Investing in Gyms: Why Franchising Is a Stronger Investment
Attention to our health and fitness is more important than ever. Many people re-evaluated the quality of their lives during the pandemic and discovered creating a work/life balance is essential to overall wellbeing. Working out is a key component of a healthier lifestyle. Gyms provide an environment where people can discover new and fun ways to sweat.
39% of Americans have gym memberships and the fitness industry is expected to grow to $434.74 billion by 2028. As consumers invest time and energy into improving their health, you may be considering investing in gyms. But how? Let’s look at some options for fitness investments, and why franchising in this booming industry is the most strategic decision you can make when investing in gyms!
Gym Stocks: Bull or Bear?
One way to invest in the fitness industry is to purchase gym stocks. According to The Motley Fool, gyms produce recurring revenue which results in more predictable revenue growth. Since gyms generate cash, gym stocks can be a profitable purchase for a stock investor.
Gym stocks can be somewhat volatile as the gym business tends to be seasonal. Membership numbers climb in January as people resolve to get into shape and dip in later months. Not every investor has the stomach for watching the value of their investment ebb and flow. Stocks in general are passive investments since you invest money but not so much time and effort. A return of 5% to 12% is considered good.
So why is investing in gyms through franchising a better idea than stocks? As 2022 has shown us, the stock market can be unpredictable and precarious. It takes nerves of steel to weather the ups and downs of today’s stock market. An investment in a franchise can be more stable and predictable. Franchisors provide financial disclosure documents (FDD) that outline the terms of the franchise agreement, including franchisor/franchisee responsibilities. Financial performance is also explained in the FDD so an investor can see how a brand has done in the past and more easily predict how it may do in the future.
Starting a New Gym vs. Investing in Gyms through Franchising
Starting your own gym and building a brand from scratch comes with a significant investment of time, energy, and money. You need to craft a business model, attract customers,
Investing in a gym franchise comes with some key advantages, not the least of which is their better success rate. You’ve already learned that franchises come with FDDs that indicate past financial performance which helps you better calculate a predicted return on investment. A franchisee can expect an ROI of 15% to 20% by the second year in business. Franchises also come with proven business models, brand recognition, marketing plans, and an established customer base, none of which new gyms have. The cost to invest in a gym franchise depends on which brand you choose, on what scale you are investing, and the location. Brands often have varying personal financial requirements and royalty fees.
When deciding whether to invest in gym stocks, opening a new gym, or investing in a gym franchise, franchises are the more tested and stable choice.
RockBox Fitness: A Knockout Investment Opportunity
Investment in a RockBox Fitness franchise makes you part of a growing brand with over 40 locations in 22 states. Our successful and fast-growing company has impressive potential for you to build a rewarding future.
We work with you to create the best possible outcome for your business, providing support like site selection, training, and marketing. We help you build your business with multiple revenue streams so you can make the most of your investment. Learn more about how to invest in RockBox Fitness today.