Your fitness franchisor will typically charge you a marketing fee, and may charge you for lead generation and web hosting. The advantage of being part of a fitness franchise is that you’ll be able to purchase equipment for less than if you went into business by yourself since your franchisor is able to negotiate better prices that it passes on to you. A fitness franchise that uses less equipment will equate more money in your pocket, but the potential profit is likely far less than a full-scale gym. while others require some free weights and exercise bands and some need no equipment at all. Some need weight lifting machines, stationary bikes etc. The amount and cost of fitness equipment you’ll need for your fitness franchise depends on the business model. Franchisors also typically use them to cover costs relating to their administration, corporate staff, and franchisees recruitment efforts. Generally, all the ongoing support your franchisor provides you with is covered by your royalty payments. Flat rate royalty fees remain constant no matter what your fitness franchise sales are, which can result in higher profits for you. The first is a flat rate royalty fee and the second a fixed percentage royalty fee, usually between 4% and 8%. Typically there are two types of royalty fees in the fitness franchise industry that are charged monthly. Royalties are the primary source of revenue in most franchise systems. Costs will include furniture, fixtures, and signage as well as architectural drawings, zoning compliance, contractor fees, decor packages, security, deposits, insurance, and landscaping. Unless you elect to invest in a mobile fitness franchise that enables you to host classes outside or in a low rent facility such as a school or church, you will have to factor in the cost of renting or purchasing your franchisor approved location as well as building it out to your franchisor’s specifications. Usually the franchise fee is non-negotiable, but if you were to agree to open multiple locations over the course of a defined period of time, which is known as a multi-unit development agreement, the franchisor will likely reduce the franchise fee. In addition, the franchisor will keep the licensing fee whether you succeed as a franchisee or not. They differ greatly from one fitness franchise to another and typically include initial training, services to help you acquire and develop your location, initial advertising, and grand opening support.Ī higher franchise fee is not an indicator of the quality of or success you might have with a brand. The franchise fee is the one-time payment you’ll make to a franchisor to join its franchise system. Understanding the elements of the FDD that will impact your profitability is where the challenge lies.īelow are several factors that you should pay particular attention to when it comes to your potential profitability as the owner of a fitness franchise. Simply fill out the brand’s application for franchise consideration. It’s easy to obtain a fitness franchisor’s FDD. You’ll want to pay particular attention to item 19 of the FDD, which provides details on earnings, costs, and other factors likely to affect the financial performance of the franchise you are considering. Many are outlined within a franchisor’s Franchise Disclosure Document (FDD), which clearly defines what the franchisor will do for you and what it will expect of you. There are multiple factors that impact franchisees’ profitability. Before you run out and invest in a fitness franchise, however, it’s important to take a look at how profitable you might be. The stats above may well have you seeing investing in a fitness franchise as a surefire path to achieving business ownership and unlimited success. In fact, nearly one out of five Americans belong to a health club and health club membership has grown by 26.3%, while the total number of club-goers has increased by 26.5% according to The International Health, Racquet Sportsclub Association. generating $21,800,000,000 in revenue according to Statistic Brain since Americans are trying to combat our increasingly sedentary lives by getting active and healthy. It’s not surprising that there are over 30,000 gyms and health clubs in the U.S.
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