Looking into gym franchises can be a costly, but wealth-generating endeavor. The return on your investment in a gym franchise is well worth the costs of starting the business if you do it correctly and wisely. In 2018, the fitness club industry was valued at almost $32 billion. Last year, the industry value went up by two billion. This means money is there to be made and lives to be changed for the better. The fitness industry may have taken a large hit this year because of COVID, but that means that there will be much more opportunity within the next couple of years to actually buy into fitness franchises.
With many gyms, unfortunately, needing to close, the market for opening gyms will be booming in the following years. Most gym franchises that are taking major hits right now will have to radically reduce the buy-in cost. Of course, all restrictions and lockdowns need lifting before we can even begin to think about taking action. Here is what to expect looking into gym franchises and how to find the right franchise for you and your budget. We will also go into detail about what background knowledge you need to brush up on before running a full-blown fitness business as a gym franchisee.
Preparation for buying into gym franchises
Most likely, one can assume that you have been sitting on the idea of owning a gym for a while. You have probably been saving up your money from a personal training business or another source of income. Regardless, you want to be able to sit on a stack of cash before even considering buying into a franchise. Pulling out loans can help, but the interest rates and the overall investment is a bit daunting. It’s even more daunting if you are not all guaranteed that your business will flourish right off the bat. However, there are enough advantages of a gym franchise to consider buying in.
Having a savings account to draw from to start your fitness franchise is the most secure option. Franchisees often run into many problems in the construction and formation of their business. This means that the budget will have to accommodate for the hiccups. It is much easier to pay out of pocket for those hiccups than having to pay for those hiccups and the overall interest on the loan itself. Everybody knows that money adds up quickly!
Consider involving some investors in your business. These people can be your friends, family, or just some colleagues that are interested in the same pursuit. Although, if you involve your friends or family in this pursuit, make sure your relationships are strong. You might have to face some tumultuous times and financials can be quite damaging for relationships.
Consult the pros!
It is also extremely beneficial to seek out professional help with accounting and money management. Approaching an accountant to make sure that you are financially prepared to take on a franchise can save you a lot of remorse and stress.
This also goes for the legal hoops you need to jump through to become a franchisee. Consult an attorney at every step of the process. You want to make sure you will not set yourself up for legal troubles down the road. It is also wise to consult an attorney to make sure that the franchisor is not trying to set you up for any unreasonable legal bindings. Without a doubt, they had their own attorneys formulate confusing contracts muddled with legal jargon that might not make any sense to the average person.
What to Consider
Franchise owners make around $50,000 on the lower end of the average while others can make up to around $100,000. However, take into account the startup costs and the amount of time it takes to begin generating revenue. Plan for your gym franchise to not comfortably sustain you in the first year or so.
You also need to consider the demand for fitness clubs in your area. Building in an area with very few fitness clubs can put you in a better position to get a bunch of new members and fast. The area you choose to build your gym franchise in will also be important to rental costs if you are not the owner of the property.
Right now, people who opened their franchise before the pandemic experience issues like construction being placed on hold. Also, not enough people can attend gyms at the moment to actually see an immediate return on the huge investment. The pandemic is a prime example of hiccups in plans that are completely out of the control of the franchisee. Therefore, save your money now!
A concept to build on when thinking about how to structure your gym’s culture is the social connection that you need to build upon. Right now, more than ever, people are drawn to the social aspect of the places they invest their time in. Therefore, make sure there is a reason and a way for your customers to socialize and connect with others at your gym. Exercising, a lot of the time, is about the community and shared support for reaching each others’ goals.
However, most of the time, people do not want to go to the gym out of fear of being judged. Therefore, it is essential to cultivate an openness to your gym culture. Do your research on the fitness style that stands out to you and the customers that you want to attract. Doing research will help you get started quickly and help your franchise run smoothly in the long run.
Also, figure out what the general population of people is like in your area. Can they afford gym memberships? Are they too old to consider going to the gym? Is your area family-oriented? Can you form a childcare program? How would the residents of your community react to the opening of your gym? Are gym franchises very popular in your area to begin with?
Gym Franchises to Consider
Let’s start with the cheapest franchises to purchase and go to the more expensive gym franchises. Most of these franchises require a very high number and a very long-term investment in the business. Often you will need to have a net worth of over $250,000. This is why it is imperative to save up and also maybe consider your buddies who might be good business partners for taking on gym franchise opportunities. Before becoming a franchise, you need to consider what your values are in running a fitness business.
You also need to consider what the overall company is like. Make sure that that the franchising company will back you up and take care of you. Moreover, when buying into a chain of gyms, the company has a lot of power over you and your gym’s regulations. Therefore, make sure that there is a franchisee advisory board. Something of that nature should exist within the company that will have your back in case of trouble. Nonetheless, here are some nationwide gym franchise examples that you can consider.
This gym franchise focuses on mixing the elements of yoga, pilates, cardio, strength, hip hop, and kickboxing. The majority of the gym-goers are female and have an average of 7 years of membership among their customers. This is a dream for gym franchisees as customer retention and loyalty is absolute gold.
