Snap Fitness Franchise in 2024: Costs, Fee & FDD
Discover the potential of owning a Snap Fitness franchise, with over 500 locations worldwide and a proven business model. Learn about the costs, profits, and key insights to help you make an informed investment decision. Read the full analysis now!
Table of Contents:
Snap Fitness, founded in 2003 by Peter Taunton, is known for its 24/7 gym model, offering affordable and accessible fitness solutions. The brand has become a significant player in the fitness industry by focusing on convenience and creating a welcoming environment for members. Snap Fitness gyms are compact but well-equipped, providing members with a variety of cardio and strength training equipment, group classes, personal training, and wellness services.
The core customer base includes busy professionals and health-conscious individuals looking for flexible workout options. Snap Fitness also serves those interested in personalized fitness plans and virtual fitness classes. Along with memberships, the franchise sells fitness supplements and gear to enhance members’ training experience.
With over 2,000 locations across more than 20 countries, Snap Fitness has a wide-reaching global presence. Each location serves a large daily customer base, offering 24/7 access and specialized services like personal training and HIIT classes.
Franchisees receive thorough training in operations, customer service, and marketing. Snap Fitness supports its franchisees with national marketing campaigns, local promotional strategies, and proprietary technology like the Snap Fitness app to help attract and engage members.
Snap Fitness Franchise Insights
- Snap Fitness was founded in 2003 and has grown to 520 locations across the U.S., with 510 of them being franchised. This substantial number of locations shows the brand’s ability to scale and maintain a strong presence in the fitness industry.
- The franchise’s 24/7 gym access model caters to busy individuals, offering flexibility that is especially appealing to working professionals and those with irregular schedules. This accessibility contributes to high member retention and consistent traffic to locations.
- Franchisees benefit from Snap Fitness’s proprietary technology, including its app, which helps engage members and streamline the fitness experience. This innovation enhances customer satisfaction and provides franchisees with valuable tools for improving member retention and operational efficiency.
- The brand’s focus on convenience and affordability has made it a favorite among health-conscious individuals, with many locations offering personalized fitness plans and group classes. This diverse service offering helps franchisees cater to a wide range of fitness levels and preferences.
- With a relatively low initial investment compared to other fitness franchises, Snap Fitness offers an attractive entry point for prospective franchisees. The flexible gym model and low overhead costs make it an appealing option for individuals looking to invest in the fitness industry.
Snap Fitness Franchise Key indicators
Growth YOY (%)
-6%
vs industry 5%
Total U.S. Franchised Units
510
3-Year Failure Rate
21%
vs industry 12%
Sales-to-Investment ratio
0.3:1
How much does it cost to open a Snap Fitness franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Snap Fitness franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Snap Fitness franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). you can see a breakdown of the costs to open a Snap Fitness below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $39,500 | $39,500 |
| Build-Out Labor Costs | $120,000 | $240,000 |
| Leasehold Improvements | $80,000 | $280,000 |
| Exterior Signage | $10,000 | $20,000 |
| Furniture and Fixtures | $25,500 | $56,300 |
| Fitness Equipment | $60,000 | $300,000 |
| Technology | $15,000 | $25,000 |
| Door Access | $500 | $500 |
| Grand Opening Marketing | $10,500 | $10,500 |
| Occupancy (3 months) | $26,250 | $53,100 |
| Lease Deposits (3 months) | $8,800 | $17,700 |
| Insurance (3 months) | $1,500 | $2,000 |
| Travel and Training Expenses | $3,000 | $3,500 |
| Professional Fees | $5,000 | $20,000 |
| Additional Funds (3 months) | $25,000 | $50,000 |
| Total | $430,800 | $1,118,100 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a Snap Fitness franchise, the required capital involves both the initial investment costs and a net worth requirement set by Snap Fitness. Let’s take a closer look below:
- Initial Investment As shown above, the total estimated initial investment ranges from $430,800 to $1,118,100. This includes all the startup costs such as the franchise fee, real estate, construction, equipment, initial inventory, and additional funds for initial operating expenses. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid Assets Typically, for a fitness franchise with an investment in this range, you would likely need between $150,000 and $250,000 in liquid assets. This would cover the initial operating costs and provide working capital to run the business effectively during the startup phase.
- Net Worth The net worth requirement for a franchise of this scale can be estimated at around $500,000 to $1 million. This would include all assets owned by the franchisee, ensuring that they have the financial stability to support the business in its initial years.
How much does a Snap Fitness franchise owner make?
Calculating the salary of a Snap Fitness franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Snap Fitness franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Snap Fitness Revenue & Gross Sales
As the most recen data, Snap Fitness franchises achieved a median gross sales of $207,265. This strong financial performance underscores the brand’s robust consumer demand and potential for lucrative returns for franchisees.
Which key factors impact the average revenue performance of Snap Fitness franchisees?
The performance of U.S. franchisee median gross sales for Snap Fitness this past year compared to the prior year was likely influenced by several key factors. The continued demand for fitness and wellness services, especially post-pandemic, contributed to increased membership sign-ups and higher retention rates, particularly as people returned to in-person workouts. Additionally, the expansion of virtual fitness options and ongoing innovations in health trends may have attracted new customers. Snap Fitness’s consistent marketing strategies, along with their 24/7 access model catering to busy professionals, likely played a significant role in boosting customer engagement. The franchise’s strong brand recognition and established presence in local markets further helped drive sales growth, even amid potential economic challenges.
