A PROSPECTUS ON YOUR PILATES FUTUREA GUIDE TO THE STUDIO PILATES FRANCHISING PROGRAM

FRANCHISE PROSPECTUS 2014/2015AUSTRALIA & NEW ZEALAND

Our mission is to flatten the abs and sculpt the body of all who pass through our doors

Studio Pilates® works by using the resistance of the Pilates reformer to help you to increase your muscle tone and your lean muscle mass. This in turn boosts your metabolism and increases your body’s ability to burn fat when you’re at rest, at work or when working out, giving you the most

effective calorie burning workout that has ever been experienced.

Franchising: A desirable business and investment model

“The franchise sector has grown more than 14 per cent in the past two years and revenue from sales in the sector has increased to an estimated $130 billion,”

Professor Lorelle Frazer. Project leader and Asia-Pacific Centre for Franchising Excellence Director.

Pilates: The proven health and fitness alternative

Many Australians have chosen to avoid weight equipment, treadmills and gyms in favour of other fitness alternatives. As such there has been steady growth in the number of people participating in activities such as Pilates. Interest in regimes such as Yoga and Pilates is expected to increase over the next five years... Australian’s are seeking these services out and are willing to pay a premium for it.

IBISWorld 2013 Fitness Industry Report, R911. This report also reveals industry revenue is expected to increase by 4.8% p.a over the next five years.

Fitness: The star performer of franchising

“The [franchising] sector is riding the health boom to impressive growth. Growth is being fuelled by the potent combination of a health- conscious society and an ageing population that’s determined to grow old beautifully”

Here’s to the health of franchising. Australian Business Review - 28 February 2013

Studio Pilates: The franchise that enables you to capitalize on these trends

The world of fitness franchising has grown dramatically in recent years. And in a landscape once dominated by big gyms, the boutique trend is rapidly gaining ground. On the surface, the appeal of smaller, specialized facilities is obvious: They cost less to open, require fewer employees and are easier to run than their large-scale counterparts. But their real strength lies deeper--in their ability to attract a passionate client base. “Whenever you have that niche market, where you’re not trying to be everything to everyone, you’ll get enough people that are excited about being able to do that thing they love,” says Michael Parrella, CEO of Levittown

Entrepreneur Magazine April 2, 2014

The Future

The first Pilates Studio opened its doors in 1926 in New York on 8th avenue and 56th street. Here, New York’s elite could often be spotted stepping out onto the street after an intense, body-sculpting workout. Studio Pilates International® has maintained this long and rich tradition of helping people to strengthen and tone their muscles, assisting them to change their body’s physical structure through exercise.

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A word from one of our Franchisees:

“What became apparent early on in the Studio Pilates journey, was that they are well placed to capture the growing Pilates market through their ability to make reformer classes within the reach of a larger proportion of the target market, whilst also maintaining quality and a personalised feel. With a combination of the sophisticated exercise environment that the Studio Pilates standard fit-out creates and the state of the art digital exercise delivery system that enables the instructor to focus on correcting the clients technique, it results in a feel- good experience for our clients each and every visit.”

Christine Arthur, Studio Pilates International - Brisbane City Franchisee

Founders Message ............................................................................................10

The Positive Outlook .........................................................................................14

01 The Studio Pilates® Offering ........................................................................16

02 The Franchise Opportunity ...........................................................................20

03 The Science ..................................................................................................20

04 A Simple and Effective Business Model .........................................................20

05 Current National and International Opportunities .........................................24

06 The Steps to Opening Your Studio................................................................26

INVEST IN YOUR FUTURE

Open your own Studio Pilates® franchise today. Locations are available now in your city.

Visit studiopilates.com/franchising for details.

Scan this code to learn more about owning your own Studio Pilates franchise

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Founders’ Message

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Founders’ Message Thank you for taking an interest in opening a Studio Pilates International® franchise. If you have taken the time to read through the first couple of pages, the opportunity is pretty compelling, right? The remainder of this brochure provides further details on this, as well as outlining our team and the next steps to opening your own Studio Pilates International® studio. But firstly I wanted to provide you with some background on how this unique concept was created and about our journey.

