In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for an i9 Sports franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for an i9 Sports franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned i9 Sports outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the i9 Sports franchise opportunity

Section V – Presentation and analysis of i9 Sports’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average, median, highest, and lowest registration revenue, average number of venues operated, average number of sports offered, and market penetration rate for the 199 full-time i9 Sports franchise units (and 1 company-owned unit) which: (i) were operated throughout the entire Measurement Period (January 1, 2023 through December 31, 2023); and (ii) averaged 3 or more venues over 4 seasons during the Measurement Period and offered 4 or more sports during the Measurement Period

• 2023 average, median, highest, and lowest registration revenue by number of venues operated (1 venue, 2 venues, 3 venues, 4 venues, 5 venues, and 6+ venues) for the 199 full-time i9 Sports franchise units which: (i) were operated throughout the entire Measurement Period; and (ii) averaged 3 or more venues over 4 seasons during the Measurement Period and offered 4 or more sports during the Measurement Period

• 2023 average revenue, cost of goods sold, gross profit, operating expenses, and operating profit for the 113 i9 Sports franchises that (i) were operated throughout the entire Reporting Period (October 1, 2022 through September 30, 2023); and (ii) self-reported materially complete financial information to i9 Sports’ consultant

Section VI – Key ratios, comparables, computations, and analyses for the i9 Sports franchise opportunity (exclusive content for Platinum subscribers)

Section I – i9 Sports Franchise Costs

• Franchise Fee:  $24,900
• Territory Fee:  $15,000
• Grand Opening Advertising:  $6,000 to $8,000
• Insurance:  $1,000 to $1,500
• Legal and Accounting Services:  $800 to $1,500
• Furniture, Equipment, Inventory, and Supplies:  $3,000 to $4,000
• Training Expenses:  $1,200 to $2,000
• Additional Funds – 3 Months:  $8,000 to $13,000
• Total Estimated i9 Sports Franchise Costs:  $59,900 to $69,900

Section II – i9 Sports’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Royalty Fee:  New Franchisees and Existing Franchisees with a territory of fewer than 80,000 children (ages 14 and under): 7.5% of Network Revenues or a minimum of $425 per month, whichever is greater; New Franchisees and Existing Franchisees with a territory of equal to or more than 80,000 children (ages 14 and under): 7.5% of Network Revenues or a minimum of $450 per month, whichever is greater; Transfers from Existing Franchisees with a territory containing more than 80,000 children (ages 14 and under): the Royalty Fee, including the minimum, as set forth in the prior Area Developer Agreement

• National Brand Fund Contribution:  currently, 1% of Network Revenues or a minimum of $275 per month, whichever is greater

• Local Advertising:  a minimum of 3% of Network Revenues

Section III – Number of Franchised and Company-Owned i9 Sports Outlets

Franchised

2021

• Outlets at the Start of the Year:  172
• Outlets at the End of the Year:  192
• Net Change:  +20

2022

• Outlets at the Start of the Year:  192
• Outlets at the End of the Year:  218
• Net Change:  +26

2023

• Outlets at the Start of the Year:  218
• Outlets at the End of the Year:  245
• Net Change:  +27

Company-Owned

2021

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2022

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2023

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  0
• Net Change:  -1

Section IV – News Updates on the i9 Sports Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the i9 Sports Franchise (Item 19, 2024 FDD)

Part 1 – Registration Revenue and Key Performance Indicators

• Part 1 of this Financial Performance Representation reflects the historical average and median of the registration revenue and certain key performance indicators including the number of venues operated, the number of sports offered, and the market penetration rate of certain i9 Sports Franchises (“Franchise Units”) for the period January 1, 2023 through December 31, 2023 (the “Measurement Period”).

• The term “Registration Revenue” means all registration sales generated by a Franchise Unit during the Measurement Period and does not include other types of revenue earned by Franchise Units, such as sponsorships, commissions, merchandise sales, and concession sales.

• The term “Venue” is defined as the number of playing locations operated by a Franchise Unit with a unique address during the Measurement Period.

