State Of The Industry 2024

TWO-BRAIN BUSINESS

We make gyms profitable.

4TH EDITION

STATE OF THE INDUSTRY The data, analysis and insight gym owners need to grow their businesses and profit in 2024.

Copyright © 2023 Two-Brain Business Inc. 2

W HY W E COLLECT A ND PU BL ISH NU MB ER S AND WHY YOU NEED THEM

BY CHRIS COOPER, TWO-BRAIN BUSINESS FOUNDER AND OWNER OF CATALYST FITNESS I love independent gym owners.

I love those who go their own way—the pioneers, the DIYers, the trailblazers.

I love their inside jokes, their homemade logos, their bands of happy misfits who show up at 5:45 a.m. joking about their daily “torture session” while loving their coach as they would a favorite cousin.

I love the spirit of entrepreneurship, the optimism and the energy you find in every independent gym.

With so many group fitness franchises in trouble or closing, it’s remarkable to see the little gyms surviving and growing.

And I’m proud to help you—to give you the tools of the big franchises without the polished chrome handcuffs that come with the franchise agreements.

What tools do you need?

DATA

MENTORSHIP

FRAMEWORKS

You need to know what’s working so you can ignore the stuff that’s not.

You need to know who’s successful so you can ignore those who aren’t.

You need to be able to copy and paste systems and models without building everything from scratch.

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You can build a business that supports your life.

Historically, that has meant buying a franchise: getting predictable results by following someone else’s rules.

But more and more fitness franchises are failing because they focus on value for the ownership and not for the franchisee.

You can build a life that’s fulfilling instead of draining.

You can help your clients without martyring yourself.

The reason most “fitness franchises” won’t sell a location to a fitness pro is simple: We spend too much time trying to get the programming right or arguing about the method.

But we love that stuff … and there’s no reason to trade business success for passion.

The key is to follow your head to build your business while you follow your heart to help your clients.

That means using numbers to make decisions. And now you have them!

HOW TO MAKE DECISIONS WITH NUMBERS You don’t need to be an accountant to grow your gym.

There are six metrics you must track:

CLIENTS

AVERAGE REVENUE PER MEMBER (ARM)

LENGTH OF ENGAGEMENT (LEG)

You must have enough clients at the right rate to pay your expenses and yourself.

The average amount you earn per client.

It’s just as important as the number of clients you have.

How long clients stay at your gym.

EXPENSES (ROI)

EFFECTIVE HOURLY RATE (EHR)

NET OWNER BENEFIT (NOB)

The return on investment you get from your space, equipment and staff.

The value of your time as owner.

A reflection of how well you manage your team.

What your business pays you, the owner (profit, salary and extras).

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In business, we can learn a lot by copying those who are doing better than we are, just like I can build my deadlift by copying the program of a great deadlifter. The key is to follow those whose metrics are better than yours and do what they do.

But how do we know who’s actually doing better? How do we know who’s doing great?

I think my gym is great. All gym owners think their gyms are doing great. So who should we emulate? Whose advice should we take? Who’s not doing so well?

And, most importantly, how can you improve your gym?

When you know your numbers, you can take clear action to improve your gym.

Start by looking at the average numbers. Are you better or worse than average in each category?

If you have fewer clients than the average gym, focus on getting more clients. If your clients pay less than those at the average gym, increase your ARM. If your clients quit before the clients at other gyms, focus on retention.

What would it take to get you to an ARM of $205 per client per month? How can you earn 150 clients and keep them for two years or more? Those are your first goals.

But I don’t actually want you to be average: I want you to take your gym from average to good to great. So don’t stop at average. Look at the top metrics in each category. Then you can ask questions about what the best gyms are doing to earn the top spots.

Is Facebook advertising still viable? Should we spend more time on social media or less?

Are full-time trainers better than part time? Should we add a nutrition program?

Should we buy a second location, expand this location, hire a mentor?

This guide will tell you exactly what the best gyms are doing. And a mentor can help you take action to become one of the top gyms.

Great gyms don’t just appear: They are the result of focused, data-backed action.

Thanks to Two-Brain’s internal data set and the amazing contributions of our partners at Kilo, PushPress, TeamUp and Wodify, we’ve put together the most comprehensive and useful set of numbers in the entire fitness industry.

Look, I’m a skeptic. I don’t believe anything until I see proof. When you start with proof, you build your gym on a rock-solid foundation. This guide is what I use to make decisions in my fitness businesses. I hope it helps you, too.

Thank you, microgym owners. Stay indie.

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WHO’S IN THE DATA ?

STATE OF THE INDUSTRY

IN 2023, WE COLLECTED DATA FROM 13,444 GYMS WORLDWIDE.

Percentage

TWO-BRAIN SURVEY RESPONSE BY SEGMENT

Access

CrossFit

Martial Arts

Personal Training

Strength & Conditioning

Other

Gym Type Qualitative data came from our annual State of the Industry Survey, which ran from Aug. 14 to Sept. 4. Thanks to everyone who entered numbers: You’re moving the fitness industry forward by helping us make this report better every year.

We also extracted a host of numbers from our Two-Brain App, which meticulously tracks client progress. In addition, we were thrilled to receive mountains of data from our collaborators: Kilo, PushPress, Wodify and TeamUp. These leaders provided anonymized data, but the numbers are valid because we went straight to the source, minimizing input error and rough guesses.

This is the largest data set in the world for microgyms and coaches. The numbers you’ll see on the next pages carry weight.

As in 2022, regional differences are sometimes present in the data. For example, 75 percent of Wodify’s data comes from U.S.-based gyms, and 85 percent of the PushPress data is connected to American gyms. Only 46 percent of TeamUp’s data comes from North American gyms, with the bulk of the numbers coming from Europe. When we saw a significant difference in the data, we spelled it out. If we didn’t note a regional difference or highlight, you can assume the data applies worldwide.

All monetary stats are reported in U.S. dollars unless otherwise noted.

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SECT I ON 1 : CLIENT S

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HOW MANY CLIENTS DOES THE AVERAGE MICROGYM HAVE? CLIENTS In a coaching gym, 150 members are a solid foundation.

With 150 members:

Build your plan around getting and keeping 150 high-value clients. Then build a plan to get more or open a second location.

But building all your rates and models around 150 will ensure you can keep the gym open for as long as you want.

• Churn is manageable.

• You can serve your clients in 4,000 square feet (the optimum range for profitability, as you’ll see in later sections).

And most gyms never reach more than about • The owner can make $100,000 per year 150 clients anyway. and employ a full-time coach, as well as a few part-time staff members.

159

PushPress average members per gym

(up 3.2% year over year)

2022: 154

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ARE GYMS GAINING OR LOSING CLIENTS? CLIENTS WODIFY: USER GROWTH BY REGION IN RELATION TO JULY 2022 MEMBERSHIP TOTALS

15% 10% 5% 0 -5% -10% -15%

July 2022

United States

Month July 2022 Aug. 2022 Sept. 2022 Oct. 2022 Nov. 2022 Dec. 2022 Jan. 2023 Feb. 2023 Mar. 2023 Apr. 2023 May 2023 June 2023

Aug. 2022

Sept.

2022

Oct. 2022

Australia/N.Z.

U.S. Baseline 1.35% 0.60% -0.51% -0.78% -0.85% -1.09% -0.47% 0.73% 1.45% 2.18% 3.58%

Nov. 2022

Canada

Aus./N.Z. Baseline 2.04% 3.98% 4.71% 6.16% 5.30% 6.51% 6.64% 7.14% 7.71% 7.03% 5.32%

Dec. 2022

Jan. 2023

Feb. 2023

European Union

Canada Baseline -2.22% -9.47% -7.25% -4.17% -3.51% -1.12% -0.62% 0.06% 0.01% 0.40% 2.81%

E.U. Baseline 0.90% 2.27% 2.92% 3.47% 1.15% 3.07% 4.91% 6.56% 7.69% 9.24% 10.87%

Mar. 2023

Apr. 2023

May 2023

June 2023

United Kingdom

Other

Total

U.K. Baseline -3.97% -6.91% -12.12% -9.81% -11.53% -11.39% -11.00% -14.12% -13.62% -12.40% -11.16%

Other Baseline 1.08% 3.09% -1.31% -0.30% 0.70% 1.67% 3.99% 3.02% 1.94% 3.49% 5.66%

Total Baseline 1.00% 0.61% -0.75% -0.47% -0.63% -0.38% 0.51% 1.22% 1.69% 2.50% 3.86%

This is not month-over-month growth. All figures are calculated with July 2022 numbers as the baseline.

