General Fitness Franchise Industry Overview
Though the beginning of fitness as an industry can be traced to the 1930s and Jack Lalanne, the fitness boom in America started in earnest in the 1970s.
Fed by a running boom, along with greater interest in sports evidenced by events such as: the growth of Olympic viewership, the popularity of the “Battle of the Sexes” tennis match between Billie Jean King and Bobby Riggs, and the passing of Title IX—an education amendment that mandated gender equality in sports, taking greater strides for a healthy lifestyle came into vogue. By the 1980s, gyms and fitness centers were popping up all over the country.
Many entrepreneurs are surprised to learn just how much diversity exists in the fitness franchise industry. The big three divisions of the industry are fitness center, health club, and weight loss center. Though, services in these areas bleed into one another commonly. The companies with the largest market share in the gym & fitness industry include franchises: Anytime Fitness, F45 Training, Gold’s Gym, Planet Fitness, Orangetheory Fitness, and Snap Fitness.
Revenue for the gym & fitness industry is currently estimated at $3 billion a year. Per market researcher IBISWorld, “Over the five years to 2025, the gym and fitness franchises industry is projected to grow due to a burgeoning active population. [...] In particular, franchises that appeal to time-strapped consumers with convenient establishments, around-the-clock services and up-to-date fitness technology are anticipated to fare well over the next five years. For example, operators that offer services such as meal planning, goal tracking, online personal training and user forums are expected to generate a large customer base.”
Fitness was one of the industries hit hardest by the pandemic. It’s estimated that revenue for the gym and fitness franchises industry suffered a 28% decline in 2020 amid the coronavirus pandemic. While there have and will be some more permanent closures, don’t expect people to stay away from fitness franchises for long. Franchises are consistently diversifying their service offerings to accommodate a wider range of ways to engage with customers. In addition, human connection is powerful and the desire for group activity will bring people back to studio locations, particularly those with strong group programs.
Making the Best of Circumstances
Necessity caused a shift towards home and virtual workouts. While this caused problems for several fitness franchises, particularly in the early days of lockdowns, it was a boon to franchises with flexible technology platforms that allowed them to engage with customers from afar. In addition, franchises like Orangetheory Fitness had “a lot” of studios that couldn’t open their physical locations start doing outdoor programming.
Circumstances also helped mobile-based fitness franchises like in-home personal training brand GYMGUYZ, which opened 35 new locations during 2020, and now finds itself on-pace to open 200 additional franchises in 2021 as well as expand internationally.
The increase in home fitness also has helped fitness-adjacent franchises such as Fitness Machine Technicians, a business that specializes in the maintenance and repair of exercise equipment for commercial and residential customers. The franchise, founded in 2012, has found such a market for its services that it announced in May 2021 that it was crossing the northern border into Canada.
Why Should You Consider a Gym/Fitness Franchise?
A gym or fitness franchise offers you a way to earn a profit doing something you love and share your talents with others. The recognizable name of your franchise draws in customers, so you have less initial marketing and greater customer retention.
What’s more, with a gym franchise, you have guidance from the corporate office. You can access a whole range of fitness techniques, advertising, and strategies to help you make your business a success. Fitness franchise opportunities also provide a greater return on investment than other franchise opportunities, so you start earning money more quickly.
The fitness industry is strong and growing. With the demand for this kind of service, you can access major growth opportunities in this field. You don’t have to invest in goods to sell, and you’re providing something people want and need for their health.
What Do Fitness Franchisors Look for in Franchisees?
“A lot of people ask, ‘Is there a certain recipe?’ and there really is no recipe,” Anytime Fitness co-founder and President Dave Mortensen has said. “The real recipe is for someone to have a true care for the person next to him. You know, we want someone that’s a soul searcher, that’s really looking to change lives and if they really care about the individual, the rest works itself out.”
And fitness industry experience isn’t a top concern.
“We have all different types of aptitudes being successful inside the Anytime Fitness brand,” Dave says. “Really, what they need, again, is that care for an individual, someone who really wants to help others on their journey for fitness.”
Of course, what one franchisor is looking for may not completely match up with the desires of another and an ideal franchisee for one franchise system may very well be without any prior industry experience. Prospective franchisees must therefore remain open-minded to the possibility of partnering with a company they didn’t initially consider.
Main Benefits of Choosing a Fitness Franchise
Business support is one of the main reasons people choose franchises over starting their own independent businesses.
Franchises offer field-tested experience that franchisees can draw from to increase their chances of maintaining a successful business. For example, in addition to training, some franchise systems offer real estate support to find the right location for the franchisee’s unit. Some franchises even help with lease negotiation.
The support can be financial in nature too. For instance, a number of franchises offer their franchisees national contract pricing for equipment, along with leasing programs. And many franchises offer special deals for armed services veterans.
How Much Does It Cost to Start a Gym Franchise?
You should be aware, however, that you need to provide an initial investment to start your gym franchise. Investment costs vary for different franchises depending on the particular business system and execution requirements.
Initial costs associated with opening a franchise include the franchise fee, training expenses (such as travel and living expenses, not the actual training courses), grand opening marketing costs, and more.
The minimum cash required can run upwards of $100,000 or $150,000 for a gym, and the initial franchise fee can range from $30,000-$60,000 itself. You also have to pay for equipment, rent or purchase a location and hire employees.
One major variable in the initial franchise investment is the cost of real estate. Some gym/fitness franchises, such as Planet Fitness and Gold’s Gym, require a much more expansive build out in comparison to other franchises. Furthermore, there are fitness franchises such as Jazzercise and i9 Sports that can have a mobile operation with the franchisee’s home as the base. The latter will, obviously, cost less to start.
Royalties are another important consideration. You need to pay a monthly fee to continue using the franchise name. Some companies charge a flat rate, and others a percentage of your income. Make sure you know exactly what's expected of you before you invest.
While these financial considerations may be somewhat off-putting, don’t let them stop you from starting your franchise. Simply research your financing options. You may be able to get a business loan to cover start-up costs and then pay it back over time as your business grows.
So if you’d like to break into the industry, consider starting your own gym/fitness franchise to become financially fit.
Start Your Own Gym Franchise to Get Financially Fit
You can also check out many more exciting Gym Franchises here on Franchise Direct.
If you love to work out and have a knack for motivating others to do so, consider starting your own gym franchise. This business allows you to be your own boss, enjoy a job you love and help people work toward their fitness goals, so let us help you get started.