The first Gold’s Gym was opened by Joe Gold in Venice Beach in 1965, and since then the gym has become one of the world’s most famous venues for bodybuilding and strength training.
Gold’s Gym launched its UK franchise in 2016, and the group’s potentially lucrative offering of £1.6 million in revenue per gym means that dedicated investors can open strength-training gyms across the UK with support from an experienced team. In this article, we’ll explore what Gold’s Gym is, how the Gold’s Gym franchise model works, and what level of profit you could expect from opening a Gold’s Gym in the UK.
The benefits and opportunities for becoming
a Gold’s Gym franchise owner
If you’re interested in starting a gym franchise in the UK, there are many benefits to choosing Gold’s Gym as your chosen brand:
- Be part of an instantly recognisable brand in fitness, with 3 million members worldwide, a presence in 28 countries and celebrity endorsements including Arnold Schwarzenegger
- Take ownership of a high-return gym with average annual revenue per year of over £1.6 million per gym
- Benefit from extensive training provided by Gold’s Gym for every franchise owner, including a five-day training programme to help you succeed
- Get access to a proven support network as well as marketing strategies designed to drive up sales including national social media and public relations management tools
- Carve out a niche in the market by offering the highest number of strength equipment per sq foot than any competitor
- Boost uptake by offering all the traditional fitness facilities customers expect including group exercise classes, cardio fitness and small group training studios
- Take advantage of partnering with a brand that has the largest online fitness community globally and 2.5 million visitors to its website each month
- Get help and advice from the Gold’s Gym franchisee support team to find the optimum site to increase your revenue
How does the Gold’s Gym
franchise model work?
The Gold’s Gym franchise model allows franchise owners to run a successful and recognisable gym brand (with 96% brand awareness in the US) in exchange for a start-up fee and ongoing royalty fees. Investors will have to have enough liquid assets to cover the initial Gold’s Gym franchise cost, but in return, they can reap significant profits if the gym is successful.
1. Gold’s Gym franchise requirements
Opening a Gold’s Gym franchise is a significant investment of your time and money, and Gold’s Gym will be looking for investors who have the capital and the drive to make their club succeed. The usual Gold’s Gym franchise requirements are:
- Potential franchise owners are required to have a minimum net worth of around £769,000 ($1 million), with liquidity of around £307,600 ($400,000)
- You must be able to pay a Gold’s Gym startup fee of around £30,000 and further Gold’s Gym franchise costs of around £800,000
- Candidates will have to show that they have the business experience and ambition to make their gym a success
- Candidates will have to show that their chosen Gold’s Gym location aligns with the goals and targets of the group
2. Minimum cost/investment to buy and own a Gold’s Gym franchise
Gold’s Gyms have a relatively high initial investment requirement of around £852,000 per gym. The cost to open a Gold’s Gym franchise is higher than the cost to open many other fitness centres, in part because of the high cost of the equipment needed for the clubs.
This total Gold’s Gym investment figure includes everything from the cost of constructing your gym to the cost of fitness equipment, marketing, computer systems, and even travel and living expenses for yourself before your gym turns a profit.
3. Initial Gold’s Gym franchise startup fees
The initial franchise fee for starting a Gold’s Gym is around £32,000 or $40,000. Gold’s Gym franchise fees cover the administration costs associated with starting your business and essentially buy you the rights to use the Gold’s Gym brand in your new gym. In exchange for this fee, you’ll receive support and assistance with everything from choosing your new gym location to establishing operations and undergoing management training.
4. Expected Gold’s Gym franchise revenue
The owner of a Gold’s Gym franchise can expect an average revenue of around £1,677,000 per year, with an average EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) of 16.37%. This very high average income of a Gold’s Gym franchise owner justifies the higher costs of starting a Gold’s Gym franchise when comparing costs and revenue to smaller gyms or low-cost fitness centres.
5. Costs associated with running a Gold’s Gym franchise
Franchise owners will not be able to keep all of this revenue to themselves. It’s important to understand how much it costs to run a Gold’s Gym so that franchise owners know how much profit they can expect to make.
