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Weight Loss Center For Sale | Find Out The Truth

Written by: Marketdata LLC
Last Updated: May 18, 2022
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Weight Loss Centers Market

Table of Contents

At first glance, with the Covid-19 pandemic, resulting in a major recession, one would think that the weight loss centers market might be devastated last year. First impressions can be deceiving. In fact, Marketdata analysts estimate a 21% decline in the value of the total U.S. weight loss market in 2020, from $78.38 billion in 2019 to $61.85 billion in 2020.

However, most of this decline can be attributed to the sharply lower revenues of health clubs and gyms, which suffered the most under state-mandated lockdowns. Health club revenues were $35 billion in 2019, accounting for 44% of the total market’s value.

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The “Core” Weight Loss Market Held Much Better

Revenues of the large commercial chains actually rose 6.8% to just over $4 billion, largely on the strength of a 31% gain in Medifast sales. Other MLM companies such as Herbalife did very well too.

Sales of low-calorie frozen dinners ($2.1 billion) also benefited from the pandemic, as homebound consumers stocked up on frozen and shelf stable foods.

Meal replacements (shakes, nutrition bars) fared well also, growing by 2.6% to a $5 billion segment of the market. Meal replacements growth outpaced that of retail diet pills/appetite suppressants.

The other major losers were the medical weight loss programs, including bariatric surgery. These programs represent a large portion of the U.S. weight loss market, and this segment was hit hard, as physicians scrambled to shift from in-person visits to virtual ones. Hospitals and clinics, focused on treating Covid-19 patients, cancelled elective surgeries such as weight loss procedures. Consequently, this segment of the market fell 20% from $8.8 billion to $7.1 billion in 2020. Revenues of the regional weight loss chains and

At first glance, with the Covid-19 pandemic, resulting in a major recession, one would think that the weight loss centers market might be devastated last year. First impressions can be deceiving. In fact, Marketdata analysts estimate a 21% decline in the value of the total U.S. weight loss market in 2020, from $78.38 billion in 2019 to $61.85 billion in 2020.

However, most of this decline can be attributed to the sharply lower revenues of health clubs and gyms, which suffered the most under state mandated lockdowns. Health club revenues were $35 billion in 2019, accounting for 44% of the total market’s value.

The other major losers: The medical weight loss programs

Including bariatric surgery. These programs represent a large portion of the U.S. weight loss market, and this segment was hit hard, as physicians scrambled to shift from in-person visits to virtual ones. Hospitals and clinics, focused on treating Covid-19 patients, cancelled elective surgeries such as weight loss procedures. Consequently, this segment of the market fell 20% from $8.8 billion to $7.1 billion in 2020. Revenues of the regional weight loss chains and franchises, hospital-based programs, and clinic-based programs, all contracted by an estimated 27%.

Weight Loss Centers

Weight loss chains

Revenues of the major commercial weight-loss chains such as WW, NutriSystem, Jenny Craig, Medifast and others actually held up well last year, growing by 6.8% in 2020 to $4.07 billion. WW had a very moderate dip in sales as it shifted from in-person studio business to virtual meetings. And, Medifast, with its Optavia MLM model, posted very strong 31% growth to a record $934 million.

The value of total medical weight loss programs and services is estimated to have declined 19% in 2020 to $7.78 billion.

This segment of the weight loss market was hit hard, due to 8-10 week closures of programs based in hospitals, clinics, and physician offices. Hospitals were scrambling to service Covid-19 patients, not weight loss patients. MDs (incl. bariatricians/obesity medicine specialists) and medical weight loss chains and franchises were serving existing patients only, not new ones, and scrambled to shift to virtual services and curb-side pickup of food, meal replacements and supplements.

Weight Loss Center Market Definition

The U.S. weight loss market or “industry” is comprised of a variety of sub-markets. There is no Census Bureau code covering all segments, just one for commercial weight loss center (NAICS code 812191).

The weight loss industry doesn’t even have its own formal trade association, or a trade journal.  Instead, the various segments of this market are classified within broader industry groups. For example, Marketdata has divided the weight loss and diet control market into the following nine market segments:

Over-the-counter Appetite Suppressants and meal replacements (shakes and powders, diet pills, candies, gums, powders, lozenges, etc.).
Low-Calorie Prepared Foods (frozen entrees: Weight Watchers, Lean Cuisine, etc.)…  dietetic foods.
Diet Soft Drinks…  bottled & canned soft drinks.
Artificial Sweeteners.
Commercial Weight Loss Center…  (Jenny Craig, Weight Watchers, etc.)
Medically Supervised Weight Loss Programs (by hospitals, clinics, physicians, dietitians, diet drugs)
Fitness/Health Clubs (non-residential)…..  (i.e. 24 Hour Fitness, other chains, etc.)…  physical fitness facilities.
Diet Books, Exercise Videotapes, and Audio Cassettes.
Weight loss surgery.