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ARE GYMS GAINING OR LOSING CLIENTS? CLIENTS WODIFY: CANCELED USERS AS A PERCENTAGE OF ACTIVE BY REGION

July 2022

Aug. 2022

United States

Month July 2022 Aug. 2022 Sept. 2022 Oct. 2022 Nov. 2022 Dec. 2022 Jan. 2023 Feb. 2023 Mar. 2023 Apr. 2023 May 2023 June 2023

Sept.

2022

Oct. 2022

Australia/N.Z.

U.S. 5.18% 5.44% 5.02% 4.81% 4.48% 4.62% 5.29% 4.46% 4.62% 4.78% 4.83% 4.82%

Nov. 2022 Canada

Aus./N.Z. 5.60% 5.90% 5.98% 5.68% 5.35% 5.93% 7.13% 5.42% 6.24% 6.41% 6.47% 6.45%

Dec. 2022

Jan. 2023

Feb. 2023

European Union

Canada 4.02% 5.05% 5.31% 4.41% 4.51% 3.55% 3.99% 4.21% 4.35% 4.49% 4.28% 4.57% 10

E.U. 5.15% 5.72% 5.78% 6.07% 4.98% 5.80% 4.81% 4.13% 4.82% 5.08% 4.64% 5.10%

Mar. 2023

United Kingdom

U.K. 5.60% 6.84% 8.84% 7.14% 6.92% 5.47% 6.82% 5.67% 5.23% 6.17% 5.34% 5.70%

Apr. 2023

May 2023 Other

Other 3.78% 3.71% 3.55% 4.00% 3.81% 3.38% 3.48% 3.40% 4.01% 4.12% 3.49% 4.73%

June 2023 Total

Total 5.00% 5.30% 5.08% 4.91% 4.57% 4.61% 5.14% 4.38% 4.67% 4.85% 4.74% 4.95%

ARE GYMS GAINING OR LOSING CLIENTS? CLIENTS WODIFY: NEW USERS AS A PERCENTAGE OF ACTIVE BY REGION

July 2022

Aug. 2022

United States

Month July 2022 Aug. 2022 Sept. 2022 Oct. 2022 Nov. 2022 Dec. 2022 Jan. 2023 Feb. 2023 Mar. 2023 Apr. 2023 May 2023 June 2023

Sept.

2022

Oct. 2022

Australia/N.Z.

U.S. 3.92% 4.74% 3.90% 3.60% 3.48% 3.10% 5.22% 3.66% 4.48% 4.03% 4.48% 4.74%

Nov. 2022 Canada

Aus./N.Z. 5.74% 6.99% 6.00% 6.79% 4.84% 3.85% 7.43% 5.44% 5.34% 4.64% 5.48% 4.18%

Dec. 2022

Jan. 2023

European Union

Canada 3.54% 3.92% 4.79% 4.16% 4.44% 2.81% 5.09% 3.36% 3.97% 3.32% 3.96% 4.17%

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E.U. 3.68% 5.58% 6.46% 5.13% 4.31% 3.02% 5.81% 3.59% 5.11% 3.61% 4.86% 4.07%

Feb. 2023

Mar. 2023

Apr. 2023

May 2023

United Kingdom

Other

U.K. 4.87% 6.14% 5.87% 5.48% 5.05% 3.25% 8.36% 5.85% 5.21% 4.69% 5.51% 4.25%

Other 2.98% 3.77% 3.45% 3.36% 2.80% 2.26% 4.15% 2.97% 3.33% 2.94% 3.48% 3.19%

June 2023 Total

Total 3.92% 4.83% 4.24% 3.96% 3.62% 3.02% 5.36% 3.74% 4.43% 3.89% 4.45% 4.41%

WHO ARE THE CLIENTS? CLIENTS

BREAKDOWN BY GENDER

51.0% Male

49.0% Female

Source: Wodify U.S. Segment

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WHO ARE THE CLIENTS? CLIENTS

BREAKDOWN BY AGE

Under 21

21-30

31-40

41-50

51+

Source: PushPress, TeamUp, Wodify

Age Range Under 21 21-30 31-40 41-50 51+ Source: Wodify U.S.

Aus./N.Z.

E.U.

Canada

13

U.K.

Other

HOW ARE GYMS GAINING CLIENTS? MARKETING

Only

80.9% of gyms

49.1%

were running ads in August 2023

have run ads

THE KEY TAKEAWAYS:

There’s a strong correlation between gyms that are profitable and gyms that are running ads. Only 50 percent of gyms run ads for various reasons, but this is an important consideration: If you aren’t running ads and the other gym in town is, it’s getting a lot more lead traffic than you are. Staff members at the other gym are probably talking with clients before you are.

“Waiting and hoping” is not effective.

All gyms need a marketing strategy, which may or may not include paid ads.

In our conversations with gym owners, many say “ads don’t work” because they don’t understand the whole funnel. Ads are one part of the funnel. They must be supported by lead nurturing, systems that help leads book and show up for appointments, and effective salespeople who solve problems and close. For example, a spectacular advertising campaign can be derailed by a poor salesperson.

The most profitable gyms have a precise plan to acquire leads and clients, and they usually use all four of the funnels we recommend: paid ads, referrals, organic social media and content.

You can’t run a microgym without marketing, and we teach four marketing funnels in TwoBrain. One of those funnels involves paid ads.

Some gym owners use it very effectively when they understand how it works, and others can acquire the clients they need without paid advertising.

THE MOST COMMON REASONS WHY RESPONDENTS ARE NOT CURRENTLY RUNNING ADS • Organic campaigns and referrals work better (46% of those not running ads) • Lack of skill with advertising (39.9%)

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WHY OWNERS ARE NOT RUNNING ADS MARKETING

Organic Campaigns are Better

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

No Return on Investment Lack of Skill With Advertising At Max Capacity Poor Lead Quality

PERCENTAGE RUNNING ADS AS OF AUGUST 47.4% 44.2% 85.7% 49.5%

57.6% 54.0% 49.1%

Other 0

50

100

150

200

Note: The graph above shows selections from a checklist in our survey.

Gym owners were asked to check all reasons why they are not running ads, not the main reason only. Many gym owners checked two or more boxes.

WHAT ELSE ARE GYM OWNERS DOING TO ATTRACT CLIENTS?

81.3%

Nothing

Other Lead Magnets/ Nurturing Campaigns Blogging/Website SEO

of survey respondents use social media to attract clients

73.7%

7%

do nothing beyond paid ads

use referral campaigns, Affinity Marketing and local networking

Social Media Publication Referral Campaigns/ Affinity Marketing/ Local Networking

Note: The graph above shows selections from a checklist in our survey.

Gym owners were asked to check everything they are doing, not the main activity only.

Many gym owners checked two or more boxes.

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LEADS PER MONTH MARKETING

AVERAGE NUMBER OF LEADS PER MONTH Access

59

CrossFit

21

Martial Arts

46 Personal Training

31 Strength & Cond.

31

28

Other

Survey respondents’ average number of leads per month across all gyms

40

Total

28 Kilo stats reveal what the funnel looks like: (Kilo monthly average sales stats)

25 leads

To become clients, leads must book an appointment, show up for the appointment and sign up.

9 appointments 6 sales 16

COST OF A NEW LEAD MARKETING

Leads coming from social media, blogs, podcasts and other media don’t carry a measurable cost, which pulls the average cost of acquisition down. However, generating these leads takes time.

$45.91

Average cost of a lead across all gyms

$27 2022

GYM TYPE Access CrossFit Martial Arts

AVERAGE COST $11.27 $33.10 $56.54

Personal Training

$57.59

Strength & Conditioning Other Total

$91.42 $34.59 $45.91

In the early stages of gym ownership, time is your greatest asset, and it should be invested into lead generation with low ad spend.

However, the most profitable gyms eventually run paid ads. And knowing the cost to acquire a client can help gym owners direct attention to the greatest point of leverage in their marketing plans.

If the cost of their leads is too high, they can focus more on posting media. If the cost of their leads is low, they can focus on adding paid marketing to speed up a working process.

SIGNUPS PER MONTH This is an interesting number to know, and several factors should be considered when evaluating it.

First, is your gym signing up more or fewer clients than the average in your category?

Next, what are gyms in the other categories doing to sign up more people?

For example, while access gyms regularly sign up more clients per month, their churn rate is also much higher, and the value of each client is much smaller. Look at the average pricing tables in the next section and you’ll see that it takes four access-only clients to equal one coaching client in value.

The strategies for acquisition are different in each niche, but if it costs the same amount to get a high-value client and a low-value client, it’s a good indication that coaching gyms should prioritize value, not headcount.

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GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

AVERAGE SIGNUPS PER MONTH 38 7 11 9 9 10 9

NEW MEMBERS MARKETING

7.3

5.3

Average new members per month

Average cancellations per month (PushPress)

(PushPress)

INVESTMENT IN MARKETING SOFTWARE

$370

Average investment by those who pay for marketing software

70%

of survey respondents invest in email or text automation, a customer relationship management system (CRM), funnel builders, etc.

