The Restore Hyper Wellness location at 295 St. Paul St. in Cherry Creek. (Instagram)
Three cryotherapy spas in Cherry Creek and Boulder County are bankrupt.
Restore Hyper Wellness, an Austin, Texas-based company, has 225 locations nationwide and eight in Colorado, owned by franchisees. Cryotherapy involves sitting in subzero temperatures for two or three minutes. Restore also offers IV drips, infrared saunas and red light therapy.
Restore said such services can improve an array of bodily functions, though their online legal disclaimer stresses they don’t “treat, cure, mitigate or prevent any disease.”
On Jan. 19, Restore’s locations at 295 St. Paul St. in Cherry Creek, 2835 Pearl St. in Boulder and 2934 Arapahoe Road in Erie filed for Chapter 11 bankruptcy. Taken together, they have $3.4 million in debt and $700,000 in assets, according to bankruptcy filings.
The three locations are managed by co-owner Daniel Franklin of Erie, a lawyer with Shanor and Franklin in Denver who is also a Ziggi’s Coffee and Anytime Fitness franchisee. He manages and co-owns a fourth Restore franchise in Cherry Hills Village that is not bankrupt.
“Inflation and interest rates changed the economics of that Erie location basically from Day 1,” Franklin said of the spa, which opened in January 2023. “We thought we were going to be able to open the location for $660,000 and it ended up being just under $1.2 million.”
The LLC for that location in Erie owns $431,000 in assets and owes $2.2 million to lenders, according to its bankruptcy paperwork. Its 2023 gross revenue was $845,000.
“Boulder and Cherry Creek we acquired from other operators (in March 2023) and situations there were way worse than we anticipated,” Franklin said. “The situation was not as it was marketed to us. We were put in a spot of losing $40,000 to $50,000 per month.”
“We know that at one point, they were absolutely crushing it and then things started to change while we were in the process of transacting with them and by the time we took over, they were an absolute dumpster fire,” the franchisee said.
The Cherry Creek location has $120,000 in assets and owes $440,000 to its previous owner, a private equity firm out of Utah. Its 2023 revenue was $588,000.
The location in Boulder has $131,000 in assets — spa and sauna equipment, primarily — and owes $729,000 to United Leasing, in Indiana. Its 2023 revenue was $447,000.
“We have been very fortunate in Cherry Creek to basically be cash-neutral now, but we did fall behind on debt service and rent in the process. So, the benefit of Chapter 11 is that it gives us a reset in order to restructure debt and debt service payments,” Franklin said.
“We still have some work to do in Boulder,” he said, calling it “our challenge location.” But that spa has doubled its revenue since the takeover last March, according to its co-owner.
Franklin added that he doesn’t expect layoffs and Restore customers won’t see changes.
“Ultimately, I’m pretty excited about the (Chapter 11) filings,” he said. “Really, my only concern is that my team is going to be like, ‘What the hell is going on?’ and everyone walks off the job. If that happens, that would be an extreme difficulty, but I don’t think that’s likely.”
The Restore Hyper Wellness location at 295 St. Paul St. in Cherry Creek. (Instagram)
Three cryotherapy spas in Cherry Creek and Boulder County are bankrupt.
Restore Hyper Wellness, an Austin, Texas-based company, has 225 locations nationwide and eight in Colorado, owned by franchisees. Cryotherapy involves sitting in subzero temperatures for two or three minutes. Restore also offers IV drips, infrared saunas and red light therapy.
Restore said such services can improve an array of bodily functions, though their online legal disclaimer stresses they don’t “treat, cure, mitigate or prevent any disease.”
On Jan. 19, Restore’s locations at 295 St. Paul St. in Cherry Creek, 2835 Pearl St. in Boulder and 2934 Arapahoe Road in Erie filed for Chapter 11 bankruptcy. Taken together, they have $3.4 million in debt and $700,000 in assets, according to bankruptcy filings.
The three locations are managed by co-owner Daniel Franklin of Erie, a lawyer with Shanor and Franklin in Denver who is also a Ziggi’s Coffee and Anytime Fitness franchisee. He manages and co-owns a fourth Restore franchise in Cherry Hills Village that is not bankrupt.
“Inflation and interest rates changed the economics of that Erie location basically from Day 1,” Franklin said of the spa, which opened in January 2023. “We thought we were going to be able to open the location for $660,000 and it ended up being just under $1.2 million.”
The LLC for that location in Erie owns $431,000 in assets and owes $2.2 million to lenders, according to its bankruptcy paperwork. Its 2023 gross revenue was $845,000.
“Boulder and Cherry Creek we acquired from other operators (in March 2023) and situations there were way worse than we anticipated,” Franklin said. “The situation was not as it was marketed to us. We were put in a spot of losing $40,000 to $50,000 per month.”
“We know that at one point, they were absolutely crushing it and then things started to change while we were in the process of transacting with them and by the time we took over, they were an absolute dumpster fire,” the franchisee said.
The Cherry Creek location has $120,000 in assets and owes $440,000 to its previous owner, a private equity firm out of Utah. Its 2023 revenue was $588,000.
The location in Boulder has $131,000 in assets — spa and sauna equipment, primarily — and owes $729,000 to United Leasing, in Indiana. Its 2023 revenue was $447,000.
“We have been very fortunate in Cherry Creek to basically be cash-neutral now, but we did fall behind on debt service and rent in the process. So, the benefit of Chapter 11 is that it gives us a reset in order to restructure debt and debt service payments,” Franklin said.
“We still have some work to do in Boulder,” he said, calling it “our challenge location.” But that spa has doubled its revenue since the takeover last March, according to its co-owner.
Franklin added that he doesn’t expect layoffs and Restore customers won’t see changes.
“Ultimately, I’m pretty excited about the (Chapter 11) filings,” he said. “Really, my only concern is that my team is going to be like, ‘What the hell is going on?’ and everyone walks off the job. If that happens, that would be an extreme difficulty, but I don’t think that’s likely.”
