Health and wellness industries were hit hardest during the pandemic. Since the start of COVID-19, 22 percent of gyms were forced to close their doors and the industry saw a revenue drop of close to $29.2 billion. Circumstances seemed grim for gym franchises over the last few years, but the industry is finally starting to recover.
Individuals are frequenting gyms and other health and wellness establishments with renewed vigor, and gym owners are identifying ways to adapt to the fundamental changes brought on by the pandemic.
Gyms Make a Comeback
Individuals had to find workout alternatives during the lockdown since very few gyms offered digital fitness opportunities. There was an uptick in mobile fitness app downloads and virtual workout video subscriptions. Additionally, retail and e-commerce stores saw an increase in sales as consumers purchased in-home fitness equipment like yoga mats, dumbbells, exercise bikes, and treadmills.
Over 50 percent of people said they’d likely never return to a gym now that they had access to workout equipment and digital fitness options, which caused concern for gym owners who were waiting for the lockdown restrictions to be lifted. However, once COVID-19 restrictions were finally loosened and gyms could once again offer their complete services, what gym owners feared the most ended up not being a problem at all.
By mid-2021, gym traffic was already up 83 percent of pre-COVID levels as people started to lose interest in at-home exercising. Planet Fitness, one of the largest and most popular gym franchises, saw a notable resurgence. By the start of last year, they were almost back at 100 percent membership capacity.
While COVID-19 challenged consumers’ loyalty to their gyms, the fast rebound of gym franchises proves that this loyalty can withstand even the most unprecedented times.
One of the most significant reasons for the resurgence of gym memberships is social interaction and accountability. The COVID-19 pandemic was deeply isolating and people realized that part of the draw of working out in a gym was being surrounded by other people. Working out at home is far less motivating and gym goers want to rebuild the social connections that help motivate and inspire them to reach their fitness goals.
Gym Franchise Valuation Process
Gym chains like Planet Fitness and Equinox have found a way to overcome hurdles presented by the pandemic. A steady stream of customers, along with a positive culture and sound financial footing, contribute to the ongoing success of these franchises. Our team has provided valuation services to these two gym chains, and many more like them.
Federal, state, and local funding options for business owners are beginning to wane across all industries. Franchise owners, small business operations, and investors want to fully understand the potential gains and liabilities of investing in or maintaining a stake in gym franchises and similar business entities. As the recovery process continues, it is important to consider all the various contributing factors that impact the overall value and worth potential of a particular business within the health and wellness field.
A comprehensive valuation report from us provides a complete look at any private business or franchise opportunity. Our experienced valuation associates fully understand the current environment, including the recovery process for gym franchises since COVID-19.