt service assumes level amortization at the average disclosed term and rate. Owner-level splits rely on borrower-name matching and may misclassify. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $19,950 franchise fee (Item 5) and a total investment of $289K–$830K (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$289K–$830K
all-in investment range
Franchise fee (Item 5)
$19,950
upfront, one-time
Royalty (Item 6)
See Item 6
not a single flat % — read the fee table
This is not profit. It covers what the FDD fixes: what you put in, and the royalty you owe on sales. Your take-home depends on rent, staff pay, equipment payments, and the months to breakeven, none of which the FDD fixes for your unit (some Item 19s include cost data — read it).
Build a real pro-forma for HOTWORX with a buyer-paid CPAHow the earnings claim is built
FDD ITEM 19 · BASIS · 2025 FDD
Item 19's tables are images in this filing, so we could read who is included but not every figure. Open Item 19 in the PDF.
Show the basis ↓Hide the evidence ↑
| What is measured | Total Revenue (revenue) |
| Period | FY2025 |
| Whose results | Franchised outlets |
| Units included | 700 of 797 open franchise outlets during 2025 fiscal year |
| Left out |
|
| Average (mean) | not printed |
| Median | not printed |
| Met or beat the average | 300 (42.9%) |
| Costs shown | Yes — through a profit line |
| Where | p. 83 (Item 19 runs pp. 77–87) |
| The filing's words | “The 700 studios accounted for below in Table 19.2 are comprised of franchised businesses that were opened between 2017 and 2024 and were fully operational for all 12 months in 2025.” |
Modeled risk
FDD Risk Score · a prediction from disclosure and loan-file features
This brand's own loan record is better than the model predicts: its franchisees' SBA loans charged off at 0× the rate of same-year franchise loans, where the model expects about 0.6×. We lead with the observed record; the model is shown for context.
Observed · vs same-year loans
0×
0 of 47 seasoned loans charged off
Risk percentile
6th
Checkable · higher = riskier
Modeled · vs same-year loans
0.6×
≈ 10.4% at the all-loan vintage mix
Top drivers: Share financed by high-loss lenders (lowers) · System size (log units) (lowers) · Item 20 exit rate (lowers) · Net unit growth (raises). The observed record differs from the model, so treat the score as context only. A linear scorecard trained on brands' vintage-adjusted SBA loss records; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Public records
Bankruptcy, closure & federal court records · coverage is selective · dockets are not scored
Filed against the franchisor · CourtListener/RECAP ↗ · 13mo ago
Filed against the franchisor · CourtListener/RECAP ↗ · 17mo ago
Franchise litigation docket: Thorne v. Hotworx Franchising LLC (District Court, S.D. New York)
Filed against the franchisor · CourtListener/RECAP ↗ · 24mo ago
Franchise litigation docket: Skistimas v. Hotworx Franchising LLC (District Court, W.D. Washington)
Filed against the franchisor · CourtListener/RECAP ↗ · 36mo ago
10 questions to ask a HOTWORX franchisee
Built from this brand's own disclosures · take it to your validation calls
The franchisor will give you a list of owners to call. Most buyers ask whether they like it. These questions come from what HOTWORX has disclosed. Each one carries the number it came from, so you can check the answer against the record.
- 01
HOTWORX’s own Item 20 shows 1 of 712 franchised outlets left the system in fiscal 2025 — about 0.1%. Do you know any of those owners, and do you know why they left?
A franchisor will call these “transitions.” An owner three doors down usually knows whether they sold at a profit or handed the keys back.
FDD Item 20 · FY2025
- 02
40 units transferred to new owners in fiscal 2025. When you look at those, were they people cashing out a good business — or getting out of a bad one?
Item 20 counts transfers as neutral, but a transfer can be a good sale or a reluctant exit — the filing does not say which.
FDD Item 20 · FY2025
- 03
SBA loans to HOTWORX franchisees approved 2017–2020 defaulted far less often than franchise loans made in the same years: 0 charge-offs among 47 resolved loans, where about 4.7 would be expected (0×). Did you finance with an SBA loan, and how close did your first two years come to trouble?