Snap Fitness Franchise Operational Costs
When opening a Snap Fitness franchise, the primary ongoing operational costs you should consider include:
- Staffing Costs This includes salaries for gym staff, personal trainers, managers, and front desk personnel. The size of your staff will depend on your location and the services you offer.
- Lease and Rent Renting or leasing the gym space is a significant ongoing cost. Rent can vary greatly based on the location, size of the facility, and the local real estate market.
- Facility Maintenance Regular maintenance costs for cleaning, repairing equipment, and general upkeep of the facility, including utilities like electricity, water, and internet, are crucial for smooth operations.
- Insurance Liability, property, and worker’s compensation insurance are essential to protect your business and employees.
- Equipment Maintenance Ongoing maintenance and occasional replacement of fitness equipment, such as cardio machines and weights, is necessary to keep the gym in good working condition.
- Inventory Restocking retail products such as fitness supplements, apparel, and accessories that you sell at your gym will be an ongoing expense.
- Local Marketing and Promotions While national marketing is covered by the franchise, you’ll need to budget for local advertising efforts, such as social media campaigns, community outreach, or partnerships to attract and retain customers.
These costs can vary depending on your location and the size of your gym, so it’s important to plan accordingly for profitability.
Snap Fitness Franchise Fees
When opening a Snap Fitness franchise, it’s essential to understand the ongoing fees that contribute to the overall cost of operations. These fees support the franchise’s brand, marketing efforts, and operational systems, ensuring continued growth and brand recognition.
- Royalty Fee 6% of gross revenue, paid monthly. This fee is essential to support the franchise’s operational resources, including training, support, and system development.
- National Marketing Fee Up to 4% of gross revenue, currently set at 2%, paid monthly. This fee helps fund national advertising and promotional efforts to increase the brand’s visibility and drive membership growth.
- Local Marketing Fund or Cooperative Advertising Contribution $200 per month, paid monthly. This fee supports local marketing campaigns, which can help franchisees attract and retain members in their specific areas.
These fees are essential for sustaining the brand’s growth and visibility. Additionally, there may be other fees for specific services or programs not listed above, so it’s important to review the Franchise Disclosure Document (FDD) for any additional charges.
Snap Fitness Franchise Earnings
Based on the most recent data, the median gross sales for a Snap Fitness franchise were approximately $207,265. From these gross sales, the owner-operator earned an estimated $31,090, indicating that franchisees can expect a decent return on investment. The owner’s earnings represent roughly 15% of gross sales, which is a common ratio for franchises that require active involvement in daily operations. This suggests that, with effective management, the Snap Fitness business model offers a profitable opportunity, especially for those committed to running the business efficiently and focusing on membership growth and retention.
These figures provide an estimate of potential earnings, but they can vary based on location, local market conditions, and operational efficiency. Therefore, franchisees should anticipate some fluctuation in earnings, particularly in the early years as they build their customer base.
How to Open a Snap Fitness Franchise
Becoming a Snap Fitness franchisee involves several key steps that guide you from initial inquiry to the opening of your fitness center. Here’s a breakdown of the process:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Franchise Application If you decide to move forward, you’ll submit a formal franchise application. This will include details about your financial qualifications, relevant business experience, and a personal assessment to ensure you meet the franchise’s criteria.
- Franchise Approval & Agreement Snap Fitness will review your application and, if approved, offer you a franchise agreement. This document outlines your responsibilities, fees, and operational guidelines. Once signed, you’ll officially become a Snap Fitness franchisee.
- Location Selection & Build-Out With Snap Fitness’s guidance, you’ll select an appropriate location for your gym. They’ll help ensure your chosen site aligns with their brand and operational standards. After securing the location, you’ll proceed with the facility build-out, including installing gym equipment and setting up the space according to Snap Fitness’s specifications.
- Training & Pre-Opening Support Snap Fitness provides comprehensive training to help you run your franchise successfully. Training covers operations, marketing, customer service, and day-to-day management. You’ll also receive pre-opening support, including staff hiring assistance and local marketing strategies to generate buzz around your gym.
- Grand Opening & Launch Once your gym is ready and training is complete, you’ll officially open for business. Snap Fitness typically provides marketing support to help ensure a successful launch, including promotional materials and digital marketing strategies. From there, you’ll begin serving customers and operating your franchise according to the established business model.
Pros & Cons
Pros
Proven Business Model: With over 500 locations worldwide, Snap Fitness has a successful track record in the fitness industry. Their 24/7 gym access model appeals to busy individuals, providing consistent demand for memberships.
Low Overhead Costs: Compared to traditional fitness centers, Snap Fitness gyms are often smaller and more compact, which means lower overhead costs for rent, utilities, and staffing.
Flexible Operating Hours: The 24/7 access model attracts a wide range of customers, including those with irregular work schedules, enhancing membership retention and appeal.
Strong Brand Recognition: As one of the most recognized fitness franchises globally, Snap Fitness benefits from its established brand, which helps in customer acquisition and retention.
Cons
Competitive Market: The fitness industry is highly competitive, with numerous local gyms and national chains vying for market share. Snap Fitness must continually innovate and offer exceptional customer service to stay ahead.
Initial Investment: The total investment required, ranging from $430,800 to $1,118,100, is significant. While it’s lower than some larger fitness franchises, it’s still a considerable financial commitment.
Limited International Expansion Potential: While Snap Fitness has a global presence, some markets may have saturated, limiting opportunities for expansion or new territories.