For persons interested in franchising, there are only two segments of the market that would be of interest, where franchises are sold. Franchising is more prevalent in the medically supervised segment of the market.

Commercial weight-loss centers

  • Jenny Craig (may not be actively selling franchises currently).
  • Profile by Sanford.
  • Slimgenics.
  • Quick Weight Loss Center.
  • Other regional chains.

Note: Weight Watchers has a closed franchise system, wherein franchises are bought and sold to family members or heirs. Not available to the general public.

Medical weight loss center or clinics

  • Medi-WeightLoss Clinics.
  • Let’s Lose.
  • G’s Weight Loss & Wellness.
  • Ideal Protein.
  • Jumpstart MD.
  • Centers for Medical Weight Loss.
  • Physicians Weight Loss Center.
  • Be Balanced Hormone Weight Loss Center.
  • Nuviva Weight Loss.

Marketdata Weight Loss Centers Report (OV4)

Weight Loss Centers Market Size & Growth…

Following are Marketdata’s estimates for the major weight loss market segments.

Size of the U.S. Weight Loss Market

($ Billions)201220152016201820192020F
Diet soft drinks$21.82$19.75$19.34$18.63$20.88$19.42
Artificial sweeteners2.662.582.342.252.312.19
Health clubs’ revenues22.025.827.6032.235.022.0
Commercial weight-loss centers3.422.652.773.743.814.07
       
Low cal/diet foods2.161.821.781.912.002.13
Retail & MLM meal replacements, diet pills3.443.994.164.704.955.08
       
All Medical Plans total:6.367.387.858.708.857.16
Bariatric surgery4.034.905.406.306.405.12
Prescription diet drugs.521.596.615.655.694.764
VLCD/LCD programs.326.346.346.360.368.268
Bariatricians’ plans.525.488.488.439.439.320
Hospital, clinic, MD plans-.9591.051.00.950.950.689
       
Diet books, exercise videos, DVDs1.131.04.884.797.797.477
TOTAL INDUSTRY:$62.99$65.01$66.72$72.93$78.38 $61.85

-Includes low and moderate-cost hospital programs, treatment by RDs, MDs, etc.

Weight Loss Centers Market Trends & Issues…

Changes in Dieter Behavior and Attitudes – Demographics

The U.S. obesity rate is not improving, and it’s likely that Americans overall have grown heavier during the Covid-19 pandemic.

The traditional “diet season” lasts from the last week of December until Memorial Day. If dieters have not reached their goal weight by the Summer, they usually take a break and pick it up in the Fall, or quit altogether.

Last year, with the coronavirus pandemic in full swing, dieting activity shifted until later in the year. Consumers were following the bad news daily, getting stressed out about the stock market’s wild swings, and are thinking about how they will maintain their income and employment as businesses shut down. Dieting was not top of mind.

Digital tools to monitor diet are becoming an increasingly helpful and convenient tool for weight loss. Applications like MyFitnessPal, for example, are enjoying a surge in popularity among consumers.

More dieters, forced to stay at home, are using live streaming services, YouTube workout videos, and weight loss and fitness apps such as Noom and many others.

 Do-it-yourself dieters now represent an estimated 84% of the total, up from 70% ten years ago. Most still use OTC diet pills, diet websites, meal replacements and buy popular diet books.

Marketdata analysts estimate that there are 112 million dieters in the United States, that is, 112 million people who take some action to lose weight in a given year, by purchasing weight loss products or joining a structured weight loss program.

This is up from the 97 million Marketdata estimated in 2019.

 Several important eating trends are present now:

Clean Eating – not eating foods with preservatives, artificial sweeteners, dyes, colors, flavors or GMOs, or even frozen foods.

  • Eating Low-Carb/High-Protein foods
  • Intermittent Fasting

There is no doubt that the Millennials are becoming an important group for the future of weight loss companies. To ignore them is to ensure a slow but steady decline in business for diet companies that are still chasing aging Baby Boomers. Most Baby Boomers are now in their 60s and 70s, and will not be dieting at all. Millennials, whom we define as those ages 18-34 in 2015, now number 75.4 million, surpassing the 74.9 million Baby Boomers (ages 51-69).

weight loss centers

2021 Diet Season

 Marketdata analysts expect a mixed/weak first quarter and “diet season” for the commercial companies, at least through March. Business should pick up in the 2nd quarter from April to June. Sales comparisons to the first quarter of 2020 will be difficult, since the pandemic and recession did not take hold until mid-March 2020.

