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Worst Gym Franchises to Own in 2024

Worst Gym Franchises to Own in 2024

Posted by Tyler Spraul, Certified Strength and Conditioning SpecialistĀ® (CSCSĀ®) on July 1, 2023 ā€” Updated on December 22, 2023

Read our list of the worst gym franchises to own based on profit potential, initial investment, and more. Then be sure to refer to our big list of gym franchises and our list of the best gym franchises to own to help your fitness franchise research efforts.

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In the fast-paced world of fitness, owning a gym franchise may seem like a lucrative business opportunity. But as with any investment, there are risks involved. In this article, we will delve deep into the realm of gym franchises, exploring the factors to consider when choosing one, the financial risks and challenges associated with ownership, and the high failure rates that plague this industry. Then don’t miss out on the opportunity to book a demo with Exercise.com and discover how the best gym management software can transform your gym and propel your business forward.

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Finding the Worst Gym Franchises for YOUR Needs

Determining the “worst” gym franchises to own can be a challenging task because what might be a poor fit for one person could be a great opportunity for another, depending on factors such as individual business goals, financial resources, and local market conditions.

However, when evaluating a gym franchise (or any franchise), there are several common factors you might consider:

  1. Initial and ongoing costs: Some franchises require a high initial investment, which might not be feasible for all investors. There may also be high ongoing fees that could strain profitability.
  2. Brand reputation: A franchise with a poor reputation may struggle to attract and retain members.
  3. Franchisor support: Franchisors should provide comprehensive training, operational support, and marketing resources. If this support is lacking, it could make running the franchise more challenging.
  4. Member satisfaction: High membership turnover could be a sign of member dissatisfaction, which might reflect poorly on the franchise.
  5. Market saturation: In some areas, the market might be oversaturated with certain types of gyms, making it harder for new franchises to succeed.
  6. Franchisee satisfaction: Current and former franchisees can provide valuable insights into what it’s like to run the franchise. If many franchisees express dissatisfaction, it might be a red flag.
  7. Financial performance: Check the franchise’s financial performance metrics, such as average revenue and profit, in the Franchise Disclosure Document.

To get a list of “worst” franchises based on these criteria, you would need to conduct thorough research, including reviewing Franchise Disclosure Documents, speaking with current and former franchisees, and consulting with financial and legal advisors. It’s also important to consider your personal goals, skills, and resources when evaluating a gym fitness business franchise opportunity.

Read More:

Introduction to the Gym Franchise Industry

The fitness industry has witnessed exponential growth in recent years, with an increasing number of individuals realizing the importance of leading a healthy lifestyle. As a result, gym franchises have become a popular investment choice for entrepreneurs looking to capitalize on this trend. These franchises offer a turn-key solution for aspiring gym owners, providing them with a proven business model, branding, and support from the franchisor.

However, not all gym franchises are created equal. While some have flourished, others have floundered, leaving their owners with financial losses and shattered dreams. In this article, we will explore the worst gym franchises to own, shedding light on the challenges and pitfalls that await unsuspecting investors.

One of the key factors that determine the success of a gym franchise is its location. A prime location with high foot traffic and easy accessibility can significantly contribute to the gym’s profitability. On the other hand, a poorly chosen location can lead to low membership numbers and financial struggles. It is crucial for potential gym franchise owners to thoroughly research and analyze the demographics, competition, and market demand in the chosen location before making a final decision.

In addition to location, the quality of equipment and facilities offered by a gym franchise plays a vital role in attracting and retaining members. State-of-the-art exercise machines, well-maintained facilities, and a variety of amenities can enhance the overall member experience and differentiate a gym from its competitors. Investing in top-notch equipment and regularly updating the facilities can help a gym franchise stay ahead in the highly competitive fitness industry.

Factors to Consider When Choosing a Gym Franchise

Purchasing a gym franchise is a substantial financial commitment that warrants careful consideration. Before diving headfirst into this venture, entrepreneurs should evaluate several crucial factors. These include the reputation and history of the franchisor, the strength of the brand in the market, the level of initial investment required, and the ongoing royalty fees and other expenses associated with the franchise.

It is also essential to assess the market demand for gym features, amenities, and services in the desired location, the competition in the area, and the suitability of the franchise’s business model for the target demographic. Neglecting to thoroughly research these factors can spell disaster for aspiring gym owners, especially when considering the volatile nature of the fitness industry.

Furthermore, potential gym franchise owners should consider the support and training provided by the franchisor. A reputable franchisor will offer comprehensive training programs to ensure that franchisees are equipped with the necessary knowledge and skills to run a successful gym. This may include training on sales and marketing strategies, operational procedures, and customer service techniques.

