Gyms are not a new concept. Average Joes and gym rats have pursued the art of “getting big” for decades. Going to the gym typically involved using the weights section or hitting the cardio machines. Nowadays things are… a little different. Instead of grinding out countless sets of chest and arms in between a chalky protein shake, people actually look to their gym for a sense of community, camaraderie, and spiritual healing. Gym goers now seek a wide variety of spin classes, yoga studios, ab blasters, cardio courses etc., and entrepreneurs are taking notice.
Approximately 57 million Americans belong to gyms. Currently, the fitness industry brings in roughly $31 billion annually in the U.S. Around $4 billion comes from fitness franchises, but fitness franchises have outpaced the overall industry in recent years. IBISWorld’s 2018 Gym & Franchise Report suggests that the overall fitness market will grow at 1.5 percent the next few years. Gym franchises are projected to grow twice as fast. So what’s fueling this fitness frenzy?
Americans agree… Health is Wealth
According to the online publication Quartz, a majority of Americans exercise more than the government recommends. Why is that? America’s obesity rate is at an all time high. Millions of Americans are feeling the effects of weight gain. People are now taking action against scary health complications like diabetes and high blood pressure that now unfortunately seem commonplace. Americans seem to be perfectly fine handing over their hard-earned money if it means they’ll live longer.
Not only will obesity effect your health, it will likely also effect your wallet. Healthier people typically pay less for health insurance. An obese person is more apt to face a steep rise in medical bills. Employers are now combatting the rise in health insurance costs by providing fitness benefits to incentivize workers to lead healthier lifestyles. Employees now feel free to take midday gym breaks as a means to refuel their bodies and mind.
The data is in… gyms are a great way to meet new people
A recent study found that of the nearly 20,000 Americans surveyed, 45 percent stated they were lonely. The rise of technology certainly contributes to this isolation with devices able to connect people virtually but not physically. Gym goers find that group classes are a great way to meet new people and build a sense of community. Fitness studios like SoulCycle and Crunch Fitness actively market the way their brands cultivate an aspect of community that many feel society now lacks.
Within a group fitness class, students endure the struggle together, get personal training without the high cost, and are able to socialize before and after the workout. Many now see group fitness classes as a premier way to make friends, find a partner, or just get out of the house… all in the name of health.
Wearables continue to provide a boost to the fitness industry
Imagine having access to a personal secretary at all times. This person tracks every step you take, every calorie you ingest, and every beat your heart makes. Fitbits and other wearable technology serve this role. Wearable technology provides a goal-oriented approach to fitness. Wearers may seek to walk 10,000 steps or burn 2,000 calories each day. These fitness trackers automatically make the wearer more health conscious.
As a result, people make health-minded decisions in order to reach their goals. Gym-goers are driven to workout more frequently and sign-up for more classes. The wearable trend has even made its way into the healthcare industry. UnitedHealthcare offers employees covered through some of its plans up to $4 a day for meeting certain daily walking goals.
Working out on a budget remains a growing industry.
The rise of budget gyms like Planet Fitness, LA Fitness, and 24 Hour Fitness continue to attract gym-goers from every level. People working out for the first time may not want to lock-in to a long-term commitment at a more expensive gym if they’re only interested in losing a few pounds or getting out of the house for a few hours. Alternatively, more seasoned fitness enthusiasts may shell out the low monthly dues at a budget gym for more variety in their workout. Planet Fitness may be within walking distance from where they work, but a more expensive gym is closer to where they live.
Typical gyms usually offer a complex pay structure that makes it difficult to cancel. Budget gyms offer flat-monthly fees, no commitments, and a wide variety of equipment and classes. The rise in budget-gyms does not appear to be slowing down anytime soon. The Wall Street Journal reported that Planet Fitness’s revenue increased more than 30% over the past year. Its value has nearly quadrupled to about $6.2 billion since it went public in 2015. The chain has more than 12.5 million members and operates over 1,700 locations with the goal of ultimately running 4,000 sites.
Entrepreneurs love the growth. So how do they buy their very own gyms?
While some entrepreneurs decide to open their own gym, others are buying franchises instead. When someone acquires a franchise, they are buying the license to operate a business under the name and likeness of an established brand. By tapping into the franchise business, entrepreneurs are able to partner with a well-known company and gain valuable advice from someone with years in the industry.
Some entrepreneurs feel that franchises offer the opportunity to skip the line of small business owners looking to build their business from step one. There are many popular gyms that franchise. Some of these are listed below:
With over 150 locations nationwide, Retro Fitness is a popular franchise in the fitness industry that offers affordable, membership options and an array of exercise programs. College dropout Eric Casaburi founded the brand in 2005 and it has grown ever since.
- Approx. Initial Fee: $69,000
- Approx. Startup Cost: $944,000-$1,592,250
- Approx. Revenue Range: $1,066,524-$2,211,967
Anytime Fitness is a supportive gym community that offers a variety of classes and training tools for all fitness levels. Anytime Fitness has embraced state-of-the-art technology to generate more customers. The fitness giant boasts over 4,200 locations and approximately 3 million clients.
- Approx. Initial Fee: $21,000-$42,500
- Approx. Startup Cost: $78,012-$521,437
- Approx. Revenue Range: See FDD
For over a decade, Club Pilates has transformed fitness for millions of customers across the nation with its for low-stress, high intensity workouts. The studios are bright, airy, and thriving. As of 2018, Club Pilates plans to open 600 new locations.
- Approx. Initial Fee: $60,000
- Approx. Startup Cost: $167,967-$280,446
- Approx. Revenue Range: $533,899,$557,550
Cycle Bar is staying on top of the current cycling trend by empowering and motivating their clients with their all-inclusive, low-impact, high-intensity indoor cycling experience. Cycle Bar continues to rapidly expand with 400 locations open so far.
- Approx. Initial Fee: $60,000
- Approx. Startup Cost: $319,159-$497,200
- Approx. Revenue Range: $432,857-$616,411
Fitness isn’t just a trend, it’s a lifestyle. Gyms continue to pop up across America
With the rise in obesity, loneliness, and budget-gyms many Americans are now more health-conscious than ever. Currently, there are approximately 38,000 health-clubs/gyms in the U.S. but that number will surely rise in the coming years. The growth trend is great news for entrepreneurs looking to crack into a hot industry with ample opportunity for success. But most importantly, the rise in gym attendance means Americans are finally living healthier lives!
By Tyler Dikun and Jim Notaris