The Hidden Costs that Most Gym Franchise Don’t Tell You Aout

When considering a fitness/gym franchise, it may seem like a great opportunity. The problem with most gym franchise business models is that they are VERY expensive to start.  Most of these franchises cost $70,000-$2,000,000. There are a lot of costs that aren’t taken into consideration when signing with a gym franchise as well.

Why Big Gym/Fitness Franchises Have High Costs

Here are just a few examples of how big gym franchisors find ways to make the initial investment costs soar.

1. The Gym’s Exact floor plan design

The thing that big franchised gym members expect is similar floor plans in each location. Since their customers expect predictable floor plans big franchisors mandate specific construction models for each location. These models include everything from the color of paint to the number of lockers in the room. If you think that one Smith Machine is enough and the floor plan calls for 3 then your obligated by contract to purchase three.

While this type of road-mapping may be useful for those who do not want to design the layout of their gym it may also be more expensive. The specifications about brands and models of equipment means that your equipment costs are as likely to rise as the cost to construct the space is. This factor is one of the reasons that it can cost so much to open a brand named franchised like Gold’s Gym which averages a $1-$3 million investment per site.

2. Security systems

For the automated gyms that are open 24 hours with or without an employee on site the security systems can be quite costly. Each member is required to have a special access card which unlocks the doors. The doors must have the special magnetic locking that connects to the computerized card reader. Along with access control costs there are also the costs to have security cameras viewing all areas of the site. No employee is usually present during the late hours of these gyms and security costs can become extremely high.

3. Franchisor Charges

Everyone knows about licensing fees and royalty fees that gym franchises charge. Most people don’t know that the fees that gyms charge are flexible rates. This means that the more successful the gym becomes the more money that the franchisor makes.  If a franchisor is taking 8 percent of sales for each month a gym with 500 members at $40 a member is going to be paying $1600 in royalties each month. A gym with 700 members at the same rate is going to be paying $2240. So the more successful gym is being punished for doing well.

In the same token many big gym franchises charge a percentage of sales as their way to handle marketing. The more successful you are the higher your marketing costs are going to be. If a business owner wants to increase the marketing during a down time it may be difficult to reconcile with the gym franchisor.

4. On site visit or training

One of the costs associated with opening a franchise that no one tells anyone about is the cost of travel and expenses associated with it when visiting the franchisors location. There are a few different times that you will be expected to visit. The first is before you even decide to sign the franchise agreement. This is for a walk through type orientation to get you acquainted with more of the details about the gym franchise operations. This visit is HIGHLY recommended even though it is an out of pocket expense.

The next expenses are for any training that you have to do. Most big gym franchises offer training through some type of school type environment. This training will require travel to and from the location. Lodging and other associated expenses will be the responsibility of the franchisee. Skipping this training is not allowed and so the expense is something that must be calculated into the costs.

5. Required credit score and liquid capital

Most of the big gym franchises are going to require a certain amount of liquid capital along with a credit score that meets a minimum requirement. This is because after the initial cash investment there will still be loans that are used to purchase equipment and fund construction. Understanding that after the franchise fee and the initial cash investment there is still more money required is important before partnering with any big gym franchise.

Alternative fitness/gym franchises

In today’s fitness industry there are more options available for franchisees than the standard big gym franchises. Some of these models require very little equipment and construction and the costs are dwarfed by the costs of the big gyms.

Fit Body Boot Camp’s Fitness/Gym Franchise Model

Fit Body Boot Camp is the perfect example of a fitness franchise that does not cost nearly what the big gym franchises cost. This is because the boot camp format does not require the gym franchisee to purchase an entire lay out of expensive gym equipment (some of which may never get used). The equipment fees alone make a huge difference in the costs of starting a FBBC franchise compared to another type of gym franchise.

Low Royalty Fees

The royalty fee that Fit Body Boot Camp charges is a fixed rate. This means that as the Fit Body Boot Camp location becomes more popular the franchisee does not get taxed for being successful. If you make more money you keep it. This type of royalty fee collection demonstrates a franchisor that has the franchisees best interest in mind.

Marketing and Support

The last reason that Fit Body Boot Camp stands out against other gym franchises is because of the way they charge for marketing content. Fit Body Boot Camp has enabled franchisees to pay only for the leads that are actually generated by the main website and through the social media marketing outlets. This means that money isn’t being wasted from your budget to pay for leads that are generated for other locations. A fair and thorough online marketing program is one other reason that FBBC is a cheaper and better alternative to expensive gym franchises.  Watch this video to see what I have to say about starting a successful gym franchise in today’s market.