In this FDD Talk 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 2021 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 2021 FDD

• Section IV – Number of franchised and company-owned Snap Fitness outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of Snap Fitness’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2019, 2020, and January to April 2021 average square feet, total sales per month, membership counts, member counts, and sales per square foot for the 603 franchised Snap Fitness clubs in the U.S. that were open as of December 31, 2018 and still open as of March 31, 2021 (by quartile and overall)

Section I – Background Information

23 Things You Need to Know About the Snap Fitness Franchise

Parent Company Announces New C-Suite to Lead Global Fitness Brands Under #OneTeam

1.  At the beginning of May 2021, Lift Brands, the parent company to several global fitness brands including Snap Fitness, YogaFit and Fitness On Demand and minority partner for 9Round, announced a refresh of its C-suite executives to lead under the company’s #OneTeam initiative. The new executives ladder up to Ty Menzies who was named global CEO in June of 2020.

2.  Menzies said, “#OneTeam means that we support each other as a family of team members and franchisee owners. We elevated this by putting people in leadership positions that live our values. We are indeed #OneTeam as we look ahead with new leaders and a new vision for Lift Brands. There’s a lot of excitement around an invigorated direction for our company, and this fine group of leaders will no doubt be an integral part of our growth.”

3.  In addition to chief legal officer duties, Alison McElroy was named president of international in August of 2020 to lead executive teams globally. McElroy has been with the company since 2009, previously serving as chief global development officer and senior vice president of strategic relationships and general counsel.

4.  Paul Early comes on board as Lift Brands’ chief financial officer, most recently coming from Gold’s Gym as chief administration officer. He has also spent time at Bread Zeppelin Salads Elevated, TGI Friday’s, and Carlson Companies.

5.  Rose Minar, chief marketing officer, joins Lift Brands following a successful career in hospitality, most recently with the Radisson Hotel Group and Carlson. At Lift Brands, Minar will lead strategic brand and marketing initiatives including a global Snap Fitness brand re-positioning.

6.  Andy Peat, chief product officer, has been with Lift Brands and Snap Fitness his entire career. He previously served as director of Snap Fitness clubs and chief executive officer in Australia and New Zealand. In his new role, Peat oversees all member-facing products, partnerships, and overall look and feel of clubs around the world.

7.  Rounding out the executive team is Rob Mendel, chief technology officer, who has served in his role since 2018 and oversees all systems and IT operations. Uday Anumalachetty, vice president, leads Fitness On Demand that promotes virtual fitness programs and offerings.

8.  With increased focus on international expansion, Chris Caldwell takes over as APAC CEO based in Brisbane, and Jon Cottam is named EMEA CEO out of London following the re-acquisition of its Snap Fitness UK and Ireland area developer. Both will oversee operations for Snap Fitness and 9Round in their regions.

9.  Much of the company’s strategic plan for the next several years revolves around its commitment to infrastructure development, club growth and redesign, innovative product and technology offerings, and franchise support. As such, Lift Brands has created a team of 10 Snap Fitness Franchise Business Coaches (FBC) in the U.S. and Canada that oversee regions of club managers and franchisee owners. Coaches use their knowledge of fitness operations and staff resources to counsel and advise franchisee owners to improve their membership sales and grow their businesses. Internationally, there are 10 additional FBCs that already serve the EMEA and APAC regions.

10.  According to Brian Tietz, vice president of brand support for Lift Brands, “The FBC team is created out of a need to offer consistent, ongoing support to the people who make our business run – our franchise owners. Several coaches have owned or currently own clubs themselves and know what it takes to succeed. They’re up to speed on industry trends, have served in the industry for years, and act as tremendous mentors for owners who want to grow their business and retain their members. We’re excited to see this team do great things.”

