Franchise Costs: Detailed Estimates of Anytime Fitness Franchise Costs (2018 FDD)

Updated May 22, 2018.

Detailed Estimates of Anytime Fitness Franchise Costs Based on Item 7 (Estimated Initial Investment) of Anytime Fitness’s 2018 Franchise Disclosure Document

• This table relates to the estimated initial investment for a start-up fitness center.

1.  Initial Franchise/Development Fee:  $17,000 to $42,500

• The Initial Franchise Fee is generally $42,500 for an Anytime Fitness center franchise. However, Anytime Fitness discounts these fees in certain specific circumstances.

• The low estimates assume that you qualify for a discount as a member of Club Platinum.

2.  Travel and Living Expenses While Training:  $3,080 to $3,580

• The person you designate as the “Principal Operator” of your business must attend mandatory training in Woodbury, Minnesota or such other place Anytime Fitness may designate. In addition, if your Principal Operator is not a Principal Owner, then a Principal Owner must also attend and complete this training to the company’s satisfaction before you open your Anytime Fitness center.

• While Anytime Fitness does not charge for this training, you do have to pay your travel and living expenses while you attend the training.

3.  Real Estate and Improvements:  $13,455 to $333,000

• This estimate assumes you will lease space for your Anytime Fitness center.

• If you open an Anytime Fitness center, you should have at least 4,000 square feet, and Anytime Fitness recommends that you not have more than 5,500 square feet for your center. All estimates are based on these assumptions.

• Rent for these locations will typically vary from $10 to $35 per square foot per year. Anytime Fitness’s estimate assumes you must pay only the first month’s rent and a security deposit equal to another month’s rent.

• The Anytime Fitness franchise model is based on minimizing overhead expenses, including real estate costs.

• A lower cost center is one that would require fewer leasehold improvements and fewer equipment expenditures. The lower estimate assumes the landlord will cover many of the leasehold improvement costs.

• Moderate and higher cost fitness centers may require extensive interior and additional equipment. The above figures do not include extensive renovations.

• Anytime Fitness assumes the general contractor will include permitting fees in the construction costs.

• You may be required to participate in Anytime Fitness’s “Construction Management Services” program offered through its approved vendor to oversee the construction of your Anytime Fitness center. Anytime Fitness anticipates that the cost of the Construction Management Services will be $6,500 to $8,500.

• At this time, participation in the Construction Management Services program is optional, and the $8,500 cost is included in the high range estimates.

4.  Architect/Design Fees:  $5,000 to $9,500

5.  Fitness Equipment:  $3,462 to $139,100

• The low estimate for equipment assumes you lease all the equipment. The low end estimate therefore covers only the security deposit and other up-front costs.

• If you choose not to lease your equipment or leasing is not available, your initial investment for fitness equipment, tanning equipment, and operating systems (not including monitoring costs), will increase to:

• Exercise Equipment:  Approximately $139,000

• Tanning Equipment:  Approximately $9,000

• Technology System (including estimated taxes, shipping, and installation):  $19,500 to $32,000

• If you purchase this equipment, the amount of Additional Funds for the 3 months operating expenses would also be adjusted to reflect that you will not make 3 monthly equipment lease payments, but your total initial investment will be substantially higher than Anytime Fitness has estimated.

• Exercise equipment includes fitness equipment, security devices, access equipment, televisions and/or stereo, durable floor pads, decorations, and fixtures.

6.  Tanning Equipment:  $0 to $9,000

7.  Hydromassage Equipment:  $0 to $16,995

8.  Global Access Equipment:  $485 to $32,000

9.  First Aid Equipment:  $1,000 to $1,400

• Anytime Fitness requires you to have an automated external defibrillator. This equipment will generally cost between $1,000 and $1,400. In some areas, you may be required to have additional first aid supplies, and the high estimate covers the cost of these supplies.

10.  Interior Signs:  $133 to $5,326

11.  Outside Signs:  $199 to $10,000

• The low estimate for signage assumes you finance the signage with a 10% down payment, and a minimum signage package. The total cost of the signage will vary depending on various factors, including the size of your location and local zoning requirements.

