One of the very few fitness club franchise to charge a fixed royalty fee vs. a percentage of revenue, Anytime Fitness is a very popular chain for franchisees who want to get into the fitness industry.
In addition to being the largest fitness in the US by far with more than 4,700 gyms (of which 2,500 are franchise owned), it’s also a very profitable business.
Indeed, whilst you would need to invest $510,165 to open a new gym on average, the revenue per gym is about $413,942 and EBITDA margins reach 15%, impressive.
How much does it really cost to open a new Anytime Fitness franchise? How much profits can you really make as the franchisee? In this article we’re diving into the Franchise Disclosure Document to find out whether you should open a new Anytime Fitness club. Let’s dive in!
|Sales to investment ratio||0.7x|
|Minimum net worth||$350,000|
|Minimum liquid capital||$175,000|
** assuming 15% net profit margin
What is Anytime Fitness?
Anytime Fitness is an American fitness chain that operates health and fitness clubs 24 hours a day, 365 days a year.
The franchise was founded in 2002 in Cambridge, Minnesota, by Chuck Runyon, Dave Mortenson, and Jeff Klinger. It is a subsidiary of Self-esteem Brands and is headquartered in Woodbury, Minnesota.
It provides gym fitness centers offering convenient access and one-on-one, small-group, and large-group training and coaching services.
Anytime Fitness began franchising in 2002 and currently has over 4,700 gyms in 50 US states and over 50 countries globally.
Anytime Fitness franchises pros and cons
- Comprehensive training: Anytime Fitness offers its franchisees a 2-week training curriculum to equip them with the basics of its business concept. Its current training program consists of 24 on-the-job training hours and 34 classroom hours.
- Site selection and construction: Anytime Fitness helps franchisees identify a convenient location for their clubs, considering high-traffic areas. It also helps in the club layout and design, the building of the clubs, and equipment selection.
- Convenience: The fitness franchise offers members flexibility and uninterrupted access to their gyms 24/7
- Third-party financing: Anytime Fitness has an agreement with third-party partners to fund its franchisees’ start-up fees, equipment, inventory, and payroll.
- Multiple revenue streams: The brand provides franchisees with the potential for recurring revenue through personal and group training as well as membership fees
- Exclusive territory protection: The franchisor offers its franchisees exclusive territory protection. It does not authorize any other franchises to operate in the area during the term of the franchise agreement.
- Simple franchise model: The brand utilizes smaller square footage than most other gyms (under 6,000 sq. ft.) reducing leasing and equipment costs
- Not a passive business opportunity: The franchisor does not allow for absentee ownership. It requires the franchisees to be fully active in the decision-making and running of their clubs.
- Not a part-time business: The franchise cannot be run on a part-time basis or as a side business.
- Not a home-based business: Anytime Fitness cannot be operated from home or a mobile unit. Franchisees need to establish an office space, warehouse, or retail facility.
- Competition: Anytime Fitness, just like any other franchise, faces healthy competition from other independent gyms and fitness club chains like Planet Fitness, Orangetheory Fitness and Burn Boot Camp to name a few
How much does an Anytime Fitness franchise cost?
You would need to invest about $510,165 to open a new Anytime Fitness franchised gym.
The investment depends on the type of fitness centers you choose to open. Indeed, Anytime Fitness offers 2 types of fitness centers as franchises:
- Anytime Fitness gyms are typically 4,000 to 6,000 sq. ft. in size ($381,575 to $783,897 required investment)
- Anytime Fitness Express are smaller gyms between 1,500 to 4,000 sq. ft. ($290,746 and $584,441)
Anytime Fitness startup costs
The investment includes an initial franchise fee ($25,000 – $42,000), which must be paid to the franchisor.
In addition to the initial franchise fee, the investment amount covers all the startup costs you would typically incur when opening a new gym. For example, it includes:
- Formation Costs: training fee, leasehold improvements, fitness equipment, technology equipment, interior & exterior signage, architect fees, furniture, fixtures, etc.
- Initial Marketing: grand opening advertising & presales expenses
- Operating Costs: opening supplies, first 3 month’s rent, insurance, and working capital for first 3 months, etc.
|Type of cost||Low||High|
|Initial Franchise Fee||$25,000||$42,500|
How much revenue do Anytime Fitness gyms make?
On average, an Anytime Fitness gym makes $413,942 in turnover per year. This is the annual turnover for gyms with Training Suit & KPSoftworks (see more on that below).
That’s the median turnover per year for 1,372 franchised fitness centers operating in 2021. Here again, the annual turnover depends on the format you choose.
For example, a fitness center with Training Suit & KPSoftworks (a sales & education supplier to market personal training to customers) generates twice as much revenue vs. an Anytime Fitness Express center.
When it comes to revenue per square foot, Anytime Fitness fitness club have a revenue per square foot of $68 on average, in line with the median revenue per sq. ft. for fitness clubs as per our fitness benchmarks ($80).
How profitable is an Anytime Fitness franchise?
On average, Anytime Fitness clubs make $69,516 in profits per year. That represents a 16.5% profit margin (EBITDA margin).
As for any fitness club, the most important costs are staff costs (management an personal trainers) for 32% of revenues, and rent (24%).
Anytime Fitness does provide a profit-and-loss for its company-owned gyms which we are summarizing below.
|Profit and loss||Amount||% of revenue|
Source: Franchise Disclosure Document 2022
Should you invest in an Anytime Fitness franchise?
In order to answer that question, we must look at whether the profits are worth the upfront investment of $510,165 on average. That’s what we call the payback period: the time it takes for an investment to be repaid with the profits it generates.
We found that Anytime Fitness has a payback period of 8.2 years. In other words, you would repay creditors (banks), investors and your own funds within 8 years if you were to invest in an Anytime Fitness club today.
Considering the average payback for fitness clubs is around 8 to 9 years, Anytime Fitness is in line with other fitness franchises.
That being said, profits shouldn’t the only factor when choosing a fitness franchise. Instead you should also take into account factors like training, brand awareness, competition, the franchisor’s support and training, etc.
How does it compare vs. other Fitness franchises?
|Franchise||Net worth ($)||Liquid capital ($)||Investment ($)||Revenue ($)||Payback (years)|
|Burn Boot Camp||https://sharpsheets.io/blog/burn-boot-camp-franchises-costs-profits/||300,000||150,000||314,846||400,526||$76||5.2|
|The Camp Transformation Center||https://sharpsheets.io/blog/camp-transformation-center-franchise-costs-profits/||100,000||75,000||287,000||495,067||$99||3.9|
|Fit Body Boot Camp||https://sharpsheets.io/blog/fit-body-boot-camp-franchise-costs-profits/||100,000||65,000||198,350||167,364||$61||7.9|
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