The Gym Business

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.