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Gold's Gym Franchise ProfileFitness Franchises > Gyms |
What Are the Initial Investment Requirements for a Gold's Gym Franchise?
To open a Gold's Gym franchise, you need to prepare for a significant initial investment ranging from $1,778,000 to $4,347,000. This includes a franchise fee of $40,000. It's essential to have cash on hand within this investment range, as well as a net worth of $500,000 to $1,000,000. Understanding these financial commitments is crucial to ensuring you have the resources to launch and sustain your franchise.
What Are the Ongoing Fees Associated with a Gold's Gym Franchise?
Gold's Gym franchisees are required to pay a royalty fee of 5% on gross sales, along with a marketing fee of 2%. These ongoing fees are important to factor into your budget, as they contribute to the overall operational costs of running your franchise. Being aware of these fees helps you to maintain profitability while ensuring that your gym benefits from brand marketing and support.
What Is the Average Revenue Potential for Gold's Gym Franchisees?
Gold's Gym franchisees can expect an average annual revenue of approximately $1,614,000 per unit, with the potential for even higher earnings. The median annual revenue stands at $1,419,000, while the revenue range can vary widely, from as low as $214,000 to as high as $9,593,848. This revenue potential highlights the lucrative nature of the fitness industry and the importance of location and management in maximizing earnings.
What Is the Financial Performance Outlook for Gold's Gym Franchisees?
The financial performance of Gold's Gym franchises shows a promising outlook, with a breakeven time of around 24 months and an investment payback period of approximately 28 months. With average operating expenses around $1,063,435, franchisees can achieve an EBITDA of $353,792, indicating a healthy profit margin. These metrics suggest that with effective management, franchisees have a solid chance of achieving financial success in the competitive fitness market.
Gold's Gym Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Gold's Gym Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 226 | 221 | 210 |
| Net Change YoY | -5 | -11 | |
| Franchised Units | 166 | 158 | 158 |
| Net Change YoY | -8 | 0 | |
| Corporate Units | 60 | 63 | 52 |
| Net Change YoY | 3 | -11 |
Initial Investment
The Gold's Gym franchise requires an initial investment ranging from $1,778,000 to $4,347,000. This includes a franchise fee of $40,000 and additional costs associated with setting up the gym, equipment, and operational expenses. The investment level reflects the brand's established presence in the fitness industry and the comprehensive support provided to franchisees.
Financial Performance
Gold's Gym franchisees can expect an average annual revenue of approximately $2,229,227 per unit, with a gross profit margin of 63.6%. The highest reported annual revenue per unit reaches up to $9,593,848, illustrating the potential for significant profitability. However, it's essential to consider the operating expenses, which account for about 47.7% of the revenue.
Royalty and Marketing Fees
Franchisees are required to pay a royalty fee of 5% of gross sales, along with a marketing fee of 2%. These fees contribute to the ongoing support from the corporate team, including national marketing campaigns and brand development efforts, which help drive customer traffic to each location.
Financial Requirements
To qualify for a Gold's Gym franchise, potential franchisees must demonstrate a net worth between $500,000 and $1,000,000. Additionally, they should have liquid assets available to cover the cash required for the initial investment, ensuring they can sustain the business during its startup phase.
Breakeven and Payback Period
Franchisees can expect to reach breakeven within approximately 24 months after opening. The investment payback period is estimated at around 28 months, allowing franchisees to recoup their initial investment relatively quickly compared to other franchise models.
Franchise Growth
As of 2023, Gold's Gym operates a total of 210 units, with 158 being franchised and 52 corporate-owned. This represents a slight decline from previous years, indicating a stable yet competitive market. The brand's focus on maintaining quality and support for franchisees plays a crucial role in its overall growth strategy.
Frequently Asked Questions
The initial investment for a Gold's Gym franchise ranges from $1,778,000 to $4,347,000. This includes the franchise fee, equipment, build-out costs, and other startup expenses.