How Much Does it Cost to Open Gym in the US?

Fired up to make your gym ownership dreams a reality but not sure what kind of money you’ll need? Opening a sweatbox doesn’t come cheap, but knowing the numbers is half the battle. If you’re calculating how much it would cost to open a gym, we have you covered!

From securing the perfect gym location to stocking up on top-notch equipment and assembling a rock-star team, the costs can quickly add up. So, here is a detailed guide on how to budget and what to consider while launching your gym in the United States.

Whether you’re dreaming of a mega fitness playground packed with all the latest equipment or an intimate boutique studio with a trendy following, this guide has everything added.

From real estate and equipment to licensing and marketing – we’ll break down all the essential expenses. Get ready to crunch the numbers and start your journey towards building a successful fitness community!

Types of Gyms and Their Costs

Note: All of the above costs mentioned are estimates as per multiple sources. These estimates may vary depending upon factors such as location, machinery supplier, state law and others.

Startup and One-Time Costs

Real Estate Cost

$11,250 – $45,000 (Lease Deposit)

$105,000 – $150,000 (Buying Amount)

One of the biggest startup and one-time costs for opening a gym will be the real estate costs associated with either leasing or purchasing a facility. If you choose to lease a space, you’ll typically need to pay a lease deposit which can range from 3 to 6 months’ worth of rent.

From different resources, for a 3,000 square foot gym space with an annual lease rate of $15 to $30 per square foot, the annual rent would be $45,000 to $90,000. This means the lease deposit could be anywhere from $11,250 to $45,000, assuming a 3 to 6 month deposit requirement from the landlord.

Alternatively, if you decide to purchase the property outright, you’ll need to put down a down payment which usually falls between 20% to 30% of the total property value. For a 3,000 square foot building, with an estimated cost of $35 to $50 per square foot, the total property value could be $105,000 to $150,000. Therefore, the down payment amount would likely range from $21,000 to $45,000 to secure the purchase.

On average, the lease deposit could be around $28,125, while the down payment for purchasing could average around $33,000 based on these estimates. However, the actual real estate costs can fluctuate significantly depending on the specific location, property size, condition, and market factors.

Gym Equipment Cost

$30,000 – $40,000

Gym equipment is another huge expense you’ll need to account for. The cost can vary significantly depending on whether you choose to lease or purchase the equipment outright. Leasing gym equipment tends to be more affordable upfront, with typical costs ranging from $2,000 to $3,000 per month for a 3,000 sq.ft facility, plus potentially a one-month security deposit.

However, you’ll never actually own the equipment. Purchasing equipment outright requires a much larger upfront investment, with estimates suggesting around $25 per square foot. So for a 3,000 sq.ft gym, you could be looking at roughly $75,000 for the training equipment alone. If financing with an equipment loan, you’ll have ongoing monthly payments of $1,000 to $2,000 plus interest.

Aside from the core training equipment like weights, machines, and cardio gear, you’ll also need to budget for non-training equipment costs. This includes items like couches, chairs, tables, towels, artwork, and decor which can add another $10,000 to $20,000 to your total equipment expenses. In total, the gym equipment costs can range from as little as $10,000 for a basic personal studio, all the way up to $50,000 or more for a fully-equipped commercial gym. On average, you could estimate around $30,000 to $40,000 as a reasonable startup equipment budget for a modest commercial gym.

Licensing and Permit Cost

$2,500 – $3,500

When opening a gym, one-time costs like licensing and permit fees can’t be overlooked. These fees vary greatly depending on your location and the specific requirements of local authorities. Here’s a breakdown of what you might expect:

• Business License: Required for legal operation, ranging from $50 to $400 annually depending on location and gym size.
• Building Permits: Necessary for renovations or construction, averaging around $1,000, contingent upon project scope and local regulations.
• Health Permits: Essential for maintaining sanitary conditions, costing approximately $200 per year for inspections and compliance.
• Fire Safety Permits: Crucial for ensuring fire safety standards, typically around $100 annually to meet regulatory requirements.