How we started Studio Pilates®

At the age of 23 I had just finished up my career as a swimmer. This career had blessed me with

the opportunity to see the world, to compete for my country several times as a member of the

Australian Swim Team and I was selected as a member of the 1996 Olympic Games team at the

age of just 17. I am forever grateful for the skills I gained during this experience as it taught and

instilled in me the importance of hard work, dedication and working as a part of a team, skills

that have proved invaluable to me in business.

After swimming, I still had such a passion for health and fitness and this, combined with my

inbuilt desire for helping other people, saw me pursue a new career as a Personal Trainer. Life as a

Personal Trainer was incredibly rewarding, but I really wanted to be able to help those who came

to me with injuries more than I could do working in the gymnasium environment. I wanted to

be able to free people from what was holding them back physically in their life and help them to

become fitter, stronger and healthier.

At the same time as this career transition was taking effect for me, my wife Tanya Winter

was working as a Sports Physiotherapist after also reaching a high level in swimming. Tanya’s

Physiotherapy career however was taking it’s toll on her thumbs and joints with early arthritis

symptoms presenting from the rigorous physical demands of ‘hands on’ sports physio treatment.

Not ideal at the age of 23.

This was all back in 2002 and at this time we were presented with an opportunity to lease a tiny

space at a local health club to run as a Pilates studio. Pilates was an area in which we had both

been exposed to through during swimming and one in which we had both recently studied and

trained in.

Pictured: Jade & Tanya Winter. Co-Founders of Studio Pilates International®

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We decided that this was a good move for us and so we went to the bank to ask for a small loan.

We were promptly denied because we had absolutely no assets or savings. Not letting that stop

us, we started the business up on our credit cards.

Upon launching the business, we focused solely on our clients and we ensured that we gave

them an amazing workout each and every time they came in. We both worked diligently, side -by-

side, six days a week, from 5am till 8.30pm. We quickly built up a loyal customer base and then

worked hard to buy our first home just a year later after we opened our doors.

After several years of working hard and saving our money, we wanted to expand our business

and the vision that we had for it. This is when we purchased the property that houses our original

flagship location, in Hawthorne, Brisbane, Australia.

Here, the focus was to create something different and something truly unique. We wanted to

create a luxury workout experience that everyone could afford to do and have access to. A place

where they could come and feel like they are working out like a Hollywood celebrity and feel

good about themselves at the same time.

We wanted to create an environment where our clients could enjoy a safe workout, with highly

trained instructors and experience all of the life changing benefits that Pilates can bring. We knew

from experience that clients loved the intensity of our workouts. We knew that they appreciated

how the worouts sculpted and toned their entire body yet were easy to follow and simple to

coordinate.

Drawing upon this vision and inspiration, the Studio Pilates® Platinum model was born. We

designed the workout space in a style that would transport our clients to New York or the

Hamptons and at the same time we developed what we call our Digital Exercise Delivery

System™. Overnight, this new system forever changed the way that our Pilates classes were

delivered and revolutionized the group fitness industry.

Now in our classes, the demonstration of the exercise and the verbal instruction was being

delivered through television screens on the walls of our studio and the effects where incredible.

With this simple change, it helped to free us up from having to demonstrate and explain each

exercise and it allowed us to do what we really wanted to do and that was to help our clients

with their technique.

Founders Message

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This meant that our clients got a superior workout; they felt the exercise more in the right spot

and their bodies transformed before our eyes. This new system also had the benefit of making

each Pilates move clearer and easier to understand for participants, which helped even the

mostuncoordinated feel like a professional.

Our instructors are very much present and are pivotal to our success. They interact in tandem with

the system each day in every one of our studios across our network. The Digital Exercise Delivery

System™ works to support and assist them as a virtual instructor and is one that gives the same

great instruction day in and day out.

This ultra high level of consistency and quality has been the key to enabling us to give a great

class experience across all of our locations and expand our franchise network.

In June 2013, we were incredibly proud to release our first franchise and to see our first

franchisees open their Studio at Portside Wharf, in the picturesque suburb of Hamilton, Brisbane.

This was an exciting time for us as we watched on with joy to see it explode, far beyond all of our

expectations.

