Should I buy an existing gym franchise or open a new one?
An existing gym gives you members and equipment you can inspect, but also its history and wear. A new one gives you new equipment and a clean start, but a build-out, presale and ramp-up before it settles. Weigh both against your cash and patience.
The two routes trade certainty against control. With an existing unit you can look at real members, real records and real equipment. With a new unit you shape everything, but you carry the time and cost of getting it open and full. This page lays out the trade-offs and does not say which to choose, since that depends on your money, your skills and your risk.
What an existing gym gives you
You can review the membership list, cancellation patterns, visit records and staff. You can test the equipment and read the lease. Ask what members pay, how many are on long agreements and how many have left recently. Your accountant can help you read the statements, and your lawyer can explain what transfers to you.
What it may carry with it
An existing gym brings its reputation, which could be good or poor. Equipment may be near the end of its life, and the franchisor may require updates or renovations of a new owner. Ask the franchisor what it would require and when. Ask who has been leaving the gym and why.
What opening new involves
A new unit means finding a site, negotiating a lease, building out the space and buying equipment. Ask how memberships are sold before opening and how long the ramp-up after opening has taken for other units. Ask the franchisor what support it gives and what other franchisees in the brand experienced. Talk with a lender about the financing a new build needs.
Questions to settle first
- How much cash can you hold in reserve while members build up?
- Does the area already have a unit of this brand?
- Can you take over a lease, or must you sign a new one?
- Will the franchisor approve you either way?
Related reading
10 pages on the same subject, grouped by topic.
Buying
Due diligence
Financing
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentEquipment purchase financing for entrepreneurs
- 03Canadian Franchise AssociationIndustryLookForaFranchise.ca - The Official Online Franchise Directory of the CFA
- 04Canadian Franchise AssociationIndustryFranchise Disclosure Legislation across Canada
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