{"id":1004,"date":"2023-06-14T08:55:53","date_gmt":"2023-06-14T07:55:53","guid":{"rendered":"https:\/\/hitsona.com\/?p=1004"},"modified":"2023-07-28T17:32:02","modified_gmt":"2023-07-28T16:32:02","slug":"is-owning-a-gym-fitness-franchise-profitable","status":"publish","type":"post","link":"https:\/\/hitsona.com\/blog\/is-owning-a-gym-fitness-franchise-profitable\/","title":{"rendered":"Is Owning a Gym or Fitness Franchise Profitable? – A Deep Dive"},"content":{"rendered":"
There are over 7,000 health clubs operating across the UK, sharing over 10 million members between them. Gym and fitness franchises<\/a> are becoming increasingly popular with investors wanting to benefit from a market that\u2019s growing all around the world, and there are dozens of fitness franchises in the UK to choose from.<\/p>\n The vast majority of gym franchises in the UK are profitable, and only about 2% of gym franchises in the UK fail, which compares very favourably with starting your own non-franchised fitness centre. But how profitable are fitness franchises, what are the opening costs<\/a>, and how do these profit margins differ between franchises?<\/p>\n In this article, we\u2019ll take a deep dive into gym franchise profit margins and identify the most profitable fitness franchises in the UK today.<\/p>\n <\/p>\n <\/p>\n According to a survey by the British Franchise Association conducted in 2018, 93% of gym franchises<\/a> are profitable. But the profit margins of different franchises can vary significantly, as can the profits of individual gym franchise owners within a single brand.<\/p>\n One study estimates that the average revenue of a gym in the UK is \u00a3708,000<\/a> per year, which equates to \u00a359,000 per month. But with profit margins ranging between 15% and 73%, the amount of this revenue that gym owners hold onto can vary massively from franchise to franchise.<\/p>\n <\/p>\n <\/p>\n Out of this total revenue, around 60 to 80%<\/a> comes from gym membership fees. The rest of a gym\u2019s revenue comes from other sources, including pay-as-you-go classes, product sales, and complementary services. Exactly how much money a fitness franchise makes from different revenue streams will depend entirely on the business model of the franchise and the spending habits of the gym\u2019s members.<\/p>\n <\/p>\n <\/p>\n It\u2019s no surprise that the biggest revenue stream for most gyms and fitness centres is membership fees, but the way in which a franchise structures its membership fees can have a significant impact on revenue and profit.<\/p>\n <\/p>\n Some examples of standard membership fees for gyms in the UK – although rates vary between individual gyms – are:<\/strong><\/p>\n <\/p>\n <\/p>\n The huge variation in gym membership fees often reflects what\u2019s included for members. Expensive gym memberships like those offered by F45 franchises will include a huge range of gym classes and training sessions, whereas a PureGym membership includes access to gym equipment and basic fitness classes.<\/p>\n <\/p>\n <\/p>\n Some gym franchises offer members the opportunity to pay a higher monthly fee to benefit from upgraded membership status. This might mean that they can attend more weekly classes and group sessions or attend the gym during peak times.<\/p>\n <\/p>\n Some examples of upgraded membership tiers in the UK include:<\/p>\n <\/p>\n PureGym Plus:<\/strong> This allows members to attend multiple gyms, bring a friend, drink sports water, and book classes in advance.<\/p>\n Train Learn Go:<\/strong>\u00a0 At Train Learn Go<\/a>, members pay a fixed monthly fee depending on the number of weekly personal training sessions they want.<\/p>\n Lots of gyms offer multiple membership tiers that allow members to pay more or less depending on the services they want, how much they want to use the gym, and how many additional perks they want to enjoy.<\/p>\n For example, at PureGym, more expensive memberships allow members to book classes further in advance, making it easy to secure a place in popular sessions.<\/p>\n Some gym franchises may also offer flexible payment options. For example, at Hybrid Fitness, members can either pay a recurring membership fee to enjoy unlimited gym access alongside a personal training package or buy individual credit packs that grant single-use gym access or fitness class attendance.<\/p>\n <\/p>\n <\/p>\n Fitness franchise profit margins can also be relatively high on product sales within the gym. Lots of gym franchises supply and sell related products including protein bars and shakes, energy drinks, low-calorie snacks, training equipment, and meal plans.<\/p>\n While the sale of these items is often considered supplementary, such revenue streams can have a significant impact on a gym franchise\u2019s average profit.<\/p>\n At Anytime Fitness, members can purchase discounted Grenade protein bars, Virgin experience days, and Gousto meal boxes. Curves members can get NIMBL percussion massagers and Brumate shakers cheaper, while Gold\u2019s Gym sells its own branded protein bars and whey protein powders.<\/p>\n Many fitness franchise agreements will outline a requirement that franchisees must supply and sell branded products and amenities that the franchisor requires, and buying inventory to meet these conditions will cost franchisees money. Successfully promoting products to increase gym sales is an effective way to increase franchisees\u2019 revenue and profits.<\/p>\n <\/p>\n <\/p>\n Many gym and fitness franchises in the UK offer complementary services including caf\u00e9s and massage services, which can help to increase the total gym franchise profit of any centre. These additional services are not included in the price of the gym membership but instead offered as extra services for members that want to make use of them.<\/p>\n In some cases, gym and fitness franchise owners might pair up with local businesses to offer specialist services that they\u2019re not equipped to offer independently. Technically, personal trainers are often hired on this basis, with most gym franchises not including personal training sessions in the standard cost of membership and taking a percentage of the personal trainer\u2019s fees as revenue.<\/p>\n Some gym franchises<\/a> may also encourage franchise owners to invest in the infrastructure to provide in-house complementary services, such as a caf\u00e9 or refreshments zone. Caf\u00e9s can significantly increase a gym franchise owner\u2019s average salary, with most coffee shops enjoying a 75%<\/a> profit margin on refreshments.