1

2017 AFFILIATE GYM BENCHMARK REPORT

2

TABLE OF CONTENTS

CREATING A FINANCIALLY FIT AFFILIATE GYM 3

DEMOGRAPHICS 9 COUNTRIES 10 GENDER 11 BUSINESS SIZE 12 TIME IN BUSINESS 13

FINANCIALS 14 PROFIT & LOSS STATEMENT 15 AVERAGE REVENUE AND EXPENSE 16 PERCENT OF TOTAL MEMBERSHIPS GIVEN DISCOUNTS 18 DISCOUNT PERCENT BY DISCOUNT TYPE 19 PERCENT OF DISCOUNT TYPE OFFERED 20 HOW OWNERS PAY THEMSELVES 21 STARTUP CAPITAL 22

FACILITY SIZE 23 MEDIAN FACILITY SIZE 24 MEDIAN SQUARE FEET PER MEMBER 25 AVERAGE RENT PER SQUARE FOOT 26

MEMBERSHIPS 27 TYPES OF MEMBERSHIPS OFFERED 28 AVERAGE MONTHLY PRICE OF MEMBERSHIP 29 PERCENT OF MEMBERS ON AUTOPAY 31 AUTOPAY CONCERNS 32 METHODS OF PAYMENT COLLECTION 33 MEMBER RETENTION 34

CLASSES 35 AVERAGE CLASS SIZE 36 WEEKDAY CLASSES PER DAY 37 TYPES OF CLASSES OFFERED 38

STAFF 40 MEDIAN NUMBER OF COACHES 41 MEDIAN MEMBERS 42 MEMBER-TO-COACH RATIO 43

COMPETITIONS 44 TYPES OF COMPETITIONS HOSTED 45 CROSSFIT® OPEN PARTICIPATION 46

ABOUT THIS SURVEY:The following findings represent data provided by 378 individual survey responses.

Leaders are defined as affiliate gyms that generate at least $7,000 in monthly profit.

3

For the second year in a row, I’ve had the pleasure of reviewing business metrics from a

large group of affiliate gyms located throughout the world. One thing still rings true and the

numbers don’t lie: a financially strong business is the cornerstone to running a successful

affiliate gym. Regardless of the energy of the coaches, the structure of the classes or the

correlating workout and meal plans, if the money isn’t there, the gym won’t be either.

We explored several of the same topics and themes this year that we did last year, and also

asked some new questions this year to dig deeper into various financial, operational and

emotional aspects of owning a business. We again created two financial groups from this

data. Group 1, the Leaders, is classified as financially thriving, generating at least $7,000 per

month in net income. Group 2, the Laggards, is at the other end of the spectrum and contains

affiliate gyms that are losing money each month. To qualify, each affiliate gym needed to be

in business for at least 12 months. This eliminates the startup period required to get a business

up and running.

If you participated in the survey, thank you; I hope this data simplifies the countless business

metrics you could be tracking and puts into perspective how gyms like yours operate. For those

who didn’t have the opportunity to provide data this year, I hope you take the initiative to compile

your financials and take steps towards making your business financially fit in the coming year.

Here is what I found…

I am lucky that I get to speak directly with affiliate gym owners

from around the world on a daily basis. Not only do I get to learn

about their passions for their industry and community that surrounds

them, I also get to learn about their software needs. It never ceases

to amaze me the multitude of ways owners choose to operate

their business within the same general industry. While a lot of the

terminology and equipment might be similar, each box seems to run

with its own set of plans.

CREATING A FINANCIALLY FIT AFFILIATE GYM

FROM PHIL STERN, GENERAL MANAGER, ZEN PLANNER

4

Leaders charge for the value of their service and don’t discount

In the prior year we pointed out that Leaders charge higher prices. I want to modify this

statement slightly by saying this has greater meaning than simply charging more. This is

ensuring you are charging for the value of the service you are providing. You are not a “big box”

gym with members you’ve never even met. You are in the business of relationships, providing

one-on-one and group training catered to the needs of your members. You deliver the best

possible results so members of your community are able to achieve their personal goals.

