Have you ever wondered what owning a fitness franchise is like and whether it is profitable? The market is highly competitive, but there are many good opportunities, and one of those good ones is Crunch Fitness.
If you are interested in the industry and want to own a fitness franchise, you probably heard of Crunch Fitness. They are a strong player with hundreds of stores throughout the United States.
This article will explain Crunch Fitness’s franchise system and give you all the necessary information.
About Crunch Fitness And Crunch Fitness History
Crunch Fitness is a classic American fitness studio chain in the United States with over 440 outlets across the world, in a total of six countries.
The chain was founded in 1989 as a small fitness studio, and they worked their way up to becoming an actual studio chain.
The studio is divided into two categories, one with a standard format where you can get group classes and traditional services. The other is a premium, full-service fitness club with monthly memberships in selected metropolitan areas.
There are only 28 of them. They’ve been franchising since 2010, and over 90% of all Crunch Fitness studios are franchise-owned.
Franchise Model Table
| Cost Or Fee | Amount |
|---|---|
| Initial Investment | $668,000-$6.9 million |
| Franchise | YES |
| Franchising Since | 2010 |
| Franchise-Fee | $25,000 |
| Royalty-Fee | 5% |
| Liquidity | $400,000-$500,000 |
| Estimated Outlets | 440+ |
How Much Does It Cost To Open A Crunch Fitness Franchise?
The initial investment scale ranges from $668,000 to $6.9 million for a Crunch Fitness studio. This cost includes the franchise fee, equipment, real estate, and all other related startup costs.
The major difference is the type of franchise you choose. They have two types: one is the Crunch Fitness Model, and the other is the Crunch Sport Model.
The fitness model could cost between $668,000 and $4.3 million. Sports models range from $1.2 million to $6.9 million. Operating, marketing, and employee costs are also included in these ranges.
Franchise Requirements
The financial requirements for all potential franchisees are a net worth of $2 million minimum and liquidity of between $400,000 and $500,000. There is also a size requirement for the stores. It should be between 20,000 to 40,000 square feet.
There is no mandatory professional background requirement. If you have managerial skills that show strong communication, marketing, and management skills, this could come as a plus to your application.
Profit & Revenue Of Crunch Fitness
There is no official figure for Crunch Fitness’s company profit and revenue. Judging by the average numbers per store, we conclude that Crunch Fitness’s revenue is around $792 million, and the net profit is around $271 million annually.
The exact numbers might be different than these as these are estimates.
Overall Sales
The average Crunch Fitness franchise store makes around $1.8 million in overall sales annually. This number comes from the Crunch Fitness stores that have been in operation in the last year. Gyms that are 12 to 24 and 37 to 48 months old make close to $2 million in overall sales, whereas 25 to 36 months old outlets make over $2 million.
How Much Does Cruch Fitness Franchise Owner Earn?
The average revenue is $1.8 million, but this is before deducting all the expenses. Once you remove all the expenses and the taxes, a franchise owner’s salary is around $619,720 annually per store on average. This means that the profit margin is around 33% per store.
| Financial Overview | Percentage of Revenue | Amount ($) |
|---|---|---|
| Individual Franchise Annual Revenue | 100% | 1828085.00 |
| Rent | 8.26% | (151045.52) |
| Insurance | 4.13% | (75522.76) |
| Salaries | 16.52% | (302091.05) |
| Franchise Royalty Fees | 4.13% | (75522.76) |
| Utilities | 1.65% | (30209.10) |
| Cost of Goods Sold (COGS) | 20.66% | (377613.81) |
| Labor (Variable) | 10.74% | (196359.18) |
| Total (Expenses) | 66.10% | (1208364.18) |
| Net Profit | 33.90% | 619720.81 |
Note:The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.
Payback Period Of Crunch Fitness Franchise
With a Total investment of $6,900,000 and a yearly profit of $619,720, we can calculate the payback period of Crunch Fitness.