Some sources recommend budgeting around $1,700 to $2,000 for the initial licensing and permit costs, plus the ongoing annual renewal fees. However, other estimates suggest setting aside as much as $5,000 to comprehensively cover all potential licensing, permitting, and certification requirements your locality may have. This higher estimate accounts for fees like trade name registration, employer registration, and ensuring your training staff has proper accreditations, which can cost up to $800 per certification.

So, you should expect to budget anywhere from $1,500 on the lower end for basic requirements, up to $5,000 or more to fully cover your bases and avoid any regulatory issues. The average cost seems to fall around $2,500 to $3,500 for most gym businesses to get properly licensed and permitted initially.

Certifications

$500 – $1500

You’ll also need to account for certifications, especially if you plan to have certified personal trainers on staff, which is a major selling point for gyms. The costs for personal trainer certifications can vary, but you can expect to pay anywhere from $400 to $1000 per certification for an entry-level program.

Some of the most recognized and accredited personal trainer certifications to consider are from organizations like the American Council on Exercise (ACE), National Academy of Sports Medicine (NASM), International Sports Sciences Association (ISSA), American College of Sports Medicine (ACSM), and National Strength and Conditioning Association (NSCA).

In addition to the certification fees, you’ll likely need to purchase study materials and take advantage of preparatory courses, which can further add to the costs. For more advanced or specialist certifications in areas like strength training, senior fitness, or youth fitness, the costs tend to range from $400 to $500 per certification. Overall, while a basic personal trainer certification may cost around $500-$600, if you want multiple trainers with advanced certifications, you could be looking at $1500 or more per person for their full credentials.

Legal Fees

$2,000 – $15,000 (varies as per legal work)

Legal fees are another startup and one-time cost to factor in when opening a gym. You’ll likely need professional legal assistance for negotiating leases, closing on property sales, obtaining necessary licenses and permits, drafting business documents like operating agreements and employment contracts, and more. Attorney fees can run around $200 per hour on average.

The total legal fees can vary significantly depending on how much legal work is required. It is estimated as follow:

• Low End: For basic legal assistance covering essential tasks like lease negotiation and permit acquisition, startup legal fees may range from $2,000 to $5,000.
• Mid Range: More comprehensive legal services, including business incorporation, drafting contracts, and other necessary documents, could cost between $5,000 to $10,000.
• High End: For larger or more complex gym setups needing extensive legal work upfront, costs might range from $9,000 to $15,000 or even higher.

Hardware and POS System

$1,500 to $3,000

As part of the startup and one-time costs, you’ll need to invest in a hardware and point-of-sale (POS) system for your gym. These include things like tablets, card readers, printers, and cash drawers. Estimates suggest an initial cost of around $1,400 for a basic POS hardware setup, which may include 2 tablets, 2 card readers, a printer, and a cash drawer.

Additionally, you’ll need POS software, which can range from $100 to $200 per month. However, some gym management software solutions offer more affordable packages, like around $300 upfront with the software included in a monthly subscription fee. To budget conservatively, you should plan for $1,500 to $3,000 as the startup cost for the POS hardware and software system.

Building Remodeling and Décor

$105,000

A major startup and one-time cost will be building remodeling and decor to transform a generic space into a functional gym facility. This involves installing showers, locker rooms, specialized gym flooring, functional training areas, reception areas, and more. According to different studies, you should budget around $35 per square foot for these remodeling costs. For an average 3,000 square foot gym space, that equates to approximately $105,000.

However, there may be opportunities to negotiate some or all of these remodeling costs with the landlord. Some landlords may be willing to cover the full refurbishment expense in exchange for higher rent, while others may split the costs. It’s advisable to try negotiating, as one example showed getting 6 months of free rent by highlighting the $60,000 expected remodeling budget. If negotiating is unsuccessful, the full $105,000 remodeling budget may be required upfront.

Employee Uniforms

$500 – $2500

Getting employee uniforms add a touch of professionalism, so spending on this one-time cost is a benefit for your new start-up. But, you’ll need to decide if you want branded uniforms or a more basic uniform policy. Branded uniforms with items like track pants and logo t-shirts can project a more professional image, but add extra costs.