This company also has over 8,000 locations nationwide. Therefore, it has been successful for some rhyme or reason all this time. You can buy into this business for the cheapest price of any commercial business. An estimated buy-in starts at $1,250 and an overall investment max at $4,000.
This fitness franchise has perks like running 24 hours. This gym is available in many different countries around the world. Therefore the membership for the gym-goer is very valuable. This level of value is backed by a well-known brand and good marketing. You would not have to worry about attracting customers as the brand name does that for you.
The initial franchise fee goes up to around $42,000 and requires an overall initial investment of up to half a million. This is in the mid-range for many gym franchise investments. As a franchisee, it is important to consider the value of the brand you are buying into. Consider if your initial investment in the whole company will be worth it.
Buy into Pure Barre if you like trendy fitness and multiple means of income. This company exemplifies aesthetics and minimalism. You have the opportunity to sell Pure Barre clothing as well as owning your own studio. This form of exercise is available at many gyms, but many people are attracted to the focus that Pure Barre has on this training style.
The initial investment fee requires around $60,000 and you need to have around $90,000 in assets. Your overall worth must be around $300,000 to be considered for the franchise. However, you can generate revenue from clothing sales, selling classes, and training classes for your teachers. Its recommended that you be the master of barre to flourish with this franchise.
Like Anytime Fitness, Planet Fitness is massively popular for being open 24 hours and its affordability. Planet Fitness has almost 2,000 locations all over the United States. The mantra this company bases its culture on is having a judgment-free place for anyone and everyone to workout at. They back this mantra with the fact that Planet Fitness has a wide range of equipment to use for anyone who wants to get fit.
The franchise fee for this company starts at $20,000 and requires an overall total investment of $1 million at a minimum. On the high end, for a fully stocked and large Planet Fitness gym, one would need to invest around $4 million.
These are just four popular and profitable options if done right. Find the detailed information for the money you will need to become a franchisee here. If I went into the very fine details of the finances it takes to open up each one of these fitness businesses, then you would be reading this article all night!
However, many more options might be local to your area. For example, here in Colorado Springs and a few other specific cities in other states, we have VASA Fitness. This is a gym designed to be aesthetically pleasing and meet the needs of a large array of clients. Their gyms are stocked with Pools, saunas, hydrotherapy rooms, massage rooms, free weights, cardio room, performance lifting area, kid care, fitness classes of all types, and more. Do a deep dive into the gyms in your area and see if more localized gym franchises fit your needs.
|GYM||Total Initial Investment||Franchise Fee||Net Worth Required|
|9Round||$79,175 – $163,275||$30,000||$150,000|
|Anytime Fitness||$74,290 – $523,824||$42,500||$300,000|
|Burn BootCamp||$148,830 -$353,150||$40,000||$300,000|
|CycleBar||$284,350 – $497,150||$49,500||$600,000|
|F45 Training||$313,200 – $485,100||$50,000||–|
|Jazzercise||$2,415 – $3,200||$1,250||–|
|Orange Theory||$608,172 – $1,800,322||$59,950||$500,000|
|Planet Fitness||$968,100 – $4,113,500||$20,000||$3,000,000|
|Pure Barre||$198,650 – $446,250||$60,000||$500,000|
|UFC Gym||$295,057 – $4,912,007||$50,000||$250,000|
What to Expect as a Franchisee
Stress. Expect to be stressed until you have the right people under your wings to run the gym for you. The startup process is not an easy nor quick one. What makes it much easier though is hiring the right people. Hone your sense of judgment when it comes to people in the hiring process. When you hire the right people, then your gym will run smoothly. When your gym runs smoothly, then you will find yourself under much less stress.
Have an organized budget for your gym’s monthly expenses. This is a skill that helps in all of life’s pursuits. Creating a detailed list of your expenses from month to month will help you better budget your spending on the gym. Pair this with your estimated revenue based on the projected new membership signups, cancellations, and planned payments.
Many gym franchises require that their members sign a contract to pay for membership over a certain period of time. This is important in member retention and what to expect in terms of revenue. Predictable revenue makes life a bit easier on the franchisee.
People often compare the franchisee’s pursuit in business to getting married. It requires a ginormous investment and very long-term commitment. Otherwise, you’ll find yourself bankrupt and battered. Therefore, it’s good to have the support and advice to make smart decisions moving forward with your franchise. Compare the legal and financial advising you will need in this endeavor to marriage counseling. Marriage is absolutely not easy and you won’t always be able to make the right decisions on your own. The same goes for this business.
The good part about franchising, however, is that you will get the advising and resources you need from the franchising company. Unlike starting a gym completely from scratch. The company you are buying into relies a bit on your success as well. Therefore, they will help you get started with business plans, regulations, procedures, policies, and more. You essentially don’t have to come up with your own business model for running the gym.
A lot of factors come into play when it comes to gym franchises. You have to be well prepared and well adjusted to running a business before even considering buying in. Always ask for advice from financial and legal professionals before laying your money down on the table. It never hurts to be told that what you’re doing is wrong or right before you actually sign away your money.
Make good connections with people who will support your business endeavor and even invest in it. This way you have a team to rely on when navigating the tricky waters of business. Make sure you also build a good team of employees so that you do not have to fear what goes on day-to-day.
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