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SE CT ION 2: CLI ENT VA LUE

19

CLIENT VALUE REVENUE

Total revenue isn’t the most important metric—but it’s still important.

In an ideal world, a gym would have strong, consistent monthly revenue totals all year round. But, as you know, December is often a bad month in the gym world, and January is usually a good month.

In the chart and table below, July 2022 revenue is used as a baseline, and you can see when gyms made more money—or less—over the next 11 months. Some clear regional trends are also apparent.

WODIFY: MONTHLY GYM REVENUE CHANGES IN RELATION TO JULY 2022 REVENUE 20% 15% 10% 5% 0 -5%

July 2022

Aug. 2022

Sept.

2022

Oct. 2022

United States

Month July 2022 Aug. 2022 Sept. 2022 Oct. 2022 Nov. 2022 Dec. 2022 Jan. 2023 Feb. 2023 Mar. 2023 Apr. 2023 May 2023 June 2023

U.S. Baseline 2% 1% 2% 3% 0% 10% 4% 8% 6% 12% 13%

Nov. 2022

Dec. 2022

Jan. 2023

European Union

E.U. Baseline 2% 11% 19% 16% 6% 11% 4% 10% 9% 14% 14%

Feb. 2023

Australia

Mar. 2023

Apr. 2023

May 2023

United Kingdom

Aus. Baseline 10% 4% 12% 10% 5% 13% 6% 17% 5% 17% 9%

Note: This is not month-over-month growth.

All figures are calculated with July 2022 numbers as the baseline.

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June 2023

U.K. Baseline 1% 5% 9% 3% -3% 5% 5% 9% 11% 12% 10%

CLIENT VALUE REVENUE

WODIFY AVERAGE REVENUE PER GYM Month July 2022 Aug. 2022 Sept. 2022 Oct. 2022 Nov. 2022 Dec. 2022 Jan. 2023 Feb. 2023 Mar. 2023 Apr. 2023 May 2023 June 2023 Average

U.S. $11,886 $12,107 $11,976 $12,182 $12,196 $11,922 $13,050 $12,331 $12,841 $12,614 $13,300 $13,482 $12,490.58

E.U. (euros) €8,882 €9,022 €9,854 €10,594 €10,328 €9,424 €9,903 €9,267 €9,768 €9,676 €10,110 €10,167 €9,749.58

WODIFY AVERAGE REVENUE PER MONTH IN U.S. DOLLARS

U.S. $12,490 E.U. $10,272 (9,749 euros)

Aus. $11,578 (AU$18,271)

U.K. $10,618

(8,745 pounds)

Converted with Oct. 18, 2023, rates

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Aus. (AU) $16,766 $18,384 $17,395 $18,838 $18,494 $17,560 $18,928 $17,713 $19,598 $17,589 $19,648 $18,341 $18,271.17

U.K. (pounds) £8,283 £8,372 £8,697 £9,018 £8,502 £8,049 £8,723 £8,696 £9,051 £9,166 £9,257 £9,135 £8,745.75

CLIENT VALUE REVENUE

TWO-BRAIN GYMS: AVERAGE REVENUE PER MONTH

$21,040 Two-Brain gym

average revenue per month

AVERAGE NUMBER OF MEMBERSHIP PLANS BY PARTNER

WHAT ARE GYMS SELLING?

PARTNER

AVERAGE NUMBER OF MEMBERSHIP PLANS

PushPress TeamUp Wodify (U.S.) Wodify (Canada) Wodify (E.U.)

17 13 12 16 13

22

GROUP TRAINING

WHAT ARE GYMS SELLING?

73.9%

GROUP TRAINING

$165

Survey respondents’ median price of group training

3.1%

increase over 2022

Average percentage of total revenue for CrossFit respondents who offer group coaching

65%

41%

Average percentage of total revenue for survey respondents who offer group coaching

Average percentage of total revenue for Personal Training respondents who offer group coaching

67%

Average percentage of total revenue for Access respondents who offer group coaching

$160

2022 price

7.6%

2022

Almost every CrossFit and Martial Arts gym in the data set offers group training. Access Only gyms are least likely to provide group training—only 52.6% offer the service (2022: 57%).

GYM TYPE

AVERAGE PRICE

Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

$145 $160 $152 $180

PERCENTAGE OFFERING 52.6% 99.8% 93.3% 73.1%

$175

94.4%

$150 $163

92.0% 93.1%

HOW MANY GROUP CLASSES DOES THE GYM PROVIDE PER WEEK?

27

57

PushPress’s average (dominated by U.S.-based gyms)

TeamUp’s average (dominated by European gyms)

54

31.4

2022 number

2022 number

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GROUP TRAINING

CLASSES & ATTENDANCE WODIFY: HOW MANY GROUP CLASSES DO GYMS PROVIDE PER WEEK?

Percentage of Gyms

Wodify broke the numbers down further to show that 53 percent of gyms have between 20 and 50 classes per week.

Classes per Week

AVERAGE ATTENDANCE PER CLASS

9.5

TeamUp average class attendance

What’s even more interesting than “how many classes?” is the question “how many classes should gyms be offering?”

In general, we’ve found that client adherence is improved in classes of 7-13, but many gyms are running classes for fewer than four attendees.

It’s simple to determine whether you should keep a class: Just calculate the average amount clients pay per class and multiply that by the number of people in the class.

Is it worth it? The math should tell you.

6.9

PushPress average class attendance

6.6

2022 number 24

GROUP TRAINING AVERAGE CLASS SIZE

Wodify’s data shows the distribution of gyms according to average class size.

Percentage of Gyms

33% of gyms have an average class size of 4 or 5.

Analysis: We saw a significant change in Wodify’s data from year to year: Fewer gyms are running classes of 1-4 and more gyms are running classes of 5-8.

Average Class Size Note: The combined percentage of gyms with average class sizes of 15 or more is 1.23%.

• The percentage of gyms with average class sizes of 1-4 people decreased from 71.33 percent to 47.38 (-23.95 points).

• The percentage of gyms with average class sizes of 5-8 people increased from 26.56 percent to 43.24 (+16.68 points).

Gyms aren’t running more classes, but the average number of attendees per class is rising. Average membership hasn’t increased much since last year, so that means gyms are getting better at running the number of classes they need instead of running a bunch of classes for one or two people.

This decreases costs for the gym—and it’s correlated with higher retention, too. It’s just more fun to have five to eight people in a class than one or two.

Take note: Almost no one in the data set is consistently running classes with more than 10 attendees all the time. Building your business on the target of running large classes all day is just not a good idea.

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Average Percentage Class of Gyms Size 1 7.82% 2 9.01% 3 13.39% 4 17.16% 5 15.53% 6 13.10% 7 9.60% 8 5.01% 9 3.32% 10 2.31% 11 1.21% 12 0.71% 13 0.41% 14 0.21%

ANALYSIS: GROUP TRAINING CLIENT VALUE

In theory, the group model should be the most profitable. One coach working with 12 clients should generate more revenue at a higher margin.

But the reality—highlighted in data from 13,444 gyms and obvious to anyone selling the group model—is that the model has flaws. The average group has three to seven clients, not 12. Yet the average gym owner has invested in space and equipment for 12, so six-person groups barely cover the bills.

Worse, most gyms are undercharging for coaching: They’re selling small-group coaching at large-group prices. That puts gym owners in a real pinch: They’re not making enough with six people in a group because their prices are too low, and they’re paying too much in expenses. They have three choices: 1. Coach everything themselves for 12 hours a day.

2. Pay their coaches a low wage and make very little themselves.

3. Supplement the model by selling personal training, semi-private training, nutrition coaching and other higher-value services.

No matter what your method is (CrossFit, HIIT, bootcamp, strength and conditioning, Brazilian jiu-jitsu, Pilates, etc.), focusing on a higher-value model is your best bet against the commoditization of intense exercise done in a group setting.

Attendance Patterns Wodify supplied detailed tables showing very clear attendance patterns.

• • •

•

In the past, it took gym owners three to five years to figure this out. But now they don’t have the luxury of time: With group-exercise competitors flooding the market, prices are going down fast, leads are harder to find, and clients jump from gym to gym after months instead of years.

•

The bottom line: If you’re selling group exercise, you’re going to compete with Nike, Revel, F45 and others at a lower price. If you’re selling coaching, you can deliver it in ways that don’t appear to be the same as the lower-priced “commodity brands.”

•

CrossFit affiliate owners might not like to hear this, • but they should take comfort in the knowledge that Greg Glassman didn’t sell big group classes. His groups were small, carried a high value, and required little space and overhead. The myth that “CrossFit equals big classes” came from an outsider.

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Monday remains the most well-attended day of the week worldwide.

