With every individual becoming aware of physical fitness, the growth of fitness centres isn’t slow. So, Gold’s Gym franchise is ideal for you, whether you are a gym rat or an entrepreneur looking to get your feet wet in the lucrative fitness industry.
However, with starting a franchise comes many things that need to be addressed before you invest in it.
For example, you must know how much you have to invest, what support will be given by the franchisor, and, most importantly, what the franchise’s financial performance is.
All this information takes a lot of time to collect and understand, but if you have stumbled upon this site and are already reading this article, congratulations! You are saving your valuable time.
Therefore, keep reading to learn about owning Gold’s Gym franchise!
Table of Contents
About Gold’s Gym
Gold Gym Internatinal Inc. is an American chain of international co-ed fitness centres. Joe Gold opened the first Gold’s Gym in August 1965 in Venice Beach, California.
Since then, it has become the world’s most well-known traditional fitness company. It has been in the business for over 55 years, with over 600 locations on six continents.
The original Gold’s Gym, which became the most legendary gym in the world, had bodybuilding greats such as Arnold Schwarzenegger, Lou Ferrigno, and Franco Columbu.
Gold’s Gym Franchise Model
| Cost Or Fees | Amount |
|---|---|
| Initial Investment | $1,483,000 to $3,602,000 |
| Franchise | YES |
| Franchising Since | 1980 |
| Franchise-Fee | $40,000 |
| Royalty-Fee | 5% |
| Liquidity | $400,000 |
| Estimated Outlets | 740 |
How Much Does It Cost To Open A Gold’s Gym Franchise?
To open a Gold’s Gym franchise, you must make an initial investment ranging from $1,483,000 to $3,602,000 with an initial franchise fee of $40,000.
Besides these two fees, the franchisor expects you (the franchisee) to have a net worth of $1 million with liquid capital of $400,000.
Here is a breakdown of all the costs associated with operating the franchise:
| Types Of Expenditure | Amount | Whom To Pay |
|---|---|---|
| Initial Franchise fee | $40,000 | The franchisor |
| Travel and living expenses during training | $4,000-$7,000 | Outside suppliers and the gym |
| Security deposit for lease | $12,000-$150,000 | Landlord |
| 3 month’s rent | $30,000- $255,0000 | Landlord |
| Leasehold improvements and free weights | $1,000,000-$2,000,000 | Outside contractors and suppliers |
| Cardiovascular equipment | $100,000-$300,000 | |
| Computer System and Gym Management System | $20,000-$35,000 | Outside suppliers |
| Signage | $40,0000-$85,0000 | Outside suppliers |
| Initial inventory, other equipment and supplies | $12,000 to $45,000 | Outside suppliers |
| Advertising and marketing | $25,000-$120,000 | Outside suppliers |
| Miscellaneous opening costs | $10,000 to $65,000 | The gym and outside suppliers |
| Additional Funds-3 months | $40,000-$10,000 | The gym and outside suppliers |
| Total estimated initial investment | $1,483,000 to $3,602,000 |
How Much Does A Gold’s Gym Franchise Owner Make?
On average, the Gold’s Gym franchisee can make $1,638,000 in revenue per year. When it comes to revenue per square foot, Gold’s Gym franchises make $47 revenue per square foot per year.
Moreover, when talking about profit, according to our estimation, a Gold’s Gym franchise owner makes $245,700 in net profit on average.
Here is how we calculated Gold’s Gym franchise owner profit:
| Financial Overview | Percentage of Revenue | Amount ($) |
|---|---|---|
| Individual Franchise Annual Revenue | 100% | 1638000.00 |
| Rent | 10.63% | (174037.50) |
| Insurance | 5.31% | (87018.75) |
| Salaries | 21.25% | (348075.00) |
| Franchise Royalty Fees | 5.31% | (87018.75) |
| Utilities | 2.13% | (34807.50) |
| Cost of Goods Sold (COGS) | 26.56% | (435093.75) |
| Labor (Variable) | 13.81% | (226248.75) |
| Total (Expenses) | 85.00% | (1392300.00) |
| Net Profit | 15.00% | 245700.00 |
Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.