Since then, we have seen more franchised locations come online in Brisbane and with interest

and demand increasing rapidly from Sydney, Melbourne and internationally, we have been

busy gearing up to expand our Pilates studio model with the framework to be a best practice-

franchising network.

It is our vision to see Studio Pilates International® studios spread across the world, with our

members and franchisees enjoying the many benefits that Studio Pilates® brings. We love to

share our experiences with our team and our franchise partners and we are looking forward to

seeing more motivated individuals who are passionate about health and fitness partnering with us

to see this vision become a reality.

Jade Winter

Founders Message Continued

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The Positive Outlook

“Globally women are a bigger growth market than China and India combined”

(Harvard Business Review – August 2009)

A wide target demographic – Studio Pilates® attracts a wide array of members, from the time

poor young professional to the professional athlete, from the first time exerciser to the hard-core

fitness fanatic. Studio Pilates International® occupies an enviable position in the international

fitness market as reformer Pilates classes continue to grow in popularity and are rapidly reaching a

point of mass consumption.

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Real household discretionary income:

Higher levels of discretionary income give

consumers greater scope to spend money on

fitness products and services. Discretionary

income is expected to increase over the 2014

– 17 years, fostering growth in the health and

fitness industry’s activities.

Levels of obesity on the rise:

As obesity levels rise, efforts to prevent or

combat the disease have led to increased

spending on fitness. As obesity levels are

expected to continue rising, this should have

a positive impact on growth in the health and

fitness industry.

An ageing population:

Maturing consumers will be key drivers of

growth as awareness of the benefits of physical

activity on health and quality of life in later years

becomes widespread. The ageing population

will also result in greater numbers of people in

this market sector. Australia’s ageing population

will be key to growth in low impact exercise

regimes such as Pilates

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The Studio Pilates® Offering

A Different Type of Workout

Studio Pilates® is a 40min, express Pilates reformer class set to

high-energy music that tones and sculpts the entire body. It’s highly

versatile, catering for multiple levels of fitness, incredibly effective

and low impact.

It’s simple for members to follow with instruction on how to perform

each exercise presented on television screens on the walls of the

studio, with an audio guide and explanation to accompany. Highly

trained instructors monitor, support, correct and motivate our clients

with every single exercise ensuring maximum benefits and results for

our members.

A Proven Fitness Method

Ever since the first Pilates studio was opened in 1926, Pilates

has grown organically and spread across the world. Since being

established in 2002, Studio Pilates International® has stood the

test of time and continues to expand its reach each day. With the

added backing of physiotherapists overseeing instructor training

and program development, Studio Pilates International® is a proven

mainstay in the fitness industry.

Convenience

Today’s fast paced lifestyle demands a streamlined way to achieve

results when exercising. A 40 min, Pilates reformer class that tones

and sculpts the entire body is simply a perfect fit. Class times

scheduled before and after work hours, studios placed in convenient

locations and the ability to book your classes on your smartphone

make doing a Studio Pilates® class that much easier.”

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Clients simply love the ability to book their Studio Pilates® classes on their smartphone. This in return streamlines operations and reduces administration costs of the business.

Accessibility

For too long, Pilates studio classes have been the exclusive domain of Hollywood celebrities and

society’s elite. Studio Pilates International® has changed all of this and disrupted the market by

creating a true luxury workout experience and at the same time, made it accessible and affordable

for all.

Quality

Quality is at our core. Through the innovations that we have made in technology and training, we

have been able to dramatically increase the level of quality experienced in group Pilates reformer

classes. This is realized through the use of our Digital Exercise Delivery System, which allows a

highly qualified instructor to focus on correcting each client’s technique during the workout on

the very best Pilates equipment in the market.

Variety

Our class programs are changed daily from a large, automated library of workouts. New programs

are designed and released by the Studio Pilates International® team each quarter keeping

members engaged and continuing to achieve results.

Desirability

Our members want to work out in style. We provide this to them with an aesthetically elegant,

chic and desirable workout space with the very best custom built Pilates reformers.

Uniqueness

Studio Pilates International® is so unique in many ways. One way that we really stand out from

the crowd is that Studio Pilates International® is the only luxury fitness offering in a market

saturated with mediocre and budget providers. This market niche is one of the many things that

sets us apart and gives the Studio Pilates marque an edge over competitors.