Gold’s Gym doesn’t currently publish official figures for royalty fees online for their UK franchisees, but in the US all franchise owners are expected to pay a number of costs including royalty fees, marketing fees, and cooperative contributions. Some of the biggest costs to buy and own a Gold’s Gym franchise are:
- Royalty fees of 5% or $2000 per month, whichever is greater
- Marketing fees of 2% or $1350 per month, whichever is greater
- Cooperative contributions of up to 3% per month
- A studio programme training fee of $250 per trainee
- Convention registration fees of $500
- Management fees of 3% of revenue
In addition to these Gold’s Gym fees, Gold’s Gym franchisees will also have to pay for running costs such as ground rent, utilities, staff wages, and the costs of repairs and maintenance. The Gold’s Gym franchise cost total per month can add up to thousands and thousands of pounds.
6. Predicted average profit of a Gold’s Gym franchise owner
The Gold’s Gym franchise owner average profit can be calculated by deducting the total monthly costs from the total monthly revenue. The average monthly revenue of a Gold’s Gym franchisee is around £140,000 per month, but 13% of this will be lost to various Gold’s Gym fees and much more will be spent on rent and utilities.
Some estimates predict that Gold’s Gym franchise owner’s average profit per month is around $29,000, which reflects a 21% EBITDA margin.
A Look at the Gold’s Gym franchise agreement and Policies
Owning a Gold’s Gym franchise will also mean following the terms of agreement and policies set out by the Gold’s Gym group. These terms of agreement will ensure that you operate within the boundaries that Gold’s Gym set out for you at the start of your contract.
1. Training
All Gold’s Gym franchisees will have to agree to undertake an initial training programme to the satisfaction of the franchisor. This will consist of approximately 20 hours of classroom training and around 12 hours of on-the-job training. Additional training may be required at the discretion of the franchisor.
2. Location
Franchisees are bound by their contract to operate at the specific site accepted by the franchisor. The Gold’s Gym group will identify a site selection area using city boundaries or within a specific radius, and franchisees will not be permitted to open a Gold’s Gym outside of this area.
3. Obligations
The Gold’s Gym recommends that franchisees participate in the direct operation of their Gold’s Gym facility, but this is not considered to be a requirement. The Gold’s Gym group also requires that franchisees offer all amenities and other products and services that the franchisor deems mandatory, and franchisees are forbidden from selling or offering products and amenities not expressly authorised by the Gold’s Gym group.
What are the franchise terms of agreement
and renewal for Gold’s Gym?
When you sign a contract to become a Gold’s Gym franchisee, you’ll usually sign up for an initial franchise term of around 10 years. This term expires 10 years after the facility first opens to the public. After this period, if franchisees have complied in full with the Gold’s Gym Franchise Agreement, they may acquire a successor franchise under a new agreement.
Is Gold’s Gym a good fit for you?
It’s important to consider the Gold’s Gym brand before you sign up to become a Gold’s Gym franchisee. Gold’s Gym franchise opportunities can be profitable, but they also entail that franchisees operate in line with Gold’s Gym brand.
1. The target market of the average Gold’s Gym franchise
Gold’s Gyms are fitness centres focused on strength training. They pride themselves on having more strength training equipment per square metre than any other fitness centre or gym chain. Gold’s Gym memberships typically cost around £29.99 per month, which makes them relatively affordable without being quite low-budget.
The majority of the audience for Gold’s Gyms is comprised of young males looking for a cost-effective way to maintain strength and athletic performance. They don’t care about luxury services or amenities like swimming pools and smoothie bars, but they do want to work out at a gym that prioritises strength training and has the specialist equipment they’re looking for.
2. Is a Gold’s Gym fitness franchise right for your chosen location?
Understanding the Gold’s Gym target audience can help you to determine which locations would be most suitable for a Gold’s Gym. Towns and cities with significant populations of young professionals and professional males, and locations which may be lacking in gyms primarily aimed at strength training and performance training, are most suitable for a Gold’s Gym.
The franchisor can work with you to choose a good site for your new gym.
3. Other factors to consider when deciding whether a Gold’s Gym fitness franchise is right for your chosen location?
If you want to open a Gold’s Gym in the UK, you might also want to consider whether you’re prepared to take on the risk of opening a franchise that’s relatively unknown here compared to its home market of the US. There are currently only five Gold’s Gyms in the UK, all located around London. The company is trying to grow its brand, but as the franchise owner, you will be the person taking on most of the risk if your gym isn’t successful.
