we sell gym
WHY BUY A GYM FRANCHISE?
[ FRANCHISE VS. NON-FRANCHISE ]
we sell gym
we sell gym

Why Buy A Gym Franchise?

When deciding whether to start your own fitness center or buy into a gym franchise, there are a number of important fundamentals that should be considered that will have a major impact on your success.

Often, we find that many people may feel their passion for fitness and personal experience has prepared them to open their own gym. However, that kind of thinking can be akin to opening your own restaurant because you love food and like to eat!

While there can be a certain attraction to creating your own brand, types of service offerings and developing your own way of doing business, it also comes with a number of challenges and potential failure risks that any serious entrepreneur should consider.

Why you should consider the fitness industry?

RECURRING REVENUE/ CUSTOMER RETENTION

Unlike many business models that are a “one and done” purchase that require the business owner to constantly spend advertising dollars to compete for consumer expenditures every day - fitness offers the opportunity to create a revenue stream that accumulates through recurring monthly membership fees to increase income potential and build greater equity in your business.

Most membership fees are charged monthly through auto-debits to your customers.... This provides a predictable, recurring, and bankable revenue stream. Most gyms provide incentives for members to sign monthly or yearly agreements. These membership packages often come with perks and bonuses such as group classes, gear or clothing discounts.

In addition, fitness offers one of the highest average customer retention rates in all of franchising – typically ranging from 6+ mos. to 4+ yrs. As it is said, it is much cheaper to keep a customer than find a new one!

we sell gym
we sell gym

HIGH ROI BUSINESS

While there will certainly be a number of startup and carrying costs in opening any new business, fitness can offer a very attractive ROI and cash-on-cash return for the business owner. The availability for preferred financing terms, accelerated depreciation on equipment, recurring revenue from membership sales, all contribute to an appealing business investment. Coupled with the benefits of a franchise system, shared cost benefits, proven systems and efficiencies, you end-up with a business that is not only fun to own, but financially attractive from an investment point of view.

EQUITY/ WEALTH CREATION

One of the biggest advantages of owning your own business is creating wealth through the asset value of your business upon resale.

To put this in perspective - twenty percent of the affluent all over the world are retirees. Of the remaining eighty percent, more than two-thirds are self-employed owners of businesses. ...

we sell gym
we sell gym

MULTIPLE REVENUE STREAMS

Fitness facilities can also offer multiple revenue streams through recurring monthly membership fees, personal and class training, merchandise sales including fitness apparel, work-out gear, supplements and more.

Depending on location, demographics and desired investment level, you can choose from a variety of “boutique” fitness concepts including Yoga, Pilates, cardio boxing, Martial Arts and more, as well as traditional fitness such as strength training and cardio for men, women and children to deliver an all-in-one neighborhood fitness center for the entire family.

STRONG GROWTH INDUSTRY

Fitness is not a fad or prone to changes in consumer demand. It cannot be replaced by technology or outsourced overseas. According to the International Health, Racquet & Sports Club Association (IHRSA.com), it is a recession proof $94 billion industry that has enjoyed 20+ years of annual growth and it is expected to reach USD 147.11 billion by 2024, witnessing a CAGR of 7.81% during the forecast period, 2019-2024 (marketwatch.com) as more women and seniors are joining fitness centers in the pursuit of a longer, healthier lifestyle. ...

we sell gym
we sell gym

LOW OVERHEAD/ FEW EMPLOYEES

Fitness has little to no cost of goods (COG’s) and little to no variable expenses producing excellent net margins. In addition, labor costs are relatively low as boutique fitness centers typically require few employees – often only 1-2 during non-peak hours depending on the concept. As a result, fitness does not have the headache of constantly recruiting and managing numerous employees like many industries such as food or most service-based business models.

Plus, unlike many businesses - fitness enthusiasts love what they do! For most, ...

