Gym Franchises are they worth it? Use our top 6 questions to ask a Gym franchise manager the right questions. It’s a bit like asking whats the best car is or whats the best fast food chain, very subjective. Some might say guess work. Does it really comes down to these 3 things;
- Monetary return on investment
- Return on time invested
For some people it’s a passion and maybe that is the one of the strongest drivers. I mean if you had money and wanted to make some money would you choose a Gym? Lets ask.
Before we go into a crude example let’s outline some reasons why people sell franchises and why somebody would buy a franchise rather than start something organically.
As a business owner, why would you expand your Gym using a franchise model?
- Expansion without the cost of equity or debt
- Faster growth
- Reduces the risk significantly
- Adding fresh ideas to your brand
- Brand valuations go up
- Free up time
Why would you buy a franchise instead of starting your own Gym brand?
- Support in the right areas
- Can be easier to secure finance
- Bigger discounts on equipment
- Faster route to market
- Help in specialist areas such as compliance or property
- You don’t necessarily need Gym business experience
Bear in mind it’s not all about the advantages; agreements can stifle your creativity, you can be shackled to a particular product set or service and reputation that is hard earned can be shattered by poor operators under the same brand.
How much money can you make owning a Gym?
According to Statista in 2019 there was 6700 Gyms in the UK with 9.7 million members. This is why franchise Gyms are appealing to investors and fitness enthusiasts alike, it’s a market that turns over nearly 2 Billion every year. They also say that from 2012 to 2016 the average number of members per Gym in the UK was around 5000 people. The average price of membership is around £40 per month, pretty good maths right.
So, is opening a Gym a good investment?
Based on our research the cost of a franchise gym can vary from about 50k – 500k, let’s take £500k as an example. 500K could buy you a 4 bed house in the Home Counties. Rent for the house would be around 2k per month. 24k gross per year.
Put the same 500k into a Gym with half the UK average number of members let’s say 2500 paying £40 per month. 100k per month in recurring revenue each month. 1.2 million gross per year.
Our crude example demonstrates why Gyms have been on the rise for the last 10 years, and why Gym Franchises have accelerated that growth. Gym Management salaries are typically quite low, often Personal Trainers are self-employed further lowering running costs. Gyms seem to run pretty lean so profits for the thriving clubs in good areas appear to be worth the effort. But not without risk. Picking the right Franchise partner is paramount.
Our top 6 questions to ask a Gym franchise manager
- How do you feel about the brand, more importantly how do they feel are they passionate?
- How do the general public perceive the brand, try Brandwatch, Trustpilot, etc
- Do they have detailed demographic and finance data supporting your potential location.
- Do you like the management team? Go beyond the sales people.
- How many Gyms have failed in their group, and why, what happened to those Gyms and owners?
- What percentage of their Gyms are run by investors vs passionate Gym people like ex personal trainers?
There will always be people comparing numbers with other types of investment, is this the best return on 500k, probably not but if you have a passion for people, achievement and an interest in fitness this definitely makes sense.
Our advice apart from our top 6 questions to ask a Gym franchise manager, do your homework!
Once you have a Gym you are going to need to employ people, check out our guide here to Talent Acquisition.
If you want to talk to us about executive hiring in the Gym industry you can find us here.