Read More: Most Successful Gyms in America

The Importance of Researching Potential Gym Franchises

Researching potential gym franchises is of paramount importance for entrepreneurs looking to avoid the pitfalls of the industry. Robust due diligence involves studying the history and performance of the franchise, speaking with current and former franchisees, and understanding the franchisor’s support and training programs.

By conducting the necessary research, prospective gym franchise owners can gain insights into the franchisor’s track record, financial stability, and reputation. Armed with this knowledge, they can make informed decisions about whether a particular franchise is a worthwhile investment or a potential disaster waiting to happen.

Furthermore, researching potential gym franchises allows entrepreneurs to assess the market demand and competition in their desired location. Understanding the local demographics, target audience, and existing fitness facilities can help determine the viability and potential success of a gym franchise in a specific area.

Financial Risks and Challenges of Owning a Gym Franchise

While the allure of owning a gym franchise is undeniable, the financial risks and challenges associated with this business model cannot be ignored. One of the primary concerns is the high initial investment required to launch a gym franchise. Costs can include leasehold improvements, equipment purchases, staffing, marketing, and initial inventory.

Add to that the ongoing expenses such as rent, utilities, insurance, marketing, and royalties, and it becomes clear that running a gym franchise is a financially demanding endeavor. Additionally, fluctuating membership numbers and unpredictable revenue streams can make it difficult for gym owners to maintain profitability, especially during times of economic downturn or increased competition.

Another financial challenge that gym franchise owners may face is the need to constantly update and upgrade equipment and facilities. In order to stay competitive and attract new members, gym franchises often need to invest in state-of-the-art equipment and modern amenities. This can be a significant expense, especially if the franchise is located in a highly competitive market where other gyms are constantly upgrading their facilities.

High Failure Rates Among Gym Franchises

The fitness industry is notorious for its high failure rates among gym franchises. Countless stories exist of entrepreneurs who invested their life savings into gym franchises, only to see their dreams crushed within a few short years. The reasons for these failures are varied, ranging from poor management and lack of marketing prowess to fierce competition and changing consumer preferences.

Becoming aware of the potential risks and challenges is essential to navigate the treacherous waters of the gym franchise industry successfully.

One common reason for the high failure rates among gym franchises is the difficulty in attracting and retaining members. With the rise of boutique fitness studios and online workout platforms, consumers have more options than ever when it comes to their fitness routines. This increased competition makes it challenging for gym franchises to stand out and convince potential members to choose their facility over others.

Gym Franchise Problems That Can Lead to Gym Franchise Failure

Gym franchise problems that can lead to failure include:

  1. High initial and ongoing costs: The upfront costs of starting a gym franchise can be substantial, including the franchise fee, equipment costs, and leasehold improvements. On top of this, ongoing costs such as rent, utilities, maintenance, staffing, and royalty fees can strain profits. If these costs aren’t properly managed, it can lead to financial hardship and potentially business failure.
  2. Poor location: Location is crucial in the fitness industry. A gym that is too hard to access or not conveniently located can struggle to attract and retain members, leading to decreased revenue.
  3. Ineffective marketing: Gyms, like any other business, need effective marketing strategies to attract and retain members. Franchisees who do not effectively utilize the marketing resources provided by the franchisor, or who do not do additional local marketing, may struggle to build a sufficient client base.
  4. Poor management: Managing a gym requires a range of skills, including customer service, staff management, financial management, and more. Franchisees who lack these skills, or who fail to hire staff who possess them, can run into problems that hurt their bottom line.
  5. Inadequate support from the franchisor: Franchisors are expected to provide a range of support services to franchisees, including training, marketing support, operational guidance, and more. If this support is lacking, franchisees may struggle to operate their business successfully.
  6. Market saturation: In some areas, the market for fitness services may be oversaturated, making it difficult for new franchises to attract members. This can lead to decreased revenues and potential business failure.
  7. Economic downturns or unforeseen circumstances: Economic downturns can decrease discretionary spending, leading to drops in gym memberships. Unforeseen circumstances like the COVID-19 pandemic can also severely impact gym franchises.
  8. Failure to meet the needs of the local market: Gyms need to offer the classes, equipment, and amenities that appeal to their local market. Failure to meet these needs can lead to a lack of members and decreased revenues.

By carefully evaluating and addressing these potential issues, gym franchisees can increase their chances of running a successful business. Using the best comprehensive gym management software like Exercise.com can also help manage various aspects of the business, from member management to scheduling to financial reporting, further enhancing the likelihood of success.