So, to find out how long it will take to earn back the initial investment:
Payback Period = Total Investment / Yearly Profit = $6,900,000 / $619,720 =11.14 years
Based on these figures, it will take approximately 8 to 12 years to pay back the initial investment for Crunch Fitness. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
Failure Rate Of Crunch Fitness Franchise
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 225 | 252 | +27 |
| 2021 | 252 | 284 | +32 |
| 2022 | 284 | 318 | +34 |
For theFranchisedoutlets:
- In 2020, the growth rate was (27)/225×100≈12%
- In 2021, the growth rate was (32)/252×100≈12.69%
- In 2022, the growth rate was (34)/284×100≈11.97%
Company-Owned Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 25 | 23 | -2 |
| 2021 | 23 | 22 | -1 |
| 2022 | 22 | 13 | -9 |
- In 2020, the failure rate was (2)/25×100≈8%
- In 2021, the failure rate was (1)/23×100≈4.35%
- In 2022, the failure rate was (9)/22×100≈40.91%
Total Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 250 | 275 | +25 |
| 2021 | 275 | 306 | +31 |
| 2022 | 306 | 326 | +20 |
ForTotaloutlets:
- In 2020, the growth rate was (25)/250×100≈10%
- In 2021, the growth rate was (30)/275×100≈11.27%
- In 2022, the growth rate was (20)/306×100≈6.53%
According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.
We can see that the franchised outlets for Crunch Fitness grew from 2020 to 2022, showing a growth rate between 12% and 11.97%.
On the other hand, for company-owned outlets, the failure rate of Crunch Fitness was quite high, lying in the range between 8% and 40.91% for the same period of time.
Overall, when we combine the data of franchise and company-owned outlets, we can see that the Crunch Fitness franchise has expanded in the years 2020-2022 showing a total growth rate between 10% and 6.53%.
Training and Support
There are 200 hours of on-the-job training that happens in one of the Crunch Fitness locations. This generally happens in their HQ in New York, but the location could be arranged depending on your needs. They also provide 40 hours of classroom training to teach the basics of operations, marketing, and other related operational needs.
Crunch Fitness also provides extensive pre-opening and post-opening support. You get full-on marketing support, proprietary software, site selection, lease negotiation, and similar support.
Terms of Agreement and Renewal
The initial term of the agreement will be for ten years. Renewal could be possible if both parties agree to it. Depending on your franchise agreement with Crunch Fitness, there might be a renewal fee.
Obligations and Restrictions
The full-time presence of the franchisee to oversee the operations is not mandatory, but it’s highly recommended by Crunch Fitness. In case you don’t oversee the daily operations, you need to appoint a manager who will successfully complete all the initial training.
The franchisee or the appointed manager can’t run the business part-time. They have to be present on-site during the operation hours.
Financial Assistance
Crunch Fitness does not offer direct financial assistance, but they offer indirect assistance through third-party lenders. They introduce you to a network of lenders depending on your financial situation, and the rest will be on you.
Crunch Fitness Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
| Planet Fitness | $20,000 | 7% | $1.5 million-$5.1 million |
| Anytime Fitness | $42,500 and $699/mo | $8,388 | $381,575-$783,897 |
| Crunch Fitness | $25,000 | 5% | $668,000-$6.9 million |
Conclusion
Crunch Fitness is one of the biggest fitness studios in the United States, with over 440 outlets and operations in 6 countries.
Despite the saturated market, Crunch Fitness has an average annual revenue per store of $1.8 million and around $600,000 in net profits per store.
They are an extremely lucrative opportunity, and any entrepreneur who has the necessary financials can apply to be a franchisee with them. If you want to be a part of their network, you should strongly consider talking to them.
FAQs
What is the franchise fee for Crunch Fitness?
The franchise fee for each Crunch Fitness outlet is $25,000. This fee is paid in a lump sum when you sign the franchise agreement.
Is Crunch Fitness a franchise?
Yes, Crunch Fitness has been a franchise since 2010, and they have been offering opportunities since.
Do I need experience with the company before becoming a franchisee?
No, you don’t need to work for Crunch Fitness before applying to be a franchisee with them. A managerial experience in the industry, however, is desired.
Where is Crunch Fitness headqaurtered?
Crunch Fitness is headquartered at New York, 22 W 19th St 3rd Floor, United States, and has 6 office locations.
Who owns Crunch Fitness?
It was announced in July 2019 that Crunch Fitness will acquired by private-equity firm TPG through its growth-equity unit of 405 clubs in the United States and 5 other countries.
How many locations does Crunch Fitness have?
Currently, Crunch Fitness has 435 locations.
Who founded Crunch Fitness?
Crunch Fitness was founded in Greenwich Village of NYC. It was founded by Doug Levine, a former stockbroker.
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