Crunch Fitness Franchise Costs $668K – $6.7M (+ 2024 Profits)

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 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. The franchise model emphasizes flexibility and franchisee support, ensuring adaptability in diverse markets with comprehensive operational standards and industry expertise backing each franchisee.

Type of Expenditure	Amount (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

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Initial Franchise Fee

The initial franchise fee varies depending on the Crunch health club model. For Crunch Fitness or Crunch Select models, the fee is $25,000. For the Crunch Signature model, the initial franchise fee is set at $50,000.

Royalty Fee

Franchisees are obligated to pay a royalty fee, which is calculated as 5.0% of the monthly Gross Sales.

Development Fee (For Area Development Rights)

The development fee per Crunch Fitness or Crunch Select club required to be established under the Area Development Agreement is $25,000. For each Crunch Signature club required under the same agreement, the fee is $50,000.

Multi-Unit Fee (For Multi-Unit Development Rights)

The Multi-Unit Fee for developing each Crunch Fitness or Crunch Select club is $25,000. For each Crunch Signature club, the Multi-Unit Fee is $50,000.

Brand Marketing Fund Contribution

Franchisees must contribute up to 2% of monthly Gross Sales to the Brand Marketing Fund, although the franchisor has the right to charge a pro rata share of actual marketing expenses instead.

Transfer Fees

A transfer fee of $5,000 or the actual cost, including legal fees, is required if a franchise is transferred to a third party. This fee is waived if the transfer is within the franchisee’s corporation or entity and the original owner maintains majority ownership.

Renewal Fees

The renewal fee for continuing the franchise agreement is set at $12,500.

Franchise Pros and Cons

The Pros:

• Quality training program: The chain offers its franchisees an extensive training program to equip them with the necessary resources to establish and run successful clubs. Its on-the-job and classroom training covers the business concept, training, sales, and hiring of the best staff. 
• Flexible membership options: Crunch Fitness has designed a variety of flexible membership options to enable members to get the most out of their subscriptions. These include equipment, online nutrition, one free personal training session, proprietary group fitness classes, small group training, streaming workout videos, indoor cycling, multi-club access, unlimited guest privileges, tanning, and Hydro Massage.
• Third-party financing: The brand assists franchisees with financing assistance for start-up and development costs through third-party lenders.
• Exclusive territory protection: The franchisor provides its franchisee with an exclusive development market through a protected territory. It does not establish other franchises or operate competing channels in the designated areas. 
• Public relations and marketing: Crunch Fitness has an experienced marketing team to help its franchisees with their public relations and create awareness for their local studios. Franchisees can leverage the brand’s popularity, national media, social media, regional advertising, fun and quirky promotional campaigns, and advertising tools to attract customers and improve their sales.

The Cons:

• Not a home-based or mobile business: A crunch Fitness franchise cannot be operated from home or a vehicle. Franchisees must establish an office space, retail facility, or warehouse.
• Not a part-time business: The business cannot run on a part-time basis. Franchise owners must follow the franchisor’s operating hours.
• Competition: The franchise faces stiff competition from other fitness chains such as Anytime Fitness, Gold’s Gym and Planet Fitness.

How to open a Crunch Fitness franchise

Opening a Crunch Fitness franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Crunch Fitness franchise.

1. Understanding the Financial Requirements

• Ensure you meet the minimum financial requirements: a combined $2 Million in net worth and $400,000-$500,000 in liquid capital among all partners.
• Be prepared for the total investment, which ranges from $668,000 to $3,488,000, excluding real estate costs​​.

2. Selecting the Franchise Location

• Crunch will discuss territory availability during your initial conversation with their team.
• Consider the size requirements for a Crunch gym, which typically range from 20,000 to 40,000 square feet, with a sweet spot of 25,000 to 30,000 square feet and at least 125 parking spots​​.

3. Applying for Financing Assistance

• Crunch provides assistance with financing by reviewing your finances and recommending financing through a network of lenders.
• Understand that each franchisee is responsible for obtaining their own financing, and Crunch’s introduction to lenders does not guarantee financing​.

4. Designing and Outfitting Your Gym

• Once you become a franchisee, Crunch will provide a construction manual to help build your club.
• Submit a CAD/PDF drawing of your location for Crunch to create a floor plan and equipment layout.
• Crunch also offers a branding package to ensure a consistent look across all locations and can provide architectural and construction resources if needed​​.

5. Training and Development

• Crunch offers world-class training, including a mix of online and in-person training for franchisees, key managers, and staff before opening.
• Ongoing training and consultation are provided after your club opens to ensure continued operational success​​.

Disclaimer

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