Sunday is the least well-attended day of the week worldwide.

Sunday attendance drops off more dramatically in the U.S. and Aus./N.Z. (about 5 and 9 points, respectively), but the decline is less pronounced in Canada, the U.K. and the E.U. (about 4 points in all regions).

Attendance declines each day from Monday to Sunday worldwide, with the exception of slight increases from Thursday to Friday in the U.S. and U.K. Significant attendance declines appear on Thursday in all regions except Canada, from a 3.86-point drop in the U.S. to a 2.68-point drop in the E.U. In Canada, the Thursday decline is still present but lesser in magnitude: 1.07 points.

In 2022, the E.U. saw the lowest WednesdayThursday dropoff, at 1.76 points.

Combined Saturday and Sunday attendance is still not as great as attendance even on the worst single weekday (Thursday or Friday) in all regions but the U.K. In that region, combined weekend attendance is greater than attendance on Thursday and attendance on Friday.

In the U.S., Saturday attendance is more than 4 times that of Sunday. This figure is 9x in Aus./N.Z. but less than 2x in the E.U., the U.K. and Canada.

POPULAR CLASS TIMES WHEN DO CLIENTS TRAIN?

Most Popular Weekday Class Times: U.S.

1

2 5 a.m.

3 5 p.m.

4 4 p.m.

6 a.m.

Most Popular Weekday Class Times: Aus./N.Z.

1

2 5 a.m.

3 6 a.m.

4 5 p.m.

9 a.m.

Most Popular Weekday Class Times: E.U.

1

2

6 p.m.

3

4

7 p.m.

5 p.m.

4 p.m.

Most Popular Weekday Class Times: Canada

1

2 5 p.m.

3 6 a.m.

4 4 p.m.

6 p.m.

Most Popular Weekday Class Times: U.K.

1

2 6 p.m.

3 5 p.m.

4 6 a.m.

7 p.m.

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Most Popular Weekend Class Times: U.S. 1st: 9 a.m.

2nd: 8 a.m.

3rd: 10 a.m.

Most Popular Weekend Class Times: Aus./N.Z. 1st: 8 a.m.

2nd: 7 a.m.

3rd: 9 a.m.

Most Popular Weekend Class Times: E.U. 1st: 10 a.m.

2nd: 9 a.m.

3rd: 11 a.m.

Most Popular Weekend Class Times: Canada 1st: 9 a.m.

2nd: 10 a.m.

3rd: 8 a.m.

Most Popular Weekend Class Times: U.K. 1st: 9 a.m.

2nd: 10 a.m.

3rd: 8 a.m.

Source: Wodify

PERSONAL TRAINING CLIENT VALUE

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

PERSONAL TRAINING

2022 AVERAGE PERCENTAGE PERCENTAGE PRICE OFFERING OFFERING $67 94.7% 85.7% $75 93.7% 93.3% $78 93.3% 87.5% $76

98.1%

98.4%

$77

95.2%

89.8%

$74 $74

81.3% 93.3%

87.5% 92.1%

$75

Survey respondents’ average 60-minute PT session price

$74 2022

$71 2021

22%

Average percentage of total revenue for survey respondents who offer 1:1 coaching

93%

of gyms in all categories except Other offer PT Other: 81.3% CrossFit: 93.7%

Analysis While it’s nice to see the price of PT slowly climbing over the last three years, it’s even better to see that more gyms are offering PT—a high-value service that supports gyms, produces the swiftest results for clients, and creates more income for trainers.

We saw sizable increases in the percentage of Access, Martial Arts, and Strength and Conditioning gyms that offer PT, while the CrossFit and Personal Training gyms held steady (both well over 90 percent). Only the Other category saw a decline.

This is important: If the median group-training membership for a whole month is $165, gyms can take in almost the same amount by selling just two PT sessions.

The 9-point increase in Access gyms that offer PT carries even more weight. These gyms charge an average of $43 a month for uncoached facility access (see Page 34), and on average they charge $67 for one PT session.

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So selling two PT sessions provides more revenue than acquiring three new members.

If you own one of the few gyms that doesn’t offer personal training, consider adding the service tomorrow.

NUTRITION COACHING CLIENT VALUE

NUTRITION COACHING

$151

Survey respondents’ average monthly price 2022: $145

66.1%

Percentage of survey respondents who offer nutrition coaching

4.3%

Average percentage of total revenue for survey respondents who offer nutrition coaching

Survey respondents’ median monthly price

$150—2023 $140—2022 $129—2021 $110—2020

This is an annual increase of about 8% per year

Analysis The question we must ask with every service is this: Does it solve the problems of the client and the coach and the gym owner?

On the surface, nutrition coaching does all three. In theory, it’s more scalable than group training because a nutrition coach requires less time to deliver service. And the nutrition coach doesn’t have to show up at 11 a.m. every day to run the Noon Nutrition Group.

The problem: Most popular models for delivering nutrition coaching aren’t working.

While more than 66 percent of gyms have a nutrition program now, those programs, on average, create less than 5 percent of total revenue. If you subtract about half for the coach, there’s almost nothing left—and if you’re paying an external company to oversee your nutrition coaching, the net benefit to the gym is probably zero.

AVERAGE PRICE Access $167 CrossFit $150 Martial Arts $130 Personal Training $152 Strength & $157 Conditioning Other $151 Total $151 GYM TYPE

% OFFERING 31.6% 73.5% 33.3% 61.5% 63.5% 52.0% 66.1%

More importantly, most don’t tend to stick with nutrition coaching long enough to develop a habit—at most, a few months. So the model doesn’t work for the coaches for long, either.

Some clients pay a nutrition coach for accountability long term, but you should ask this question in your gym: How long does the average client pay for nutrition coaching? And do they keep up their habits after the coaching ends? If so, then the program is working for the clients.

But if clients sign up for $150 a month, stay for three months and then quit, are they really benefiting? Is the gym? Is the coach?

In that light, it might be better to run quarterly nutrition challenges or have a regular “accountability” add-on instead of selling a separate monthly service. This is an area where the theory of “what’s best” doesn’t match what’s happening. That’s why we trust data instead of just seeing what we want to be true.

29

ONLINE COACHING CLIENT VALUE

ONLINE COACHING

$166

Survey respondents’ average monthly price

2022: $181 2021: $163

GYM TYPE

3.8%

Average percentage of total revenue for survey respondents who offer online coaching

2022: 5%

Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

AVG. PRICE $161 $164 $93 $189

% OFFERING 31.6% 28.2% 20.0% 51.5%

$170

44.4%

$136 $166

34.7% 34.8%

51.5% of Personal Training gyms

The percentage of gyms offering online coaching has declined since COVID times—from 63 percent in 2020 to 35 percent in 2023. That said, the figure increased by 3.2 percentage points from 2022 to 2023.

offer the service (highest rate).

As in 2022, Martial Arts gyms are still the least likely to offer online coaching.

Many bricks-and-mortar gyms simply stopped offering online training when they reopened after lockdowns. But clients who purchased equipment while their gym was closed, clients who move away from the gym, and clients who travel often can still benefit from this service.

In many cases it’s a defensive move to keep clients, not an upgrade.

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SUPPLEMENTS CLIENT VALUE

50.8%

of survey respondents reported selling supplements

2022: 48.1% 2021: 52.5% 2020: 54%

3.7%

Average percentage of total revenue for survey respondents who sell supplements

2022: 3%

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

PERCENTAGE SELLING 52.6% 59.3% 20.0% 36.5% 44.4% 39.7% 50.8%

Analysis The percentage of gyms selling supplements has gone up over last year. Supply-chain issues have been mostly ironed out, and supplements carry value on two fronts: 1. Gym members often buy supplements from someone who isn’t as knowledgeable as their coach, so you have a chance to offer more value to clients if you prevent them from being led astray at the mall.

2. Selling supplements is actually a high effective hourly rate (EHR) activity because, while setup takes a few hours, system maintenance is almost nil.

Next to raising rates 3.4 percent or reducing transaction fees 3.4 percent, selling supplements is one of the easiest ways to add revenue. And many gyms do it just to get good stuff for their people.

BioEdge, for example, tracks inventory and pays the gym whenever anyone buys, then ships new stuff when we’re low. We’ve done literally nothing since we printed out the QR code and taped it on the shelf.

The key is to use a service you don’t have to spend time maintaining. The old way of buying and storing inventory is not effective.

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KIDS CLASSES CLIENT VALUE

7.6%

Average percentage of total revenue for survey respondents who offer kids coaching 2022: 9%

Most likely to offer kids classes: Martial Arts, CrossFit, Strength & Conditioning

40.9%

Least likely: Personal Training, Access

of survey respondents offer kids classes 2022: 39.5%

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

PERCENTAGE OFFERING 21.1% 49.3% 80.0% 16.5% 41.6% 24.0% 40.9%

In 2023, 40.9 percent of survey respondents offer kids classes, as opposed to 39.5 percent in 2022. But the revenue stream is contributing less to total revenue in gyms that serve kids. On average, it provided 7.6 percent of income in 2023 vs. 9 percent in 2022.

