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Gyms have seen a steady increase in membership — even during the recession. American’s interest in a healthy lifestyle has only continued to grow, resulting in a search for the place to work out. If you’re interested in starting your own business but aren’t sure how to find financing, a franchise can be a great place to start. We’ll introduce you to the costs of buying into a franchise and how you can finance your next big business venture.
The total cost of a gym franchise varies by brand, but you should expect to pay anywhere from $45,000 to $330,000 to get started. Common starting costs include:
You’ll also need to factor in the price of maintaining your gym. When developing your business plan, consider how you’ll tackle:
Compare the franchise fees of five popular gym franchises below. Keep in mind the franchise fee is one-time charge paid to join the company’s organization. It’s only a portion of the initial costs when opening a franchise.
Before you invest in a franchise, do some research on the company. What are the opinions of people in online forums? There’s no point buying into a franchise that has a terrible reputation among consumers and former employees.
Once you’ve settled on a franchise and are ready to take the first step, consider the location, competition and convenience. Like any business, your plan should take into account the demographics of the area and what people expect from a gym, whether that’s a fully-equipped health center or a minimalist area to get in shape. Think about how you’ll differentiate your gym from other in your area. Are you offering any bonuses like a low monthly fee or a small spa? Are you in a location that receives a lot of foot traffic? All of this play into the profitability of your fitness franchise and could influence the success of your business.
Not everyone has hundreds of thousands of dollars in liquid assets to sink into a gym franchise. When you’re ready to submit a loan application, consider these important questions.
A lender wants to know that you’re capable of running a gym before extending a loan. You’ll have to meet a few basic qualifications in order to apply.
As a gym owner, you’ll no doubt be well aware of the equipment needs of your business. The good news is that there are finance options available to help you purchase all the essential items that any successful gym needs, including:
When you get equipment financing, you’ll be expected to provide a small down payment of 10% to 20% of the total cost. Your equipment acts as security for your loan, giving you access to lower rates than an unsecured loan. This means you can buy your ellipticals, weight machines and treadmills all at once and pay them off over time.
Opening your own gym comes with a number of pros and cons. With a franchise, you have to follow a number of business rules set by the franchisor, but it means you have a lower overhead cost and a business model ready to go. On the other hand, starting your business gives you the freedom to run things your way. Unfortunately, this also means you’ll face much higher overheads since you’ll have to purchase all the equipment, hire staff, pay for advertising and handle the rent without any help from corporate.
Whether you choose to buy a franchise or open your own gym is entirely up to how you see yourself running a business and how you want to spend your money. Both have their benefits, so weigh your options carefully before committing.
Gyms are a booming business across the US and can be a solid franchise option for people looking to get into the industry or expand their current options. The total investment cost vary, but you have a range of loan options available to help you fund your venture. Browse our business loan page to find more information on types of loans available, or check out our franchise financing guide for tips on industry-specific tips.
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