Common Mistakes to Avoid When Investing in a Gym Franchise

Achieving success in the often treacherous gym franchise industry requires avoiding and learning from common gym owner mistakes that have plagued many aspiring gym owners. One critical mistake is underestimating the initial investment required and failing to secure adequate financing.

Other common errors include improper location selection, inadequate marketing strategies, insufficient attention to member retention efforts, and neglecting ongoing education and professional development. These mistakes can lead to dwindling membership numbers, reduced profitability, and ultimately, failure.

Hidden Costs and Fees Associated with Gym Franchises

Gym franchises often come with hidden costs and fees that, if not carefully calculated, can significantly impact a franchise owner’s bottom line. These costs may include marketing fees, software licensing, equipment maintenance, required purchases from approved suppliers, and additional fees for continued professional development.

Unwary franchise owners can find themselves caught in a labyrinth of financial commitments that erode their profitability and limit their ability to navigate unforeseen challenges.

Lack of Support and Training from Gym Franchise Headquarters

One factor that often contributes to the failure of gym franchises is the lack of support and training provided by the franchisor. Without proper guidance and ongoing support, franchise owners can find themselves ill-equipped to handle the day-to-day operations of their business.

Additionally, a lack of ongoing training can hinder franchise owners from staying ahead of industry trends and implementing necessary changes to stay competitive.

Difficulties in Attracting and Retaining Members in Certain Gym Franchises

Attracting and retaining members is essential for a gym franchise’s success. However, some franchises face difficulties in this area due to various factors, including competition from other fitness facilities, lack of effective marketing strategies, and a failure to offer unique or compelling experiences to their members.

Owners must constantly adapt and innovate to remain relevant in a highly saturated market. Failure to do so can result in declining memberships and a shrinking customer base.

Legal Issues and Lawsuits Faced by Some Gym Franchises

Gym franchises are not immune to legal issues and lawsuits. Some franchises have faced lawsuits due to alleged false advertising, negligence, or failure to fulfill contractual obligations. Legal battles can be financially devastating and tarnish the reputation of both the individual franchise owner and the franchise as a whole.

It is crucial for potential gym franchise owners to be aware of the legal risks and invest in comprehensive insurance coverage to protect themselves and their businesses.

Inadequate Marketing Strategies of Underperforming Gym Franchises

Effective marketing strategies are vital for any gym franchise to attract and retain members. However, underperforming franchises often struggle in this area, either due to insufficient marketing budgets, lack of expertise, or a failure to adapt to today’s digital marketing landscape.

Gym franchises must invest in comprehensive marketing plans that encompass both online and offline channels and employ strategies that resonate with their target audience.

The Impact of Location on the Success or Failure of a Gym Franchise

Location plays a pivotal role in the success or failure of a gym franchise. Choosing the wrong location can significantly impact a franchise’s profitability, as factors such as population density, competition, accessibility, and target market demographics come into play.

Thorough market research and a detailed analysis of potential locations are essential to ensure optimal success of a gym franchise.

Challenges in Differentiating Your Gym Franchise from Competitors

In a highly competitive industry, differentiating your gym franchise from its competitors is crucial for success. However, many franchises struggle to carve out a unique identity that sets them apart from the countless other gyms in their vicinity.

Franchise owners must develop and maintain a value proposition that addresses the needs and desires of their target market, be it through specialized training programs, cutting-edge equipment, or personalized customer experiences.

Alternative Business Models to Consider Instead of a Traditional Gym Franchise

For aspiring entrepreneurs who are hesitant to dive into the challenging world of gym franchises, alternative business models exist that offer a different approach to the fitness industry. These models include boutique fitness studios, personal training services, online fitness programs, and wellness retreats.

By exploring these alternatives, individuals can find a business model that aligns with their goals, interests, and the demands of the local market.

How to Determine the Worst Gym Franchises to Own

Determining key factors like the gym franchise with the least locations, highest initial investment cost, lowest new franchise success rate, and lowest average profit can be challenging, as franchises don’t always publicly release specific data and such information can vary over time. Also, these values can depend significantly on various factors, such as location, management, and economic circumstances.

Which gym franchise has the least locations?

Many emerging gym franchises have fewer locations than established ones. A specific example may be outdated due to growth or changes in the market. To find the most current information, you may want to look at franchise directories or contact the franchises directly.

Which gym franchise has the highest initial investment cost?