Partners with Escape Fitness for Club Equipment

11.  In late May 2021, Snap Fitness announced a partnership with Escape Fitness, which specializes in free weights and functional accessories in select or new U.S., Canada, and APAC Snap Fitness clubs. This comes after both companies have successfully partnered in the U.K. for the past several years.

12.  Andy Peat, chief product officer of Lift Brands, parent company to several global fitness brands including Snap Fitness, said, “We’re thrilled to work with the team at Escape Fitness. Some of our existing equipment needs an upgrade, and when clubs are ready – or new clubs open – Escape Fitness will be a natural fit to provide quality equipment for years to come.”

13.  Escape Fitness will outfit clubs with innovative, functional training tools like branded dumbbells and racks, grip discs, kettlebells, medicine balls, and bumper plates. These tools of the trade are unique because they not only meet members’ needs, but also keep them engaged to deliver an unparalleled training experience. In fact, Escape Fitness was chosen as a partner based on feedback from Snap Fitness franchisees. They liked the quality, price, and service offered.

14.  Luke Januszek, commercial director for Escape Fitness, added, “We work with clubs around the world to design and modernize their spaces to get people excited about fitness and health. We are able to work so closely with the Snap Fitness team to create an engaging, welcoming space in their clubs. We think alike and have the same visions. It’s exciting to be part of something like this.”

Announces Global Partnership with ScentAir

15.  In early July 2021, ScentAir, the global leader in scent marketing, announced its partnership with leading fitness franchise Snap Fitness. Together, Snap Fitness and ScentAir designed a scent initiative to inspire members to level up their training with a new ambient scent. The ScentAir fragrance team developed the Snap Fitness signature scent with notes that create an invigorating sensory experience.

16.  Andy Peat, chief product officer of Snap Fitness, believes that the fragrance will elevate the feeling of welcome for members, describing it as “a positive scent to uplift their mood,” which “starts the moment a member walks into the club.” Peat added, “It’s great to have a well-known and reliable partner in ScentAir to ensure our franchisees are receiving the best product and service available.”

17.  With dedicated local teams across seven worldwide offices, ScentAir is proud to offer Snap Fitness high-quality fragrance solutions on a global scale. For more than 25 years, ScentAir has paved the way as a champion of intelligent ambient scenting. Their diverse global team delivers powerful customer experience solutions that speak to the needs of local businesses, while meeting them with world-class service.

18.  Brian Edwards, president of ScentAir, says of the partnership, “It is always exciting to work with other global brands, where we can do what we do best – serve a business on a worldwide scale. We’re confident that the new Snap Fitness signature scent will quickly become an integral part of their brand.”

Company History

19.  Snap Fitness was founded in 2003 by Peter Taunton, who had previously run several America’s Fitness Centers around Minnesota before starting his own fitness franchise. Although the fitness industry was already a competitive market, Taunton felt that he could offer something different. He wanted to open a gym that was affordable and open to its members 24 hours a day. Also, Taunton decided to only have equipment that he knew gym members actually used.

20.  A year after opening the first Snap Fitness, Taunton began franchising the concept. Snap Fitness grew quickly and by 2008, there were over 910 clubs with 400,000 members across 46 states. The following year, Snap Fitness opened its first international locations in Australia and New Zealand.

21.  Building on the success of Snap Fitness, Taunton started Lift Brands in 2014 to serve as the parent company of Snap Fitness as well as 9Round, Kosama, Fitness On Demand, and STEELE 365. In 2019, Taunton stepped down as CEO of Lift Brands and transitioned to the advisory position of non-executive chairman of Lift Brands’ board of directors.

22.  Today, there are Snap Fitness locations in 48 states in the U.S., as well as Australia, Belgium, Canada, Egypt, Georgia, Hong Kong, India, Indonesia, Ireland, Mexico, the Netherlands, New Zealand, Philippines, Spain, Taiwan, Turkey, United Arab Emirates, and United Kingdom.

