One of the fastest growing membership mass market fitness franchise with more than 1,100 locations globally including 585 in the US alone, Snap Fitness is an obvious alternative if you want to get into the fitness industry as a franchisee.
Yet, despite the sheer size of the chain, Snap Fitness isn’t the most profitable fitness. Indeed, although a Snap Fitness gym makes on average $194,000 per year as per the latest Franchise Disclosure Document, franchisees must invest a total of $783,000 on average.
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In this article we’re looking at Snap Fitness from the perspective of its Franchise Disclosure Document to find out how much it really costs, how much profits you can realistically make with this business, and whether you should invest in it. Let’s dive in!
Key stats
What is Snap Fitness?
Snap Fitness is a privately owned American health and fitness club franchise headquartered in Chanhassen, Minnesota.
The chain was founded in 2003 by Peter Taunton. It operates fitness studios that offer a high-quality workout experience featuring 24/7 intensity training that includes functional, cardio, strength, group, and personal training options.
Snap Fitness began franchising in 2004 and currently has more than 1,100 clubs in the US and 20 other countries.
Snap Fitness franchises pros and cons
Pros
- Exclusive territory protection: The franchisor provides its franchisees with a protected development market. As long as the agreement is in place, the brand does not license any other franchises or operate competing units in the agreed-upon area.
- Franchise training: The brand offers its franchisees a detailed training program to give them the basics about its business concept, training, handling equipment, and hiring the most qualified staff.
- Multiple income sources: The brand employs a standout concept with a 24/7 workout convenience, Function, cardio, strength & group training. Franchisees can stand out from the competition and improve their earning potential.
- Third-party financing: Snap Fitness helps its franchisees with planning and securing finance. Franchisees get access to third-party financing for the franchise fee, inventory, equipment, and trade fixtures.
- Marketing strategy: The brand employs effective marketing and advertising to help franchisees create awareness about their clubs and attract a lot of traffic. Franchisees can leverage the brand’s growing popularity, national media, regional advertising, social media, and targeted promotional campaigns and resources.
- Technology-focused concept: The brand’s business concept employs value-added technology that supports members’ desire to work out on their terms and products like MyFit, Fitness on Demand, and MyZone.
- Modular design: The franchise utilizes a modular gym design that can fit into the most available market opportunities from small to big cities.
Cons
- No absentee ownership: The franchise does not allow passive ownership. Franchisees must participate in the day-to-day operations of their studios.
- Not a home-based opportunity: Snap Fitness franchise cannot be run from a mobile unit or home. It requires franchisees to operate from a fixed office space like a warehouse or retail facility.
- Not a part-time business: The franchise does not present a side business opportunity. The clubs must operate as per the parent company’s operating schedule.
- Strong competition from other large fitness brands like Anytime Fitness, Planet Fitness or even Orangetheory to name a few
How much does a Snap Fitness franchise cost?
You have to invest around $783,328 to open a Snap Fitness franchise club.
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This is an average; indeed, it varies based on many factors, such as the location of your club, its size, market conditions, and other factors.
In addition to the initial franchise fee of $29,500, which you must pay to the franchisor, you would also pay for the leasehold improvements, furniture and fixtures, signage, equipment, professional fees, training expenses, etc.
Snap Fitness startup costs
Here’s the full breakdown of costs:
What is the average turnover of a Snap Fitness franchise?
On average, a Snap Fitness franchise made $194,124 in turnover per year in 2021. This is a significant increase vs. 2020 (+23.4% at $157,308).
This is the average sales per franchised club for 573 of the 585 franchised clubs that were open for all of 2021, as disclosed in the Franchise Disclosure Document.
When it comes to revenue per square foot, Snap Fitness franchise clubs have a $46 revenue per square foot, up from $38 in 2020. This is lower than the fitness industry average at $80 as per our own fitness benchmarks.
How profitable is a Snap Fitness franchise?
We estimate that a Snap Fitness gym makes on average $50,000 in profits per year. This represents a 24% profit margin (EBITDA margin).
Note that Snap Fitness does not provide any detailed profit and loss or cost structure information regarding its franchised-owned gyms apart from rent and royalty and marketing fees. Therefore, we had to make assumptions using industry averages for fitness franchises as described below.
Is a Snap Fitness franchise a good investment?
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This is where it gets tricky for Snap Fitness. Even though Snap Fitness does seem profitable on paper (as explained just now we estimate a Snap Fitness gym generates $50,000 in profits per year – as in EBITDA), the reality is very different when we compare profits to the initial investment cost.
Indeed we found Snap Fitness has an average payback (as in the time to repay the investment) of 25 years, by far the longest payback we found for US fitness franchises.
This means that you would need to wait 25 years so the profits generated by your Snap Fitness gym can repay entirely the upfront investment, whether you took a loan (e.g. SBA loan) or raised funds from investors.
As such, Snap Fitness isn’t a great investment unfortunately: the investment you would have to make is fat too high compared to the profits you can make with this business.
That being said, this analysis is based on the average performance of the gyms as disclosed in the Franchise Disclosure Document as well as some assumptions on our part. As such, your gym may or may not perform better than the average.
Also, your decision to choose a franchise shouldn’t rely entirely on financials: instead you should also pay attention to factors like support, training, brand name, etc.
How does it compare vs. other Fitness franchises?
Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.
All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.
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