Snap Fitness Franchise Costs $529K – $1.0M (+ 2024 Profits)

Snap Fitness, founded in 2003 and headquartered in Chanhassen, Minnesota, embarked on its franchising journey a year later, in 2004. This dynamic franchise operates under the umbrella of Snap Fitness, Inc., offering its members 24/7 gym access, a feature that distinguishes it from many competitors in the fitness industry. 

The franchise prides itself on providing an array of fitness services, including group fitness and personal training, supported by advanced fitness technologies and high-quality fitness equipment. 

The franchise offers a comprehensive training program for franchisees, which is mandatory for at least two individuals within the franchisee’s organization, including the general manager. 

Type of Expenditure	Amount
Initial Franchise Fee	$39,500 to $39,500
Build-Out Labor Costs	$120,000 to $240,000
Leasehold Improvements	$80,000 to $280,000
Exterior Signage	$10,000 to $20,000
Furniture and Fixtures	$64,405 to $74,174
Fitness Equipment	$120,000 to $180,000
Technology	$15,000 to $25,000
Grand Opening Marketing	$10,200 to $10,200
Occupancy (3-month)	$26,564 to $53,129
Lease Deposits	$8,855 to $17,710
Insurance (3-month)	$1,233 to $1,362
Travel and Training Expenses	$3,000 to $3,500
Professional Fees	$5,000 to $20,000
Additional Funds	$25,000 to $50,000
Total	$528,757 to $1,014,575

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 for a Snap Fitness franchise is $39,500. If you are an existing franchisee acquiring your second or subsequent Club, you are eligible for a reduced initial franchise fee of $34,500 .This fee is deemed fully earned upon payment, considering the expenses incurred and services rendered in granting the franchise, and is non-refundable.

Royalty Fee

The royalty fee for a Snap Fitness franchise is 6% of Gross Revenue. Additionally, there is a National Marketing contribution that can be up to 4% of Gross Revenue, which is currently set at 2%.

Technology Fee

The Technology Fee is currently $310 per month but is subject to increase in accordance with the CPI.

National Marketing Fee

The National Marketing Fee can be up to 4% of Gross Revenue, with the current rate set at 2%. This fee is due monthly, starting from the month your Club opens.

Additional Fees

Other notable fees include a Grand Opening advertising and marketing fee of $10,200, due 90 days prior to opening, and insurance premiums through the Snap Asset Protection Plan, estimated to be between $454 and $1,362 before opening.

Transfer Fees

Transfer fees vary depending on whether the transferee is a new or existing SNAP FITNESS franchisee, with new franchisees required to pay the then-current Initial Franchise Fee and existing franchisees paying a reduced fee of $5,000.

Legacy Fee Structure

For qualifying franchisees under the Legacy Fee Structure, different fees apply, such as a Royalty Fee of $625 per month and National Marketing and Technology Fees set at fixed monthly rates. This structure is available under specific conditions and subject to meeting certain revenue thresholds.

Franchise Pros and Cons

The 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.

The 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 to open a Snap Fitness franchise

Opening a Snap 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 Snap Fitness franchise.

1. Discover and Explore

• Begin by learning about the Snap Fitness franchise, its business model, offerings, and unique selling points.
• Understand the financial requirements and benefits of owning a Snap Fitness franchise.

2. Initial Inquiry

• Submit an initial inquiry through the Snap Fitness franchise website or contact their franchising department directly.
• Receive preliminary information and possibly schedule a more detailed discussion or meeting.

3. Formal Application

• Complete a formal franchise application, providing detailed personal, financial, and business background information.
• The application process may include providing financial statements, a business plan, and other relevant documents.

4. Review and Due Diligence

• Undergo a review process where Snap Fitness evaluates your application against their franchisee criteria.
• Conduct your own due diligence by reviewing the Franchise Disclosure Document (FDD), consulting with current franchisees, and possibly seeking legal and financial advice.

5. Discovery Day

• Attend a Discovery Day at Snap Fitness headquarters or a designated location, which may include meeting the corporate team, learning in-depth about operations, marketing, and support, and seeing a functioning Snap Fitness club.

6. Franchise Approval

• Receive approval from Snap Fitness to proceed with opening a franchise.
• This approval is based on the successful completion of all previous steps and a mutual agreement on the potential for success.

7. Site Selection and Agreement

• Work with Snap Fitness to identify and approve a suitable location for your franchise, considering demographics, competition, and local demand.
• Sign the franchise agreement and pay any associated fees to secure your territory and franchise rights.

8. Training and Preparation

• Participate in the comprehensive training program provided by Snap Fitness, covering operations, sales, marketing, and the use of their proprietary technology and systems.
• This training is essential for understanding the business model and ensuring consistency across franchises.

Disclaimer

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