Gold’s Gym Franchise Owner’s Salary, Profit & Failure Rate 2024

With every individual becoming aware of physical fitness, the growth of fitness centers doesn’t seem to slow. So, whether you are a gym rat or an entrepreneur looking to get your feet wet in the lucrative fitness industry, Gold’s Gym franchise is ideal for you.

Gold's Gym Franchise

However, with starting a franchise comes many things that need to be addressed before you invest in it.

For example, you must know how much amount you have to invest, what will be the support given by the franchisor, and most importantly, what is the financial performance of the franchise.

All this information takes a lot of time to collect and understand, but if you have stumbled upon this site and are already reading this article, then congratulations! You are saving your valuable time.

Therefore, keep reading to get every detail to own Gold’s Gym franchise!


About Gold’s Gym

Gold Gym Internatinal Inc. is an American chain of international co-ed fitness centers. The first Gold’s Gym was opened in August 1965 in Venice Beach, California, by Joe Gold.

Since then it has become the most well-known and traditional fitness company in the world. It has been in the business for over 55 years with over 600 locations on 6 continents.

The original Gold’s Gym, which became the most legendary gym in the world, had bodybuilding greats such as Arnold Schwarzenegger, Lou Ferrigno, and Franco Columbu.


Gold’s Gym Franchise Model

Cost Or FeesAmount
Initial Investment      $1,483,000 to $3,602,000
FranchiseYES
Franchising Since1980
Franchise-Fee$40,000
Royalty-Fee5%
Liquidity$400,000
Estimated Outlets740


How Much Does It Cost To Open A Gold’s Gym Franchise?

To open Gold’s Gym franchise, you are required to make an initial investment ranging from $1,483,000-$3,602,000 with an initial franchise fee of $40,000.

Besides these two fees, the franchisor also expects you (the franchisee) to have a net worth of $1 million with liquid capital of $400,000.

Here is a breakdown of all the costs associated with operating the franchise:

Types Of ExpenditureAmountWhom To Pay
Initial Franchise fee$40,000The franchisor
Travel and living expenses during training$4,000-$7,000Outside suppliers and the gym
Security deposit for lease$12,000-$150,000Landlord
3 month’s rent$30,000- $255,0000Landlord
Leasehold improvements and free weights$1,000,000-$2,000,000Outside contractors and suppliers
Cardiovascular equipment$100,000-$300,000
Computer System and Gym Management System $20,000-$35,000Outside suppliers
Signage$40,0000-$85,0000Outside suppliers
Initial inventory, other equipment and supplies$12,000 to $45,000Outside suppliers
Advertising and marketing$25,000-$120,000Outside suppliers
Miscellaneous opening costs$10,000 to $65,000The gym and outside suppliers
Additional Funds-3 months$40,000-$10,000The gym and outside suppliers
Total estimated initial investment $1,483,000 to $3,602,000


How Much Does A Gold’s Gym Franchise Owner Make?

On average, the Gold’s Gym franchisee can make $1,638,000 in revenue per year. When it comes to revenue per square foot, Gold’s Gym franchises make $47 revenue per square foot per year.

Moreover, when talking about profit, according to our estimation, a Gold’s Gym franchise owner makes $245,700 in net profit on average.

Here is how we calculated Gold’s Gym franchise owner profit:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%1638000.00
Rent10.63%(174037.50)
Insurance5.31%(87018.75)
Salaries21.25%(348075.00)
Franchise Royalty Fees5.31%(87018.75)
Utilities2.13%(34807.50)
Cost of Goods Sold (COGS)26.56%(435093.75)
Labor (Variable)13.81%(226248.75)
Total (Expenses)85.00%(1392300.00)
Net Profit15.00%245700.00

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.


Failure Rate Of Gold’s Gym Franchise

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20201781802
2021180166-14
2022166158-8

For the Franchised outlets:

  • In 2020, the growth rate was (2)/178×100≈ 1.12%
  • In 2021, the failure rate was (14)/180×100≈ 7.77%
  • In 2022, the failure rate was (8)/166×100≈ 4.81%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
202012161-60
20216160-1
202260633

For the Company-Owned outlets:

  • In 2020, the failure rate was (60)/121×100≈ 49.5%
  • In 2021, the failure rate was (1)/61×100≈ 1.64%
  • In 2022, the growth rate was (3)/60×100≈ 5%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2020299241-58
2021241226-15
2022226221-5

For Total outlets:

  • In 2020, the failure rate was (58)/299×100≈ 19.40%
  • In 2021, the failure rate was (15)/241×100≈ 6.22%
  • In 2022, the failure rate was (5)/226×100≈ 2.21%

According to the data mentioned above, we can see that the franchised outlets for Gold’s Gym have decreased for two years that is from 2021-2022, showing a failure rate between 7.77% and 4.18%. In the year 2020, the gym started with growth rate of 1.12%.