The first quarter of 2021 should see strong sales of retail meal replacements, frozen diet dinner entrees, diet apps such as Noom, and exercise streaming services.

Weight Loss plan

The Commercial Weight Loss Programs Market

Commercial weight loss chains probably receive the most publicity, due to the large amounts they spend on advertising — $200+ million each for NutriSystem and Weight Watchers. They are the most well-known of weight loss options available. They also come under the greatest criticism.

This segment of the weight loss market, however, does NOT represent the bulk of the industry’s sales volumeSystemwide revenues of the leading chains accounted for only an estimated $3.74 billion of the total weight loss “industry” in 2018 – a small share.  This elite group is estimated to have had 2020 revenues of $4.07 billion.

 Looking at 2020 as a very difficult year characterized by a national pandemic and recession, this segment of the weight loss market has held up very well. Weight Watchers pulled off a major shift from in-person meetings at its studios to digital services, resulting in only a 2.8% sales drop. NutriSystem maintained 2019 revenue levels, benefiting from its non-contact model of shipping foods directly to customers’ homes. And Medifast used the MLM model to grow revenues by a very strong 30%. Profile by Sanford continues to grow, although at a  slower pace than pre-pandemic. Overall, this was a very good showing by the industry’s leaders.

Market data estimates that revenues of the commercial weight-loss centers segment of the market grew by 6.8% in 2020.

Actual and estimated revenues of the commercial leaders: ($ millions)

 20162017201820192020
Weight Watchers$1,164$1,307$1,514$1,413$1,378
NutriSystem (estd.)$545$697$691$632-$684
Jenny Craig (estd.)$316$334$400$420$400
Medifast$276$301$501$713$934
Subtotal:$2,301$2,639$3,106$3,178$3,396
Add 20% for all other firms     
Total market:$2,761$3,167$3,727$3,814$4,075

– Revenues in the Nutrition segment of Tivity Health were $498.1 million for the fiscal year since acquisition, and revenues for NS in Q1 2019, prior to the acquisition were $134 million.

Marketdata estimates that that the “average” commercial weight loss center in 2020 had annual revenues of $549,000, but it’s a high overhead, low profit model.

Weight Loss Center Operating Ratios

 The long-term historical growth rate for this segment’s revenues, with all the expansions and contractions, from 1988 to 2018, comes out to 3.3%.

Note:  2017 Census data for this industry is available, classified under NAICS code 812191.  Additional national data is scheduled to be released through 2021. See www.census.gov for information.

The Census data reflects only the operations of “brick and mortar” commercial weight loss center with physical locations. It does NOT cover Internet-based or mail order weight loss services, and not medical clinics.

Industry snapshot of the major ratios, comparing 2017 to 2012 and 2007

 2002200720122017
Number of Companies1,5191,2981,2601,296
Number of Establishments3,0883,2173,1812,982
Industry Receipts (millions)$1,689$1,838$1,919$1,780
Avg. Receipts per Estab.$547,101$571,471$603,000$597,013
Number of Industry Employees35,70629,13234,09425,273
Avg. Employees per Estab.9.89.110.78.5
Payroll as a % of Sales22.924.924.524.9
AVG. Receipts per Employee$55,490$63,107$56,000$70,443
Avg. Payroll per Employee$12,727$15,093$13,791$17,517
Single-unit Firms as % total94.194.694.294.0
% Corporations as % estabs.87.486.486.583.8
% Sole Proprietor as % estabs.7.04.73.75.8
% Partnerships as % estabs.5.69.09.910.3
% Estabs. Operated Part-time12.623.99.521.0
Top 4 Company Market-share60%61%61.155.8
Top 8 Company Market-share65%64%64.459.1
Top 20 Company Market-share72%71%70.665.0
Top 50 Company Market-share80%78%77.872.0
Source: U.S. Census of Service Industries, Marketdata calculations.

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The Medical Weight Loss Programs Market

 Medical weight loss programs constitute a significant $7.1 billion share of the total market, comprised of the following:

  • Bariatric (weight loss) surgery
  • Bariatricians (obesity medicine specialists – MDs with a sub-specialty treating obesity)
  • Prescription weight loss drugs
  • LCD/VLCD programs (low calorie/very low calorie diets)
  • Hospital, regional clinics/franchises, and MD-based programs (exc. Bariatricians)

 

Following is the mix and value of various medical weight loss markets:

Value of The U.S. Medical Weight Loss Market ($millions)

 201220152016201820192020 E
All Medical Plans total:$6,360$7,380$7,850$8,700$8,850$7,160
Bariatric surgery$4,030$4,900$5,400$6,300$6,400$5,120
Prescription diet
drugs
$521$596$615$655$694$764
VLCD/LCD programs$326$346$346$360$368$268
Bariatricians’ plans##$525$488$488$439$439$320
Hospital, clinic, MD plans, franchises$959$1,050$1,000$950$950$689
Source: Marketdata estimates and forecasts
#Bariatrician’s total income is about $180,000, but not all of it comes from weight loss patients.