• The term “Market Penetration Rate” is defined as the total number of unique player registrations generated by a Franchise Unit during the Measurement Period divided by that Franchise Unit’s territory population of kids ages 14 and under (as determined by using SiteSeer Technology’s software).

• As of December 31, 2023, there were 245 Franchise Units. Charts 1 and 2 in this Part 1 include the results of 199
  Franchise Units, which are all of the Franchise Units that were operated throughout the entire Measurement Period
  (the “Covered Units”).

• i9 Sports considers a Franchise Unit to have begun operating on its Business Launch Date.

• The Covered Units do not include 46 Franchise Units that were not operating throughout the entire Measurement Period.

Chart 1 – Registration Revenue and Key Performance Indicators for Covered Units During the Measurement Period (January 1, 2023 to December 31, 2023)

Total

• Maximum Registration Revenue:  $1,871,983
• Median Registration Revenue:  $399,384
• Minimum Registration Revenue:  $29,746
• Average Registration Revenue:  $485,569
• Total Number of Units:  199
• Average Number of Venues:  4.0
• Average Number of Sports:  4.1
• Market Penetration Rate:  2.5%

Bottom Half

• Maximum Registration Revenue:  $389,464
• Median Registration Revenue:  $217,110
• Minimum Registration Revenue:  $29,746
• Average Registration Revenue:  $215,250
• Total Number of Units:  99
• Average Number of Venues:  2.5
• Average Number of Sports:  3.5
• Market Penetration Rate:  1.5%

Top Half

• Maximum Registration Revenue:  $1,871,983
• Median Registration Revenue:  $626,330
• Minimum Registration Revenue:  $399,384
• Average Registration Revenue:  $753,184
• Total Number of Units:  100
• Average Number of Venues:  5.6
• Average Number of Sports:  4.7
• Market Penetration Rate:  3.5%

Chart 2 – Average Registration Revenue by Number of Venues Operated for Covered Units During the Measurement Period (January 1, 2023 to December 31, 2023)

1 Venue

• Average Registration Revenue:  $132,056
• Lowest Registration Revenue:  $29,746
• Highest Registration Revenue:  $365,716
• Median Registration Revenue:  $114,811
• Number of Units Included:  16
• Number and Percentage That Met or Exceeded Average:  4 (25%)

2 Venues

• Average Registration Revenue:  $196,139
• Lowest Registration Revenue:  $48,994
• Highest Registration Revenue:  $477,191
• Median Registration Revenue:  $168,636
• Number of Units Included:  43
• Number and Percentage That Met or Exceeded Average:  17 (40%)

3 Venues

• Average Registration Revenue:  $392,243
• Lowest Registration Revenue:  $177,689
• Highest Registration Revenue:  $1,123,640
• Median Registration Revenue:  $343,803
• Number of Units Included:  46
• Number and Percentage That Met or Exceeded Average:  18 (39%)

4 Venues

• Average Registration Revenue:  $438,279
• Lowest Registration Revenue:  $220,616
• Highest Registration Revenue:  $698,061
• Median Registration Revenue:  $439,849
• Number of Units Included:  32
• Number and Percentage That Met or Exceeded Average:  16 (50%)

5 Venues

• Average Registration Revenue:  $735,311
• Lowest Registration Revenue:  $294,001
• Highest Registration Revenue:  $1,871,983
• Median Registration Revenue:  $614,298
• Number of Units Included:  22
• Number and Percentage That Met or Exceeded Average:  7 (32%)

6+ Venues

• Average Registration Revenue:  $945,909
• Lowest Registration Revenue:  $247,316
• Highest Registration Revenue:  $1,774,323
• Median Registration Revenue:  $939,459
• Number of Units Included:  40
• Number and Percentage That Met or Exceeded Average:  20 (50%)

• Of the 40 Franchise Units operating 6+ Venues, the lowest number of Venues operated by a Franchise Unit was 6 Venues and the highest number of Venues was 21.

Part 2 – Sales-to-Cost Analysis

• Part 2 of this Item reflects financial information that i9 Sports’ franchisees were required to report to a third-party consultant that i9 Sports engaged to provide financial benchmarking for the i9 Sports Network.

