Verified — real FDD extraction
SBA-eligible · directory code S2031 since 2017
HOTWORX
Other · independent · est. —
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% from 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. The numbers on this page come straight from that document:
- 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 and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Proven & strong
Distress
Enough units and history to judge, and the record is good: growing or stable units with clean exits by the standards of its disclosed record. The standout in the record: the system is growing.
Exit rate · latest year
0.1%
fiscal 2025, per Item 20
Cost to open
$289K–$830K
Item 7 total investment range
SBA loan defaults
1.5%
vs 14.8% avg across rated brands
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · 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
Systemwide units
2022–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 1 of 712 franchised outlets left the system — a 0.1% annualized exit rate. Not every exit is a failure — but this is the measurable floor.
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 lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 534 SBA-backed loans to HOTWORX franchisees since 2017. Of the 130 that have resolved, 1.5% were charged off (defaulted) rather than paid in full, versus 14.8% across 576 rated brands.
1.5%
2 of 130 resolved defaulted
12.2%
avg. charged-off $ ÷ approved $
0.2%
default rate × loss severity
$370,197
what recent franchisees borrowed
37 mo
approval → charge-off, defaulted loans
102 vs 38
distinct banks still lending
Charge-off rate by loan approval year (%)
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO HOTWORX BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
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 every dollar the store takes in — before rent, payroll, food, or royalty.
Who finances it
the Huntington National Bank
23.8% of this brand's loans
That lender charges off 10.1% of its loans to other franchise brands, vs 14.8% nationally.
Who buys it
65.8%
first-time franchise owners
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators charge off at roughly 10% versus 17% for brands sold mostly to newcomers.
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%.
Computed from 534 SBA 7(a)/504 loans to HOTWORX franchisees joined to the brand's own FDD. Debt service assumes level amortization at the average disclosed term and rate. 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 $20K 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)
$20K
upfront, one-time
Royalty (Item 6)
—
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$0
0% of sales, before profit
Over a 10-yr term
$0
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for HOTWORX with an independent CPAModeled risk
FDD Risk Score · modeled from the public record
Modeled from the public record, this brand looks safer than 91% of systems we score.
Risk percentile
9 / 100
Loan-corroborated
Modeled SBA charge-off
7.0%
Observed SBA charge-off
1.5%
Top drivers: System size (log units) (lowers) · Share financed by high-loss lenders (lowers) · Item 20 exit rate (lowers) · Investment ceiling (log) (lowers). 15+ resolved loans stand behind this estimate. A linear scorecard built from this brand's own disclosure figures plus the federal loan record behind its franchisees; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
CourtListener/RECAP · 10mo ago
CourtListener/RECAP · 14mo ago
Franchise litigation docket: Thorne v. Hotworx Franchising LLC (District Court, S.D. New York)
CourtListener/RECAP · 21mo ago
Franchise litigation docket: Skistimas v. Hotworx Franchising LLC (District Court, W.D. Washington)
CourtListener/RECAP · 33mo ago
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing HOTWORX's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →HOTWORX franchise questions, answered from the filings
What percentage of HOTWORX franchises closed last year?
In HOTWORX's latest FDD Item 20 (fiscal 2025), 1 of 712 franchised outlets left the system — an annualized exit rate of 0.1%. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a HOTWORX franchise cost?
Per HOTWORX's 2025 FDD, buying in requires an initial franchise fee of $20K (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?
Across 534 SBA-backed loans to HOTWORX franchisees since 2017, 2 of the 130 that have resolved were charged off — a 1.5% default rate, versus about 14.8% across all rated franchise brands. This is the lender's-eye view of franchisee failure, drawn from public SBA 7(a)/504 FOIA data and independent of the franchisor's own disclosures.