Crunch Fitness Franchise FDD, Profits, Costs & Fees (2024)

Crunch Fitness, established in 1995, has evolved into a prominent player in the fitness industry, differentiating itself with a philosophy of “No Judgments,” which embodies a community and gym for all.

This approach has set Crunch apart in the competitive fitness landscape, promoting an inclusive environment where serious fitness is made fun.

The franchise offers a variety of fitness services, including state-of-the-art equipment, proprietary group fitness classes, and additional amenities like tanning and HydroMassage, catering to a wide range of fitness enthusiasts.

Headquartered in New York City, Crunch Fitness began franchising to extend its unique fitness philosophy and gym design, characterized by a vibrant mix of equipment, expansive training areas, and engaging group fitness rooms.

Initial Investment

How much does it cost to start a Crunch Fitness franchise? It costs on average between $668,000 – $6,671,000 to start a Crunch Fitness franchised studio.

This includes costs for construction, equipment, inventory, and initial operating expenses. The exact amount depends on various factors, including the type of gym you choose, the location, and whether the franchisee chooses to lease or purchase the property. Indeed, Crunch Fitness offers 3 types of franchises:

Franchise TypeInitial Investment Range
Crunch Fitness health club franchise$668,000 to $3,513,000
Crunch Select health club franchise$794,000 to $5,418,000
Crunch Signature health club franchise$1,277,000 to $6,671,000

We are summarizing below the main costs associated with opening a Crunch Fitness health club franchise. For more information on the costs required to start a Crunch Fitness franchise, refer to the Franchise Disclosure Document (Item 7).

Type of ExpenditureAmount (Crunch Fitness Model)
Initial Franchise Fee$25,000
Training Expenses$1,000 – $5,000
Lease deposits$5,000 – $50,000
Leasehold Improvements$400,000 – $1,900,000
Fitness equipment, fixtures, other fixed assets$150,000 – $1,000,000
Opening Inventory$1,000 – $5,000
Site Selection Travel Expenses$500 – $3,000
Security deposits, utility deposits, business licenses bonding (if required) and prepaid expenses$3,000 – $45,000
Professional fees$5,000 – $35,000
Signs$7,500 – $45,000
Office equipment, computer system, furniture graphics package and supplies$25,000 – $35,000
Initial Advertising$15,000 – $45,000
Insurance$5,000 – $20,000
Additional Funds – 3 months of operations$25,000 – $300,000
Totals$668,000 – $3,513,000

Average Revenue (AUV)

How much revenue can you make with a Crunch Fitness franchise? A Crunch Fitness franchised center makes on average $3,236,000 in revenue (AUV) per year.

Here is the extract from the Franchise Disclosure Document:

Crunch Fitness fdd item 19 extract

This compares to $1,173,000 yearly revenue for similar gym franchises. Below are 10 Crunch Fitness competitors as a comparison:

Crunch Fitness franchise competitors

Crunch Fitness Franchise Disclosure Document

Recent Legal Disputes and Litigation

Crunch Fitness has faced legal disputes involving its franchisees in recent years. One notable lawsuit took place in 2022, when a group of franchisees filed a complaint against Crunch Franchising, LLC. The lawsuit centered on claims of misrepresentation and breach of contract.

Franchisees alleged that Crunch Fitness had overstated the potential profitability of the gyms, leading them to invest under false pretenses.

The franchisees argued that Crunch Franchising had not provided adequate support, particularly in helping them navigate the financial challenges of running a fitness business. Some franchisees reported that the franchisor failed to deliver on promises related to marketing and operational support, leaving them struggling to meet financial obligations.

These claims were particularly prevalent during the COVID-19 pandemic, which exacerbated financial difficulties for many gym owners.

This legal dispute underscores the importance of clear communication and mutual support in franchisor-franchisee relationships. It also serves as a reminder for potential investors to thoroughly review franchise agreements and evaluate the franchisor’s track record before committing to an investment.

Frequently Asked Questions

How many Crunch Fitness locations are there?

As of the latest data, Crunch Fitness operates over 400 locations worldwide. The majority of these are franchised, with a smaller number of company-owned gyms. Crunch Fitness has a strong presence in the United States but continues to expand internationally.

What is the total investment required to open a Crunch Fitness franchise?

The total investment required to open a Crunch Fitness franchise ranges from $668,000 to $6,671,000.

What are the ongoing fees for a Crunch Fitness franchise?

Crunch Fitness franchisees are required to pay a 5% royalty fee on gross sales. Additionally, there is a marketing fee of 2% of gross sales, which contributes to both national and local marketing campaigns. These ongoing fees are essential for supporting the brand’s growth and ensuring consistent marketing and operational support across all locations.

What are the financial requirements to become a Crunch Fitness franchisee?

To become a Crunch Fitness franchisee, candidates must meet specific financial requirements. The minimum net worth required is $1.5 million, with at least $500,000 in liquid capital. These financial thresholds are in place to ensure that franchisees have the necessary resources to cover startup costs and sustain the business through its early operations.

How much can a Crunch Fitness franchise owner expect to earn?

The average gross sales for a Crunch Fitness franchise are approximately $3.24 million per location. Assuming a 15% operating profit margin, $3.24 million yearly revenue can result in $486,000 EBITDA annually.

Who owns Crunch Fitness?

Crunch Fitness is owned by TPG Growth, a private equity firm, along with its management team. TPG Growth acquired a majority stake in Crunch Fitness in 2019.

The ownership group also includes Mark Mastrov, a fitness industry veteran, and Jim Rowley, the CEO of Crunch Fitness. This ownership structure has helped Crunch Fitness expand significantly in recent years.

Disclaimer

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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