SIMPLE BUSINESS MODEL

Fitness is a very well-established proven industry without the many moving parts found in other industries. Fitness offers a predictable, sustainable revenue stream through recurring memberships and multiple revenue sources that can be annuitized and easily duplicated across multiple manager-run units.

we sell gym
we sell gym

FUN BUSINESS!

Unlike many sectors like food or automotive repair, fitness is a fun and rewarding business to own and operate! It is a business that you can enjoy and allow you to turn your passion into profit by helping others transform their lives through health & fitness!

Why should you consider investing into a fitness franchise?

First and foremost, it is well established that a proven franchise system provides the highest potential for success. Why? Consider the amount of time and energy that would be needed in developing effective advertising, marketing, management systems, location site selection and lease negotiation, build-out specifications, equipment research, financing, supplier relationships, class programs, etc. necessary for successful brand penetration and efficient operations.

For most, the cost of royalties associated with a franchise is a well thought out and worthwhile investment in the success and prosperity of your business, while providing the “recipe for success” of an established franchise system that has been successfully proven and replicated multiple times in diverse markets.

we sell gym
  • 01
    Brand Awareness

    A critical key component of any business is the ability to attract, acquire and retain new customers.

    Being part of an established brand provides your potential customers with a name they will know and trust – thus they are more likely to visit providing your business the opportunity to deliver a great experience and acquire long-term members.

    In addition, a franchise provides the proven operating systems that will give your customers a clear understanding of the memberships, packages and services provided, as well as consistent systems that are well accepted across the country.

    Have you ever wondered why there are so many Planet Fitness locations, or how come Orange Theory or Anytime Fitness gyms seem to be everywhere? It’s the same reason there are multiple Domino's Pizza's, Jiffy Lube's or Sport Clips in almost every major city. It’s because successful franchises have the brand recognition to attract more customers, as well as the shared operating systems in place to retain more customers and make them comfortable that your business will be around for the long haul.

  • 02
    Higher Monthly Recurring Revenue

    As mentioned, one of the most attractive aspects of owning a fitness/gym business is the ability to create recurring revenue through long-term membership fees, thus building overall income potential and greater equity.

    Being part of a national franchise system will allow you to attract and retain more customers to increase revenue while also increasing the number of new customers that may be relocating to your area and transferring their existing membership to your club.

  • 03
    Build More Equity

    Franchises typically demand a higher resale value in the market. Why? It’s simple - would you rather buy a Subway or some unknown independent sub shop?

    Buyers will usually prefer stepping into a known franchise system with proven systems and training that is provided to ease transition of ownership, not to mention the continued advantages of name recognition, economies of scale, purchasing power, etc. of a national franchise system vs. the possibility of losing customers and/or employees due to change in ownership or needing to reestablish vendor relations, supply chain, etc.

    As your business grows and becomes more profitable, so too will your equity. With recurring revenue from membership sales, predictable and sustainable income makes owning a fitness franchise very attractive to potential buyers.

  • 04
    Multiple Ownership Models

    While it helps if you believe and live the fitness lifestyle, not all franchise owners are personal trainers or hardcore fitness enthusiasts. More important than fitness experience is business acumen.

    With established business systems, operational procedures, and class programing in place, franchises offer very attractive investment opportunities for owner/operator, semi-absentee and multi-unit ownership. Even if you have minimal to zero experience in the fitness industry, you can still successfully own a gym or chain of locations.

  • 05
    Wide Range of Investment Levels

    From Bootcamps to Big-Box Gyms, the cost of ownership can range from $150,000 to $1,500,000. Depending on your financial goals, investment capital and work/lifestyle goals, bigger is not always better. There are boutique sized gyms that are returning 40% annual cash-on-cash to their owners providing very attractive, scalable multi-unit ownership opportunities. Finding a broker/consultant who specializes within the fitness industry can help you align your personal and financial goals to opportunities best suited for you.

