Should you open an independent gym or go with a franchise concept? In our previous blog, we considered the pros and cons of owning a franchise fitness center. Here, we take a look at the advantages and disadvantages of being an independent gym owner and starting your own health club.
What is an independent gym?
It is a sole proprietorship or LLC, started by an individual or partnership, that provides fitness services to the public — essentially, one of the estimated 17 million small businesses founded every year by aspiring entrepreneurs in the United States. It’s yours to nurture and grow.
What are the cons to independent gym ownership?
Independent gyms face a higher failure rate than a franchise. Competition is fierce and the industry is constantly changing. Here are a few of the disadvantages to starting and owning your own gym.
Independent gym owners are jacks of all trades.
From our experience of providing gym management software to crazy numbers of independent gym owners, you’re going to enjoy many new roles — contractor, real estate agent, general manager, human resource expert, and creative designer.
Questions you’ll need to answer:
- Who is going to write the manual on employee policies and procedures?
- What is your gym concept and target market? Where’s the marketing plan for that?
- Which location will you choose? How does the lease read?
- What types commercial equipment will you buy?
- Where will you get the money to finance all of this?
- Have you written a thorough business plan?
As a private gym owner, expect to trade the security and turn-key approach of a franchise for the wilds of an unknown model.
It’s hard to secure funding.
It can be very difficult to secure traditional sources of funding for a new business without a financial track record. Most new owners dig into their own savings while tapping friends, family, and credit cards. Unfortunately, underfunding is the main reason new gyms fail.
You’re on your own — independent gym owner.
There are no volume discounts from suppliers for a single gym location or a comforting human resource department to call. All the club’s decisions fall on you and your team of professional advisors. Most significantly, unless you’re building on a client base from another business, your concept has no brand recognition in the market from which to draw members.
It’s more difficult to scale operations.
A single gym owner has to be 100% sure their current fitness center is ready to fly solo before opening a second location. He or she can’t count on the new neighborhood recognizing your business logo and brand. All the marketing, systems, and services must be in place and ready to roll from day one.
What are the pros to independent gym ownership?
We believe, the main advantage is the freedom to create a fitness community reflecting your values and passions. It is yours to mold, define and build.
In addition, independent gym owners enjoy:
Full control
This is probably the most appealing factor for independent gym owners. There are no franchisor rules to follow, and you enjoy full managerial control to pivot and change with the market. You can:
- Hire as many or as few employees as you like;
- Negotiate with suppliers and vendors;
- Select your own club management software;
- Buy or lease new or used fitness equipment;
- Set fixed gym hours or go 24/7.
Lower bar to entry
Although it is expensive to open a gym, there are no upfront licensure fees or net worth requirements. For example, to buy into a Planet Fitness franchise requires a minimum investment of $1.5 million and a net worth of more than $3 million.
Since you’re not tied to a particular concept as well, you can grow organically, adding equipment, services, and square-footage over time. Over the long term, you also won’t have to share profits with the franchise, or watch in horror as they take a percentage of sales every month by dictating your choice of gym software.
Transformative powers
Exercise is prone to trends just like any other part of modern life. Some say boutique fitness fads run their course in as few as three years. When you start your own gym, you’re free to edit classes and equipment. There are no contracts requiring you to switch out equipment every so many years or adhere to current operational changes made by a national company.
Conclusion
If you decide to start your own gym, rather than buy into a franchise, you will find it both challenging and rewarding. But do your due diligence. Although breaking off from a franchise has been described as a painful divorce, watching your life savings disappear into a struggling business is equally devastating.
Before becoming an independent gym owner, increase your chances of success by:
- Strengthening your credit;
- Making marketing a priority;
- Designing a solid business plan.
Gym Insight:
Thank you for following our blogs! Just like you, we are a privately held company, building what we modestly consider the best gym software in the industry. We’ve produced our own software since 2008 and provide a suite of fully integrated products created specifically to put you in control of your finances and operations. We never take a percentage of sales, force you to sign contracts, or keep you waiting on hold for customer service. Our software is beloved by our customer base because of its simplicity and affordability. Call us today for a free demo. Please ask for Anthony or Natalia. Our number is 855-FOR-GYMS (855-367-4967.