According to the estimates provided, outfitting around 6 employees with simple branded uniforms could cost approximately $300. However, for a gym, the norm is often just having staff wear basic workout clothes with company logo shirts, which may be more affordable. The costs can range from around $500 on the lower end for basic uniform pieces, up to $2,500 or more for fully branded uniforms across your entire staff.

A Responsive Website

$300 – $700

For a responsive website as part of the startup and one-time costs, you have a few options. You could build it yourself using platforms like Squarespace or WordPress, with costs potentially as low as $300. However, for a professionally built website, you should expect to pay around $500 to $700 for the initial build and setup.

Some estimates suggest budgeting up to $700 for a well-designed, responsive gym website created by a professional. Overall, the typical cost range for this one-time website expense seems to fall between $300 on the low end for a DIY site, or $500 to $700 for hiring professional website development services.

Ongoing Operating Costs

Lease/Mortgage Payments and Utilities

Opening a gym involves a significant amount of ongoing monthly expenses, with lease/mortgage payments and utilities being two major components. The costs associated with these can vary widely depending on several factors, such as the location, size, and amenities of the facility.

Lease/Mortgage Payments

$3,750 to $7,000 (monthly lease payment)

If you choose to lease a building, you can expect to pay anywhere from $15 to $30 per square foot per month. For a 3,000 square foot gym, this translates to a monthly lease payment ranging from $3,750 to $7,000.

Alternatively, if you decide to purchase the building outright, the cost can be higher, ranging from $35 to $50 per square foot.

The location of the gym plays a crucial role in determining these costs. For instance, being located next to a health market or a high-traffic area may be more beneficial for your business than being next to a warehouse or a less desirable location.

Utilities Costs

$2,500 – $6500 (monthly bills)

Gyms are known to be energy-intensive, primarily due to the electricity required to power the various cardio and strength-training equipment, as well as lighting and music systems.

For a well-equipped 3,000 square foot gym, you can expect to receive a monthly utility bill of around $2500, primarily for electricity. Upfront deposits for utilities, including gas, sewer, water, and electricity, can be around $6500 for a medium-scale standard gym. These costs are ongoing and should be factored into your budget and financial projections.

According to industry estimates, larger-scale gym operations pay an average of $63,465 to $68,413 annually for utilities.

Estimated Monthly Costs

• Lease: $2,000 (approximate)
• Utilities: $833 (assuming $10,000 annually)

Gym Insurance

Varies as Per Requirements

Gym insurance is a critical aspect of protecting your business, employees, and customers from potential liabilities and accidents. Several types of insurance coverage should be considered as an ongoing cost while starting a gym, including:

General Liability Insurance: Covers your employees if they are found responsible for an accident or injury on the premises.

• Estimated Cost: $200 – $4,900 per year.

Professional Liability Insurance: Covers employees’ acts of omission that lead to accidents or injuries, such as not placing an out-of-order sign on faulty equipment.

• Estimated cost: Starts at around $1,000 and varies based on the size of the business.

Worker’s Compensation Insurance: Covers you if an employee brings a work-related injury claim against you.

• Estimated Cost: Starts at $950 per year.

Property Coverage: Covers damage, theft, and vandalism to the building.

• Estimated Cost: Starts at $1,000 per year.

Equipment Breakdown insurance: Covers the cost of repairing or replacing gym equipment in case of breakdowns. This may not apply if you are leasing the equipment.

So, the estimated cost for gym insurance can range from $500 to $2,000 annually. Another estimate suggests that for a small gym with one desk clerk and no more than $100,000 worth of gym equipment, the cost of insurance can be up to $6,000 per year. So, a reasonable assessment is between $2,000 to $6,000 annually for a small to medium-sized gym, based on the various insurance types and coverage needed.

Wages and Taxes (Employee Wages + Payroll Taxes)

$300,000 – $500,000 (approx. 10 staff members)

Operating a gym involves significant ongoing costs related to employee wages and taxes. Based on industry standards, plan to employ one staff member for every 50 members, with average salaries ranging from $40,000 for fitness instructors to $69,000 for gym managers. For a 1,000-member facility, annual employee wage costs can range from $700,000 to $900,000.