With that said, Leaders charge higher prices across the board for all membership types. Leaders

charge a median price for unlimited memberships of $165 per month versus $128 for Laggards.

While this is slightly less of a range than we saw in the prior year ($172 vs. $133) the value can

add up. With even 100 members, that is a monthly variance of $3,700 and an annual variance of

over $44,000.

Another key factor of effective pricing is how much you’re discounting your original membership

prices. When we look at the average revenue per member for Leaders as compared to Laggards,

the variance becomes astounding. Leaders get, on average, $145 per member each month

where Laggards only get $66. Members remain loyal because of the results you generate and

community you’ve built, not the discounts or deals you throw their way.

CHARGE MORE & AVOID DISCOUNTS

Median unlimited membership

Revenue per member

$165

$128LAGGARDS

LEADERS

$145

$66LAGGARDS

LEADERS

5

Leaders efficiently manage overage costs

Last year I focused primarily on the importance of managing personnel costs and I want to

reiterate this point. Staffing needs and those associated costs is by far the most emotionally

driven expense you will encounter in your business. You want to retain the right people and

to do so, you need to pay them well. This is also consistently one of the highest costs in the

business with roughly 20-30% of your monthly revenue allocated to covering this expense. I

do, however, want to take a step back. While personnel costs are a large chunk of the monthly

budget and one of the toughest to manage, they are again, just one of many necessary

expenses for your business. While this may sound obvious, one thing I’ve come to realize in my

position is that not all business owners are finance professionals. What do I mean? The concept

of balancing revenue coming into the business with expenses going out is not always as simple

as it appears. This requires maintaining financial records and detailed expenses which is a

crucial step that many busy gym owners do not make time for.

For example, this means knowing exactly what you spend on your business on a monthly basis.

Remember, this is actual spend, not “ideally I would like to only pay…” This requires you to keep

an ongoing record of your expenses broken out by category, such as classes, retail, personal

training, etc. Likewise, how much revenue are you bringing in? Again, this is not “I have 50

members and I advertise that I charge $170 a month.” This is how many members you have

for each membership type you offer and how they actually pay you for that membership on a

monthly basis. This is where you’ll need to look at all of the discounts you’ve offered. Leaders are

profitable and Laggards are not, and in large part it can be attributed to this simple fact:

I realize, too, that businesses are not going to be profitable the moment the ribbon is cut off

the door; there are expenses that need to be paid and members that need to be acquired.

However, knowing your numbers and where you stand on a monthly basis will drive the

business decisions you need to make to put your gym in the green.

UNDERSTAND YOUR FINANCES

Leaders know their numbers.

6

Leaders make great use of their space

The second largest cost, next to personnel, is your facility costs. Again, we found that Leaders

make better use of their space. Last year we uncovered a key metric in determining the health

of your business: median space per member. This essentially means how big your gym is versus

how many members you have. Last year we found that Leaders have fewer square feet per

member than Laggards. This year, that trend remained consistent with Leaders averaging 26

square feet per member and Laggards averaging 49 square feet per member. For reference,

last year Leaders averaged 26 square feet per member and Laggards averaged 42 square feet

per member.

We know that a brand-new business is not going to fill its classes immediately. But for any

business, space to member ratio is a critical indicator of the health of your gym. You need to

determine the specific amount of space you can comfortably own or rent to provide enough

room for your members to get the best workout possible. You must also take into consideration

that larger spaces cost more to rent, heat and maintain, and that you will not have all of your

members in every class.

OPTIMIZE YOUR SPACE

Median square feet per member

49 sq ft 26 sq ft

LAGGARDS LEADERS

7

Leaders have more members

Last year we found that the average member base for Leaders was 215 while Laggards was

around 140. This year Leaders have an average of 189 members, where Laggards have 61 members.