The gym franchise with the highest initial investment cost can vary greatly. High-end, large-scale, or specialized gym franchises often require a more significant initial investment due to the cost of specialized equipment, larger facilities, and the need for experienced staff. Brands such as Life Time Fitness, with their large-scale luxury fitness complexes, may require a higher initial investment. However, this information may have changed, and you should always verify with the most recent Franchise Disclosure Document (FDD) for the most accurate information.

Which gym franchise has the lowest new franchise success rate?

This data is not typically publicly available and can depend on numerous factors such as the franchise’s support for new franchises, the suitability of the franchise for different markets, and the financial and managerial skill of the individual franchisee. To get an understanding of a franchise’s success rate, potential franchisees should review the franchisor’s FDD and speak to existing franchisees.

Which gym franchise has the lowest average profit?

Profitability varies widely among gym franchises, influenced by factors such as membership numbers, operational costs, location, and management quality. Franchises do not typically disclose specific profit data, and such information is not usually publicly available. Potential franchisees should conduct thorough due diligence, including reviewing the FDD and consulting with existing franchisees, to get an idea of potential profitability.

Big List of Gym Franchises

So, ready for some data on gym franchises to help you decide which is the worst gym franchise to own for your specific fitness franchise requirements? Here you go:

NameUpfront InvestmentLocationsYear Founded
24 Hour Fitness$100,000 – $250,000100+1983
30 Minute Hit$25,000 – $50,00050-1002004
9Round Fitness$50,000 – $100,000100+2008
Ageless Fitness<$25,000<202018
AKT$100,000 – $250,00020-502013
Alloy Personal Training$100,000 – $250,000<201992
Anytime Fitness>$250,000100+2001
Apex Leadership$50,000 – $100,000100+2011
Athletic Republic$50,000 – $100,00050-1001990
Axe Monkeys$50,000 – $100,00020-502016
BASH Boxing>$250,000<202017
BeBalanced Hormone Weight Loss Centers$50,000 – $100,00020-502008
Beem Light Sauna$100,000 – $250,000<202019
BFT$100,000 – $250,000100+2017
Big Blue Swim School>$250,00020-502009
BODYBAR Pilates$100,000 – $250,000<202011
CityRow$50,000 – $100,000<202014
CKO Kickboxing>$250,00050-1001998
Club Pilates>$250,000100+2007
Complete Nutrition$50,000 – $100,000100+2005
Consignment King<$25,000<202010
Core Progression$50,000 – $100,000<202008
Crunch Fitness>$250,000100+2010
Ctrl V$50,000 – $100,00020-502016
Curves$100,000 – $250,000100+1992
CycleBar$100,000 – $250,000100+2004
D1 Training>$250,00050-1002001
Delta Life Fitness$50,000 – $100,00020-502009
Elite Home Fitness$50,000 – $100,000<202016
EOS Fitness$25,000 – $50,000100+1985
Farrell’s eXtreme Bodyshaping$50,000 – $100,00050-1002001
Fitness 1440$100,000 – $250,000<202009
Fitness ConnectionCan’t find50-1001999
Fitness First<$25,000100+1993
Fitness Machine Technicians$100,000 – $250,00050-1002002
Fitness Premier 24/7 Clubs$50,000 – $100,000<202004
FITtec.$100,000 – $250,000<202019
FUN BUS Fitness FUN on Wheels$50,000 – $100,00020-502003
Gold’s Gym>$250,000100+1965
Green Leaf Massage and Sports Recovery$100,000 – $250,000<202009
GYMGUYZ$50,000 – $100,000100+2008
Hapa Yoga & Fitness$50,000 – $100,000<202016
Hard Exercise Works$50,000 – $100,000<202008
Honor Yoga$100,000 – $250,00020-502013
Hudson Valley Swim$50,000 – $100,000<202003
IM=X Pilates and Fitness$100,000 – $250,00020-502004
In-Symmetry Spa$100,000 – $250,000<201999
Intrepid Gym$100,000 – $250,000<202011
ISIĀ® Elite Training$100,000 – $250,00020-502011
Jabz Boxing$25,000 – $50,000<202012
Jon Ric International$100,000 – $250,00020-501983
Just You Fitness$25,000 – $50,000<202011
Kids In Sports$50,000 – $100,000<201999
KIKA Stretch Studios$25,000 – $50,000<202011
La Fitness$100,000 – $250,000100+1984
Legends Boxing$100,000 – $250,000<202013
Level Red Boxing$100,000 – $250,000<202017
Life Time FitnessPrivate100+1992
