Industry operators will benefit from an increasingly health-conscious environment, driving membership growth.
New York, NY (PRWEB) February 08, 2014
During the past five years, the Gym and Fitness Franchises industry lifted itself to revenue growth, benefiting from an increase in the number of health club memberships. In the five years to 2014, health club memberships are expected to grow at an annualized rate of 6.1% to 54.1 million, which bolstered membership sales for gym and fitness franchises. Furthermore, many franchisors, to generate a large customer base, invested in franchise consultants and regional training, which benefited industry operators. “To attract potential franchisees with low start-up investment costs, many franchisors implemented franchise business models for both single and multiunit franchise investments,” according to IBISWorld Industry Analyst Sarah Turk.
During the five years to 2014, the yield on a 10-year treasury note is expected to decrease at an annualized rate of 1.7%. As interest rates declined, many franchisors responded to the favorable investment environment by providing more franchise opportunities, which bolstered industry revenue. Also, low interest rates prompted industry entrants, as many franchisors developed networks to assist franchisees in obtaining a loan for franchise investments. As a result, during the five years to 2014, industry revenue is anticipated to grow at an annualized rate of 5.2% to $2.7 billion, including growth of 5.6% in 2014. As low-cost, low-amenity gyms gained popularity over the period, lower franchise investments were required, which caused profit to rise from 6.5% of industry revenue in 2009 to 7.1% in 2014. “Additionally, contained start-up costs, such as low marketing costs due to franchisors' already established brand awareness, spurred many franchisers to enter the industry,” says Turk. Growing popularity of budget and boutique gym and fitness facilities further prompted franchisors' demand for franchise establishments, as franchise establishments attracted local clientele.
During the five years to 2019, industry revenue is forecast to grow. The growing proliferation of public health campaigns that raise awareness about health and fitness will prompt new gym and fitness franchises to enter the market. Further, more time-strapped consumers will require high-margin services, like fitness trainers and individually tailored nutritional plans, to achieve fitness results in low time increments. As more individuals prefer gyms that are catered toward local clientele, franchises will become more popular.
For more information, visit IBISWorld’s Gym and Fitness Franchises in the US industry report page.
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IBISWorld industry Report Key Topics
This industry operates franchised fitness establishments and gyms. Franchisees receive branding, marketing, administrative support and training for their franchise. Reports in our Business Franchise collection focus solely on the operation of franchised outlets and exclude nonfranchise data. They show the total number of franchise outlets, total franchise revenue and the average profit margin earned by franchisees. Our reports also highlight the largest franchisors by market share.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
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