Health and fitness clubs provide their customers with the equipment necessary for their workouts in exchange for a membership fee. Many clubs also have trainers on staff to assist customers in safely reaching their goals. Some health club franchises have also been known to offer child care facilities, member lounges, and saunas as well.
In addition, revenues within the industry don’t only come from exercise-related services. Many health and fitness clubs also make money from the sale of related products such as foods, supplements, weight reduction products, equipment, and clothing.
Although the exact beginning of the health club and fitness industry is unclear, it has had consistent growth for an extended period of time, including a boom period that saw the number of Americans who said that they did something outside of work to promote their own physical fitness jump from less than 25% in 1961 to more than 66% by the early 1990s.
The industry has proven to be very resilient throughout the years. Economic downturns within the past couple of decades, including an unprecedented facilities shutdown during the COVID-19 pandemic, have only stagnated growth within the industry for brief periods of time.
Here are some statistics on the health and fitness club industry in the United States as it currently stands, per Statista:
- Market size: $147.11 billion
- Annual revenue: $14.63 billion
- Approximately 39% of people are a currently the member of a gym.
Diversity of options is a major attribute of the industry.
Not only are there franchises dedicated to certain segments of the population (e.g., centers that cater to women or kids), but there’s also a wide variety of services that can be provided by a single franchise. Personal training, step/bench aerobics, cardio kickboxing, yoga, strength training, aerobics classes, and spin classes are just a sampling of the programs offered by health club and fitness franchises.
Because many franchises cater to a specific niche in the market, there no clear cut market leader. Some of the largest and most popular franchises include Planet Fitness, Anytime Fitness, Orangetheory Fitness, Snap Fitness, Crunch Fitness, Gold’s Gym, Jazzercise, Club Pilates, Pure Barre, and CycleBar.
And customization doesn’t just stop with the fitness style or who the workout is catered to.
Franchisors are also catering their sites to the communities where their franchisees open a location. For instance, as Fitness 1440 General Manger Michael Wilson said, “Our gyms aren’t cookie-cutter images of each other but, instead, vary in size and capabilities depending on the community they serve.”
Looking forward, something to watch in the industry will be the expected continued evolution of the hybrid fitness model.
In the time since the onset of the pandemic, the ways it has changed the ways businesses operate are becoming clearer. For health and fitness club franchises, the change is showing up in where people want to work out.
Home workouts have always been popular. However, when social distancing became necessary, a way to operate away from the traditional studio or gym became necessary. And the methods health and fitness club owners used to survive the pandemic are maintaining relevancy.
As Julie Cartwright, president of P.volve, told Global Franchise Magazine, “With a hybrid fitness model, franchisors and franchisees can tap into both facets of this post-pandemic demand and ensure clients are able to achieve their personal health goals regardless of where they want to work out.”
Ideally, the concept allows franchises to build both a best of both worlds following. With a hybrid approach, franchisors build out a traditional studio experience while simultaneously developing an on-demand platform that customers can access whenever and wherever they want to work out.
The approach goes beyond safety. Convenience was becoming all the rage no matter what industry you operated in – and the pandemic accelerated that consumer desire. “People want to work out in a way that’s convenient to them – they don’t always have time to commute, nor do they want to,” says Cartwright.
Initial Investment Costs for Health Club Franchises
Investment costs vary for different franchises depending on the particular business system and execution requirements.
Initial costs associated with opening a health club franchise include the franchise fee, training expenses (such as travel and living expenses, not the actual training courses), grand opening marketing costs, and more.
One major variable in the initial franchise investment is the cost of real estate. Some health club and 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 health club and fitness franchises such as Send Me A Trainer and Jazzercise that can operated as a mobile franchise with the franchisee’s home as the base. The latter will, obviously, cost less to start. However, you would need to factor in vehicle and vehicle maintenance costs.
Our franchise profiles will present you with a basic range for the initial investment or minimum cash required to open a franchise. But when it comes to finding out the details of an initial investment, the franchise disclosure document (FDD) is the best place to look. Franchisors offer itemized estimates in their FDD based upon their experience establishing, and in some cases operating, units.
Keep in mind these estimates are just that, though—an estimate. Prospective franchisees should review the figures presented with a business advisor, taking into consideration their unique circumstances, before making the decision to enter into a franchise agreement.
Ongoing Costs for Health Club Franchises
When setting your budget, don’t forget about the additional costs required for nearly all franchise businesses. This includes expenses such as royalty fees, marketing fees, software fees, training fees, and more.
The most common is the royalty fee. Royalty fees are assessed for the continued use of the franchisor’s trademarks and patented processes, along with certain types of operational support. In addition to regularly assessed fees, other fees are charged on an “as needed” basis such as audit fees, or costs for additional, non-mandatory, training.
It’s important to note that while many initial and ongoing costs are detailed in the FDD, there are some costs inherent to business ownership, like employee wages or utility costs, that aren’t.