<\/p>\n <\/p>\n <\/p>\n Investors should consider two questions before taking on a fitness franchise<\/a>: how much profit will the franchise make and how long will it take to see a return on their initial investment?<\/p>\n <\/p>\n <\/p>\n Most of the fitness franchise revenue that comes from membership fees, upgrades, and product sales will be spent on operational costs, including royalty fees, staff wages, and rent. Usually, only a relatively small amount of revenue is profit, with most gym franchises in the UK offering profit margins of 15-33%.<\/p>\n It\u2019s important that potential investors calculate their expected fitness franchise profit margins before investing. Consider whether the profit margin you\u2019ll make is enough to cover your living expenses and maintain your current lifestyle, as well as how long it will take you to make a return on your initial gym franchise investment.<\/p>\n For example, if you invest in a gym franchise and put up \u00a3300,000 of your own money to fund your new gym, it will take six years of earning \u00a350,000 per year to make a return on this initial investment. However, franchisors running a successful franchise may also be able to sell their gym franchise for a profit after a number of years.<\/p>\n <\/p>\n <\/p>\n As well as understanding how much profit they\u2019ll make per year, prospective gym franchisees should always be aware of how long it could take to make back their initial investment in a fitness franchise. With fitness franchises in the UK often costing between \u00a3200,000 and \u00a3800,000 to open, the length of time it takes to make back this investment can really vary.<\/p>\n It\u2019s important that franchisees ensure that they can make back their initial investment within the term of their gym franchise agreement, which is often five years. Usually, regardless of profit margins, gym franchises that require a higher initial investment will also make higher annual revenues and therefore higher total profits per year to enable investors to make a positive ROI within the franchise agreement term.<\/p>\n Published ROI figures show that Gold\u2019s Gym franchisees – who invest upwards of \u00a3800,000 in their franchises – are expected to make a return on their investment within 24 to 30 months<\/a>, while Anytime Fitness franchise owners take an average of 8.2 years<\/a> to make a return.<\/p>\n This range demonstrates that the amount of money you\u2019re required to invest in a gym franchise doesn\u2019t always align with the time it takes to make a return on your investment. Efficient, successful gym and fitness franchises enable their franchisees to make fast returns even if their initial investment is very high.<\/p>\n <\/p>\n <\/p>\n The most profitable gym franchises are those franchises that manage to offer their franchisees a high profit margin<\/a> regardless of the initial investment they make.<\/p>\n The best way to assess fitness franchise profit margins is to consider the EBITDA of a franchise, or the Earnings Before Interest, Taxes, Depreciation and Amortisation represented as a percentage of gross revenue.<\/p>\n <\/p>\n Below is a list of the gym franchise profit margins of major UK gym franchises, ordered from most to least profitable:<\/strong><\/p>\n <\/p>\n <\/p>\n At the very top of the list is the gym franchise with the highest average profit margin, Train Learn Go. Train Learn Go boast extremely high-profit margins in part because the running costs of the franchise are so low, with franchise owners hiring personal trainers to travel to clients\u2019 homes and offer convenient, mobile personal training sessions at home.<\/p>\n It\u2019s also important to note that while Anytime Fitness offers the lowest profit margin of all the listed gym franchises, it remains extremely popular with investors. This is likely because Anytime Fitness is one of the most popular and recognisable fitness brands in the world, and franchisees are taking on a lower amount of risk when they invest in such a solid brand.<\/p>\n <\/p>\n <\/p>\n It\u2019s clear that owning a gym franchise in the UK is profitable, with the vast majority of gym franchises turning a profit annually. The average profit of a gym owner is around \u00a350,000 per year, but owners of high-end, specialist gyms with high revenues and profit margins can make more than this.<\/p>\n However, investors interested in starting a gym franchise should also take into consideration the huge initial investment that they will have to make to launch a franchise gym.<\/p>\n Investors are recommended to make sure that they can make a return on their investment within the duration of the initial franchise term as set out in the franchise contract. If a significant number of gym investors do not make a return within this period, investors must accept that they risk not making any investment returns at all.<\/p>\n <\/p>\n <\/p>\n If you would like to know more about gym franchise average profits in the UK and whether or not owning a fitness franchise is profitable, read answers to our most frequently asked questions.<\/p>\n <\/p>\n <\/p>\n Most of the time, yes. 93% of gym franchises in the UK make a profit, which compares very favourably with the profitability of non-franchise gyms in the UK. However, the amount of profit you make from your fitness franchise will depend on your success as a franchise owner and the franchise that you choose to invest in.<\/p>\n <\/p>\n <\/p>\nIs owning a gym or fitness franchise profitable?<\/strong><\/h2>\n
The biggest gym and fitness centre revenue streams<\/strong><\/h2>\n
1. Gym Membership fees<\/strong><\/h3>\n
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2. Gym Membership upgrades<\/strong><\/h3>\n
3. Product sales<\/strong><\/h3>\n
4. Complementary services<\/strong><\/h3>\n
How to assess the profitability of a gym franchise<\/strong><\/h2>\n
1. How much of a gym franchise\u2019s revenue is profit?<\/strong><\/h3>\n
2. How long will it take to make a return on your investment?<\/strong><\/h3>\n
The most profitable gym franchises in the UK<\/strong><\/h2>\n
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Conclusion: Is owning a gym<\/strong><\/h2>\n
or fitness franchise profitable?<\/strong><\/h2>\n
FAQs<\/strong><\/h2>\n
1. Is owning a fitness franchise profitable?<\/strong><\/h3>\n
2. How much money does a gym or fitness franchise owner make?<\/strong><\/h3>\n