The Major Medical Weight Loss Chains & Franchises – Estimated Number of U.S. Locations

Due to the pandemic, the number of medical weight loss center sites has declined for most companies. For example, in 2019, Marketdata estimated that there were 3,917 sites operating. Today, as of March 2021, we estimate that this figure has fallen to 3,623.

Weight Loss OrganizationNumber: 2021
Centers for Medical Weight Loss150 (licensees, not franchise)
HMR (Health Management Resources)90 (not a franchise)
Optifast150 (not a franchise)
Medi-Weight Loss Clinics95
Physicians Weight Loss Centers23
Lindora Medical Clinics34 (not a franchise)
Medical Weight Loss of Michigan30 (not a franchise)
Dr. G’s Weight Loss19
Nuviva Medical Weight Loss9
Thinique1
JumpStart MD12
Let’s Lose Advanced Weight Loss10
Sub-total: 638
Ideal Protein providers/clinics/MDs3,000 (not a franchise)
Total: 3,623

2021 and Beyond

Marketdata analysts made a profound analysis of the industry and produced a forecast for the following years on how the industry will develop.

Are you interested in this industry? Do you want to discover more and learn what analysts specialists anticipate for the following years? Then we, at Vetted Biz, recommend you order the exclusive 46-page weight loss centers  report (Report OV4) by Marketdata. You can purchase it by clicking here.

 

Note:

The complete 46-page Marketdata Overview contains information about all nine weight loss market segments (status reports for each), including: commercial & medical weight loss centers, franchises and chains, historical revenue/trend data, diet foods, retail diet products, books, prescription drugs, health clubs, as well as dieter demographics and effects of the pandemic on operations, a Reference Directory of industry trade associations, reports and other sources.

Marketdata Weight Loss Centers Report (OV4)

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Home Services Franchise: Bloomin Blinds (2021 FDD Review)

Ice Cream Franchise Review with Chill-N Nitrogen

Ice Cream Franchise Review with Chill-N Nitrogen

Burger Franchise Review with Juicy Burger

Burger Franchise Review with Juicy Burger

Bar-B-Clean: BBQ/ Grill Cleaning Franchise Review (2021)

Bar-B-Clean: BBQ/ Grill Cleaning Franchise Review (2021)

UPS Store Franchise Cost Worth 2022 Profit Potential?

UPS Store Franchise Cost Worth 2022 Profit Potential?

Popular Business Industry Opportunities

Popular Business Industry Opportunities

Foreign Buyers look for in Business Listings

Foreign Buyers look for in Business Listings

Top 20 Most Popular Franchises of 2022

Top 20 Most Popular Franchises of 2022

5 Most Important Business Skills Every Entrepreneur Must Have

5 Most Important Business Skills Every Entrepreneur Must Have

Arby’s Franchise: Is it worth the investment? (2022)

Arby’s Franchise: Is it worth the investment? (2022)

How Much to Franchise McDonald’s? McDonald’s Franchise Cost & Profit (2022)

How Much to Franchise McDonald’s? McDonald’s Franchise Cost & Profit (2022)

JAN PRO Franchise Cost Worth Owner Salary? (2022)

JAN PRO Franchise Cost Worth Owner Salary? (2022)

3 Things to know when Searching for a Business to Buy

3 Things to know when Searching for a Business to Buy

Franchise Consulting  Targeting the Franchise Industry

Franchise Consulting Targeting the Franchise Industry

What To Look For When Buying A Business

What To Look For When Buying A Business

Selling Your Business in the Future

Selling Your Business in the Future

Buying a Hampton Inn Franchise

Buying a Hampton Inn Franchise

8 Steps to Sell Your Business for the Best Price

8 Steps to Sell Your Business for the Best Price

Ace Hardware Franchise: Is It Worth The Investment? (2022)

Ace Hardware Franchise: Is It Worth The Investment? (2022)

What to know about the SBA Paycheck Protection Program

What to know about the SBA Paycheck Protection Program

Miami businesses for sale: What to look out for

Miami businesses for sale: What to look out for

Explore Businesses for Sale in Florida

Explore Businesses for Sale in Florida

Small Business Coronavirus Recovery Options

Small Business Coronavirus Recovery Options

Changing Landscape for Retail and Food Space

Changing Landscape for Retail and Food Space

How to Understand Franchises Numbers

How to Understand Franchises Numbers

3 Salad and Go Franchise Alternatives For 2022

3 Salad and Go Franchise Alternatives For 2022

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