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The Science 02Studio Pilates® radically reshapes your body, giving you the physique you’ve always wanted. Studio Pilates® is unlike other Pilates classes and other forms of exercise, sculpting your body in a very unique way.

Firstly, your Studio Pilates® workouts incorporate the Pilates reformer, a spring loaded machine which was designed over 90 years ago by Joseph Pilates. The reformer machines specifically target not only the larger muscle groups, but also the smaller accessory muscles, which you never even knew you had. This combination of working both the large and smaller muscles combined with Studio Pilates’® scientifically designed choreography means that you receive maximum results fast, transforming your body’s problem areas and changing your body for life. In your Studio Pilates® classes, we also focus on targeting and isolating specific deep core muscles. These include the Transversus Abdominus muscle and the Pelvic Floor. We call the simultaneous contraction of these two muscles the ‘T-zone’ for short. It is scientifically proven that through working these deep core muscles, you can dramatically flatten your abs more effectively than any other type of abdominal workout. This is why up until now, all of those sit ups have been a total waste of time!

Your Gluteal muscles are also targeted in your Studio Pilates® classes to transform your butt. There are actually 3 main Glute muscles and they all have different functions and are all targeted in your Studio Pilates® classes. The butt is made up of the Glute Medius, the Gluteus Minimus and the Gluteus Maximus as well as other smaller stabilising muscles.

By targeting the Gluteus Medius, your butt and saddlebags will be radically reduced, by training the Gluteus Maximus you will find your butt completely reshaped and by toning the Gluteus Minimus you will find your butt looking higher and more lifted. Training these muscles in your Studio Pilates® classes will all combine to give you a completely new rear end.

Other areas of the body which are strategically targeted in your Studio Pilates® classes include the lower trapezius and rhomboid muscles which are in the middle of the back, making your waist look thinner by improving your posture.

The adductor muscles (inner thighs) are worked to firm, reduce and reshape this area dramatically. Triceps are focussed on as well, which when firmed, gives you toned, trim and lean looking arms.

With a new workout each day to experience, Studio Pilates® will reshape your body leaving you looking trim, toned and transformed in a very short period of time.

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The Franchise Opportunity

A Streamlined Business with a Personalised Feel:

Studio Pilates International®‘s business model has been developed

since 2002 and the market leading Digital Exercise Delivery System™

has been designed and refined since 2009.

Technology drives our business and no other Pilates provider has ever

deployed the same level of sophisticated technology. This system

allows for our franchisees to achieve greater economies of scale by

having more participants in each class, which increases profits and

maintains unparalleled quality at the same time.

Efficient Sourcing:

Studio Pilates International® has recently undertaken a strategic

sourcing project to ensure capital and operational efficiencies are

realised. Through streamlining the main components of studio

establishment, start up costs required for studios have been

significantly reduced, resulting in a Studio Pilates International®

franchise becoming more accessible for more people.

This, along with the fact that certain operational items are now also

being sourced more efficiently will result in a more impressive return

on investment.

Classes Paid in Advance:

The Studio Pilates International® business model operates on a

prepaid package revenue model for all classes. All revenue goes into

your bank account and you never have the stress of managing and

following up bad debts.

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Flexibility in the Cloud:

Online cloud based administration and management systems allow franchisees the flexibility

to monitor and manage their studio onsite or remotely. This means that you have the ability to

monitor your studio’s performance at the tip of your fingers including reporting, class timetable

management, tracking of revenues, KPI’s, customer flow and more.

Online Training Systems:

All Studio Pilates International® franchisees and employees benefit from online pre learning

modules before any course. This greatly expedites the training process, which in turn saves

you time and money. You also benefit from 24/7 access to our world leading online training &

resource centre.

Ongoing Professional Development:

Studio Pilates International® delivers ongoing professional development to all instructors across

the network directly to their smartphones. This keeps you and your team up to date with all

the latest research, instructing techniques and information on how to help members to achieve

enhanced results from their classes.

Unparalleled Support:

Studio Pilates International® is committed to providing initial and ongoing support and training

to our franchise partners. This is the same whether you are looking for new ways to improve

your key performance indicators, assistance with any back end system or advice in other areas of

business operations. We are there for you every step of the way.