Analysis Many martial-arts gyms now focus on kids, and more CrossFit gyms are bringing back programs for kids. Many “strengthand-conditioning gyms” are sport specific, which lends itself to a younger audience of hopeful athletes.

Overall gym revenue hasn’t gone up much, so that means gyms are either undercharging or the classes aren’t filled.

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HYBRID PROGRAMS CLIENT VALUE

$337

Survey respondents’ average monthly price

2022: $319

8.5%

Average percentage of total revenue for survey respondents who offer hybrid programs

2022: 11%

62.1%

of Personal Training gyms offer hybrid memberships (greatest percentage)

21.1%

of Access gyms offer hybrid memberships (lowest percentage)

54.9%

of CrossFit gyms offer hybrid memberships

54.6%

of survey respondents offer hybrid memberships

2022: 47.7%

Analysis Hybrid packages are defined as a combination of two or more services. Hybrids are any prepackaged combo of group classes, personal training, online coaching or nutrition services. In the future, we might call these packages “high-ticket offers.” The table shows the average values of the packages gyms are selling.

It’s interesting to compare 2023 data against last year’s numbers— the average price of a hybrid package has gone up by $18. This is an indication that gyms are selling higher-value packages now—or at least that their most expensive options are more expensive than they used to be.

What’s most important is that more gyms are solving clients’ problems more fully instead of just offering an exercise program.

33

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

AVERAGE PERCENTAGE PRICE OFFERING $250 21.1% $322 54.9% $384 46.7% $377

62.1%

$365

58.7%

$327 $337

45.3% 54.6%

UNCOACHED ACCESS WHAT ARE GYMS SELLING?

$76 Survey respondents’ average monthly price

2022: $73

26.8%

of all gyms offer uncoached access

2022: 23.9%

15%

Average percentage of total revenue for survey respondents who offer uncoached access

2022: 20%

74.8%

Average percentage of total revenue for survey respondents who identify as Access gyms

2022: 77%

AVERAGE PERCENTAGE PRICE OFFERING Access $43 100% CrossFit $86 29.2% Martial Arts $38 13.3% Personal $73 16.4% Training Strength & $69 22.6% Conditioning Other $61 19.2% Total $73 26.8% GYM TYPE

Analysis Obviously, Access gyms offer uncoached access. But more CrossFit, Martial Arts and Personal Training gyms are offering it now, even though fewer Strength and Conditioning and Other gyms are offering it. The total percentage of gyms offering uncoached access increased by 2.9 points from 2022 to 2023.

The really interesting thing is that most coaching gyms that sell uncoached access are charging double what an access-only gym would charge. For example, Access gyms charge $43 on average, but the CrossFit number is $86.

There are two possibilities here: Either the gym is selling uncoached access as an alternative to its coaching program or the gym is selling it as an add-on to its coaching program.

34

PERCENTAGE OF REVENUE WHAT ARE GYMS SELLING? This is one of the most interesting pages every year. First, it highlights opportunities for owners to increase their value to clients (and receive value in the form of more revenue). Second, it shows owners where they can refocus their attention.

revenue to “group.” In addition, sources not listed in this table were not significant enough to warrant their own category but could result in totals that do not equal 100 percent.

This table breaks down the average percentage of revenue each service stream contributes to gyms in each category. Note: Input errors create totals that do not equal 100 percent.

For example, 25 percent of CrossFit gyms reported revenue from sources outside of the segments listed. These sources might include specialty classes, diversified models including space rental, punch-card sales and drop-in fees.

For example, a gym owner might have mistakenly entered percentages that total above or below 100, or the owner might have attributed “kids”

Nevertheless, the table still shows clear trends and revenue-generation opportunities for businesses in all categories.

AVERAGE REVENUE BY STREAM GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

GROUP 4.6% 80.0% 82.0%

PT NUTRITION ONLINE SUPPLEMENTS 13.6% 0.4% 0.3% 1.9% 12.8% 3.2% 0.9% 2.7% 19.5% 1.9% 0.6% 3.4%

KIDS 3.5% 2.7% 34.9%

HYBRID 1.9% 3.1% 9.9%

ACCESS 74.8% 1.3% 0.1%

32.5%

51.1%

3.8%

3.6%

2.4%

1.2%

12.3%

4.4%

56.8%

24.5%

3.6%

1.8%

2.2%

6.1%

6.2%

5.6%

55.7% 61.9%

24.6% 20.5%

2.9% 3.2%

5.5% 5.0%

1.2% 2.6%

2.8% 3.7%

6.6% 5.3%

5.4% 4.2%

35

SECT I ON 3 : CLI ENT R E T ENT ION

36

LENGTH OF ENGAGEMENT: CHANGING LIVES CLIENT RETENTION

The industry average length of engagement—LEG— is 7.8 months. That’s too low.

20.7 months

7.8

months

LEG is our primary retention metric. We measure other metrics—such as how many clients cancel in Industry a month—but LEG is important because it tells us if Two-Brain clients’ average we’re changing a client’s life. Let’s face it: If clients average length of length of stay for a few months, they might learn something engagement engagement new—but the period isn’t long enough to build exercise and nutrition habits that will last a lifetime. who do personalized programs with a coach in small For that, you need about two years. groups of about two to four people.

Longer LEG is also good for business. The longer But LEG drops off in group training classes that have you keep members, the less you have to market to between four and seven clients. It’s a little better replace departing members with new clients. with groups of seven to 12. But LEG and all retention metrics drop off sharply when you have more than In general, LEG is highest with personal-training 13 in a class. This is another challenge that gyms runclients. Data is starting to emerge that shows LEG is also really good with semi-private training clients ning big classes have to overcome—and a few do.

WODIFY: CANCELED USERS AS A PERCENTAGE OF ACTIVE BY REGION

July 2022

United States

Aug. 2022

Sept.

2022

Australia/N.Z.

Month July 2022 Aug. 2022 Sept. 2022 Oct. 2022 Nov. 2022 Dec. 2022 Jan. 2023 Feb. 2023 Mar. 2023 Apr. 2023 May 2023 June 2023

U.S. 5.18% 5.44% 5.02% 4.81% 4.48% 4.62% 5.29% 4.46% 4.62% 4.78% 4.83% 4.82%

Oct. 2022

Nov. 2022

Canada Aus./N.Z. 5.60% 5.90% 5.98% 5.68% 5.35% 5.93% 7.13% 5.42% 6.24% 6.41% 6.47% 6.45%

Dec. 2022

Jan. 2023

European Union Canada 4.02% 5.05% 5.31% 4.41% 4.51% 3.55% 3.99% 4.21% 4.35% 4.49% 4.28% 4.57%

37

E.U. 5.15% 5.72% 5.78% 6.07% 4.98% 5.80% 4.81% 4.13% 4.82% 5.08% 4.64% 5.10%

Feb. 2023

Mar. 2023

Apr. 2023

May 2023

United Kingdom

Other

U.K. 5.60% 6.84% 8.84% 7.14% 6.92% 5.47% 6.82% 5.67% 5.23% 6.17% 5.34% 5.70%

Total 5.00% 5.30% 5.08% 4.91% 4.57% 4.61% 5.14% 4.38% 4.67% 4.85% 4.74% 4.95%

Other 3.78% 3.71% 3.55% 4.00% 3.81% 3.38% 3.48% 3.40% 4.01% 4.12% 3.49% 4.73%

June 2023

Total

S E CT I ON 4 : E X P ENS ES

38

MONTHLY EXPENSES HOW MUCH IS THE AVERAGE GYM PAYING OUT? Are you getting good value on that space you're renting or do you have “dead zones” that don’t generate any revenue for your business? Are you generating a return on your investment in staff? Are you warehousing unused equipment? We've all got a dusty set of jerk blocks or a cobwebbed reverse hyperextension machine, right?

Every dollar you spend is an investment that should generate a good return. But you won’t know if you’re getting a return if you don’t dig into your expenses.

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

2023

2022 AVERAGE MONTHLY EXPENSES $25,800 $13,958 $18,699 $15,515

$32,987 $18,732 $19,814 $17,236

$17,066

$17,263

$17,670 $15,465

$23,104 $19,082

What are they getting for that money?

• Expenses were up in all categories.

• Access gyms had the highest monthly expenses.

• Expenses increased the most in the Access, CrossFit and Other categories.

For example, many gym owners believe they’re saving money by “trading” memberships for coaching, but sometimes those deals actually cost far more than just paying a class wage. Similarly, gym owners often commit to too much space and then spend all their time marketing to fill it—and the only one who profits is the landlord.