While the median numbers for both groups are lower than they were previously, it is important

to understand the relative nature of this metric to your overall business. In other words, getting

more members isn’t always the answer. Balancing your membership and your expenses is more

important to ensuring your success. And it’s important to remember that the cost to market

and acquire a new member is always going to be more expensive than keeping the members

you already have. Listen to the needs of your members, make your class times convenient, keep

your programming up to date and remember that variety is key to keeping your members

motivated and coming back.

BUILD A STRONG COMMUNITY

Median number of members

189

61LAGGARDS

LEADERS

8

FINAL THOUGHTS

Although it is easy to get caught up in the complexity of running your own affiliate gym,

if you focus on the fundamental business drivers outlined above, you will be well on your way

towards achieving financial success. I, and the rest of the Zen Planner team, would love to

answer any questions you may have to help you with your business needs. We look forward

to hearing from you.

Sincerely,

Phil Stern

General Manager, Zen Planner

Phil Stern is the General Manager of Zen Planner. He has three main

passions in life: family, mountain sports and building teams of great

people to grow businesses.

Phil cares deeply about small business success and works closely with

Zen Planner’s customers, partners and team members to ensure our

customers hit their business goals and achieve wild success. To this end,

Phil is an advisor and mentor to startups in Denver and Boulder. Phil also

blogs and delivers webinars about how fitness business owners can grow

their businesses without employing hard sales tactics and discounts.

Phil lives in the foothills of Colorado’s front range with his wife, son and

dog. He earned a BA from Bowdoin College.

9

DEMO

GRAPHIC

S

10

10%CANADA

7 1%UNITED STATES

10%AUSTRALIA/NEW ZEALAND

4%EUROPE

5%OTHER

COUNTRIES (percentage of respondents)

11

GENDER (percent of members)

45%MALE

55%FEMALE

12

BUSINESS SIZE Business size is a designation determined by Zen Planner based on member count and its

relation to facility size and Profit and Loss Statements.

Throughout the remainder of our findings we have referred to facilities with 1-75 members per

location as “Small” (31% of respondents), 76-200 members per location as “Medium” (56% of

respondents) and 201+ members per location as “Large” (13% of respondents).

S M L1–75 76–200 201+

Respondents

Total number of members

S: 31%

M: 56%

L: 13%

LMS

13

S

M

L

<1 YEAR

<1

<1

<1

1-2

1-2

1-2

1-2

3-4

3-4

3-4

3-4

5-6

5-6

5-6

5-6

6+

6+

6+

6+

TIME IN BUSINESS(in years)

32%

6%

8%

2%

27%

21%

24%6%

9%

23%

37%

33%

17%

19%

9%

14%

9%

22%

51%

31%

14

FINA

NCIALS

15

Small Medium Large LEADERS

Revenue

Memberships $4,487 $12,121 $27,843 $23,628

Drop-ins $122 $193 $430 $505

Merchandise $243 $733 $1,650 $1,779

Events $98 $82 $125 $185

Personal training $402 $923 $2,718 $2,395

Other $93 $184 $826 $757

Total Revenue $5,445 $14,236 $33,592 $29,249

Expenses

Rent/mortgage $2,270 $3,738 $6,865 $5,060

Payroll $972 $4,167 $11,612 $8,880

Utilities and building expenses $278 $603 $963 $639

Equipment $184 $288 $458 $452

Certification/professional fees $100 $164 $232 $229

Marketing expenses $130 $275 $463 $344

Insurance $108 $183 $546 $296

All other expenses $223 $741 $1,246 $1,096

Total Avg Expenses $4,265 $10,159 $22,385 $16,996

Avg Monthly Profit $1,180 $4,077 $11,207 $12,253

PROFIT & LOSS STATEMENT (monthly average in $USD)

16

$109REVENUE

EXPENSE $85

REVENUE $116

EXPENSE $83

REVENUE $121

EXPENSE $81

REVENUE $155

EXPENSE $90

AVERAGE REVENUE AND EXPENSE(per member)