Personal trainer compensation models vary, including straight percentage (typically 50% of revenue), sliding scales, tiered plans, or hourly rates ($9-$20 per hour). Additionally, you’ll need to allocate funds for payroll taxes, which may need to be paid quarterly, and self-employment taxes, typically around 7.6% of individual income. Careful planning and budgeting for these significant wage and tax expenses are crucial for the successful operation of your gym business.

Marketing and Advertising

$3,000-$5,000 (initially)

Marketing and advertising are crucial for attracting and retaining members for your gym. Initially, you should allocate $3,000-$5,000 for your grand opening marketing efforts. Afterward, plan to set aside around 7.5% of your monthly revenue for ongoing marketing costs. Key strategies include building a strong online presence through your website, Instagram, and Facebook, as well as offline tactics like flyer distribution ($100 for 2,000 flyers), local advertisements, and sponsored community events (around $5,000 for the first year).

Additionally, consider launching paid social media campaigns and utilizing Google Ads to reach potential customers. Consistently investing in marketing efforts is essential for building a loyal community and ensuring the long-term success of your gym business.

Gym Management Software

$175 (monthly)

Investing in quality gym management software is crucial for streamlining operations, automating tasks, and providing a personalized experience for your members. Look for a comprehensive system that includes features like lead management, automated billing, membership management, staff management, mobile app integration, and website integration. While the cost may vary, you can expect to pay around $175 per month for a good gym management software solution. This upfront investment can save your staff countless hours of manual labor and ensure efficient and seamless operations, ultimately contributing to the success of your gym business.

Maintenance and Repairs

$500-$1000 (monthly)

Maintaining your gym facilities and equipment is crucial for providing a safe and well-functioning environment for your members. Plan to budget $500-$1000 per month to cover wear and tear expenses on items like couches, flooring, window coverings, and computers. If purchasing gym equipment, set aside $25 per month for each second-hand piece to cover potential breakdowns. Additionally, allocate funds for routine HVAC maintenance (around $500 annually) and overall equipment repairs and maintenance, which can cost approximately $25,040 per year. Overall, expect to budget around $6,000-$37,000 annually for maintenance, cleaning, and repair costs to keep your gym in top condition.

Miscellaneous Expenses

Varies as per requirements

The last things in ongoing monthly/yearly costs are all covered up in miscellaneous expenses. These can be a variety of items that contribute to creating an engaging and attractive environment for members. Some miscellaneous costs to consider include:

• Hiring a freelance fitness writer ($500 per month) to provide cutting-edge content for emails, website blogs, and positioning your gym as an industry expert.
• Sound system, TVs, and furniture ($3,000 for initial setup).
• Internet service to provide your customers can go up to $70 per month, making it a total $840 annually.
• Other potential expenses: Towel service, vending machines, retail merchandise, etc.

While these costs may seem relatively small compared to larger expenses like rent and payroll, they can add up quickly, so make a proper budget.

Funding Options When Starting a New Gym

There are several funding options available for entrepreneurs looking to open a new gym. Each option has its own pros and cons, and the right choice will depend on your specific circumstances and financial situation.

Bank Loans: Traditional bank loans can provide a lump sum of capital to cover startup costs like equipment, leasehold improvements, and initial operating expenses. However, they often require collateral and a strong credit history, making them harder for new businesses to obtain.

SBA Loans: The Small Business Administration (SBA) offers loan programs with more favorable terms and lower down payments than conventional bank loans. These can be a good option for startups, but the application process can be lengthy.

Crowdfunding: Platforms like Kickstarter and Indiegogo allow you to raise funds from a large pool of backers in exchange for rewards or equity. This can validate your concept and build an initial customer base, but requires effective marketing.

Investors: Securing investment from angel investors or venture capitalists provides capital in exchange for equity in your business. While diluting ownership, investors can provide valuable expertise and connections.

Equipment Financing: Some lenders and manufacturers offer equipment leasing or financing options specific to gym equipment, avoiding a larger upfront investment.

Merchant Cash Advance: With an MCA, you receive an upfront sum of capital that’s repaid via a percentage of your gym’s daily credit card sales.