Tracking your expenses tells you exactly where your money is going and if it’s generating a return for you. If you aren’t getting ROI, first look for a way to change that before eliminating the expense.

For example, ask your bookkeeper, “How can I leverage your service better right now?” I’m sure they will have an answer; I’m also sure few people ask.

Sometimes, of course, you will want to cut an expense. But you’re smart: There’s a reason you signed up for that service or software in the first place. Chances are, you don’t need to cancel—you just need to optimize.

$3,617 Average increase in total monthly expenses from 2022 to 2023

39

GYM SIZE EXPENSES

The average square footage of all gyms decreased from 5,220 to 4,899 from 2022 to 2023.

On average, Access gyms have the most space by far.

Personal Training gyms have the least by a significant margin.

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

AVERAGE SQUARE FOOTAGE 6,906 5,639 4,164 3,199 4,134 4,148 4,899

COST OF GYM SPACE

$4,885

Access gyms paid an average of

Average monthly real-estate cost

(2022: $4,962)

$7,763 (2022: $8,613)

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

CrossFit gyms:

$4,949

(2022: $4,709)

AVERAGE MONTHLY REAL-ESTATE COST $7,763 $4,949 $3,533 $4,085 $4,660 $5,616 $4,885

40

REAL ESTATE STRATEGY EXPENSES Building ownership is interesting but not necessarily a key indicator of business success because many owners might take their income and reinvest elsewhere.

89.6%

of gyms rent their space

For example, gym owners will not buy their buildings in Las Vegas even if they’re super profitable.

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

PERCENTAGE WHO RENT 73.7% 90.5% 86.7% 89.1% 87.2% 94.4% 89.6%

PERCENTAGE WHO OWN 26.3% 9.5% 13.3% 10.9% 12.8% 5.6% 10.4%

BUSINESS DEBT

37.2%

of survey respondents reported no business debt

2022: 42%

Predictably, the Access category had the greatest number of gym owners with debt over $50,000. This is just part of the business model associated with access gyms: Rent a big space, buy a lot of equipment and accept early losses until you reach the minimum viable client count. Many access gyms also pay franchise fees.

Conversely, many coaching gyms (like Martial Arts and CrossFit) have no debt. That doesn’t mean they’re more profitable.

Debt is a balancing act: Used wisely, debt can be a tool. But the gym owner must understand numbers well before taking on debt to finance a gym or expand a gym.

27.8% 22.0% 20.0%

$20,000$49,000 5.6% 16.3% 33.3%

$50,000$99,000 16.7% 11.2% 6.7%

39.4%

25.0%

14.4%

7.7%

13.5%

36.0%

21.6%

14.4%

11.2%

16.8%

32.0% 37.2%

16.0% 21.9%

22.7% 16.4%

6.7% 10.3%

22.8% 14.2%

GYM TYPE

NO DEBT

< $20,000

Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

11.1% 39.3% 33.3%

41

$100,000+ 38.9% 11.2% 6.7%

S E CT I ON 5: STA FF

42

NUMBER OF TEAM MEMBERS STAFF

12 number

of team members

Source: PushPress

8 number

How many staff members does the average gym have, and how much do team members make per year? How are the best gyms making careers for others without starving the owner?

of team members

Source: TeamUp

Staff Count

PERCENTAGE OF GYMS BY STAFF MEMBER COUNT

Percentage of Gyms

Source: Wodify

FULL-TIME STAFF MEMBERS

1-2

Access gyms typically had more full-time staff members. However, it’s worth noting that “full time” in a coaching business generally carries an income that’s more than double that of the average “full-time job” in an access gym.

Same as 2022

In some cases, though, gym owners refer to themselves as full-time employees. Indeed, gym owners shouldn’t concern themselves with paying anyone full time until they’re making a full-time wage themselves. Consider the numbers in the table at the top of the following page to be a little higher than reality.

Average full-time team members for gyms in all categories

43

NUMBER OF FULL-TIME TEAM MEMBERS STAFF

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

AVERAGE NUMBER OF FULL-TIME STAFF 1.6 1.2 1.9 2.3 1.7 1.1 1.5

PART-TIME STAFF MEMBERS

Staffing accounts for

31.3% of expenses in

the average gym

2022: 33%

Most staff members in gyms consider themselves part time. While part-time coaches can bring a lot of energy and enthusiasm into the gym, it can be challenging to operate with a large staff composed only of part-timers.

Keeping part-time staff updated on policies, educated on procedures and accountable for excellence is incredibly tough.

But the real reason most staff members in gyms are part time is because there’s no opportunity to make a good income as a full-time coach. A balance seems to be ideal: an owner, a full-time staff person and a few passionate part-timers to keep the energy high.

In our survey, the responses varied widely, from “I’m the only person working at my gym” to “we have 14 parttime coaches doing 1-2 classes per week each.”

44

GYM TYPE Access Only CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

AVERAGE NUMBER OF PART-TIME STAFF 5.7 6.0 5.6 3.2 4.6 7.0 5.5

COST FOR COACH TO RUN CLASS STAFF

We saw two significant changes in 2023: 1. The average cost to staff a class across all gyms increased $4.46, from $22 to $26.46.

2. The average cost to staff a class in a CrossFit gym increased by $6.36, from $21 to $27.36.

$26.46

2022, 2021 and 2020: $22

GYM TYPE

AVERAGE COST $21.78 $27.36 $24.75 $24.67 $24.93 $27.70 $26.46

Average pay for a coach to run a class (regardless of size)

Increasing staff costs make it even more important to run your numbers and analyze your group revenue stream: • If the average gym now pays $26.46 to staff a class and the average class contains 6.9 members (according to PushPress), the gym is paying around $4 per head for coaching—that’s up about 33 percent from 2022. Recall that the median price of group training only increased 3.1 percent from 2022 to 2023 ($160 to $165).

• If the average gym is charging $165 for an unlimited membership and the average client attends 3.4x per week (with 4.3 weeks per month), then the gym is only grossing $11.29 per attendee or $77.90 per class. That’s $51.44 after 2023 staff costs.

Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

For your gym, you should do the same calculation for any class with fewer than six attendees on average. Once you have the numbers, you can decide if it’s wise to keep the classes or do something else with that time.

HIGHEST-EARNING STAFF MEMBER

$30,408

Average wage of highest-earning staff member across all segments

2022: $28,709

Personal Training gyms:

$35,193

Highest average among categories

Personal Training and Strength and Conditioning gyms posted the greatest numbers: Both were just over $35,000.

The average wages of the highest-earning staff member at CrossFit gyms increased from $26,973 to $28,009.

45

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

AVERAGE WAGES OF HIGHEST-EARNING STAFF MEMBER

$29,239 $28,009 $30,337 $35,193 $35,095 $30,884 $30,408

SECT I ON 6: OW NER BENEFIT

46

NET OWNER BENEFIT OWNER BENEFIT GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

2022 MEDIAN MONTHLY NET OWNER BENEFIT $2,900 $3,500 $1,750

2023 MEDIAN MONTHLY NET OWNER BENEFIT $3,250 $3,500 $3,160

$4,000

$4,040

$4,000

$4,450

$4,000 $3,787

$3,715 $3,967

$3,967 Median net owner benefit per month across all categories

2022: $3,787

Half of survey respondents take home less than $4,000 a month (same as 2021 and 2022)

$4,763 Average Two-Brain client

A business that doesn’t pay its owner isn’t a good business. Nobody wins if you’re broke. To really change lives, you need to be around for a long time, and you won’t be able to last in the fitness industry if you don’t earn a good income.

monthly NOB from March 2022 to July 2023

We measure your total income as net owner benefit (NOB): the full amount your business pays you, including salary, dividends and perks.

Making $100,000 in NOB per year isn’t complicated—you just have to build a business that will produce it.

Most importantly, a higher NOB for owners doesn’t mean a lower income for staff. And it doesn’t mean that owners are greedy. It means they’re growing the pie for everyone, not taking larger slices for themselves. And the same business model that provides for owners will provide better for staff members, give clients a better experience and actually change lives.

47

EFFECTIVE HOURLY RATE OWNER BENEFIT When calculating average EHR for survey respondents, we excluded outliers—not because their data was invalid but because their numbers were so large that they skewed the results.

In general, your time should be worth more as an owner than it would be as a coach.

Because when you open a gym, coaching is no longer your job; you’re an owner first.

We measure the value of your time by calculating your effective hourly rate (EHR)— your monthly net owner benefit divided by the hours you worked. This is how much you earn for the time you spend working.

The best way to improve your EHR is to work with a mentor, offload low-value roles and focus on growing your business.

For example, some Two-Brain clients have valid EHR scores of $900 or more. They spend little time working on their gyms but have very high net owner benefit numbers.