On the other hand, company-owned Gold’s Gym outlets grew only in 2022, showing a growth rate 5%. From the year 2020-2021, the company’s growth rate was between 49.5% and 1.64%

Overall, when we combine the data of franchise and company-owned outlets, we can see that the Gold’s Gym experinced failure from 2020-2021 with a rate of 19.40%-2.21%.


Payback Period Of Gold’s Gym Franchise

Using the mid-point investment of $2,563,000 and average profits of $245,700, we can determine how long it will take to earn back the initial investment:

Payback Period = Investment / Yearly Profit = $2,563,000 / $245,700 = 10.43 years

So, based on these figures and the calculation, we can see that it will take 10.43 years for you to recoup your initial investment amount on average.

However, this time period could be more or less depending on your actual total initial investment and profits earned.


Training & Support Of Gold’s Gym Franchise

Training & Support Of Gold's Gym Franchise

Gold’s Gym has a multi-level comprehensive training and support system. It provides management training programs to franchisees through

  • Gold’s Gym University (GGU),
  • Gold’s Gym Management Institute (GGMI), and
  • Gold’s Gym Body Success Institute (Fitness Nutrition Counseling).

As a Gold’s Gym Franchisee, you’ll receive individual instruction, a training manual, training materials, and programs.

The initial training of Gold’s Gym consists of 20 hours of classroom training and 12 hours of on-the-job training. This training is provided in the franchisor’s location, which is Dallas, Texas.

The franchisor also requires the franchisee and their personnel, such as any newly hired manager and previously trained and experienced employees at the facility, to attend and complete the various training and programs that the franchisor chooses to provide.


Terms Of Agreement & Renewal Of Gold’s Gym Franchise

The initial franchise term of Gold’s Gym is for 10 years.

Moreover, if the franchisees have complied with the Franchise Agreement during its term, then they may acquire one successor franchise under the then-current form of franchise agreement.


Gold’s Gym Franchise Obligations & Restrictions

These are the certain obligations and restrictions that you as a franchisee need to follow:

  1. The franchisor recommends the franchisees personally participate in the direct operations of the facility.
  2. Franchisees must offer all the amenities, services, and other products that the franchisor has specified.
  3. The franchisees must not offer, sell, provide, or distribute any products or services the franchisor has not authorized to sell in any location.

Gold’s Gym: Financial Assistance

The franchisor doesn’t offer direct or indirect financing. The franchisor also doesn’t guarantee a franchisor’s note, lease, or other obligations.

For the location, if the franchisees have not yet located and accepted the site, the franchisor will help the franchisee designate a ‘site selection area’ when they sign the agreement. Also, there is no minimum size for a site selection area.


Comparison

NameFranchise FeeRoyalty FeeInitial Investment
Anytime Fitness$42,500$699 per month$388,966-$970,097
Club Pilates$60,0008%$193,600-$407,000
Workout Anytime$35,0006%$784,950-$2,073,050
Gold’s Gym$40,0005%$1,483,000 – $3,602,000

Conclusion

In conclusion, to own a Gold’s Gym franchise, you need to understand the financial requirements of the gym, which include franchise fees, initial investment, liquid capital, and net worth.

Additionally, you should get all your finances in place and understand every legal term given in the franchise disclosure document.

If you are new to franchising, then it is recommended to hire the best franchise attorney who specializes in the field.


FAQs

Where is Gold's Gym headquartered?

The headquarters of Gold’s Gym is located in Dallas, Texas, United States.

Who founded Gold's Gym?

Gold’s Gym was founded in August 1965 by Joe Gold. He opened the first Gold’s Gym in Venice Beach, California.

What is the profit margin of Gold's Gym franchise?

According to our estimates, Gold’s Gym franchise enjoys a profit of $245,700. The profit margin of this fitness center ranges from 10-15%. However, the profit margin depends on the location where the gym is operating.

How many locations does Gold's Gym has?

Gold’s Gym has over 700 locations serving 3 million people in 6 continents.

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