I've been interested in the gym business for quite some time, mainly because it combines working out with making money; given the amount of time I spend in the gym, seemingly not a bad thing. This past Friday, Paul Wright owner of Gold's Gym, Ann Arbor, and I had a chance to sit down and discuss his entry into the gym business. We're going to do a short series of it on Muscle Ventures, typically 5 to 7 minutes a shot. I just posted the first episode.
We talk about how Gold's got started in Ann Arbor. We're now about 10 months out from launch, and Gold's has over a thousand members. At $45 per month, that's a base cash flow of $45K, making for $540K in annual revenue. The target membership of 2300 leads to an annual revenue of $1,242,000. Initial investment appears to have been well over a million, plus there's a franchise fee, employees to pay, and rent. My guess is that full membership leads to a business that is barely profitable for the franchisee. Multiple locations where the franchisee can spread costs is probably more lucrative. As we'll see in later episodes, Paul is looking to open additional locations.
My son signed a 1 year contract without my approval. He was 18 years old at the time and right out of high school. He paid for one month and they talked him into a 1 year membership. He had a part-time job at the time and he sure didn't think on it very long or consult his parents. We are getting billed for $1400. After a month or two, he lost his job and couldn't pay the monthly fee. He is now a college student.
Posted by: yeast infection no more | December 19, 2011 at 05:00