• As of September 30, 2023, there were 230 Franchise Units in operation. The chart below includes financial performance data for the 12-month period beginning October 1, 2022 through September 30, 2023 (the “Reporting Period”) for 113 Franchise Units, which are all of the Franchise Units that (i) were operated throughout the entire Reporting Period and (ii) reported materially complete financial information to our consultant (“Included Franchises”).

• The data in the chart below excludes: (i) 28 Franchise Units that opened at some point during the Reporting Period and, therefore, did not operate throughout the entire Reporting Period; (ii) 46 Franchise Units that did not report revenue and expense data for all 12 months of the Reporting Period; and (iii) 43 Franchise Units that reported data in a manner that was inconsistent with the categories that i9 Sports has presented (either because data was not reported for each category or certain data was miscategorized in the incorrect category).

• Number of Franchise Units Included:  113
• Average Number of Venues:  4.0
• Average Number of Sports:  4.1
• Market Penetration Rate:  2.5%

Revenue:  $486,637 (100.0%)

Cost of Goods Sold

• Player Expense:  $64,154 (13.2%)
• Venue Expense:  $49,335 (10.1%)
• Other Cost of Sales:  $23,372 (4.8%)
• Total Cost of Goods Sold:  $136,860 (28.1%)

Gross Profit:  $349,776 (71.9%)

Operating Expenses

• Personnel Expense:  $140,590 (28.9%)
• Marketing Expense:  $14,618 (3.0%)
• Other Expense:  $32,588 (6.7%)
• Total Operating Expense:  $187,796 (38.6%)

Royalty Fees:  $36,498 (7.5%)

Operating Profit:  $125,483 (25.8%)

Revenue

• Highest:  $1,866,317
• Median:  $407,746
• Lowest:  $30,739

Operating Profit

• Highest:  $754,353
• Median:  $108,656
• Lowest:  $(47,775)

• “Revenue” is the average revenue generated from player registrations, sponsorships, commissions, merchandise sales, concession sales, and other revenue.

• “Player Expense” is the average expenses related to purchasing jerseys, participant shirts, equipment bags, t-ball hats, flag belts, awards (trophies, stickers, medals), and name tag labels.

• “Venue Expense” is the average fees spent on venues to operate sport programs as agreed upon in the venue contract.

• “Other Cost of Sales” is the average expenses related to coaches, background checks, player liability insurance, credit card fees, and other registration-related costs.

• “COGS” is equal to the sum of Player Expense, Venue Expense, and Other Cost of Sales.

• “Gross Profit” is equal to Revenue minus COGS.

• “Personnel Expense” is the average expenses related to staff wages, payroll taxes, worker’s compensation, payroll company fees, training/continuing education, staff meetings, staff appreciation, recruiting fees, group insurance/benefits, and other employee expenses. This does not include any compensation paid to owners.

• “Marketing Expense” is the average expenses related to in-person events, flyers/printed materials, road signs, digital marketing, sponsorships/partnerships, Brand Fund contributions, and other marketing fees.

• “Other Expense” is the average expenses related to general and operating fees, office/storage, and insurance expenses.

• “Total Operating Expense” is equal to the sum of Personnel Expense, Marketing Expense, and Other Expense.

• “Royalty Fee” is the average aggregate royalty fee paid by Area Developers under the terms of the Area Developer Agreement, which is 7.5% of Revenues.

• “Operating Profit” is equal to Revenue minus COGS minus Total Operating Expense minus Royalty Fee. Operating Profit does not include: (i) any compensation or benefits paid to owners, including owners’ salary, bonus, commission, benefits, travel, vehicle expenses, and other owner-related expenses; (ii) charitable contributions; (iii) meals and entertainment; (iv) the monthly Franchise Fee for franchisees choosing to make such payments over the term of a 5-Year Agreement; (v) interest, taxes, depreciation, and amortization; (vi) finance charges; and (vii) other miscellaneous non-operating expenses.

• Some Franchise Units have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.

Section VI – i9 Sports Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️