In total, 1.7 percent of survey respondents listed EHR scores of $500 or more, and less than 1 percent entered $1,000 or more.

Of note in 2023, the average EHR of TwoBrain clients is still significantly higher than the survey average: $48.55 vs. $38.88.

This is because our mentors teach gym owners to earn more and still work fewer hours, creating a sustainable lifestyle.

The numbers you see below are free of outliers—but it’s worth remembering the numbers entered by outliers are achievable with mentorship.

$38.88 Average EHR across

all survey categories

2022: $30

$48.55 Two-Brain client

average EHR from March 2022 to July 2023 GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total 48

Average EHR $38.68 $37.73 $48.24 $38.23 $43.40 $37.31 $38.88

NET OWNER BENEFIT AND MENTORSHIP OWNER BENEFIT

73.5% of top-earning

survey respondents work with a mentor.

The effects of mentorship compound over time. The longer a gym owner works with a mentor, the greater their result—not just in revenue and clients.

The gym owners who have a mentor earn more than those who don’t.

GYM OWNER INCOME < $2,000 $2,000-$3,999 $4,000-$5,999 $6,000+

WORKING WITH NOT WORKING MENTOR WITH MENTOR 62.1% 63.7% 64.4% 73.5%

37.9% 36.3% 35.6% 26.5%

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HOW MANY HOURS DO GYM OWNERS WORK EACH WEEK?

Number of Survey Respondents

OWNER BENEFIT

Hours Worked Per Week

PROFITABILITY BY HOURS WORKED

More work does not always equal more money.

As in 2022, respondents who worked more than 50 hours per week had the lowest representation of profitability

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Average hours worked per week by survey respondents

2022: 39

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PROFITABILITY BY HOURS WORKED OWNER BENEFIT

Working harder won’t make your gym more profitable. We tend to believe that working more, or working harder, will earn us more money. That’s how it works in the coal mines, but entrepreneurship is really about working better. That means optimizing output in the time you have instead of working as many hours as possible.

to do whatever they want. Some jump back into coaching, even if they don’t need to. Some take a few 1:1 clients.

Others pursue other interests. Use your time any way you want—but if you’re working 60 hours per week at your gym, you won’t be able to sustain that business for long.

Of course, nobody wants to be an absentee owner—that’s not why we opened gyms. But there’s a sweet spot: Owners who work 20-40 hours are running efficient businesses, growing their gyms, and using the rest of their time

When survey respondents are grouped by hours worked, respondents who reported working more than 50 hours per week had the lowest representation of profitability: Fewer than 66 percent of those gym owners reported profitability.

HOURS WORKED BY OWNER PER WEEK 0-20 21-39 40-49 50+ Total

PERCENTAGE WHO RUN PROFITABLE GYMS 73.0% 75.9% 75.0% 65.6% 71.9%

PERCENTAGE WHO RUN UNPROFITABLE GYMS 27.0% 24.1% 25.0% 34.0% 28.1%

2022-2023 CHANGE -9.2% -2.7% -2.0% +12.5% +0.5%

PROFITABILITY BY MONTHLY EXPENSES MONTHLY EXPENSES Less than $6,500 $6,500-$10,999 $11,000-$19,999 $20,000 or more

PERCENTAGE WHO ARE PROFITABLE 59.3% 62.9% 74.4% 84.1%

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PERCENTAGE WHO ARE UNPROFITABLE 40.7% 37.1% 25.6% 15.9%

2022-2023 CHANGE -6.6% -11.4% -2.7% +7.0%

PROFITABILITY BY FACILITY SIZE OWNER BENEFIT

Remember the 150-member target: It’s easy to train 150 people in 4,500 square feet.

But many gym owners take on high expenses because they don’t have a clear plan or assume they will get over 250 members.

“If you build it, they will come” is a fairy tale. Big facilities don’t attract new members to a coaching business.

As in 2022, gyms with 4,500-6,499 square feet of space are most likely to be profitable.

In 2023, a larger percentage of larger gyms are profitable.

GYM SQUARE PERCENTAGE PERCENTAGE FOOTAGE PROFITABLE UNPROFITABLE

Less than 2,500 2,500-4,499 4,500-6,499 6,500 or more

57.1% 72.5% 81.2% 80.0%

42.9% 27.5% 18.8% 20.0%

2022-2023 CHANGE -9.1% +1.0% +3.2% +4.0%

Build for 150 first, then expand later if you have to.

This is interesting data. Either gyms are opening with more square footage or they’re just not opening at all. The optimism is great, even if the numbers show that the “sweet spot” for coaching gyms is around 4,000 square feet.

PROFITABILITY BY YEARS IN BUSINESS

7

66.8% of survey respondents

Average and median years in business for survey respondents

have been in business fewer than 10 years

2022: 6 (median) TIME IN BUSINESS 0-4 years 5-6 years 7-9 years 10+ years

PERCENTAGE WHO ARE PROFITABLE 57.3% 76.2% 79.4% 80.0%

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2022-2023 CHANGE -9.0% +3.0% +2.8% +3.6%

SECT ION 7: I N D UST RY

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TRENDS, OPINIONS AND ANALYSIS INDUSTRY

While the data in the former sections is objective and quantifiable, most of the data in Section 7 is qualitative—it’s based on opinion. As such, I’ll share my take on the poll numbers, and I’ll review industry trends that can affect your gym from a macro view. As CEO of the largest mentorship practice in the fitness business, I’m fortunate enough to have a “lifeguard-chair view” of the industry.

I am a 15-year CrossFit affiliate, and just over 50 percent of our survey respondents are CrossFit affiliates. I still love the CrossFit method and seminars but take a more objective view of its affiliation program. So I’ll dive deeper into CrossFit than I will into franchises (like 9Round, F45 and others), for whom we also track data.

This is the section some will want to skip—but others will enjoy it most.

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AVERAGE COST TO OPEN A GYM INDUSTRY

$66,257

$50,120

CROSSFIT

PERSONAL TRAINING

$80,807

$120,981

STRENGTH & CONDITIONING

$71,000 MARTIAL ARTS

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OTHER

$319,460 ACCESS

BUSINESS PARTNER INDUSTRY Only

34.1% of respondents

reported working with a business partner

2022: 32.3%

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

PERCENTAGE WITH A PARTNER 36.8% 38.5% 26.7% 25.2% 28.0% 31.1% 34.1%

MERGER AND ACQUISITION ACTIVITY

8%

of gyms were part of a merger or acquisition in the last year

2022: 8%

GYM TYPE Access

PERCENTAGE WITH MERGER/ACQUISITION ACTIVITY 10.5%

CrossFit

9.6%

Martial Arts Personal Training Strength & Conditioning Other Total

6.7% 5.8% 4.8% 6.8% 7.9%

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BUSINESS COACHES INDUSTRY

66.4%

of survey respondents work with a business coach or mentor

2022: 65%

This figure increased year over year, and it has increased dramatically since 2012 (when I began to offer mentorship to gym owners myself) and 2016 (when I began certifying Two-Brain mentors).

Many—but certainly not all—survey respondents are Two-Brain clients. That might have a spillover effect on revenue, EHR, NOB and other numbers because the data clearly shows that gyms working with a business coach or a mentor have better metrics. If your numbers are currently below the average in any category, a mentor can help you reach—and exceed—those averages.

GYM TYPE

PERCENTAGE WITH COACH

Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

57.9% 65.8% 53.3% 68.9% 72.8% 59.5% 66.4%

WILLINGNESS TO SELL Most numbers in the table to the right remained consistent from 2022 to 2023.

• • •

The percentage of gym owners who are unwilling to sell increased by 0.5 points.

The percentage of gym owners who are willing to sell decreased by 3.3 points.

The percentage of gym owners who would consider selling increased by 2.7 points.

One data point changed significantly: Far fewer owners of Access gyms are willing to sell in 2023. The percentage decreased from 57.1 in 2022 to 5.6 in 2023.

Only 18.1% of CrossFit gyms reported willingness to sell this year, as opposed to 20.7% last year.

GYM TYPE Access CrossFit Martial Arts Personal Training Strength & Conditioning Other Total

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61.1% 49.0% 93.3%

5.6% 18.1% --

PERCENTAGE WILLING TO CONSIDER SELLING 33.3% 32.8% 6.7%

60.9%

14.7%

24.5%

59.2%

14.4%

26.4%

50.0% 53.7%

18.9% 16.4%

31.1% 29.9%

PERCENTAGE PERCENTAGE UNWILLING TO WILLING TO SELL SELL

CROSSFIT APPROVAL INDUSTRY

Analysis It’s encouraging to see CrossFit HQ’s approval rating on the rise.