Lucille Roberts>$250,00020-501973
MADabolic$50,000 – $100,000<202012
Max Muscle Sports Nutrition$50,000 – $100,000100+1990
Mayweather Boxing + Fitness$100,000 – $250,00050-1002018
MELD Fitness + Wellness$100,000 – $250,000<202014
My Backyard Sports$100,000 – $250,000<202017
My House Fitness$50,000 – $100,000<202010
Ninja Nation>$250,000<202017
Orangetheory Fitness$100,000 – $250,000100+2010
Outlaw FitCamp$100,000 – $250,000<202007
P.volve$100,000 – $250,000<202017
Peak PerformancePrivate50-1001986
Planet Fitness>$250,000100+1992
Play It Again Sports>$250,000100+1983
Powerhouse GymPrivate100+1974
Premier Martial Arts$100,000 – $250,000100+2004
PRO Martial Fit<$25,000<202021
Pulse Performance$50,000 – $100,000<202021
Pure Barre$100,000 – $250,000100+2001
Purvelo$50,000 – $100,000<202015
Real Hot Yoga$50,000 – $100,000<202012
Retro Fitness>$250,000100+2005
Rock Box Fitness$100,000 – $250,000<202016
RockBox Fitness$50,000 – $100,00020-502013
Romp n’ Roll$50,000 – $100,000<202004
Row House$100,000 – $250,000100+2014
Rumble$100,000 – $250,00020-502017
Sasquatch Strength$50,000 – $100,000<202019
Send Me a Trainer$50,000 – $100,00020-502007
Shapes Fitness for Women>$250,000<201990
Shapes Fitness for Women$100,000 – $250,000<201990
Shins Ninja Athletes$50,000 – $100,000<202019
SKfit$50,000 – $100,000<202011
Sky Zone Trampoline Park>$250,000100+2004
Smart Drinks<$25,000<202002
Snap Fitness$50,000 – $100,000100+2003
Snap Fitness$50,000 – $100,000100+2003
Soccer Stars$50,000 – $100,000<202000
SPENGA$100,000 – $250,000100+2015
StarCycle$50,000 – $100,000<202013
StretchLab$100,000 – $250,000100+2015
StretchMed$100,000 – $250,00020-502019
STRIDE$100,000 – $250,000<202017
Tapout Fitness$100,000 – $250,00020-502014
Team Combat$100,000 – $250,000<202011
The Bar Method>$250,000100+2001
The Exercise Coach$50,000 – $100,000100+2000
The Exercise Coach$100,000 – $250,00020-502000
The Gym GroupPrivate100+2007
The Little Gym$50,000 – $100,000100+1976
THE MAX Challenge$50,000 – $100,00020-502011
Thrillz High Flying Adventure Park>$250,000<202018
TITLE Boxing Club$50,000 – $100,000100+2008
Tough Mudder Bootcamp$100,000 – $250,000<202017
True Power Hybrid Fitness$50,000 – $100,000<202014
UFC Gym>$250,000100+2009
Unicus Fitness$50,000 – $100,000<202003
Urban Air Adventure Parks>$250,000100+2011
USA Ninja Challenge$100,000 – $250,00020-502015
World Gym>$250,000100+1978
XSport FitnessPrivate20-501997
Yoga Six$100,000 – $250,000100+2012
YogaFit$25,000 – $50,00020-502014
YouFit GymPrivate50-1002008
Zumba FitnessPrivate100+2001

Read More: Compare the Best CrossFit Gym Software Providers

Expert Tips for Mitigating Risks in the Gym Franchise Industry

While the gym franchise industry presents numerous challenges, there are ways to mitigate the associated risks. Utilizing the services of a reputable franchise consultant can provide crucial insights and guidance during the selection process.

Additionally, franchise owners should place a strong emphasis on ongoing education and professional development, learning from industry experts, and staying ahead of market trends. Building a strong network within the fitness industry can also provide valuable support and resources for overcoming challenges.

Entering the world of gym franchises comes with risks, and not all franchises are created equal. Thorough research, careful evaluation of the franchise’s history and performance, and meticulous planning are essential to avoid becoming a victim of failed gym franchise ventures. By understanding the challenges and taking proactive steps to mitigate risks, aspiring gym owners can position themselves for success in this competitive industry.

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Tyler Spraul is the director of UX and the head trainer for Exercise.com. He has his Bachelor of Science degree in pre-medicine and is an NSCA-Certified Strength and Conditioning SpecialistĀ® (CSCSĀ®). He is a former All-American soccer player and still coaches soccer today. In his free time, he enjoys reading, learning, and living the dad life.
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