Risk Score
Pending analysis
Investment Range
$430,800 - $1,118,100
Franchise Fee
$34,500
Min Cash Required
$25,000
Total US Locations
520
Business Summary
SNAP FITNESS operates clubs that provide 24/7 gym access to members, group fitness classes, and personal training. The clubs utilize advanced fitness technologies and high-quality fitness equipment. The business format includes a distinct interior layout, design, color scheme, and specific operating and customer service standards, all identified by the SNAP FITNESS trade name and service marks.
Corporate History
Snap Fitness, Inc. was incorporated in Minnesota on October 9, 2003, originally under the name AFC24 Hour Fitness, Inc., before changing to its current name. The company has been offering SNAP FITNESS franchises since March 2004. Snap Fitness operates as a wholly owned subsidiary of Lift Brands, Inc., a Delaware corporation.
Financial Overview
Investment Range
$430,800 - $1,118,100
Franchise Fee (Low)
$34,500
Franchise Fee (High)
$39,500
Minimum Cash Required
$25,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$300,500
Equipment Costs (High)
$901,300
Working Capital
$37,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Snap Fitness's financial statements show improved profitability in 2023, with net income attributable to Snap Fitness, Inc. at $4.875 million, up from $3.916 million in 2022 and reversing a loss of $0.876 million in 2021. Total revenues also saw a slight increase in 2023 to $52.767 million. The company maintains a positive working capital position, with current assets exceeding current liabilities. While cash and cash equivalents decreased from 2022 to 2023, the overall financial health indicates stability. The independent auditors issued an unqualified opinion on the financial statements, with no substantial doubt noted regarding Snap Fitness's ability to continue as a going concern.
Financing Details
Snap Fitness does not offer any direct or indirect financing to franchisees and does not guarantee any franchisee's notes, leases, or other financial obligations.
Performance Metrics
Total US Locations
520
Franchised Units
510
Corporate Units
10
Avg Square Footage
6,000
Franchising Since
2004
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
Yes
Litigation Count
8
Litigation Summary
Snap Fitness has had eight lawsuits disclosed in its history, all of which have been concluded. These cases primarily involved disputes with franchisees and former franchisees. Several actions, including one filed by the SF Franchisee Association in 2019 and others by former franchisees, alleged breach of contract, often related to issues with club management software, such as ransomware attacks, or violations of non-compete provisions. Most of these cases were settled in 2021. For example, Snap Fitness also initiated lawsuits against former franchisees for breaching transfer, non-compete, and confidentiality obligations, resulting in settlements in 2021 where the franchisees agreed to payments and new non-compete terms. A class action lawsuit was filed by a club member in 2017 concerning a Club Enhancement Fee, which was settled in 2019 with Snap Fitness contributing $2.9 million to a settlement fund. Snap Fitness did not initiate any new lawsuits against franchisees in fiscal year 2023 beyond those already described.
Bankruptcy History
Snap Fitness has disclosed a bankruptcy event involving its Chief Administrative Officer, Paul Early. While Mr. Early was employed as Chief Administration Officer at Gold's Gym International, Inc., an affiliate of GGI Holdings, LLC, GGI Holdings, LLC filed for Chapter 11 bankruptcy in May 2020. This bankruptcy proceeding, which involved liquidation provisions, was filed in the United States Bankruptcy Court for the Northern District of Texas. A reorganization plan for GGI Holdings, LLC was confirmed in August 2020. This indicates that a key executive of Snap Fitness was associated with an entity that experienced a bankruptcy, which was subsequently resolved.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, SNAP FITNESS franchisees must notify the franchisor in writing between six and twelve months before their current term ends. They must sign the then-current franchise agreement, which may have different terms, including fees and designated area. Franchisees must have completed all required modernization of their club to meet current brand standards and be in good standing, meaning they have not defaulted on the agreement and have met all obligations on time. If leasing, they need to provide proof of their ability to maintain possession of the club premises for the renewal term. Additionally, franchisees must comply with current training requirements and execute a general release of claims in favor of Snap Fitness and its affiliates.
Training & Support Program
Franchisor Assistance
SNAP FITNESS provides pre-opening support by offering site selection criteria and general design requirements, along with lists of approved suppliers and supplies. Franchisees receive access to an electronic operations manual and are required to complete initial training programs. The franchisor also offers grand opening services and promotional materials. Ongoing assistance includes membership services, such as administering reciprocity and billing, providing updates to approved lists, and offering general support and refresher training courses as deemed necessary. Snap Fitness also has a Franchise Advisory Council that offers advice on marketing and business initiatives.
Initial Training Hours
42
Training Location
Chanhassen, Minnesota
Ongoing Support
After opening, SNAP FITNESS provides ongoing support through various channels. This includes membership services, where the franchisor administers aspects of reciprocity and membership billing. Franchisees receive updates to lists of approved suppliers and supplies. Snap Fitness offers ongoing support and services as it determines necessary, which may include refresher training courses. Franchisees and their general managers are required to attend any conferences, meetings, summits, or seminars organized by the franchisor. Additionally, Snap Fitness has a Franchise Advisory Council that provides advice on advertising, marketing, and general business initiatives to franchisees.
Franchise Requirements
Ideal Candidate Profile
SNAP FITNESS seeks qualified candidates who have sufficient financial resources, business experience, and a genuine interest in operating a fitness club. The franchisor relies on the representations made by candidates regarding these qualifications. Once approved, the franchisee or their general manager is required to dedicate sufficient time and best efforts to managing the club and must provide direct on-premises supervision. If no single individual meets the definition of a Principal Owner, all designated owners must provide a personal guarantee for the business.
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
protected
Territory Size Requirements
SNAP FITNESS's Designated Area (territory) is initially a general geographic area where a franchisee intends to locate a club, identified as the Preliminary Designated Area. Once an approved site is secured, a specific Designated Area is defined around that Authorized Location. This area will be substantially similar in size, shape, and demographics to the Preliminary Designated Area. A minimum Designated Area is one city block, and in suburban and rural areas, it may extend up to a three-mile radius from the club's location. The exact size and boundaries are determined based on factors like population base, density, growth trends, residential and business entity density, and major topographical features.
Staffing Notes
SNAP FITNESS requires a minimum of forty staffed hours per week for its clubs. The franchisor emphasizes that it is an independent business, and franchisees are solely responsible for all employee-related matters, including hiring, discharging, training, wage and hour compliance, personnel policies, benefits, recordkeeping, scheduling, supervision, and discipline of employees. Snap Fitness explicitly states it has no power, responsibility, or liability for these personnel decisions, even if it provides advice on these subjects. Managers, instructors, and other employees who have access to proprietary information must sign non-disclosure agreements, and potentially non-compete agreements if required by Snap Fitness.