UFC Gym: a Very Profitable Franchise Yet Costing $3M

One of the most popular MMA gym franchise, UFC Gym has grown steadily over the years to reach over 140 locations globally, the vast majority being in the US (85 franchised-owned).

Yet UFC Gym is also notoriously known amongst franchisees for another reason: it’s one of the most expensive franchise when looking at the total required upfront investment.

Indeed, as a franchisee you would need to fund $3 million in startup costs, from a bank or investors, to set up a new UFC Gym.

Does this mean you should discard UFC Gym? Not necessarily. Quite the opposite actually: we found that the average UFC Gym also makes close to $3 million in revenue per year. It’s also a very profitable business with 30% profit margins (EBITDA).

Want to know more? In this article we’re looking at UFC Gym and its Franchise Disclosure Document to find out how much profits you can really make with this business. Let’s dive in!

Key figures

Franchise fee	$40,000
Royalty fee	5.0%
Marketing fee	4.0%
Investment (mid-point)	$3,059,000
Revenue	$2,963,000 per year
Revenue per square foot	$129
Sales to investment ratio	1.0x
Payback period*	7 years
Minimum net worth	$300,000
Minimum liquid capital	$100,000

What is UFC Gym?

UFC Gym is the ultimate leader of MMA-inspired fitness, founded by Jim Rowley in 2009 as a brand extension of the famous Ultimate Fighting Championship (UFC).

Based in California, UFC Gym specializes in Daily Ultimate Training, mixed martial arts (MMA), cardio boxing, cardio kickboxing, Jiu Jitsu, Muay Thai boxing and core training. 

It offers membership tiers and fitness classes, from group fitness sessions and private MMA training to MMA-inspired youth programming plus personal and group training. 

UFC Gym targets men, women, kids and anyone keen to experience the full benefits of MMA-inspired training. 

The fitness brand started franchising in 2009. 

Today, UFC Gym operates in more than 150 locations, all franchised in the USA. 

UFC Gym franchises pros and cons

Pros

• Multiple revenue streams: Franchisees get income through group fitness classes, private MMA training, and personal and group training. 
• Wide demographic base: a premier fitness center for kids, men, women and anyone seeking the benefits of MMA-inspired training. 
• Low investment cost: the franchisor attracts low entry barriers with high-income potential. Reduced fitness space with low labor and a simple operating model makes it an appealing franchise opportunity. 
• Brand popularity: UFC is one of the most popular sporting events in the world. Franchisees can leverage the brand’s popularity to capitalize on the already established market base. 
• Initial training: 2 business days of initial training at the California HQ covering the administration, merchandising, franchisor relations and marketing helps franchisees familiarize themselves with the business operations. 
• Territory granted: franchisees operate at designated territories, free from competition against other UFC Gym clubs. 
• Financial assistance: the franchisor has strong relations with third-party financial sources to help business owners cover the franchise fee, inventory, equipment, account receivables and trade fixtures. 
• Allows semi-absentee ownership: franchisees can pursue other business interests and operate several locations because UFC Gym allows semi-absentee ownership. 

Cons

• Can’t run from home/as a mobile unit: fitness clubs must be operated within the designated locations. 
• Not a part-time business: franchisees must agree to a full-time, long-term commitment and get involved in the business operations. 
• Minimum employee requirement: 3-5 employees to start and operate a UFC Gym franchise. 
• Competition: Crunch Fitness, Planet Fitness and 24 Hour Fitness.

How much does a UFC Gym franchise cost?

You would have to invest on average $3,059,166 to open UFC Gym fitness facility.

Yet note that it’s the investment required for a UFC Gym (Signature) or UFC Fit. Indeed, there 3 kinds of formats of the fitness facility you can choose with different sizes:

• UFC Gym: $354,353 (2,200-3,500 sq. ft.)
• UFC Gym (Core): $736,402 (6,000-10,000 sq. ft.)
• UFC Gym (Signature) or UFC FIT: $3,059,166 (20,000-40,000 sq. ft.)

As such, the investment varies based on many factors, such as the location of your facility, the format, its equipment and size, etc.

Here’s the full breakdown of costs per facility format:

Startup costs: UFC Gym

Startup cost	Amount
Initial franchise fee	$30,000
Leasehold improvements	$0 – $98,000
Equipment	$110,500 – $195,000
Licenses and permits	$500 – $2,500
Additional Funds 3 Months	$18,000 – $70,000
Other	$46,705 – $103,500
Total	$209,705 – $499,000

Startup costs: UFC Gym Core

Startup cost	Amount
Initial franchise fee	$40,000
Leasehold improvements	$0 – $400,000
Equipment	$152,360 – $280,800
Licenses and permits	$5,000 – $10,000
Additional Funds 3 Months	$83,200 – $140,400
Other	$73,624 – $533,219
Total	$385,184 – $1,087,619

Startup costs: UFC Gym (Signature) or UFC FIT

Startup cost	Amount
Initial franchise fee	$50,000
Leasehold improvements	$0 – $2,047,443
Equipment	$604,000 – $1,700,000
Licenses and permits	$5,000 – $25,000
Additional Funds 3 Months	$275,000 – $700,000
Other	$185,282 – $476,607
Total	$1,119,282 – $4,999,050

What is the turnover of a UFC Gym?

On average, a UFC gym franchise made $2,963,000 in sales per year in 2021. This is the average sale for a UFC gym (Signature).

This is a significant increase vs. 2020 (+19.6%, $2,476,000).

When it comes to revenue per square foot, the UFC Gym (Signature) franchise facility had a $129 revenue per square foot on average in 2021, up from $111 in 2020.

How profitable is a UFC Gym franchise?

We estimate the average UFC Gym franchise makes $880,000 in profits per year. This corresponds to a 30% profit margin (EBITDA margin).

In line with fitness franchises (28% industry average EBITDA margin), UFC Gym is therefore a profitable business.

Note that we had to make assumptions as UFC Gym does not disclose a detailed profit and loss for its franchised gyms. For example, we had to estimate staff costs (35% of revenues, in line with other personal training fitness clubs), marketing (5%) and other costs.

Profit and loss	Amount	% revenue	Notes
Revenue	$2,963,432	100%
Staff	$(1,037,201)	35%	industry average*
Rent	$(334,667)	11%	as per FDD
Royalty fee	$(266,709)	9%	as per FDD
Marketing	$(148,172)	5%	industry average
Other operating costs	$(296,343)	10%	assumption
EBITDA	$880,340	30%

Should you invest in a UFC Gym franchise?

As we just said, UFD Gym is a profitable business. Yet, it doesn’t necessarily mean it’s a good investment. Instead we must look at how profits compare vs. the initial upfront investment required to set up a new UFC Gym.

In other words, we must calculate the payback period. The good news is that we found UFC Gym has a payback period of 7 years on average, meaning you would reimburse the investment within 7 years (whether you raised a loan or equity from investors).

Indeed, the average payback for gym franchises is around 8 to 9 years. As such, UFC Gym does seem like a great investment.

How does it compare vs. other fitness franchises?

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