  • 06
    Easy to Finance

    As part of a franchise organization, accessing business financing can be easier than you might think. Most brands have pre-arranged contacts with pre-approved SBA funding and equipment financing in place. These brands will have detailed schedules for equipment, tenant improvement needs, burn capital, timelines for development and business ramp-up to streamline your funding application & approval process. With SBA loans, 401K rollovers, and HELOC’s being just a few financing options often available.

    https://www.wesellgyms.com/why-buy-a-gym-franchise/ can help provide options from some of the top gym funding resources in the country.

  • 07
    Be in Business for Yourself – NOT by Yourself!

    There are countless examples of multi-unit franchisees enjoying huge success owning large chains of locations around the country such as Domino’s Pizza, Sports Clips, Jiffy Lube, Meineke Auto, Planet Fitness or Orange Theory’s just to name few. Many of these operators have 20, 80, 200 and even 700 units under their control! Really think about this for one moment… many multi-unit owner / operators have 40+ units of a franchised brand. Why? The owner of 40 Domino’s Pizza locations surely knows how to make pizza by now. He/she obviously knows how to build-out locations, has no issue with getting additional financing, selecting equipment, hiring staff, buying inventory and supplies etc. so why wouldn’t he/she simply open their own pizza delivery business?

    Because they understand the secret sauce to making their “work / life” balance better. They understand that paying a franchise royalty fees gives them greater free time and flexibility when running their businesses. Royalties are the magic that makes the formula work. What would it cost you to develop and hire on-going management, training, marketing, advertising, web development, social media and customer support team? What about your site selection, buildout and equipment team? The answer is… a lot more than the typical owner could ever spend independently. You certainly couldn’t hire this group of talent for under 10% of company gross sales, and the vast majority of all royalties are between 6% and 8%. The wonder of royalties is that instead of an individual owner footing all the bills to develop and run his/her business, these expenses are shared among other franchisees within the organization.

    Being part of a franchise system provides the advantage of having an entire organization of knowledgeable industry professionals dedicated to the success of your business – including ongoing R&D to identity and introduce new products and services, supporting your business and continuing to improve methods and procedures to enhance unit level operations and profits. Sure, you may be able to do all of these tasks and support items yourself but, isn’t better to work smarter than harder, and have others help develop systemwide improvements so you can benefit from other people’s efforts? Multi-unit franchise owners clearly understand this and are able to build large business empires far greater than they could do on their own.

    Franchises offer the on-going support, education and system enhancements for their franchisees as well as networking opportunities with other franchisees to exchange best practices and ideas to continually refine and improve their business to achieve greater success and enjoy more free time and attractive lifestyle.

    With over 39,000 health clubs in the US, being part of a gym franchise can provide the owner with a great number of benefits and significant competitive advantages within the industry to position you for greater success.

As the number of health-conscious people around the county continues to grow, so too does the opportunity to invest in a health and fitness franchise. It is estimated that approximately one out of every five individuals in the US, has some type of gyms membership (statista.com). The fitness industry is a lifestyle not a trend. With increased awareness and information about how being active can help you physically, mentally and emotionally, the demand for fitness facilities is at an all-time high, and will continue to grow, which leads to profitable opportunities for those looking to invest. From a business and financial aspect, the pros and success rates of buying into a franchise far outweigh the costs of royalty fees.

For most people who go to the gym, it is not just about getting in a workout, it is about the environment and feeling part of a community. Whether it is a chance to share time and experience with a family member or friend, train for a personal goal or competition or even connect with new like-minded friends, the gym is more than just a place to get in shape. When you consider that an average gym membership costs between $50 to $125 per month and there are over 60 million people (according to IHRSA.com) who are being served per year, the stability and growth of owning a gym franchise can be a very rewarding and profitable business venture.

If you are interested in exploring the lifestyle benefits of owning a gym/fitness business visit us at: www.WeSellGyms.com At We Sell Gyms, we have the largest database of locations, franchise brands, and resale opportunities in the country. Plus, we have a team of industry experts who will take the time to help you evaluate opportunities that are well suited for both your personal and financial goals - whether that is one of the 20+ different franchised brands we work with or an existing fitness business for sale in your area.

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