Entrepreneur’s Franchise 500

23.  Snap Fitness did not rank on Entrepreneur’s 2021 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Snap Fitness franchise costs, based on Item 7 of the company’s 2021 FDD.

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 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

• Outlets at the Start of the Year:  898
• Outlets at the End of the Year:  861
• Net Change:  -37

2019

• Outlets at the Start of the Year:  861
• Outlets at the End of the Year:  792
• Net Change:  -69

2020

• Outlets at the Start of the Year:  792
• Outlets at the End of the Year:  629
• Net Change:  -163

Company-Owned

2018

• Outlets at the Start of the Year:  35
• Outlets at the End of the Year:  19
• Net Change:  -16

2019

• Outlets at the Start of the Year:  19
• Outlets at the End of the Year:  17
• Net Change:  -2

2020

• Outlets at the Start of the Year:  17
• Outlets at the End of the Year:  28
• Net Change:  +11

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

• As described further below, from January 1, 2021 to April 30, 2021 (“January to April 2021”) the average number of members for the 603 U.S. Snap Fitness Franchised Clubs was 520 (404 memberships).

• From January 1, 2020 to December 31, 2020 (“Calendar Year 2020”) the average number of members for the 603 U.S. Snap Fitness Franchised Clubs was 556 members (431 memberships).

• From January 1, 2019 to December 31, 2019 (“Calendar Year 2019”) the average number of members for the 603 U.S. Snap Fitness Franchised Clubs was 595 members (456 memberships).

• There are 647 U.S. Snap Fitness Clubs in the Snap Fitness system as of March 31, 2021. Of those 647 Snap Fitness Clubs, 44 are excluded from the results displayed in Part 1, Part 2, and Part 3 for the reasons provided below.

• The average square footage, average total sales, average membership counts, average member counts, and average sales per square foot are derived from the historical performance of 603 Clubs.

• The Financial Performance Representation in Item 19 is based on the financial performance of Clubs during 2019, 2020, and January to April 2021.

• Some Snap Fitness Clubs have earned the amounts in Part 1, Part 2, and Part 3. Your individual results may vary. There is no assurance that you will earn as much.

Part 1 – Franchised Clubs During First Four Months of Calendar Year 2021

Total (603 Clubs)

• Average Square Feet:  4,166
• Average Total Sales Per Month:  $15,391.43
• Average Membership Counts:  404
• Average Member Counts:  520
• Average Sales Per Square Foot:  $46.32

Top Quartile (151 Clubs)

• Average Square Feet:  5,484
• Average Total Sales Per Month:  $27,268.08
• Average Membership Counts:  601
• Average Member Counts:  784
• Average Sales Per Square Foot:  $67.54

Second Quartile (151 Clubs)

• Average Square Feet:  4,158
• Average Total Sales Per Month:  $15,928.58
• Average Membership Counts:  418
• Average Member Counts:  536
• Average Sales Per Square Foot:  $51.04

Third Quartile (151 Clubs)

• Average Square Feet:  3,765
• Average Total Sales Per Month:  $11,316.15
• Average Membership Counts:  342
• Average Member Counts:  435
• Average Sales Per Square Foot:  $39.24

Bottom Quartile (150 Clubs)

• Average Square Feet:  3,249
• Average Total Sales Per Month:  $6,997.32
• Average Membership Counts:  256
• Average Member Counts:  321
• Average Sales Per Square Foot:  $27.35

Part 2 – Franchised Clubs During 2020

Total (603 Clubs)

• Average Square Feet:  4,166
• Average Total Sales Per Month:  $12,896.39
• Average Membership Counts:  431
• Average Member Counts:  556
• Average Sales Per Square Foot:  $39.04

Top Quartile (151 Clubs)

• Average Square Feet:  5,385
• Average Total Sales Per Month:  $22,275.87
• Average Membership Counts:  630
• Average Member Counts:  823
• Average Sales Per Square Foot:  $55.80

Second Quartile (151 Clubs)