While some early initiatives didn’t dramatically increase affiliate value, it was obvious that the new guard at CrossFit HQ was trying. Affiliate roundtables offer good peer support, and the larger CrossFit Affiliate Summits feature qualified speakers on stage. We’re proud to sponsor them.

Next year, this question might be moot, but the story will still be interesting to follow. It’s clear that CrossFit’s popularity is growing in some parts of the world even while competition grows, and I hope that affiliates in those areas—Eastern Europe, Asia, Africa, etc.—can learn from the mistakes we all made through trial and error a decade ago.

1%

of respondents said they do not feel confident about the future of the brand

9%

of respondents were unsure, apathetic or hopeful for the return of Greg Glassman

28%

of formerly affiliated gym owners are confident in the future of the brand

89.7%

of gym owners in the CrossFit category who are currently affiliated feel confident about the future of the brand

Strength and Conditioning gyms had the highest rate of former CrossFit affiliation:

23.6%

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CONCLUSION INDUSTRY One of the most interesting things I see in the data—and empirically through calls with the hundreds of gyms in our mentorship program—is the flow of trends across the globe.

History leaves clues. And we can predict the future by looking at what’s happening in other areas of the world.

For example, from 2010 to 2014 in the U.S., it was pretty easy for a CrossFit gym to get clients: They just needed to hang a sign. Then, as competition increased and the “early adopter” clients left for the next thing, many affiliate owners had to get better at business to survive. By 2018, most affiliate owners in the U.S. were talking about marketing regularly.

The same pattern could be seen in Australia a few years after it was seen in the U.S.: early adoption from 2013-2018, then a steady dropoff that forced gym owners to get serious about being owners.

For example, when COVID lockdowns started in Asia and then spread west, we saw the trend in the data. When Italy shut down, and then France, and then the U.K., we were able to formulate a plan and test it. When lockdowns began on the Eastern Seaboard of North America, we already had a plan because we saw the challenge coming and knew how to confront it.

Now the challenge for microgyms seems to be commoditization.

In Australia, new HIIT-style gyms like Revel and F45 are selling group functional fitness for $99 or less. Commoditization is starting to appear on the West Coast of North America, where Nike and others are doing the same things. To the consumer on the outside, most group training looks the same; should they pay the Nike brand $99 per month or the neighborhood CrossFit gym $139?

Then the pattern appeared in Western Europe: When I was running a seminar for gym owners in France in 2018, many owners told me “we’re about three years behind you guys.”

Right around the time of global lockdowns, many gyms in the U.K., France, Ireland and the Nordic countries were getting serious about business and saying “the easy days are gone.”

The trend continues: Gyms in Spain, Portugal and Western Asia report very high client counts in CrossFit gyms but also very high churn—just as we saw in Canada and the U.S. a decade ago.

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Luckily, the solutions are also in the data.

Aim for 150 members first, and build your business around that target. Invest heavily in your media to establish a presence.

Charge a premium amount for a premium service—you’re better to charge far more than Nike than to be almost equal in price.

Make people ask why you’re worth so much more—and be worth it.

Mentorship for Gym Owners.

Learn how to build a resilient fitness business:

https://twobrainbusiness.com/book-a-call/

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Copyright © 2023 Two-Brain Business Inc.

C O L L AB OR ATOR S

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PUS HP R ESS

W EBSIT E : PUS HPR E SS .CO M

PushPress is the No. 1 rated gym management software, offering a full suite of products to help you run your fitness businesses better.

Founded and run by a team of gym owners, PushPress uses our collective 150+ years of combined ownership experience to not just help you manage your gym but to grow and scale it as well.

Thousands of gym owners around the world trust PushPress for the tools they need to succeed.

Primarily, this means we’re laser focused on your gym’s growth. We know your struggles because we’ve experienced them in our own gyms. Therefore, our products and expertise give you the tools you need and the team you trust. And, quite simply, we love helping gym owners succeed!

In addition, our dedication to customer service is unparalleled in the industry. This means we’re available around the clock to provide help when you need it.

PushPress offers tools to help with member billing, class and appointment scheduling, workout tracking, third-party integrations, lead generation, new-member nurture, social media scheduling, automation, and more.

We understand that you simply don’t have enough hours in the day. So we’ve created these tools to manage your gym better and give you back your time.

In addition, our software is designed to grow with your business. From starting a gym to having years of successful gym ownership under your belt—and every stage in between—we have the products to help.

Welcome to the future of gym ownership. Welcome to PushPress.

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TE A MUP

W EBSIT E : GOT E AM UP.CO M

TeamUp is the most recommended fitness management software for independent gyms, studios, boxes and PTs—and their in-person, online and on-demand services.

Launched in 2012, TeamUp quickly built a reputation for reliability and willingness to adapt to its customers’ needs. Its dedication to customers drives everything, which makes TeamUp stand out from other platforms on the market.

Its all-in-one software offers bookings, payments, customer relationship management, access control for facilities, online and on-demand classes, a custom branded app, community happiness reputation management, and a rich feature set of business management tools, including valuable insights and reporting specially designed for fitness business owners.

TeamUp also integrates with powerful platforms including Zapier, Zoom, BoxMate, Kisi, Gympass, ClassPass and more to offer fitness entrepreneurs everything they need to run the best version of their business in one place.

With TeamUp, your voice is heard. From the moment you make a request, you have full transparency as it moves to development and launch.

TeamUp works with some of the leading independent fitness businesses and franchises across the globe, and it’s well known and has market share in the CrossFit community. TeamUp is trusted by the biggest names in fitness as the most flexible software designed to eliminate business complexity and enable you to focus on your customer experience and thriving community.

Fitness clients love it, too—especially the ability to manage their accounts on the go via their member app, receive perfectly timed communication and engage with your business at all times.

With all features included right from the start, affordable pricing that scales with your business, a free import service to migrate your data for you, and unlimited support from a team who cares about your success, TeamUp has it all, and its ability to help you manage your business goes beyond its software. If you want great business oversight, quick and easy class management, and pain-free payments but you don’t want to pay increasingly hefty bills, TeamUp is the management software for your business.

Contact TeamUp today to redeem an exclusive offer for Two-Brain Business clients: https://learn.goteamup.com/ two-brain-business

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WOD I FY

W EBS IT E : WO D I FY.CO M

Wodify is the industry’s first Customer Retention Platform, with 5,000+ of the world’s top fitness owners trusting Wodify to run their businesses.

Wodify and Two-Brain Business have partnered to bring a new, easy-to-use business dashboard to Wodify. This business dashboard includes a section of essential metrics that Two-Brain tracks monthly for its customers and many other business health stats that Wodify customers know and love.

We know that you want to be an influential success story. In order to do that, you need a truly customizable fitness platform.

In addition to the Core product, Wodify has multiple add-on services to help you grow your business further—including automated programming from their trusted partners in the Workout Marketplace, integrated websites, real-time heart-rate tracking and more. Not to mention the Perform add-on, which is a world-class performance-tracking feature used by millions of athletes around the world and is proven to increase retention and engagement.

The problem is there are too many software tools, which makes you feel restricted and inefficient. We believe you shouldn’t hate your software.

For business owners relying on outdated software and manual processes, Wodify provides a welcome alternative.

Wodify’s intuitive platform helps gym owners like you run your business the way you want, gain confidence with technology, and save time with a single platform.

Wodify Core tracks and automates running a fitness business so that owners can scale their membership base and increase profitability. Wodify Retain gives you predictive insights into member behavior, helping you identify which clients are likely to cancel their memberships, so you can prevent churn and increase your revenue.

With Wodify’s easily accessible insights, owners can quickly access reports on everything from attendance rates to lead conversion rates to gain more clients, reduce revenue leakage and increase client retention.

The Wodify Client App for members can be tailored to look and feel like your brand while also providing a seamless experience that will keep them engaged with your business in person and on the go.

Wodify’s appointment feature allows your clients to book time based on your calendar availability for personal training, nutrition or any customizable meetings.

To make sure that you are utilizing everything Wodify has to offer your business, there are plenty of resources available, including Live Chat, email support with their Customer Success Team, the Help Center, and YouTube playlists to provide guidance on powering your business to its fullest potential.

“I can’t imagine using three different pieces of software,” said CrossFit Mayhem owner Rich Froning Jr., “when one does it all.”

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Kilo helps gyms grow.

It works on three levels: a Kilo website gets you more leads, marketing software turns leads into sales, and gym management software improves retention.

GYM WEBSITES

MORE LEADS

MARKETING AUTOMATION

GYM MANAGEMENT SOFTWARE

MORE SALES

BETTER RETENTION

Plus, it only takes a few days to get set up and our customer support team always has your back.

Book a call at UseKilo.com to grow your gym.

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Find out how a mentor can help you grow your gym.

Book a Call

https://twobrainbusiness.com/book-a-call/

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Copyright © 2023 Two-Brain Business Inc.