S

M

L

17

Rent/Mortgage as a Percentage of Revenue

Payroll as a Percentage of Revenue

Sum of All Other Expenses as a Percentage of Revenue

S: 42%

M: 26%

L: 20%

: 17%

S: 18%

M: 29%

L: 35%

: 30%

S: 19%

M: 16%

L: 12%

: 10%

LMS

LMS

LMS

18

PERCENT OF TOTAL MEMBERSHIPS GIVEN DISCOUNTS

S: 31%

M: 28%

L: 26%

: 30%

L

M

S

19

DISCOUNT PERCENT BY DISCOUNT TYPE(average discount on standard membership cost)

Fire/Police/EMT

16%OFF

Other

25%OFF

18%OFF

Student

14%OFF

Teacher

15%OFF

Military

20

PERCENT OF DISCOUNT TYPE OFFERED(percentage of affiliate gyms that offer the following discounts on their memberships)

67%

Student

Teacher35%

76%

Military

Other

76%

32%

Fire/Police/EMT

21

Fixed Salary

Profits

Both

25%

42%

33%

27%

13%

60%

HOW OWNERS PAY THEMSELVES

AVG

AVG

AVG

22

STARTUP CAPITAL(average startup capital is $56,543)

4%FINANCE COMPANY

17%BANK LOAN

24%FRIENDS & FAMILY

8%OTHER

47%SAVINGS

23

FACILIT

Y SIZ

E

24

MEDIAN FACILITY SIZE

2,500 sq ft

6,000 sq ft

S LM

3,900 sq ft

5,000 sq ft

25

MEDIAN SQUARE FEET PER MEMBERThis has been determined by the median facility size divided by the median number of members per business size.

S LM

50 sq ft

32 sq ft

22 sq ft

26 sq ft

26

United StatesS: $4.61

M: $12.28

L: $23.58

CanadaS: $1.56

M: $19.24

L: $15.20

AVERAGE RENT PER SQUARE FOOT(average in $USD)

EuropeS: $7.06

M: $10.75

L: $34.75

OtherS: $21.32

M: $32.19

L: $21.10

Australia/New ZealandS: $19.59

M: $21.46

L: N/A

27

MEM

BERSHIPS

28

UnlimitedS: 57%

M: 66%

L: 63%

: 61%

2x Per WeekS: 6%

M: 4%

L: 5%

: 5%

1x Per WeekS: 3%

M: 1%

L: 0%

: 1%

TYPES OF MEMBERSHIPS OFFEREDBelow you will find the percentage of total members that are on each type of membership option.

BeginnersS: 3%

M: 3%

L: 1%

: 3%

Drop-InS: 3%

M: 2%

L: 2%

: 1%

3x Per WeekS: 20%

M: 16%

L: 21%

: 21%

OtherS: 4%

M: 2%

L: 2%

: 3%

Punch CardS: 4%

M: 6%

L: 6%

: 5%

L M S

L M S

LMS

LMS

LMS

LMS

L M S

L M S

29

$59

$42

$55

1x Per Week

$37

S

M

L

AVERAGE MONTHLY PRICE OF MEMBERSHIP(in $USD)

$132

$176

$136

Beginners

$162

S

M

L

$88

$90

$123

2x Per Week

$97

S

M

L

$124

$115

$140

3x Per Week

$143

S

M

L

30

$18

$18

$19

Drop-In

$20

S

M

L

$118

$133

$129

Punch Card

$141

S

M

L

AVERAGE MONTHLY PRICE OF MEMBERSHIP

$168

$135

$156

Unlimited

$159

S

M

L

$59

$104

$80

Other

$140

S

M

L

31

PERCENT OF MEMBERS ON AUTOPAY

United StatesS: 76%

M: 90%

L: 94%

CanadaS: 61%

M: 79%

L: 84%

EuropeS: 44%

M: 47%

L: 51%

OtherS: 0%

M: 33%

L: 32%

Australia/New ZealandS: 85%

M: 76%

L: N/A

LEADERS: 87% AUTOPAY

32

AUTOPAY CONCERNSWhile the majority of the member base at Leader gyms is on autopay, here are the reasons members have declined to enroll in this popular payment method.

