Strong unit economics in fitness franchising are built long before a gym opens its doors. That was the message from a panel of chief financial officers at the inaugural Fitness Finance & Growth Conference, hosted by Franchise Times in Chicago on May 19, 2026. Representatives from three major franchisee groups walked the audience through how they create profitable clubs across dozens of locations.
The panel made one point plain: in a more competitive fitness market, franchisees have to generate strong unit economics before a single weight is lifted. Pre-sale marketing, disciplined site selection and a tight labor model now decide whether a new club opens with positive cash flow.
“If you start ahead, you’ll stay ahead,” said Colin Herr of Undefeated Tribe.
The work starts in the pre-sale period before a gym opens. Operators run aggressive marketing campaigns to sign as many founding members as possible, so a new club launches with positive cash flow rather than chasing it. Herr said the priority is a repeatable system:
For groups with smaller brand recognition, the panel agreed, local and grassroots marketing carries even more weight. The discipline echoes a wider industry focus on opening clubs faster and more efficiently.
Site selection is the single biggest lever. Herr estimated that about 70 percent of a club’s success is tied to its real estate decision. Before signing a lease, his team asks whether a location can realistically reach its membership target; if the answer is no, they move on. Panelists expect competition for quality big-box space to intensify over the next five years, especially in markets where operators are heavily concentrated.
Format size also matters. Smaller-footprint concepts can be nimbler in finding available retail space, while big-box brands such as Crunch Fitness, a system of nearly 600 clubs, need larger sites and longer site-selection runways. That trade-off increasingly defines where and how fast a brand can grow, much as Crunch has done with recent builds from Texas to Idaho.
Once a club is open, profitability hinges on labor. Several panelists described a managing-partner model, in which a general manager joins a profit-share plan and effectively runs the gym as its own business. Herr said the model gives managers genuine ownership, so facility issues get resolved quickly because compensation is tied to club profitability.
Operators are also turning to technology. Herr said his group overlays timesheet data with club activity, check-ins and new sales to staff each location more precisely, while other panelists set labor-hour guardrails so general managers protect the member experience without overspending.
For investors weighing fitness concepts across Asia and MENA, the panel is a useful reminder that brand strength alone does not produce returns. Unit economics are engineered: through pre-sale systems, real estate discipline and labor models that align managers with profit. The same consumer trends lifting fitness demand will only translate into returns for operators who execute these fundamentals consistently across every club. Due diligence on a fitness brand should look past unit counts to the playbook that turns each new site into a profitable one.
Source: Franchise Times — Fitness Franchisees Take Wholistic Approach to Unit Economic Wellness