12.  Miscellaneous Opening Costs:  $2,013 to $2,504

• This amount includes utility costs and licensing fees.

13.  Pre-Sale/Grand Opening Advertising:  $8,000 to $23,000

• If you are a new franchisee in the Anytime Fitness system and you open a new Anytime Fitness center, you will need to spend a minimum of between $8,000 and $18,000 (depending on your market Tier) for a Grand Opening and Ramp Up program.

• The franchisor also recommends you spend an additional $3,000 to $5,000 in local direct advertising.

• The low end of the range assumes you are in a Tier 3 market and have no additional marketing cost for local direct marketing. The high end of the range assumes you are in a Tier 1 market and spend an additional $5,000 for local direct marketing.

• Some franchisees, particularly people who sign Area Development Agreements to control an entire market, may spend more than $20,000 per center for grand opening advertising because they believe they will receive a return on that investment.

14.  Insurance:  $2,500 to $2,750

• You will need to purchase and maintain in effect at all times during the term of the Franchise Agreement a bond for your business, which you are required to purchase from the franchisor’s designated surety bond vendor to secure your obligations to pre-paid members for membership fees and for pre-paid personal training revenue.

• The franchisor has negotiated a base rate of $250 per year for bonds through its designated vendor, however your actual cost may vary based on your individual circumstances.

• Further, you will need to purchase and maintain in effect at all times during the term of the Franchise Agreement a policy or policies of insurance, naming Anytime Fitness and its affiliates as additional insureds on the face of each policy.

• You must have and maintain general liability insurance with complete operations coverage, broad form contractual liability coverage, and property damage, all with current minimum limits of $1,000,000 per person, $1,000,000 per occurrence, and $3,000,000 in the aggregate, and other insurance in the types and amounts as Anytime Fitness may require or as required by law.

• The insurance estimate assumes that you will personally operate your Anytime Fitness center and have no employees. Therefore, the estimates do not include premiums for workers’ compensation insurance, employer’s liability insurance, or automobile liability insurance.

• Before you make a decision to purchase the franchise, you should confirm that insurance is available for a fitness center of the type you intend to operate, given that you will not staff the premises all of the time.

15.  Supplies and Furniture:  $4,900 to $5,900

16.  Legal and Accounting Expenses:  $500 to $4,500

17.  Training Suite:  $0 to $7,885

• As of the issuance date of the 2017 Disclosure Document, the Training Suite is optional. However, Anytime Fitness may require you to implement the Training Suite in your Anytime Fitness center upon 90 days’ prior written notice.

• The low range estimate assumes you do not add the Training Suite to your Anytime Fitness center. The high range estimate assumes that you use the Training Suite, and includes the $500 Training Suite Training Fee and the cost of required equipment.

18.  Club Management Software:  $537

• You will be required to purchase Club Management Software from one of Anytime Fitness’s two designated vendors.

• The monthly cost for the Club Management Software is $179 per month, per Anytime Fitness center, for up to three centers. If you have four or more Anytime Fitness centers, the monthly Club Management Software is reduced to $149 per month, per center, for all centers.

• The estimate includes Club Management Fees for one Anytime Fitness center, for a period of three months, at the $179 per month rate.

19.  Additional Funds – 3 Months:  $68,489 to $73,069

• This estimates your initial startup expenses during the initial 3 months.

• These figures are estimates and Anytime Fitness cannot guarantee that you will not have additional expenses starting the business.

• These costs include payroll expenses for a full-time personal trainer and two full-time employees. These costs do not include any owners’ draw amounts.

20.  Total Costs:  $131,002 to $722,796

• These figures are estimates based on the experience of Anytime Fitness in establishing and operating Anytime Fitness centers in the last 3 years. Your actual expenses of establishing and operating this business could vary significantly from these estimates.

• Some states have laws that require staffing or operational requirements that will significantly increase the amounts you will have to spend to open and operate your Anytime Fitness center.

• If your state requires you to have someone on the premises full-time or additional equipment on the premises, these costs may increase by $5,000 or more a month.