8%DON’T SEE THE BENEFIT

12%SECURITY CONCERNS

16%OVER-DRAFT CONCERNS

64%OTHER(preference, forget to update cards, autopay not offered in region)

33

METHODS OF PAYMENT COLLECTION

United StatesCredit card: 75%

ACH: 33%

Cash: 7%

Checks: 10%

CanadaCredit card: 73%

ACH: 25%

Cash: 12%

Checks: 11%

EuropeCredit card: 51%

ACH: 72%

Cash: 31%

Checks: 0%

OtherCredit card: 45%

ACH: 76%

Cash: 48%

Checks: 5%

Australia/New ZealandCredit card: 42%

ACH: 62%

Cash: 9%

Checks: 0%

34

MEMBER RETENTIONChurn is the percentage of total members lost each month, while Net is the percentage of total members added each month minus the percentage of members lost each month.

10%

7%

7%

5%

ADDED

ADDED

ADDED

ADDED

CHURN

CHURN

CHURN

CHURN

4%

3%

3%

3%

NET

NET

NET

NET

6%

4%

4%

2%

S

M

L

35

CLASSES

36

AVERAGE CLASS SIZE(average number of members per class)

S

M

L

6

10

14

11

37

WEEKDAY CLASSES PER DAY(average number)

5

7

7

7

S

M

L

38

TYPES OF CLASSES OFFERED

BeginnersS: 72%

M: 73%

L: 66%

LMS

Boot Camp(Community WOD)

S: 33%

M: 40%

L: 49%

LMS

WODS: 81%

M: 87%

L: 77%

LMS

Olympic LiftingS: 33%

M: 52%

L: 53%

LMS

Open GymS: 67%

M: 67%

L: 74%

LMS

KidsS: 22%

M: 36%

L: 47%

LMS

39

TYPES OF CLASSES OFFERED

KettlebellsS: 10%

M: 10%

L: 15%

LMS

Mobility(Yoga/Stretching)

S: 26%

M: 36%

L: 40%

LMS

GymnasticsS: 8%

M: 16%

L: 21%

LMS

EnduranceS: 14%

M: 17%

L: 30%

LMS

Competitors(Advanced Class)

S: 13%

M: 27%

L: 38%

LMS

Non-Barbell (BodyFit/HIIT)

S: 17%

M: 16%

L: 38%

LMS

40

STAFF

41

MEDIAN NUMBER OF COACHES

S: 2

M: 4

L: 5

: 5

42

MEDIAN MEMBERS

S: 50

M: 123

L: 278

189 :

Equals 10 members

43

MEMBER-TO-COACH RATIO

S: 25 : 1

M: 31 : 1

L: 56 : 1

38 : 1 :

Equals 1 member

44

COM

PETITIO

NS

45

TYPES OF COMPETITIONS HOSTEDPercent of businesses that host competitions as compared to other businesses their size.

WOD competitions

Weightlifting competitions

Percentage of gyms that do not host competitions

S: 18%

M: 40%

L: 37%

: 40%

S: 5%

M: 13%

L: 19%

: 16%

S: 77%

M: 47%

L: 44%

: 44%

LMS

LMS

LMS

46

CROSSFIT® OPEN PARTICIPATION(average percent of members who compete in the Open)

S: 33%

M: 40%

L: 30%

: 34%

L

M

S

47 zenplanner.com

Lead your box to success with Zen Planner.

Zen Planner makes affiliate gyms wildly successful. Our comprehensive, customizable

box management solution provides you with the necessary tools to take your business to

the next level, enabling you to spend less time behind the desk and more time with your

valued athletes.

To learn more about what Zen Planner can do for your business, schedule your demo today.

SCHEDULE YOUR DEMO