Break even in 6 months? Man shares cost of running a franchise gym in Singapore

If you've ever had ideas of starting a business, becoming a gym franchise owner could be something that'll work out.

Bad pun aside, there might be some truth to the statement — according to Thomas Chua, founder of stock research service Steady Compounding, at least. 

The Singaporean went as far as saying that gym franchise owners could potentially break even in six and a half months due to a monthly profit of over $62,000. 

It might sound a little too good to be true, but Thomas went on to back his claims with numbers.

On Wednesday (Jan 25), he shared a 108-second long clip on his TikTok account Steadycompound about why 24/7 gyms have been "spawning everywhere".

It's all about the attractive returns, he said.

[embed]https://www.tiktok.com/@steadycompound/video/7192530997353762050?is_from_webapp=1&sender_device=pc&web_id=7191417687737763330[/embed]

Using Anytime Fitness as his case study, Thomas started by providing a breakdown of the initial investment required.

According to Thomas, Anytime Fitness Singapore has an initial franchise fee of $90,000.

For reference sake, Anytime Fitness' franchise fees in the US include a one-time $42,500 (S$55,700) payment and an ongoing $699 monthly payment.

AsiaOne reached out to Anytime Fitness Singapore, but they declined to comment on the given figures provided in the article.

Add in other costs such as construction, equipment deposit and real estate costs, the total amount came up to a whopping $410,000.

'The returns are extremely attractive'

While this number may seem mind-boggling, Thomas explained how the gym can recoup back the amount in a relatively short space of time.

As prices vary from location to location, he used $100 a month as the average cost of an Anytime Fitness monthly membership.

He noted that the average number of members per gym in Singapore is "between 800 and 1,200". Again, he went for simplicity and assumed an average gym to have 1,000 members.

That's $100,000 in revenue a month and even after subtracting off monthly expenses ($38,000), that's still $62,000 a month. Not too shabby.

He concluded: "You will break even in just a few months and after that, the returns are extremely attractive."

Sounds logical enough, so where do we sign up? Interestingly enough, not too many netizens were convinced.

In the comments section, many weren't buying into the numbers he provided. Some seem rather bemused at his relatively optimistic outlook on starting a gym franchise.

"Many gyms don't get 1,000 members," a TikTok user said matter-of-factly.

When netizens questioned him about his figures for the average members per gym, Thomas replied that it often "depends on location and [the gym's] marketing efforts".

He added that most gyms would have a minimum of 400 members within the first year and that figure will go "above 800" from the second year onward.

Thomas' enthusiastic attitude toward starting a business contrasts with that of another local business owner, Goh Yong Wei.

He is the co-owner of Heartbreak Melts cafe and earlier this month, Yong Wei posted a TikTok clip warning others against starting a business in the F&B scene.

The co-owner brought up some discouraging statistics from Singapore's Accounting and Corporate Regulatory Authority (ACRA) website on how common it is for a business to fold.

ALSO READ: Cheap gyms in Singapore: 10 gym memberships under $100/month (January 2023)

amierul@asiaone.com

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