Gold’s Gyms also differentiate itself from its competitors by offering more strength training equipment per square metre than any other gym and hiring and training experienced staff who can offer specialist support and advice to gym members. Gold’s Gym will expect that you’re able to meet both of these standards within your gym, which can mean higher running costs and being very involved in the day-to-day management of the facility.
Are you a good fit for the Gold’s Gym franchise?
Investors considering Gold’s Gym franchise opportunities should also ask themselves whether they’re a good fit for the franchise. Do you meet the criteria that the Gold’s Gym group will be looking for?
As well as having the capital to invest in a Gold’s Gym, the group will want assurance that you’re willing to risk a large amount of money on the venture, and they will look for candidates who are both motivated and willing to comply with the Gold’s Gym terms and conditions.
The process of starting a Gold’s
Gym franchise
For investors interested in starting a Gold’s Gym franchise, it’s important to know what the process looks like.
1. Recruitment
The first stage of starting a Gold’s Gym is the recruitment stage when candidates will meet with a representative of Gold’s Gym to establish their suitability for a partnership with the group. This is an opportunity for both parties to assess each other and establish whether to continue with the agreement.
2. Site planning
The team at Gold’s Gym will help franchisees to select a suitable site for a new Gold’s Gym. In the UK, there are very few Gold’s Gyms across the country, which means that franchisees may have more choices in the location they select than usual. The franchisor will help you to assess your site’s suitability for a Gold’s Gym, looking at site costs and local populations to ensure that your gym could be profitable.
3. Operational support
At this stage, the team at Gold’s Gym will offer franchisees operational support to help get the new gym up and running. The franchisor will help franchisees with gym design and equipment selection, technology implementation, and staff training.
4. Marketing
Gold’s Gym offers their franchisees marketing assistance and support. You will benefit from central marketing activities such as social media marketing and national marketing, and also be responsible for carrying out local marketing yourself.
5. Launch
After you’ve marketed your new gym, it’s time to launch. After launch, you’ll receive ongoing support from the franchisor in the form of staff training, media planning, and assistance as and when it’s needed.
Conclusion
Gold’s Gym is a strength training franchise with an established user base in the US and a growing presence in the UK. If you’re interested in investing a large amount of money into a gym franchise operating in the strength and performance training niche, becoming a Gold’s Gym franchisee could be right for you.
FAQs
If you want to know more about opening a Gold’s Gym, check out the answers to some of the most frequently asked Gold’s Gym franchise questions below.
1. How to start a Gold’s Gym franchise
If you’re interested in starting a Gold’s Gym franchise, you will have to:
- Contact the Gold’s Gym team and prove that you have the capital and personal qualities needed to run a successful Gold’s Gym
- Choose a suitable site and prepare your business plan
- Invest around £820,000 in gym equipment, staff training, signage, and marketing materials for your new gym
- Be involved in the day-to-day management of your gym
- Follow the Gold’s Gym franchisee terms and conditions
2. How much does owning a Gold’s Gym franchise cost?
The total investment required to set up a Gold’s Gym franchise is estimated to be around £852,000. This covers the startup fee as well as initial investments into the gym and travel and living expenses before the gym is profitable. Gold’s Gyms may also cost somewhere in the region of around £100,000 per month to run, which should be covered by the gym’s revenue.
3. Is a Gold’s Gym franchise profitable?
After paying the startup fees and investment contributions that effectively make up the Gold’s Gym franchise price, most Gold Gyms will start to make profits within months of opening. However, to maintain steady profits it’s important that franchise owners take steps to market their gyms, attract customers, and keep service levels high. The average Gold’s Gym monthly profits are around £23,000.
4. What questions to ask when buying a Gold’s Gym franchise?
Before making the decision to open a Gold’s Gym franchise, it’s important to ask any questions that you might have to make sure you understand exactly how your agreement will work. Some questions you may want to ask include:
- How much support will I receive before and after my gym launch?
- What is the total Gold’s Gym franchise startup cost?
- What ongoing fees will I be liable to pay?
- When can I put up my Gold’s Gym franchise for sale?
