Passionate about fitness? Interested in helping others improve their health and well-being? Like the idea of being your own boss? Owning one of the many available health and fitness franchises available might be right up your alley. The fact is, gym franchises have a lot of perks. Not only do you have brand recognition on your side, but you can expect benefits like training and assistance getting your business off the ground.
Of course, investing in a gym franchise—like any financial move—is one to think carefully about. In this article, we’re exploring the costs associated with opening a gym franchise to help you determine if this is the right move for you and your future.
How Much Would it Cost to Franchise a Gym?
The total upfront cost to open a gym franchise typically falls somewhere between $30,000 and $300,000, according to NerdWallet. Now, that may seem like a wide range, but it’s important to keep in mind that the total upfront gym franchise cost includes all of the elements necessary to get your franchise up and running. While this doesn’t necessarily include the day-to-day operating expenses you’ll need for the duration of your business, it does include franchise fees, startup costs, and recurring fees.
Franchise Fees
To open a franchise, you must pay the franchisor (another name for the parent company) a franchise fee. Essentially, this fee gives you the ability to own and operate a franchise location. You’re paying for the right to not only use the brand name, but to access the franchisor’s proprietary business systems as well.
Franchise fees vary from company to company, which means you can likely find a gym franchise option that fits your budget. With that said, the Small Business Administration (SBA) reports that the average fee is typically between $20,000 and $50,000. For example, the franchise fee for Pvolve is $50,000, while the franchise fee for StarCycle is $40,000.
Startup Costs
Of course, when you’re opening a gym, the startup costs are another factor you have to consider. While these costs do vary based on individual needs and the franchisor’s requirements, a basic gym expenses list may include:
- Finding a Location: Whether you’re seeking to buy real estate or lease a commercial property, owning and operating a gym requires a brick and mortar facility.
- Readying the Location: Any property you secure will likely need a facelift. You may need to install new floors, walls, locker rooms, offices, a front desk, lighting, and a point-of-sale (POS).
- Acquiring Equipment and Supplies: As a fitness facility, you’ll need to acquire exercise equipment and a wide assortment of supplies.
- Securing Insurance: As a gym owner, you’ll likely need various insurance policies, including worker’s compensation, commercial property, and general liability.
- Recruiting and Training Employees: Most gyms require at least a few staff members on hand, and there are costs associated with recruiting, hiring, and training these individuals.
- Advertising Your Business: To get the word out, you’ll want to develop local advertising, promotional, and marketing campaigns. Many franchisors even provide support and ideas on this!
- Launching Your Business: Especially during the first few months, it’s helpful to have enough working capital and an emergency fund set aside to cover day-to-day expenses.
Recurring Fees
Finally, you should also consider the potential recurring fees you’ll need to cover. For most franchises, this includes royalty and advertising fees.
- Royalty Fees: Royalty fees are the fee you pay your franchisor to continuously use their business name and plan. Your royalty fee represents a percentage of your gross revenue, and it’s typically collected on a weekly or monthly basis. While royalty fees do vary, the average ranges from 4-12%.
- Advertising Fees: Brand recognition is one of the biggest benefits of franchising, and that’s (in part) thanks to marketing. Some franchisors may ask you to pay between 2-5% of your gross revenue to support these efforts.
As you’re searching for the perfect health or fitness franchise that aligns with your budget, goals, and interests, keep these costs in mind. And also remember that while most businesses don’t turn a profit immediately, opening a gym franchise can certainly be a profitable venture!
How Profitable is a Gym Franchise?
No business is a guaranteed success, but owning a fitness franchise is typically a profitable move. When it comes to the average gym profit margin, you’re looking at somewhere between 10-15%, with boutique fitness studios having margins sometimes as high as 40%. Considering that a good profit margin for a new business ranges between 7-10%, the profit margins for a gym are certainly attractive!
But what do profit margins mean for your salary? Exercise.com reports that the average gym owner in the United States can expect to earn between $49,000 and $82,000 per year, depending on factors like the size and location of the gym. This number reflects cash in your hand once your operating expenses are taken care of.
Find Your Future Gym Franchise For Sale With Franchise Opportunities
If you’re ready to help the people of your community take the next step (or the first step) in their fitness journey, you just might have a future as a gym franchise owner. But with countless options around, it can be difficult to sort through all of your options. That’s where FranchiseOpportunities.com comes into play.
Our directory of health and fitness franchises has an assortment of opportunities that you can sort through by location and investment amount. From there, simply add them to your cart to request more information!