Multisite Ownership:

For the right operators, our multisite ownership program sees successful franchisees opening

more than one location. This allows for a greater footprint and market share, greater economies

of scale and consolidated administration options.

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2. Instructor checks client in via iPad

3. Instructor corrects position

1. Customer books in online or via IPhone

4. Customer cleans equipment

A streamlined value chain

A Simple and Effective Business Model

Highly automated • Online & smart device booking and payment systems• Cloud based management systems• Multimedia workout• Online professional development and training

Minimal HR resource requirements

• Low administration and overheads• Pre-recorded programs – reduces resources and training

requirements

Strong back office support (Corporate HQ)

• Training, recruitment and support • Outsourced payroll and bookkeeping• Performance and benchmarking analysis and reporting• Database of Local Area marketing strategies

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Book your Studio Pilates classes on your smartphone

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United States New York, California and all other U.S. states

EuropeUnited Kingdom, France and greater Europe

Current National and International Opportunities05

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Prospective locations (Australia & NZ)Sydney: Double Bay, Bondi, Manly, Paddington, Sydney CBD.

Melbourne: St Kilda, Toorak, Albert Park, Kew, Melbourne CBD.

Perth:

Claremont/Peppermint Grove,

Subiaco, Nedlands

Brisbane:

New Farm/Fortitude Valley (Reserved),

Paddington (Reserved), South

Brisbane (Reserved), Bayside ,

Coorparoo/Carindale, Gold Coast

Other Locations:

Adelaide, Hobart, Cairns (Reserved),

Gold Coast, Auckland, Wellington,

Christchurch.

If the location you are after is not listed…just ask us about it! We would be more than happy to discuss defining a suitable territory.

United Arab EmiratesAbu Dhabi & Dubai

AsiaHong Kong, Singapore, China & Japan

Australia & New ZealandSydney, Melbourne, Adelaide, Perth & NZ

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The Steps to Opening Your Studio06At our headquarters, we speak to many people on a daily basis

excited about the prospect of owning their own studio. We are

keen to see the right people become members of the Studio Pilates

International® team and become successful business operators and

we hope that this will be you.

The process we go through to assist potential franchisees into their

very own studio has many steps but we are here to help you to move

through this entire process as swiftly as possible.

A Studio Pilates International® franchise representative will guide

you through the process and help you to achieve each milestone as

you progress through to opening the doors.

Studio Pilates International® greatly streamlines the process of

opening your studio from start to finish allowing you to focus on

your training and mastering the skill of teaching Pilates.

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Your Studio Pilates® Path to Success

1. You fall in love with the Studio Pilates International® classes

and the business concept

2. You enquire about owning a Studio Pilates International®

franchise online or by phone

3. You fill out an application form

4. We discuss your application over the phone and you verify that

you have the equity required to open a franchise

5. An information pack is supplied to you including draft franchise

documents and more

6. We arrange a series of times to meet and to discuss the

opportunity further

7. An area is selected for your studio

8. You’re approved to move forward and progress through to

signing the official franchise documents once issued

9. We work in tandem to source a great site in which to operate

your Studio Pilates International® business

10. You commence and complete your training

11. Your site is found and you commence marketing in your local

area

12. Your fit out is completed in the iconic Studio Pilates

International® style

13. Your studio opens for business and you and your team receive

further ‘in studio’ training

14. You grow and expand your business and Studio Pilates

International® supports you to do so

CONTACT

All franchising enquiries to Jade Winter on 0412 031 550franchising@studiopilates.com

STUDIO PILATES INTERNATIONAL FRANCHISING

246 Hawthorne Rd, Hawthorne, QLD, 4171. Ph: 07 3899 4555

For your assurance, all discussions will be informal and confidential. They are designed to give you an understanding of the business and enable you to make an informed choice about joining the network. Some of the services described in this brochure may require you to take advice on financial matters. Studio Pilates does not give financial, legal or business advice to individuals. Prospective franchisees should take independent professional advice on all such issues as recommended under the Australian Franchise Code of Conduct and the Franchise Association of New Zealand before entering into any agreement.