Stretch Zone: a Very Profitable Franchise Making $357K (2023)

With 187 locations in the US, Stretch Zone might not be the most famous fitness franchise yet it has a serious value proposition if you want to get into the fitness industry as a franchisee.

In addition to a unique concept (practitioner-assisted stretching) vs. standard membership or pay-per-class gyms, it’s also the most profitable fitness franchise investment we found.

Indeed, with a low investment of $161,000 it’s not only affordable but it’s also very profitable: it has a payback of 3 years, the lowest in the industry.

How much does a Stretch Zone franchise really cost? How much profits can you realistically make with this business? Should you invest in a Stretch Zone franchise? Let’s find out!

Key figures

Franchise fee	$49,500
Royalty fee	6.0%
Marketing fee	2.0%
Investment (mid-point)	$161,000
Revenue	$358,000 per year
Revenue per square foot	$286 per year
Sales to investment ratio	2.2x
Payback period*	3 years
Minimum net worth	$250,000
Minimum liquid capital	$150,000

* assuming 15% net profit margin

What is Stretch Zone?

Stretch Zone is the world’s largest practitioner-assisted stretching franchise, offering high-quality fitness services in the health and wellness niche.

Founded in 2004 by Jorden Gold, the health and wellness company uses proprietary tables and the patented Stretch Zone Stabilization System to improve mobility and muscle function.

Headquartered in Fort Lauderdale, Florida, Stretch Zone covers a wide demographic base, offering a low-cost fitness strategy and great ideas to promote healthy living.

It uses certified staff and science-backed technology to deliver a personalized stretch experience to increase the livelihood of its clients.

Stretch Zone started franchising in 2015 and boasts over 200 studios in the US today.

Stretch Zone franchises pros and cons

Pros

Initial and ongoing training: Stretch Zone offers detailed training programs to help franchisees succeed. As part of the Franchise Agreement, franchisees are guaranteed 16-96 hours of effective classroom training and ongoing support covering the grand opening, field operations, site selection and meetings and conventions.
Marketing strategy: the franchisor helps new business owners reach the desired market via email marketing, national media, SEO, ad templates, social media and website development. Franchisees can leverage the brand’s popularity to get clients via digital marketing and community outreach.
Exclusive territory protection: franchisees get exclusive rights to run their businesses in select locations without competition from similar startups. Stretch Zone assures franchisees it won’t have two or more startups competing for clients in the same region.
Limitless growth potential: Stretch Zone’s business concept is one of its kind in the health and wellness industry. Franchisees invest in a unique concept with high growth potential.
Wide demographic base: Stretch Zone is a transformative fitness company for clients of all ages, from the youth to the elderly, active and inactive, men and women. Franchisees get a ready market base to improve their earning potential.
A low-cost, modular business concept: practitioner-assisted stretching is a simple concept that fits any market. New business owners can set up their brands in the smallest or largest cities, depending on their preferences.

Cons

No absentee ownership: no passive ownership when running a Stretch Zone franchise. Franchisees must be involved in business operations after the grand opening.
No part-time operation: Stretch Zone franchise isn’t a part-time business. The fitness clubs must stick to the franchisor’s schedule according to the Franchise Agreement.
Not a mobile/home-based unit: Stretch Zone fitness centers must be run from physical locations. The franchise isn’t a home-based opportunity.
No third-party financing: the franchisor doesn’t liaise with third-party sources to help franchisees secure funding. Franchisees must find their means to cover the franchise fee, equipment, trade fixtures and inventory.
Competition: Main competitors include StretchLab and Simply Stretch.

How much does a Stretch Zone franchise cost?

On average, you may need to invest around $161,027 to open a Stretch Zone franchise.

This amount is on the lower end compared to fitness franchises. Indeed, the average required investment for a fitness franchise is $1.0 million as per our proprietary fitness benchmark.

The mentioned investment amount is an average, thus, it may change depending on some factors like the studio size, location, etc. According to the latest Franchise Disclosure Document, this amount can be as low as $112,430 and as high as $209,624.

Stretch Zone startup costs

The investment includes an initial franchise fee of $49,500, which must be paid to the franchisor. In addition to the initial franchise fee, the investment amount covers all the startup costs you may need to start a Stretch Zone studio. It includes:

Formation Costs: training fee, leasehold improvements, equipment, stretching tables, furniture, outdoor and indoor signage, computer system, permits, business licenses, architect’s and engineer’s fee, attorney’s and accountant’s fees, etc.
Initial Marketing: pre-grand opening and studio grand opening marketing expenses
Operating Costs: prepaid rent, supplies, utility deposits, insurance, and working capital for first 3 months, etc.

Type of cost	Low	High
Initial Franchise Fee	$49,500	$49,500
Formation Costs	$47,425	$130,399
Grand opening	$2,500	$5,500
Operating Costs	$13,005	$24,225
Total	$112,430	$209,624

Source: Franchise Disclosure Document 2022

What is the turnover of a Stretch Zone franchise?

