In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the Snap Fitness franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Snap Fitness franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Snap Fitness franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Snap Fitness’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- average number of members and memberships for the 853 franchised Snap Fitness clubs that operated for a full 24 months as of December 31, 2016
- historic member ramp-up (member levels for the 6th month and 12th month of operation) of the 86 franchised clubs that opened from 2013 to 2015
- personal training revenue for the 261 clubs that operated for a full 24 months as of December 31, 2016 and reported a minimum monthly average of $1,000 in personal training revenue (the level Snap Fitness management estimates represents an active personal training program)
- projected revenues, expenses, and cash flow for a Snap Fitness club based on 400 members, 548 members, 750 members, and 1,000 members
- historic club transfer performance (the average percentage change in memberships and total revenue year-over-year for the 226 club transfers from 2013 to 2015, from the first month of club purchase)
Section I – Background Information
9 Things You Need to Know About the Snap Fitness Franchise
Continued Global Expansion
1. Since the start of 2017, Snap Fitness has continued its global expansion by signing master franchise agreements in countries such as the United Arab Emirates (UAE), Ireland, Saudi Arabia, and Indonesia.
2. Praveen Bhatnagar has signed on as the master franchisee for the UAE. Bhatnagar has experience helping fitness companies develop a stronger foothold in the UAE market; he helped Fitness First grow into the largest fitness operator in the region.
3. Scott Jones and Isaac Buchanan have signed on as master franchisees for Ireland and the two bring a combined 25 plus years of brand management experience with them. Their expertise in the health and fitness industry has led to successful franchises in the UK and Australia.
4. Snap Fitness entering Saudi Arabia is seen as a game-changer for bringing this underserved market an affordable fitness provider. Fahad Al-Damegh has signed on as master franchisee for Saudi Arabia and he says that the Addamegh Group is optimistic about the opportunity to grow the Snap Fitness brand across the country and to be among the first to inaugurate officially-licensed female fitness centers in Saudi Arabia.
5. Herman Susanto will serve as the master franchisee for Indonesia. Peter Taunton, founder of Snap Fitness and CEO of Lift Brands, says the expansion into Indonesia helps Snap Fitness realize its goal of making world-class fitness offerings accessible to everyone.
Largest Development Deal in Brand’s History
6. In late April 2016, Snap Fitness announced that the company had secured a major development deal for the United Kingdom with MSG Life Limited. MSG will open 30 Snap Fitness locations across the UK, making the deal the largest in the brand’s history. Chief Development Officer Steele Smiley says that the deal positions Snap Fitness as the dominant gym franchise in the UK.
7. Snap Fitness was founded in Minnesota in 2003 by Peter Taunton, who was a professional racquetball player and owner-operator of five fitness centers in Minnesota prior to founding the company. Taunton started Snap Fitness as a way to offer consumers a fast, convenient, and affordable workout alternative to traditional big box health clubs.
8. Snap Fitness began franchising in 2004 and today there are over 2,000 locations in the U.S. and globally, including countries such as Australia, Canada, Egypt, India, Malaysia, Georgia, Mexico, the Netherlands, New Zealand, the Philippines, Spain, and the United Kingdom.
Entrepreneur’s Franchise 500
9. Snap Fitness has ranked on Entrepreneur’s annual Franchise 500 list every year in the last decade. The company’s highest rank was No. 24 in 2009, while its lowest rank was No. 125 in 2017. Snap Fitness also appeared on Entrepreneur’s 2011 Fastest Growing Franchises list at No. 27, the 2010 Fastest Growing Franchises list at No. 20, and the 2010 Top Global Franchises list at No. 44.
Section II – Estimated Costs
- Please click here for detailed estimates of Snap Fitness franchise costs, based on Item 7 of the company’s 2017 FDD (updated).
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Snap Fitness’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis
Part 1 – Historic Member Numbers of Snap Fitness Clubs
- The chart below shows the information for the 853 franchised Snap Fitness clubs that operated for a full 24 months as of December 31, 2016. The average is based on the average members per month from January to December 2016.