Failure Rate Of Gold’s Gym Franchise
Franchised Outlets
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 178 | 180 | 2 |
| 2021 | 180 | 166 | -14 |
| 2022 | 166 | 158 | -8 |
For the Franchised outlets:
- In 2020, the growth rate was (2)/178×100≈ 1.12%
- In 2021, the failure rate was (14)/180×100≈ 7.77%
- In 2022, the failure rate was (8)/166×100≈ 4.81%
Company-Owned Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 121 | 61 | -60 |
| 2021 | 61 | 60 | -1 |
| 2022 | 60 | 63 | 3 |
For the Company-Owned outlets:
- In 2020, the failure rate was (60)/121×100≈ 49.5%
- In 2021, the failure rate was (1)/61×100≈ 1.64%
- In 2022, the growth rate was (3)/60×100≈ 5%
Total Outlets
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 299 | 241 | -58 |
| 2021 | 241 | 226 | -15 |
| 2022 | 226 | 221 | -5 |
For Total outlets:
- In 2020, the failure rate was (58)/299×100≈ 19.40%
- In 2021, the failure rate was (15)/241×100≈ 6.22%
- In 2022, the failure rate was (5)/226×100≈ 2.21%
According to the data above, we can see that the franchised outlets for Gold’s Gym have decreased for two years, from 2021-2022, showing a failure rate between 7.77% and 4.18%. In 2020, the gym started with a growth rate of 1.12%.
On the other hand, company-owned Gold’s Gym outlets grew only in 2022, showing a growth rate of 5%. From the year 2020-2021, the company’s growth rate was between 49.5% and 1.64%
When we combine the data of franchise and company-owned outlets, we can see that Gold’s Gym experienced failure from 2020-2021 with a rate of 19.40%-2.21%.
Payback Period Of Gold’s Gym Franchise
Using the mid-point investment of $2,563,000 and average profits of $245,700, we can determine how long it will take to earn back the initial investment:
Payback Period = Investment / Yearly Profit = $2,563,000 / $245,700 = 10.43 years
Based on these figures and the calculation, it will take 10.43 years for you to recoup your initial investment amount on average.
However, this period could depend on your total initial investment and profits earned.
Training & Support Of Gold’s Gym Franchise
For the location, if the franchisees have not yet located and accepted the site, the franchisor will help the franchisee designate a ‘site selection area’ when they sign the agreement. Also, there is no minimum size for a site selection area.
Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| Anytime Fitness | $42,500 | $699 per month | $388,966-$970,097 |
| Club Pilates | $60,000 | 8% | $193,600-$407,000 |
| Workout Anytime | $35,000 | 6% | $784,950-$2,073,050 |
| Gold’s Gym | $40,000 | 5% | $1,483,000 – $3,602,000 |
Conclusion
In conclusion, to own a Gold’s Gym franchise, you need to understand the Gym’s financial requirements, including franchise fees, initial investment, liquid capital, and net worth.
Additionally, you should get all your finances in place and understand every legal term in the franchise disclosure document.
If you are new to franchising, hiring the best franchise attorney specialising in the field is recommended.
FAQs
Where Is Gold’s Gym Headquartered?
The headquarters of Gold’s Gym is located in Dallas, Texas, United States.
Who Founded Gold’s Gym?
Gold’s Gym was founded in August 1965 by Joe Gold. He opened the first Gold’s Gym in Venice Beach, California.
What Is The Profit Margin Of Gold’s Gym Franchise?
According to our estimates, Gold’s Gym franchise enjoys a profit of $245,700. The profit margin of this fitness centre ranges from 10-15%. However, the profit margin depends on the location where the Gym is operating.
How Many Locations Does Gold’s Gym Has?
Gold’s Gym has over 700 locations serving 3 million people in 6 continents.