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The Little Gym Franchise Costs $465K – $637K (+ 2024 Profits)

The Little Gym is an esteemed children’s enrichment and physical development franchise that has been fostering the growth of young minds and bodies since its inception in 1976 by the innovative educator, musician, and kinesiologist Robin Wes. 

The franchise’s foundation rests on a non-competitive and nurturing environment aimed at promoting children’s physical, social, emotional, and intellectual development. This philosophy has been the bedrock upon which The Little Gym has built its legacy, offering a unique and engaging experience that stands out from traditional gymnastics or dance programs.

Headquartered in Bedford, Texas, The Little Gym has grown significantly over the years, demonstrating a robust global presence worldwide. This expansion is a testament to the brand’s appeal and the success of its franchise model, which began in 1992. The Little Gym distinguishes itself through a proprietary curriculum that is continually evolving, ensuring that the programs remain fresh and engaging.

a financial plan for a franchise
a financial plan for a franchise

Initial investment

Type of ExpenditureAmount
Initial Franchise Fee$60,000
Start-Up Equipment and Inventory Package$58,000 – $75,000
Exterior Signage$8,000 – $15,000
Lease and Tenant Improvements$224,000 – $270,000
Furnishings, Computer Systems, Security Surveillance System, Other Equipment & Supplies$8,000 – $23,000
Architectural Fees$17,000 – $22,000
Grand Opening Marketing$20,000 – $25,000
Security Deposits and Other Prepaid Expenses$8,000 – $30,000
Training Related Expenses$18,000 – $23,000
Insurance Premiums$2,000 – $4,000
Legal, Accounting and other Professional Fees$4,000 – $11,000
Total$465,000 – $637,000

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.

Franchise fees & Royalties

Initial Franchise Fee

The initial franchise fee is $59,500, which is non-refundable and payable in full upon signing the Franchise Agreement.

Royalty Fee

The greater of 8% of Gross Sales or a Minimum Royalty of $2,500 per month, starting after the first 180 days post-grand opening.

National Advertising Fee (NAF) Contribution

Up to 2.5% of monthly Gross Sales, with the current rate at 1%, contributing to a collective advertising fund.

Local Marketing Expenditure

Up to 6% of monthly Gross Sales, minus the NAF Contribution, with the current recommendation at 5% towards local marketing efforts.

Technology Fee

Up to $399 per month, subject to annual adjustments, covering proprietary technology used in the operation of the franchise.

Development Agreement Fee

For multi-unit development rights, a Development Fee is applicable, ranging from $113,050 for two Gyms to $160,650 for three Gyms, payable upon signing the Development Agreement.

Start-Up Equipment and Inventory Package

Before opening, franchisees must purchase this package, ranging from $58,000 to $75,000, which includes gym equipment, marketing materials, staff uniforms, and initial inventory.

Grand Opening

Franchisees are required to spend between $20,000 and $25,000 on their grand opening, with part of this amount potentially payable to The Little Gym for media planning.

revenue

Revenue & Profits

a financial plan for a franchise
a financial plan for a franchise

Franchise pros and cons

The Pros:

  • Quality training: The brand offers its franchisees extensive training to equip them with the business model and prepare them and their staff for a successful grand opening. Also, franchisees get an online training system to train their employees to ensure quality and continuity.
  • Third-party financing: The franchisor guides its franchisees on the funding and referral of third-party lenders to finance their startup and ongoing costs. Also, it helps them with financial management training and reviewing proprietary financial and analytical tools to operate their gyms.
  • Marketing and sales: The brand has an experienced marketing team to help franchisees grow their businesses. It offers them efficient marketing solutions and tools such as online marketing, email marketing, in-gym marketing, local studio-targeted promotional campaigns, print and public relations.
  • Extensive corporate support: With an experienced corporate team, the franchisor helps franchisees get started quickly by giving them growth strategies. Franchisees also get consultations and regionalized calls with other successful franchise owners.
  • Multiple income channels: The brand provides franchisees with a variety of classes to deliver excellent services to their members. In addition, it provides extras such as birthday parties, parents’ survival nights and camps, which improve sales and profitability.
  • Site selection and construction: The Little Gym real estate team provides franchisees with site selection, design, and buildout for their local studios. It also helps them with lease negotiation services to reduce development costs.

The cons:

  • Not a home-based opportunity: The franchise cannot be operated from home or a vehicle. Franchisees must have a fixed office space, a warehouse, or a retail facility.
  • Not a part-time business: The Little Gym franchise is not a side business or part-time business. It requires franchisees to operate according to the parent company’s operating hours.
  • Not a passive investment: The franchise does not allow for absentee ownership. It requires franchisees to fully participate in the daily management and decision-making of their studios.
  • No exclusive territory protection: The franchisor does not grant its franchisees a protected territory. Franchisees may face competition from franchises granted by the parent company or from competitive units it controls.
  • Competition from other children sports franchises such as Amazing Athletes or i9 Sports to name a few.

How to open a The Little Gym franchise

1. Goals, Overview & Decision Criteria

  • Collaborate with The Little Gym to assess your background, goals, and what you seek to achieve with your business.
  • Discuss your personal and professional aspirations, timeline, and investment range.
  • Address any inquiries you might have to ensure clarity and alignment with the franchise’s vision and objectives.

2. Brand Review

  • Participate in a detailed presentation about The Little Gym’s vision, objectives, and the unique value proposition offered to clients.
  • Engage in an open and honest dialogue to evaluate mutual fit and decide whether to proceed further in the franchising process.

3. Request for Consideration

  • Submit a confidential and non-binding application, indicating your serious interest in the franchise opportunity.
  • This step does not require any commitment to invest but shows your intent to move forward with the franchising process.

4. Introduction to Funding Partners & Territory Analysis

  • Explore funding options with The Little Gym’s small-business lending partners to understand how to finance your franchise.
  • Analyze available territories and discuss the best fit for your new business with The Little Gym’s support.

5. Business Review of FDD

  • Receive and review The Little Gym’s Franchise Disclosure Document (FDD), which includes comprehensive details about the company, management team, and investment breakdown.
  • This step is crucial for understanding the financial aspects and operational structure of the franchise.

6. Attend Launch Day Event

  • Meet The Little Gym’s home office team, ask additional questions, and immerse yourself in the company culture.
  • Learn about the support systems in place to assist you throughout your journey as a franchise owner.

7. Final Franchisee & Financial Validation

  • Following the Launch Day, conduct due diligence by interacting with existing franchise owners and other members of The Little Gym family.
  • Discuss the final steps and schedule the franchise agreement signing after receiving an award letter.

8. Sign Franchise Agreement

  • Officially become a The Little Gym franchise owner by signing the Franchise Agreement and paying the initial fees.
  • Begin the onboarding process, where you’ll receive further training and support to set up your franchise for success​​.

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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