Case Studies of Profitable Gyms

Although, there are many, but we chose to present the top three profitable gyms running in the US below.

LA Fitness

Established in 1983, LA Fitness has expanded its footprint through strategic acquisitions and organic growth. With over 700 clubs nationwide, it has consistently ranked among the top fitness clubs in the industry. Its revenue reached $2.1 billion in 2017, reflecting a 5.7 percent increase from the previous year. LA Fitness’ success can be attributed to its widespread presence, diverse offerings, and strategic acquisitions, such as Bally Total Fitness and Lifestyle Family Fitness.

Orangetheory Fitness

Founded by Ellen Latham in 2010, Orangetheory Fitness revolutionized group workouts with its High-Intensity Interval Training (HIIT) approach. Boasting approximately 700 locations across America, Orangetheory reported one of the largest revenue increases in 2017, with a 45 percent surge to $136.44 million. Its unique blend of heart rate monitoring, group support, and accountability has attracted a loyal customer base, contributing to its profitability.

YouFit Health Clubs

Founded by Rick Berks, YouFit entered the fitness scene approximately ten years ago, rapidly expanding to over 100 locations. Offering personal training and group exercise, YouFit caters to casual gym-goers. Notably, YouFit emphasizes environmental responsibility through initiatives like using recycled materials for gym flooring. Crunchbase reports an average revenue of about $150 million for YouFit, highlighting its profitability and sustainable practices.

Top Gym Franchise Options

You can even take a famous name and open a gym with that, called a franchise. Here are a few profitable options to consider:

Anytime Fitness

The estimated cost to open an Anytime Fitness franchise ranges from approximately:

• Anytime Fitness gym: $510,000 (on average)
• Anytime Fitness Express: $437,500 (on average)

This includes the initial franchise fee, startup costs, and the first few months of operating expenses and fees. It’s important to note that costs may vary based on location, size, and specific requirements of the franchise location.

Crunch Fitness

Here are the estimated costs to open a Crunch Fitness franchise:

• Initial Franchise Fee: $25,000 – $50,000
• Crunch Fitness Model: $668,000 – $3,488,000 (not including real estate costs)
• Crunch Sport Model: $1,226,000 – $6,986,000

The total investment amount covers various startup costs, including formation costs, initial marketing, grand opening expenses, and operating costs. However, this estimated cost can vary significantly based on the specific model you choose.

Snap Fitness

The estimated cost to open a Snap Fitness franchise in the US ranges as follows:

• Initial Franchise Fee: Up to $29,500
• Total Initial Investment: $150,000 to $460,000
• Net Worth Requirement: $250,000
• Liquid Cash Requirement: $100,000

On average, the total investment to start a Snap Fitness gym is approximately $305,000, considering the midpoint of the initial investment range.

Burn Boot Camp

The estimated cost to open a Burn Boot Camp franchise in the United States ranges as follows:

• Initial Franchise Fee: $40,000 to $60,000
• Real Estate and Leasehold Improvements: $100,000 to $300,000
• Equipment and Supplies: $50,000 to $100,000
• Training and Certification: $3,000 to $5,000
• Marketing and Advertising: $10,000 to $20,000 per year
• Operational Expenses: $10,000 to $20,000 per month

Final Verdict

At last, opening a gym requires significant upfront investment and ongoing operational costs, but the potential rewards make it an attractive business venture. Whether starting an independent gym or joining a franchise, thorough financial planning and a solid understanding of the associated expenses are crucial. From securing funding and selecting a suitable location to investing in equipment, hiring staff, and implementing effective marketing strategies, each decision impacts your gym’s profitability.

By carefully evaluating the costs outlined in this guide, aspiring gym owners can make informed choices and develop a comprehensive business plan. With dedication, strategic planning, and a passion for promoting healthy lifestyles, you can board on the rewarding journey of owning and operating a successful gym that serves and inspires your community.

NEIL DUNCAN

Neil Duncan, a professional in business innovation and management, has a deep interest in writing and sharing his voice by publishing articles on different b2b and b2c websites/blogs like this. He currently serves as the Vice President in AZ.