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Description
Investment Icon

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.

Fees Icon

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.

Revenue Icon

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.

Breakeven Icon

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.

Net Worth Required icon The minimum total assets (minus liabilities) you must possess.

i Net Worth Required:

$500,000 - $1,000,000
Investment Payback icon The estimated period to recoup your total investment.

i Investment Payback:

29 Months
Franchise Fee icon The initial fee paid to join the franchise system.

i Franchise Fee:

$59,500
Royalty Fee icon Ongoing percentage of revenue paid to the franchisor.

i Royalty Fee:

8%
Marketing Fee icon Regular contribution toward the franchise’s advertising fund.

i Marketing Fee:

1%
Breakeven Time icon The estimated timeframe to recover your initial costs.

i Breakeven Time:

24 Months
Initial Investment icon The total amount required to launch the franchise.

i Initial Investment:

$506,197 - $673,197
Cash Required icon The minimum liquid capital you must have on hand.

i Cash Required:

$506,197 - $673,197
Average Revenue icon The typical yearly revenue generated per franchise location.

i Average Revenue:

$1,125,831
Median Revenue icon The middle value of yearly revenue among franchise locations.

i Median Revenue:

$1,007,529
Highest Revenue icon The largest reported annual revenue among franchisees.

i Highest Revenue:

$1,970,747
Lowest Revenue icon The smallest reported annual revenue among franchisees.

i Lowest Revenue:

$153,750
Industry icon A broad sector defining similar types of franchise businesses.

i Industry:

Children’s Franchises
Category icon A more specific division within the broader industry.

i Category:

Children's Fitness
Leadership icon The key individuals guiding the franchise’s strategy and growth.

i Leadership:

Alex Bingham
Corporate Address icon The official business address of the franchisor’s headquarters.

i Corporate Address:

7500 North Dobson Road, Suite 220 Scottsdale, AZ 85256
Funding Year icon Available financing options to help start the franchise.

i Funding Year:

1992
Parent Company icon The main organization that owns the franchise brand.

i Parent Company:

The Little Gym International, Inc.

The Little Gym Franchise Unit Growth Summary

A breakdown of corporate, franchised, and total units, with yearly net changes.

The overall number of operating franchise locations.

Total Units i

186
The number of locations owned by independent franchisees.

Franchised Units i

185
The number of locations owned and run by the franchisor.

Corporate Units i

1
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 About

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.

Potential About

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.

Metrics About

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.

Fees About

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.

Breakeven About

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.

Units About

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.