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The Little Gym Franchise ProfileChildren’s Franchises > Children's Fitness |
What Are the Initial Investment Requirements for The Little Gym Franchise?
To open a The Little Gym franchise, you should be prepared for an initial investment ranging from $506,197 to $673,197. This includes a franchise fee of $59,500. Additionally, you will need to maintain a cash reserve between $506,197 and $673,197, along with a net worth requirement of $500,000 to $1,000,000. These financial commitments are essential to ensure you have the necessary resources to successfully launch and operate your franchise.
What Are the Ongoing Fees for The Little Gym Franchise?
As a franchisee of The Little Gym, you will be subject to ongoing fees that include an 8% royalty fee on gross sales and a 1% marketing fee. These fees contribute to the overall brand strength and marketing efforts that help attract customers to your location. Understanding these costs is crucial for budgeting and financial planning as you build your business.
What Is the Financial Performance of The Little Gym Franchise?
The average annual revenue per unit for The Little Gym franchise is approximately $1,125,831, with a median revenue of $1,007,529. The revenue can vary significantly, with the lowest annual revenue recorded at $153,750 and the highest reaching $1,970,747. This performance data can help potential franchisees gauge the earning potential and set realistic financial goals for their investment.
How Long Does It Take to Break Even with The Little Gym Franchise?
Franchisees can expect to break even within approximately 24 months of operation. Investment payback typically occurs around 29 months. These timelines are important for understanding the return on investment and planning for the future financial health of your franchise. Having a clear picture of your breakeven point can help you manage cash flow and operational expenses effectively.
The Little 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:
The Little 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 | 176 | 173 | 185 |
| Net Change YoY | -3 | 12 | |
| Franchised Units | 176 | 173 | 185 |
| Net Change YoY | -3 | 12 | |
| Corporate Units | 0 | 1 | 1 |
| Net Change YoY | 1 | 0 |
Investment Overview
The Little Gym franchise requires an initial investment ranging from $506,197 to $673,197. This includes a franchise fee of $59,500. Franchisees should also be prepared for ongoing costs, with an 8% royalty fee and a 1% marketing fee based on gross sales. To qualify, prospective owners need a net worth between $500,000 and $1,000,000, ensuring they have the financial stability to support their business.
Revenue Potential
Franchisees of The Little Gym can expect an average annual revenue of approximately $1,125,831 per unit, with a median revenue of $1,007,529. Revenue can vary significantly, with the lowest annual revenue reported at $153,750 and the highest at $1,970,747. This wide range highlights the potential for profitability depending on location and operational efficiency.
Breakeven and Payback
The Little Gym franchise has a breakeven time of about 24 months, which indicates that franchisees can expect to recover their initial investment within this period, assuming average performance. The investment payback period is approximately 29 months, providing a clear timeline for financial planning and expectations.
Franchise Growth
The Little Gym has shown consistent growth in the number of franchised units, increasing from 176 in 2021 to 185 in 2023. The company-owned units have remained stable, with one corporate unit established in both 2022 and 2023. This growth trajectory reflects the brand's expanding market presence and franchisee interest.
Financial Performance
Analyzing the average profit and loss metrics, The Little Gym reports an average gross profit margin of 17.7%, with operating expenses accounting for 30.3% of revenue. This structure indicates that while there are significant costs, the franchise still maintains a healthy EBITDA of 12.3%, suggesting sound financial management and potential for profitability.
Operational Costs
Franchisees should anticipate various running expenses, with total annual costs averaging $600,062. Key expenditures include payroll at $290,143, occupancy costs of $121,130, and advertising expenses of $34,309. Understanding these costs is crucial for effective budgeting and financial planning, helping franchisees maintain operational efficiency.
Frequently Asked Questions
The initial investment for a The Little Gym franchise ranges from $506,197 to $673,197, which includes the franchise fee, equipment, and other startup costs.