Risk Score
Pending analysis
Investment Range
$1,778,000 - $4,347,000
Franchise Fee
$32,000
Min Cash Required
$40,000
Total US Locations
210
Business Summary
Gold's Gym Franchise LLC offers franchises for health clubs known as Gold's Gym Facilities. These facilities provide a wide array of health-related amenities, products, and services to members. This typically includes cardio training equipment, resistance training equipment, group fitness classes, and personal training services, along with locker rooms and a pro shop selling branded merchandise, supplements, and nutritional products. Gold's Gym Facilities may also offer optional specialized programs like Gold's Fit for functional training and Gold's Burn for high-intensity cardio and strength training.
Corporate History
Gold's Gym Franchise LLC was formed as a Delaware limited liability company on July 27, 2020, and operates under its company name as well as "Gold's Gym Franchise" and "Gold's Gym". The current entity began offering Gold's Gym franchises on March 26, 2021. Its predecessor, Gold's Gym Franchising LLC, offered franchises for Gold's Gym Facilities from 1999 until May 2020. The overall Gold's Gym brand has a history of operating facilities since 1965.
Financial Overview
Investment Range
$1,778,000 - $4,347,000
Franchise Fee (Low)
$32,000
Franchise Fee (High)
$40,000
Minimum Cash Required
$40,000
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$1,525,000
Equipment Costs (High)
$3,411,000
Working Capital
$70,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Gold's Gym Franchise LLC's financial statements raise questions about its ability to provide services and support to franchisees. The audited financial statements for the years ended December 31, 2023, and 2022, show zero cash and cash equivalents. While the auditor issued an unqualified opinion, the franchisor's balance sheet for April 2024 shows a negative cash balance and a large amount owed to its parent company, RSG Group USA Inc. The FDD explicitly states that the franchisor's financial condition "calls into question the franchisor's financial ability to provide services and support" to franchisees.
Financing Details
Gold's Gym Franchise LLC does not offer any direct or indirect financing to its franchisees. This means Gold's Gym franchisees will need to secure their own financing for notes, leases, or other obligations.
Performance Metrics
Total US Locations
210
Franchised Units
158
Corporate Units
52
Avg Square Footage
25,000
Franchising Since
2021
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
Yes
Litigation Summary
Gold's Gym Franchise LLC has no litigation to report in this document.
Bankruptcy History
Gold's Gym Franchise LLC's predecessor, Gold's Gym Franchising LLC, along with some of its parent and affiliate companies, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Northern District of Texas on May 4, 2020. The predecessor continued to manage its business as a debtor-in-possession. An asset purchase agreement was executed on July 14, 2020, with RSG Group USA Inc. as the purchaser, and this transaction closed on August 24, 2020. The court confirmed the Chapter 11 plan on August 26, 2020, although the matter remains open due to pending litigation of some administrative claims.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Gold's Gym franchise agreement, franchisees and their owners must meet the then-current standards for franchisees. They must either keep their existing location and renovate, remodel, or expand it to meet the latest brand standards for new facilities, or they can secure and develop a new, approved site. Franchisees must provide at least 12 months' notice, remain in full compliance with all agreements, pay a renewal fee, and sign the franchisor's current form of franchise agreement, along with any related ancillary agreements and a general release of claims.
Training & Support Program
Franchisor Assistance
Gold's Gym Franchise LLC provides comprehensive assistance to its franchisees. Before opening, Gold's Gym helps with site selection and lease acceptance, provides design guidelines for the facility, and offers initial training for up to two people without additional charge. Franchisees also gain access to the Operations Manual and can be authorized to presell memberships. For those with development agreements, Gold's Gym helps determine the development schedule and area. Once the facility is operational, Gold's Gym offers ongoing guidance on operating standards, purchasing, employee training methods, and administrative and accounting procedures. This support is provided through the Operations Manual, updates, and various communication channels. Gold's Gym also manages a Marketing Fund and the System Website to support brand promotion.
Initial Training Hours
32
Training Location
Dallas, TX
Ongoing Support
Gold's Gym Franchise LLC provides its franchisees with ongoing guidance on operational standards, specifications, procedures, and purchasing for their facilities. This support is delivered through various channels including the Operations Manual, written materials, electronic media, telephone consultation, and in-person at the franchisor's office or the facility. Franchisees receive continuous access to and updates for the Operations Manual and System Standards. Gold's Gym also manages a Marketing Fund and the System Website to support the brand. While no specific ongoing training courses are currently planned, Gold's Gym may require franchisees and their personnel to attend periodic training and annual conventions, which may incur additional fees.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Supervisory
Territory Type
Limited
Territory Size Requirements
Gold's Gym Facility territories are defined as a circle with a radius measured from the facility's main front entrance. The specific radius is determined by Gold's Gym Franchise LLC based on factors like demographics, the character of the site, and nearby businesses and residences. These territories can range from a minimum of one-eighth of a mile in densely populated areas up to 3 miles in more rural areas.
Staffing Notes
Gold's Gym Franchise LLC requires a dedicated general manager who works full-time in the day-to-day, on-premises operation of the facility and has completed the franchisor's management training program. This manager should not be involved in other business ventures, apart from passive investments that don't interfere with their duties. Franchisees are responsible for their hiring decisions and employee terms, but Gold's Gym provides System Standards that may regulate staffing levels, employee appearance and uniforms, training requirements, insurance for staff, and customer service standards.