This is the lender's view of how these loans ended, from public federal records matched by SBA franchise code — independent of anything the franchisor discloses — compared with franchise loans made in the same years. A charge-off is a loan outcome, not proof the business closed.
SBA 7(a)/504 loan record, seasoned loans FY2017–FY2020 · 0× of same-vintage franchise loans
- 04
Item 7 says the low end to open is $289K; the average recent SBA loan to HOTWORX franchisees was $370K. What did you actually spend to open, all in — and did your loan cover anything beyond the build-out?
Lenders size loans to the project they finance. If owners say they spent near the loan figure rather than the Item 7 floor, budget from what they spent.
FDD Item 7 vs SBA approvals FY2020+
- 05
HOTWORX makes an earnings claim in Item 19. Does your unit look like that number — and do you know which units they included to build it?
Item 19 is legal to build from a flattering subset. Ask whether they excluded new units, closed units, or company stores.
FDD Item 19 · 2025
- 06
How many months did it take to cover your own costs, and how much cash did you burn getting there?
Ramp-to-breakeven working capital is the most underestimated line in any franchise purchase, and the most common reason otherwise-good units fail.
Not disclosed in any FDD — ask an owner
- 07
Item 3 discloses 2 legal matters. Do you know what those were about, and were any brought by franchisees?
Franchisee-brought suits over territory, fees or support tell you how the franchisor behaves when there's a disagreement.
FDD Item 3 · 2025
- 08
What does the franchisor charge for that you didn't expect — required tech fees, mandatory remodels, approved-supplier pricing?
Required spending appears across Items 6, 8 and 11 rather than in one place, so buyers routinely miss the total.
FDD Items 6, 8, 11
- 09
If your agreement came up for renewal tomorrow at current terms, would you sign again?
The single most predictive question you can ask. A hesitation is the answer.
Ask every owner you speak to
- 10
Who else should I call — including someone who left?
The franchisor's list is curated by definition. Former franchisees are where the unflattering truth lives, and current owners usually know how to reach them.
Ask every owner you speak to
Want this as a checklist you can take to the calls?
I'll email you the printable version, and tell you if HOTWORX’s numbers move — a new filing, a rising exit rate, a distress signal. Unsubscribe in one click.
A broker is usually paid by the franchisor to place you. I'm paid only by you, never by a franchisor you're considering — and the job is pressure-testing HOTWORX’s numbers, including talking you out of a bad deal.
This page is what buyers see before they call you for validation. If the record above is wrong — or right in a way the numbers can't show — say so. Franchisors: send corrections with the page reference and we will review them against the filing and update or annotate the page. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.
HOTWORX franchise questions, answered from the filings
How many HOTWORX franchised outlets left the system last year?
In HOTWORX's latest FDD Item 20 (fiscal 2025), 1 of 712 franchised outlets left the system — an exit rate of 0.1% — compared with a 1.8% median across 5 comparable systems (hiit & group training studios) tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons" as the franchisor reported them; it excludes transfers to new owners. The FDD does not say why each outlet left, and an exit is not the same as a failure.
How much does a HOTWORX franchise cost?
Per HOTWORX's 2025 FDD, buying in requires an initial franchise fee of $19,950 (Item 5) and a total initial investment of $289K–$830K (Item 7).
Does HOTWORX disclose earnings (Item 19)?
Yes — HOTWORX makes a financial performance representation in Item 19 of its 2025 FDD, reporting a median unit volume of $354K. Read it closely: franchisors choose which units and which metrics to include.
How often do SBA loans for HOTWORX franchises default?
SBA loans to HOTWORX franchisees approved 2017–2020 defaulted far less often than franchise loans made in the same years: 0 charge-offs among 47 resolved loans, where about 4.7 would be expected (0×). All-time, 2 of 130 resolved loans since 2017 charged off (1.5%); that raw figure mixes every approval year, so we compare with same-year loans instead. A charge-off is a loan loss, not proof the business closed. Source: public SBA 7(a)/504 FOIA data.