. What a great business
– you just invest and sit back as the money rolls in. But is that really the case? Today,
lets take a critical look at the Anytime Fitness Franchise. So let me start by saying that there are owners
that have done very well with their Anytime Fitness Franchise. When the model works, it
works well and you can have a relatively passive business that provides predictable income. Now that’s the side you will hear from the
franchise, but as always we like to give you the other side of the story so you can make
an educated decision. Taken from their brand new 2018 FDD the cost
to open an Anytime Fitness center will range between $131,002 and $722,796. Keep in mind
that number includes your operating capital for the first 3 months, and assumes you will
be leasing your gym equipment. If you buy your equipment count on about $140,000 on
top of that number. There is also the option for an Anytime Fitness Express location which
we won’t cover today. You will pay a $549 monthly fee to Anytime Fitness, a general
advertising fee of $300 monthly and you will be required to invest between $8,000-$18,000
on a Grand Opening and Ramp up Program when you first open up. You will pay a fee of 50
cents for each member of your club monthly for the Anytime Health membership, to a maximum
of $225 for a single location or $675 a month if you have multiple locations. There is a
global access fee of $249 per month. Training suite fees are $149 per center. So those are the fees, but how much can you
make with an Anytime Fitness Franchise? The 2018 Item 19 financials in Anytime Fitness
FDD provide suggested earnings for 500, 865 and 1150 member scenarios. The earnings BEFORE
debt expense, depreciation, interest and taxes are $9,900 for a 500 member location, and
if you read the fine print that number assumes you are working at the center yourself. If
you have installed a manager from when you opened you will not be making that amount.
Next level is $99,800 for an 865 member location, and these following numbers do assume you
now have a a manager and $192,000 for an 1150 member location. Keep in mind that representation
assumes that all members stay for a full year with zero attrition or zero new ,members,
which is not realistic. These numbers were based on an estimated value of $371.90 per
year per member, and a club size and approximate cost related to 5000 sf But how many members
will an average club have? Well if we look again at the item 19 in the FDD we see Anytime
Fitness gives the average of 697 monthly paying members, and a median of 646. Pay per visit
members average count was was 168 and median was 101. The lowest membership in their system
was 177 the highest was 3316. So essentially these numbers paint the picture in your mind
that the 697 paying members plus pay per visit of 168 gives us the average of 865 members
so we can expect $99,800. Pretty good right? And if you are emotionally driven through
the FDD thats the only number you will see. But read the fine print more closely and there
are other considerations you need to understand such as paragraph 6 in the Item 19 relating
to training income. This is important as certain clubs who did not report personal training
income of at least $1500 monthly were just not included in the numbers. So underperforming
PT locations were removed from the figures, and remember franchisors have the ability
to present these numbers to you any way they like. Also remember this number is before
debt expense, depreciation, interest and taxes. As always make sure you have read and understand
all the points in the FDD and have a competent franchise lawyer advise you. Now the growth of Anytime Fitness has been
strong with almost 400 new locations opening in the past 3 years. Litigation is almost
zero which is really amazing for a franchise of this size.
But hold on 400 locations opening that sounds like no locations have closed doesnt it? A
quick Google of the words Anytime Fitness Closed will prove otherwise Now one of the
initiatives we conduct with our clients is to contact people who closed their locations,
their names will be listed in the FDD, and ask them what happened. You dont just want
to speak to franchisees who are doing well. This is how we make an educated and balanced
franchise buying decision, not by fixating on only the positives. All franchises have
some obstacles or negatives you need to be aware of those and be confident you can overcome
them. Now if you are seriously considering buying
a gym franchise I want to bring your attention to the operational model for a second. Now
the goal if you are seeking a truly passive franchise which most people are with Anytime
Fitness, is to hire someone to run your business while you focus on other things. Now a gym
franchise, keep in mind, is completely dependent on the person you hire, much more so than
say a hair salon by virtue of the client acquisition process. So a hair Salon manager welcomes
people and runs the store, and is a relatively easy hire and even if you have to replace
this person your customers still will walk in and have their haircut. Your store success
is not tied to any one individual and people don’t need to be sold a haircut. With fitness however that manager will need
to be very adept at client acquisition, at selling. And if you can’t find someone in
the fitness industry, that is also good at selling, your club is going to suffer. So
if you are running passively, and you have ongoing problems finding the right hire your
store is going to suffer, and your passive business just became a hands on headache. We also found some negative feedback on unhappyfranchisee.com,
and I’ll post the link to that page down below in the description box if you want to visit
the page. Now keep in mind there are many more happy franchisees than unhappy, but these
comments provide us with some red flags that can help direct our future research. Some
complaints speak to the fact that actual ownership may not be as easy as claimed, that corporate
may be taking more than they should be, that their real estate team are unqualified that
Anytime Fitness did not properly disclose earnings of other clubs and support is poor
this owner suggests they are being forced to pay $60,000 after only 5 years to remodel
their club and are drowning in debt, and this prospective franchisee suggesting Anytime
Fitness did not allow them to speak to other owners, and that the fees are ridiculous.
There are over 81 comments both good and bad and will certainly be of interest to anyone
considering buying an Anytime Fitness franchise. Don’t forget to like and subscribe and if
you need help finding and researching your franchise purchase give the experts a call
at http://www.franchise.city