Should your gym add an enhancement fee to offset the increased cost of cleaning materials and procedures? We asked two fitness center owners their opinions. Here’s what we learned.
Does not charge an annual maintenance fee:
Don Roberts, owner of Fit247, Durango, Colorado
Roberts has owned his gym for 20 years and decided against charging his customers a maintenance fee. The 7,000-square-foot, 24-hour facility is in a small city with a close-knit group of customers, and he prides himself on running a very clean, organized gym. Nearly 20% of his 600 members have been with him almost 20 years. “One of my competitors is Anytime Fitness. They have a key fob fee and an enrollment fee, too. I did not want my customers to have that surprise, if you will. I wanted to be able to say – ‘I don’t have any hidden costs.’”
Roberts’ monthly fee is higher than his competitor’s, although his costs are about the same. In general, an enhancement fee “rubs him the wrong way,” and complicates signing up customers. So, for him, it is easier to stay with the higher monthly fee and raise the cost of optional services such as affiliate member punch cards.
Uses an annual fee to reinvest in health club:
Ryan Copeland, The Gym, North Myrtle Beach, South Carolina
Copeland took over The Gym in 2012 and runs the 24-hour, 3,000-square-foot facility like a big family, with a personable approach and a desire to do more for his customers. He profits from a strong tourist base, and enjoyed steady traffic throughout the COVID-19 national shutdown.
Since he bought the gym, “ It’s always been, you can’t grow, because you’re paying the bills. It’s a small gym and most don’t make a lot of money. I wanted to give my customers a better gym — do more for them, upgrade equipment and make it nicer.”
In February 2020, after offering his customers an out on their contracts, Copeland started charging a $30 annual maintenance fee, which brought in about $10,000.
He quickly converted the cash into gym improvements – replacing carpeting with matting, re-padding, repainting, and re-cabling equipment, as well as investing in a new dip machine and other necessary pieces.
For Copeland, the sales pitch is easy. He tells new customers, “There’s a one-time $20 fee for the 24-hour card and a $30 reinvestment fee.” When he first implemented it, a few customers walked away, which was ok by him — it’s more important to keep his regulars and seasonal visitors happy with the quality and cleanliness of his gym.
Keeping gyms clean, safe, and in good shape today is an expensive challenge for health clubs.
A gym maintenance fee convert
Anthony Pasquale, sales representative for Gym Insight, explains health clubs are facing tough choices. Although customers are returning to gyms, costs are higher, rents are staying steady, and laying off employees is out of the question because you need their help. Meanwhile, raising rates isn’t good for business either – even a slight increase leads to cancellations. However, he’s found most customers barely notice a single once-a-year extra payment. Once a diehard enhancement fee hater, Pasquale now supports them – his customers find they’re easy to implement and they don’t have to raise rates. For those two reasons, he’s all in. But, you decide.
Pros and cons of an annual gym maintenance fee:
|Offsets cost of increased maintenance |
No rate increases
No need to raise fees for services
Easy to add extra charge with Gym Insight gym management software
Provides additional money for gym improvements/growth
Accepted by most clients
|Seems like a hidden cost|
Feels like what a national chain would do
Complicates sign-up presentation
So what do you think? Is it better for you to raise rates, add a maintenance fee, or just absorb the new normal as a cost of doing business?
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