• Average Square Feet:  4,258
• Average Total Sales Per Month:  $13,386.17
• Average Membership Counts:  456
• Average Member Counts:  585
• Average Sales Per Square Foot:  $42.43

Third Quartile (151 Clubs)

• Average Square Feet:  3,703
• Average Total Sales Per Month:  $9,681.19
• Average Membership Counts:  368
• Average Member Counts:  474
• Average Sales Per Square Foot:  $33.94

Bottom Quartile (150 Clubs)

• Average Square Feet:  3,312
• Average Total Sales Per Month:  $6,197.96
• Average Membership Counts:  271
• Average Member Counts:  341
• Average Sales Per Square Foot:  $23.88

Part 3 – Franchised Clubs During 2019

Total (603 Clubs)

• Average Square Feet:  4,166
• Average Total Sales Per Month:  $17,003.01
• Average Membership Counts:  456
• Average Member Counts:  595
• Average Sales Per Square Foot:  $51.87

Top Quartile (151 Clubs)

• Average Square Feet:  5,241
• Average Total Sales Per Month:  $29,499.05
• Average Membership Counts:  664
• Average Member Counts:  877
• Average Sales Per Square Foot:  $77.22

Second Quartile (151 Clubs)

• Average Square Feet:  4,388
• Average Total Sales Per Month:  $17,976.37
• Average Membership Counts:  482
• Average Member Counts:  627
• Average Sales Per Square Foot:  $55.21

Third Quartile (151 Clubs)

• Average Square Feet:  3,705
• Average Total Sales Per Month:  $12,533.25
• Average Membership Counts:  396
• Average Member Counts:  515
• Average Sales Per Square Foot:  $44.24

Bottom Quartile (150 Clubs)

• Average Square Feet:  3,323
• Average Total Sales Per Month:  $7,943.38
• Average Membership Counts:  281
• Average Member Counts:  362
• Average Sales Per Square Foot:  $30.65

• Part 1 reflects the data of Franchised Clubs open for calendar years 2020 and 2019 and January to April 2021. Part 2 and Part 3 reflect the data of Franchised Clubs open for calendar years of 2020 and 2019.

• Part 1, Part 2, and Part 3 only include data of Franchised Clubs that were open as of December 31, 2018. In other words, data from Clubs that opened January 1, 2019 or later are excluded from Part 1, Part 2, and Part 3.

• Part 1, Part 2, and Part 3 exclude data from Snap Fitness’s corporate-owned Clubs.

• Variances in square footage quartiles between 2021, 2020, and 2019 are due to Clubs moving between quartiles (measured by Average Total Sales).

• The data of three Clubs (Litchfield, Minnesota; Olivia, Minnesota; and Sarasota, Florida) are excluded due to lack of available unit square footage data.

• 2021 and 2020 Club performance was impacted due to COVID-19 operational restrictions and/or temporary closures. Many Clubs experienced a decline in sales due to various state and local regulations which required closure or greatly restricted their ability to operate. Individual Club performance variations are related to state and local mandates regarding COVID-19.

• The principal source of total sales for a Snap Fitness Club is its membership revenue. Membership revenue includes any initial enrollment fees, paid in full or as prepaid dues, the member’s monthly dues obligation, as well as annual and pro-rated annual fees.

• Clubs also earn a significant percentage of revenue through the sale of personal training services to members. Not all clubs offer personal training and clubs historically have not been required to report personal training revenue to Snap Fitness. Personal training revenue varies widely by club depending on the ability to find qualified and motivated personal trainers, types of services, and management of the personal training programs.

• Typical monthly membership fees are $34.95 to $44.95 based on single membership types, and $54.95 to $84.95 for joint or family membership types. Membership rates vary by club. You set your own membership prices depending on your club’s competitive landscape and amenity service fees (such as tanning) that are added to a membership (exceptions are for National Accounts and certain promotional programs).

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