GNC is a prime example of how anyone can be an entrepreneur if they stay motivated, keep grinding, and know that their hard work will pay off. Decades later, this mindset still rings true for the franchisees of GNC. In this case study, we will go over the inspiring story of how GNC came to be, reasons why this may be your next business venture, and the fees behind it.
The Story Behind GNC Franchise
The retail health, wellness and performance stores have been providing customers with nutrition and natural products since 1935. General Nutrition Center was started by David Shakarian, who turned his Armenian family health store into one of the most recognized vitamin and fitness stores in the nation.
Shakarian’s success story is inspiring and franchisees can connect to his journey to becoming a successful businessman. When he opened his first store, formerly named Lackzoom, in downtown Pittsburgh, he mainly sold yogurt, honey, and grains. The entrepreneur only made 37 dollars at the end of his first day in business. Six months after opening, he opened a second store. Unfortunately, his business experienced a major obstacle a year later when the town faced a disastrous flood. Both of Shakarian’s stores succumbed to it, but he did not give up on his business. He quickly rebuilt them and opened five more by 1941.
For decades, Shakarian worked tirelessly to grow the business and secure customers. One of his strategies included moving into the mail-order business in 1936 during WWII. Customers would send him a check and ask him to mail them products, due to the gas rationing issue during the war. In the 1960s, a health craze swarmed the nation, which put Shakarian in the best business position. People were starting to understand the importance of proper nutrition, fitness, and natural foods, so Shakarian expanded his store outside of Pittsburgh and changed the name to General Nutrition Center. After his death in 1984, his family sold the company, and in 1990, it was acquired privately by Thomas Lee Company. After being sold to many different management companies throughout the years, GNC went public in 2011.
Live Well and Franchise Well with GNC
1. Quality Training and Support
GNC wants to make the transition into this franchise and health industry to be as smooth as possible, which is why they provide outstanding assistance when starting your business. To ensure your business thrives, franchisees work with experts who help develop their operations.
The GNC training program consists of three phases, which all franchisees must complete to the franchisor’s satisfaction. If a franchisee fails to complete any phase of the program, they may be required to repeat the phase.
- Phase I: 40 hours of training in a company-owned GNC store. This phase provides the franchisee with a real-life idea of what their day-to-day would look like, owning a GNC location.
- Phase II: a five-day classroom training session. Franchisees are responsible for all costs of the training program. GNC also gives the franchisee an exam on the classroom material at the end of the program.
- Phase III: a 7-day process at the new location.
2. An Outstanding Reputation in the Wellness Industry
GNC has been providing customers with the latest, innovative health products for decades, and there is always something new in the store. Their dedication to producing an exclusive product line is what gives GNC a trusted reputation in the wellness industry. Some of the products GNC offers to customers are men and women’s multivitamins, which are clinically studied and targets the specific needs of customers, unlike the competitors. All GNC products work to enhance performance, provide essential nutrients, and offer personalized supplements.
3. Be A Part of the GNC Difference
What sets GNC apart from its competitors is its commitment to product development and quality assurance. All products are made in their state-of-the-art facility and thoroughly tested, and franchisees are part of that process.
4. A Brand That Works for You and the Customer
From its humble beginnings to worldwide success, GNC and its brand have earned the recognition as a leader in the health and wellness industry. As a franchisee, you are responsible for continuing this brand awareness and fulfilling customers’ needs to “live well.” In doing so, GNC is able to open more stores all over the globe and satisfy the increasing demand for supplements, which means a higher chance of success for you as an owner.
Initial Franchise Fee: $20,000 – $40,000
The initial franchise fee for a GNC franchise, if given to a new franchisee, is $40,000. Once the Franchise Agreement is signed, the fee is considered fully earned and therefore nonrefundable. However, new franchisees should also consider that they must acquire inventory for the store for a fee of $65,000.
Royalty Fees: 6.0%
This is an ongoing fee and a percentage that comes out of your total gross sales. Gross sales include all of the franchise location revenue minus the sales tax or substantiated refunds. Franchisees are required to make 13 royalty fee payments per the calendar year, 12 days after the applicable accounting period ends.
Estimated Initial Investment Costs: $ $30,930- $472,630
The estimated initial investment cost is the franchisors way of breaking down how much it is going to cost the franchisee to start their business. Here is a more detailed table of the startup fees below:
|Name of Fee||Low||High|
|Initial Franchise Fee||$20,000||$40,000|
|Construction Handling Fee||$3,000||–|
|Business and Worker’s Compensation Insurance||$860||$8,430|
|Miscellaneous Opening Costs||$3,000||$4,000|
|Additional Funds – 3 months||$10,000||$30,000|
Revenue Range: $145,416 – $2,155,524
The revenge range is an estimated number of how much the franchisee may make from their business. GNC cannot guarantee an individual franchisee will see these figures and they stress this range is the highest and lowest of 2018 gross revenue.
Most people seem to agree that wellness is extremely important, and Global Wellness Institute‘s significant statistics surrounding the $4.2 trillion industry reflects that. Of course, valuing this industry and health is a necessary trait to have as a GNC franchisee, as well as a drive to get your business going and not give in to any obstacles you may face.
For more information on GNC, check out their client page.
Disclaimer: The above information was derived from the year 2019 FDD of GNC. This data may not reflect the most current information. AskMrFranchise and affiliates are not responsible for any act or failure to act in reliance upon this report, article, data, and/or information. None of the information mentioned above should be used to substitute or replace consultation with legal or other professionals