On average, a Stretch Zone franchise makes $357,632 in turnover per year.

This is the average turnover per Stretch Zone center, calculated using the 153 franchised studios operating in 2021 as disclosed in the Franchise Disclosure Document.

This revenue per unit has been growing steadily over time as you can see in the chart below (+3% average monthly revenue growth over 2021).

How profitable is a Stretch Zone franchise?

We estimate the average Stretch Zone franchise makes $112,000 in profits per year (31% EBITDA margin).

In other words, Stretch Zone is a profitable fitness franchise: indeed 31% EBITDA margin is on the higher end vs. fitness franchises.

As the average Stretch Zone has a very limited square footage for a gym/studio (1,000 to 1,500 sq. ft), rent only represents ~11% of revenues. Instead we assume staff costs are on the higher end vs. other studios because of its personal trainers (~35% of revenues or maybe even more, vs. 28% for the average gyms).

To calculate this number, we took the information available from the Franchise Disclosure Document (revenues, rent costs and royalty fees) and estimated staff costs, marketing and other costs by using our own fitness franchise benchmark.

Profit and loss	Amount	% revenue	Notes
Revenue	$357,632	100%
Staff	$(125,171)	35%	assumption*
Rent	$(38,000)	11%	as per FDD
Royalty fee	$(28,611)	8.0%	as per FDD
Marketing	$(17,882)	5%	industry average
Other Opex	$(35,763)	10%	industry average
EBITDA	$112,205	31%

* we used percentages from personal training franchises that spend a higher part of their revenues in staff costs (e.g. The Camp Transformation Center and The Exercise Coach)
Source: Franchise Disclosure Document 2022

Should you invest in a Stretch Zone franchise?

In order to answer this question, you must consider all the different parameters: the franchisor’s brand name, support, training, the competition where you want to operate, and of course the financials.

Luckily, Stretch Zone has the best payback period we found for fitness franchises: 3 years.

In other words, you would reimburse your investment within 3 years only after opening a Stretch Zone studio. This includes any loans or investors equity you would have raised to finance the upfront investment of $161,000.

Therefore, we consider Stretch Zone to be one of the best franchise you can choose as a franchisee due to its low price point (the $161,000 investment cost) compared to the profits it generates.

How does it compare vs. other Fitness franchises?

Franchise	Link	Net worth ($)	Liquid capital ($)	Investment ($)	Revenue ($)	Per sq.ft. ($)	Payback (years)
Anytime Fitness	https://sharpsheets.io/blog/anytime-fitness-franchises-costs-profits/	350,000	175,000	510,165	338,810	$68	10.0
Planet Fitness	https://sharpsheets.io/blog/planet-fitness-franchises-costs-profits/	3,000,000	1,500,000	3,273,300	1,564,877	$80	13.9
Orangetheory Fitness	https://sharpsheets.io/blog/orangetheory-fitness-franchises-costs-profits/	1,000,000	300,000	1,381,432	805,251	$244	11.4
Club Pilates	https://sharpsheets.io/blog/club-pilates-franchises-costs-profits/	500,000	100,000	287,000	544,703	$363	3.5
Pure Barre	https://sharpsheets.io/blog/pure-barre-franchises-costs-profits/	500,000	100,000	335,812	259,534	$173	8.6
Snap Fitness	https://sharpsheets.io/blog/snap-fitness-franchises-costs-profits/	750,000	250,000	783,328	194,124	$37	26.9
Burn Boot Camp	https://sharpsheets.io/blog/burn-boot-camp-franchises-costs-profits/	300,000	150,000	314,846	400,526	$76	5.2
Crunch Fitness	https://sharpsheets.io/blog/crunch-fitness-franchises-costs-profits/	2,000,000	400,000	3,092,000	1,863,627	$48	11.1
CycleBar	https://sharpsheets.io/blog/cyclebar-franchises-costs-profits/	500,000	100,000	417,410	335,855	$168	8.3
Stretch Zone	https://sharpsheets.io/blog/stretch-zone-franchises-costs-profits/	250,000	150,000	161,027	357,632	$286	3.0
Workout Anytime	https://sharpsheets.io/blog/workout-anytime-franchises-costs-profits/	500,000	175,000	1,519,450	511,628	$49	10.0
Fitness Together	https://sharpsheets.io/blog/fitness-together-franchises-costs-profits/	175,000	80,000	292,013	400,000	n.a.	4.9
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
Retro Fitness	https://sharpsheets.io/blog/retro-fitness-franchises-costs-profits/	1,500,000	300,000	1,681,341	998,459	$66	7.0
F45 Training	https://sharpsheets.io/blog/f45-training-franchise-costs-profits/	300,000	100,000	457,650	632,902	$253	4.8
Gold's Gym	https://sharpsheets.io/blog/golds-gym-franchise-costs-profits/	1,000,000	400,000	4,043,875	1,638,000	$47	16.5
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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