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World Gym Franchise ProfileFitness Franchises > Gyms |
What Are the Initial Investment Requirements for a World Gym Franchise?
To open a World Gym franchise, you should be prepared for a significant initial investment ranging from $1,094,500 to $3,690,000. This includes a franchise fee of $45,000, along with ongoing royalty and marketing fees of 5% and 4% respectively. It's essential to have a cash reserve between $1,094,500 and $1,997,500 and a net worth of $500,000 to $1,000,000 to meet the financial criteria for franchise ownership.
What Is the Revenue Potential for a World Gym Franchise?
World Gym franchises have shown promising revenue figures, with an average annual revenue per unit of approximately $3,333,484. The median revenue stands at $2,268,171, with the highest reported revenue reaching $3,333,484. This potential for profitability makes the franchise an attractive option for aspiring entrepreneurs looking to invest in the fitness industry.
What Are the Financial Performance Metrics for World Gym Franchisees?
The financial performance of World Gym franchisees indicates a challenging operating environment, with average operating expenses totaling around $4,989,148, leading to an EBITDA of -$1,488,578. While the gross profit margin is high at 97.4%, the overall expenses can significantly impact profitability. Franchisees should be prepared to manage these costs effectively to achieve financial success.
What Is the Breakeven Timeline for a World Gym Franchise?
Franchisees can expect to reach their breakeven point within approximately 21 months of operation. Additionally, the investment payback period is estimated at 15 months, which provides a relatively quick return on investment compared to other franchise models. This timeline can be a crucial factor for potential franchisees when evaluating the financial viability of the World Gym franchise opportunity.
World 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:
World 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 | 34 | 33 | 24 |
| Net Change YoY | -1 | -9 | |
| Franchised Units | 34 | 33 | 24 |
| Net Change YoY | -1 | -9 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY |
Franchise Overview
World Gym is a global fitness franchise that offers a wide range of workout options, catering to fitness enthusiasts of all levels. Founded in 1976, the brand has built a strong reputation for providing high-quality fitness experiences, innovative equipment, and a supportive community environment. With locations worldwide, World Gym is dedicated to helping members achieve their fitness goals through personalized training and diverse group classes.
Investment Requirements
To start a World Gym franchise, potential franchisees should anticipate an initial investment ranging from $1,094,500 to $3,690,000. The franchise fee is set at $45,000, with ongoing royalty fees of 5% on gross sales and a marketing fee of 4%. Franchisees are required to demonstrate a net worth between $500,000 and $1,000,000, along with cash liquidity of $1,094,500 to $1,997,500 to ensure sufficient capital for startup and operational expenses.
Financial Performance
World Gym franchises have shown promising financial metrics, with an average annual revenue of approximately $3,333,484 per unit. The median annual revenue stands at $2,268,171, indicating a strong potential for profitability. However, it is essential to note that some units have reported lower revenues, with the lowest recorded at $1,800. The average breakeven time is approximately 21 months, with investment payback expected within 15 months.
Operational Insights
Franchisees can expect operating expenses to be a significant factor in their financial planning. Average annual operating expenses total around $4,989,148, with payroll and related taxes being the largest expense at $1,541,864. General and administrative costs also play a substantial role, amounting to $2,628,213. Understanding these expenses is crucial for maintaining profitability and ensuring effective management of resources.
Growth Trends
World Gym has experienced fluctuations in its number of franchised units over recent years, with 34 units in 2021, 33 in 2022, and a decrease to 24 in 2023. This trend highlights the importance of strategic planning and market analysis for potential franchisees. Despite the decline in total units, the brand remains focused on expanding its presence and enhancing franchisee support to drive growth and sustainability in the competitive fitness industry.
Franchise Support
World Gym offers extensive support to its franchisees, including training programs, marketing assistance, and operational guidance. The franchise model emphasizes a collaborative approach, ensuring that franchisees are equipped with the tools and knowledge necessary to succeed. Ongoing support helps franchisees navigate challenges and capitalize on opportunities, fostering a strong network of motivated business owners committed to the brand's success.
Frequently Asked Questions
The initial investment for a World Gym franchise ranges from approximately $1,094,500 to $3,690,000. This includes the franchise fee, equipment, and other startup costs.