. What a great business - you just invest and sit back as the money
rolls in. But is that really the case? Today, lets take a critical look at the Anytime Fitness
Franchise.
So let me start by saying that there are owners that have done very well with their Anytime
Fitness Franchise. When the model works, it works well and you can have a relatively passive
business that provides predictable income.
Now that's the side you will hear from the franchise, but as always we like to give you
the other side of the story so you can make an educated decision.
Taken from their brand new 2018 FDD the cost to open an Anytime Fitness center will range
between $131,002 and $722,796. Keep in mind that number includes your operating capital
for the first 3 months, and assumes you will be leasing your gym equipment. If you buy
your equipment count on about $140,000 on top of that number. There is also the option
for an Anytime Fitness Express location which we won't cover today. You will pay a $549
monthly fee to Anytime Fitness, a general advertising fee of $300 monthly and you will
be required to invest between $8,000-$18,000 on a Grand Opening and Ramp up Program when
you first open up. You will pay a fee of 50 cents for each member of your club monthly
for the Anytime Health membership, to a maximum of $225 for a single location or $675 a month
if you have multiple locations. There is a global access fee of $249 per month. Training
suite fees are $149 per center.
So those are the fees, but how much can you make with an Anytime Fitness Franchise? The
2018 Item 19 financials in Anytime Fitness FDD provide suggested earnings for 500, 865
and 1150 member scenarios. The earnings BEFORE debt expense, depreciation, interest and taxes
are $9,900 for a 500 member location, and if you read the fine print that number assumes
you are working at the center yourself. If you have installed a manager from when you
opened you will not be making that amount. Next level is $99,800 for an 865 member location,
and these following numbers do assume you now have a a manager and $192,000 for an 1150
member location. Keep in mind that representation assumes that all members stay for a full year
with zero attrition or zero new ,members, which is not realistic. These numbers were
based on an estimated value of $371.90 per year per member, and a club size and approximate
cost related to 5000 sf But how many members will an average club have? Well if we look
again at the item 19 in the FDD we see Anytime Fitness gives the average of 697 monthly paying
members, and a median of 646. Pay per visit members average count was was 168 and median
was 101. The lowest membership in their system was 177 the highest was 3316. So essentially
these numbers paint the picture in your mind that the 697 paying members plus pay per visit
of 168 gives us the average of 865 members so we can expect $99,800. Pretty good right?
And if you are emotionally driven through the FDD thats the only number you will see.
But read the fine print more closely and there are other considerations you need to understand
such as paragraph 6 in the Item 19 relating to training income. This is important as certain
clubs who did not report personal training income of at least $1500 monthly were just
not included in the numbers. So underperforming PT locations were removed from the figures,
and remember franchisors have the ability to present these numbers to you any way they
like. Also remember this number is before debt expense, depreciation, interest and taxes.
As always make sure you have read and understand all the points in the FDD and have a competent
franchise lawyer advise you.
Now the growth of Anytime Fitness has been strong with almost 400 new locations opening
in the past 3 years. Litigation is almost zero which is really amazing for a franchise
of this size. But hold on 400 locations opening that sounds
like no locations have closed doesnt it? A quick Google of the words Anytime Fitness
Closed will prove otherwise Now one of the initiatives we conduct with our clients is
to contact people who closed their locations, their names will be listed in the FDD, and
ask them what happened. You dont just want to speak to franchisees who are doing well.
This is how we make an educated and balanced franchise buying decision, not by fixating
on only the positives. All franchises have some obstacles or negatives you need to be
aware of those and be confident you can overcome them.
Now if you are seriously considering buying a gym franchise I want to bring your attention
to the operational model for a second. Now the goal if you are seeking a truly passive
franchise which most people are with Anytime Fitness, is to hire someone to run your business
while you focus on other things. Now a gym franchise, keep in mind, is completely dependent
on the person you hire, much more so than say a hair salon by virtue of the client acquisition
process. So a hair Salon manager welcomes people and runs the store, and is a relatively
easy hire and even if you have to replace this person your customers still will walk
in and have their haircut. Your store success is not tied to any one individual and people
don't need to be sold a haircut.
With fitness however that manager will need to be very adept at client acquisition, at
selling. And if you can't find someone in the fitness industry, that is also good at
selling, your club is going to suffer. So if you are running passively, and you have
ongoing problems finding the right hire your store is going to suffer, and your passive
business just became a hands on headache.
We also found some negative feedback on unhappyfranchisee.com, and I'll post the link to that page down below
in the description box if you want to visit the page. Now keep in mind there are many
more happy franchisees than unhappy, but these comments provide us with some red flags that
can help direct our future research. Some complaints speak to the fact that actual ownership
may not be as easy as claimed, that corporate may be taking more than they should be, that
their real estate team are unqualified that Anytime Fitness did not properly disclose
earnings of other clubs and support is poor this owner suggests they are being forced
to pay $60,000 after only 5 years to remodel their club and are drowning in debt, and this
prospective franchisee suggesting Anytime Fitness did not allow them to speak to other
owners, and that the fees are ridiculous. There are over 81 comments both good and bad
and will certainly be of interest to anyone considering buying an Anytime Fitness franchise.
Don't forget to like and subscribe and if you need help finding and researching your
franchise purchase give the experts a call at http://www.franchise.city