Gym and Fitness Studio Valuation: What Gyms Sell For and Why
Gyms and fitness studios trade at 2.0× to 4.0× SDE, with the range driven primarily by the recurring nature of membership revenue, the number of active members, and the quality and remaining term of the location lease. The business model is fundamentally the same as a car wash membership model but in a space with higher operating complexity (instructors, classes, equipment maintenance) and greater competition.
Typical Valuation Range
| Multiple | Metric | Business profile |
|---|---|---|
| 2.0× – 2.5× | SDE | Small studio with high owner involvement, short lease, below 200 active members |
| 2.5× – 3.25× | SDE | Established gym with 300–600 members, manager in place, 3+ years on lease |
| 3.25× – 4.0× | SDE | High-membership base, strong brand, long lease, diversified class/personal training revenue |
Membership Churn: The Hidden Risk
Gyms are well-known for high membership sign-up rates and high cancellation rates. January new memberships, summer cancellations, and seasonal revenue swings are structural features of the industry. A buyer needs to understand not just total active members but monthly churn rate — a gym with 500 members but 15% monthly churn is adding 75 members and losing 75 members every month, creating a revenue treadmill with heavy marketing costs to stay flat.
Look for EFT (electronic funds transfer) contracts rather than month-to-month memberships — members on 12-month contracts have a meaningful exit barrier that month-to-month members don't. A gym with 65%+ of members on annual contracts is significantly more valuable than one with all month-to-month billing.
Franchise vs. Independent
Franchise gyms (Planet Fitness, Anytime Fitness, F45, etc.) trade on different terms than independent gyms. Franchise buyers must be approved by the franchisor and pay ongoing royalties (typically 4–8% of revenue), but gain access to a national brand, marketing support, and an established member expectation. Franchise resale values are sometimes quoted as revenue multiples by the franchise brand, which may differ from the SDE-based approach used in independent gym sales. Always normalize to SDE for comparison.
What Drives the Multiple Up
- High active member count with low churn: 500+ active EFT members with less than 5% monthly churn
- Diversified revenue: Personal training, classes, retail, nutrition supplements — multiple revenue streams beyond base memberships
- Manager-run operations: A general manager who handles staffing, scheduling, and member service reduces key man risk
- Long favorable lease: Gyms require significant buildout — a lease expiring in 2 years destroys that investment
- Strong community: Group fitness gyms and specialty studios (CrossFit, yoga, cycling) with loyal communities have lower churn than big-box gyms
Example: Valuing a Fitness Studio
A boutique functional fitness studio with $165,000 SDE, 340 active monthly members (70% on annual contracts), 8% annual churn rate, a general manager, 6 years remaining on lease, and a strong local reputation would likely trade at 2.75×–3.25× — a price of $454K–$536K.
Related
- Restaurant — similar high-labor, location-dependent model
- Car wash — membership model comparison
- All industry multiples