Should I open or buy an Anytime Fitness franchise in 2027?

New build versus resale: the two paths that actually exist

Almost everyone framing this question thinks the decision is "Anytime Fitness or some other gym brand." It is not. The decision that determines your outcome is new build versus resale of an existing unit, and the two produce completely different risk profiles from the same brand, the same equipment vendor, and the same royalty structure.

The new build path. You sign a franchise agreement, pay the initial franchise fee, then spend roughly nine to fourteen months on site selection, lease negotiation, permitting, build-out, equipment installation, and a pre-sale campaign before a single member swipes a key fob. Your total capital at risk is the full Item 7 range — franchise fee, leasehold improvements, the required equipment package, signage and the 24/7 keyless access technology, insurance and permits, training and travel, pre-opening marketing, and working capital. In practice that lands in the mid-to-high six figures for a standard 4,500–6,000 sqft club in a Tier-2 market, with the build-out and equipment lines together representing well over half the number.

What you buy with that money is territory choice and a clean P&L. You pick the site. You pick the trade area. You are not inheriting a churned-out member list, a soured local reputation, deferred equipment maintenance, or a lease signed at a rate that no longer works. If you find a genuinely underserved trade area — a county seat of 25,000–60,000 people with no 24/7 gym inside eight miles — a new build is the only way to capture it, because there is nothing there to buy.

What you pay for it is twelve to eighteen months of pure cash burn with zero revenue, followed by a ramp where you are personally responsible for converting every trial into a paying member. Roughly a third of new-build owners discover in Months 4–9 that the working capital line in the disclosure document was calculated for a club hitting plan, not a club that opened eight weeks late into a slow season.

The resale path. You buy an operating club from an existing franchisee, typically through a business broker or through the franchisor's own transfer list. You pay a multiple of trailing EBITDA rather than a construction budget. In Tier-3 and secondary markets, franchise resales in this category commonly trade in the low-to-mid three-times-EBITDA range; well-run clubs in dense suburban corridors command more. You also pay a transfer fee to the franchisor (materially smaller than a new franchise fee), assume or renegotiate the existing lease, and inherit the equipment at whatever point it sits in its service life.

What you buy is revenue on day one and a real Item 19 of your own — twelve to thirty-six months of actual bank statements for that specific address, which is infinitely more informative than a system-wide median. What you pay for it is inherited problems: the reason it is for sale, the condition of the cardio fleet, the lease's remaining term and escalators, and a member base that may have been held together with discounting.

The honest framing for 2027: if you are a first-time franchise owner without operations experience, the resale is usually the better trade because the cash-flow gap is the thing that kills first-timers, not the brand. If you are an experienced multi-unit operator with a specific unserved trade area identified and a tenant-rep broker already working it, the new build is where the wealth creation is, because you buy at construction cost and eventually sell at a multiple of earnings.

The structural feature that makes this brand different from its competitors

Before comparing dollars, understand the one thing that genuinely separates this system from Planet Fitness, Crunch, and most boutique concepts: the royalty is a flat monthly dollar amount, not a percentage of revenue.

This sounds like accounting trivia. It is the single most important line in the entire model, and it reshapes both paths above.

Under a percentage royalty — commonly in the 5–7% range across competing HVLP gym brands — your franchisor's take scales with your success. Every incremental dollar of membership revenue, personal-training revenue, and retail revenue hands a fixed slice upward. A club doing $1.4M in revenue at a 7% royalty is sending roughly $98,000 a year to the franchisor before the brand fund contribution.

Under a flat royalty, your franchisor's take is a fixed cost, and fixed costs get diluted by growth. At a modest revenue level the flat fee is a meaningful percentage of your top line. At double that revenue it is half the percentage. At triple it is a third. Your effective royalty rate falls every month you grow.

The strategic consequences are concrete:

It rewards ARPU expansion aggressively. Every dollar you add through personal training, small-group coaching, recovery services, supplements, or premium membership tiers flows to your P&L essentially unroyaltied. Under a 7% brand, a $12/month ARPU lift on 1,200 members hands roughly $12,000 a year straight back to the franchisor. Under a flat fee, you keep effectively all of it. This is why the coaching and programming attachments matter so much more in this system than they do elsewhere — the incentive math is genuinely different.

It punishes underperformance harder. The flip side of a fixed cost is that it does not shrink when you do. A struggling club at low revenue is paying the same royalty as a thriving one. A percentage royalty is, in effect, cheap insurance during a bad year. A flat royalty is not. This is why site selection and pre-sale execution matter more here than at a percentage-royalty brand — the model has no built-in shock absorber.

It changes what a resale is worth. When you underwrite a resale, you are buying a business whose royalty line will not grow as you grow it. If you believe you can add 300 members and $10 of ARPU to an underperforming club, essentially all of that incremental gross profit is yours. That makes underperforming-but-fixable clubs more attractive in this system than the equivalent turnaround would be under a 7% brand — you capture more of the upside you create.

It does not exempt you from the other fixed costs. The brand fund contribution, the technology fee, and the equipment lease if you financed it are all monthly fixed obligations too. Add them up honestly before you get excited about the royalty. The correct comparison is total franchisor-and-system cost as a percentage of your projected revenue, not the royalty line in isolation.

Anyone doing serious RevOps-style modeling on this decision should build the comparison exactly the way a revenue operations team models a pricing change: hold volume constant, vary the fee structure, and find the revenue level where the flat fee beats the percentage. Below that crossover the percentage brand is cheaper; above it the flat-fee brand wins and keeps winning. Then ask honestly whether your trade area supports revenue above the crossover point. If it does not, the structural advantage you are buying is theoretical.

How to decide between building and buying

The decision is not a coin flip or a matter of temperament. It is driven by four inputs in a specific order: capital cushion, trade-area availability, operating experience, and time horizon. Work them in that sequence, because each one can disqualify the path below it.

Capital cushion first. Not total capital — cushion. The question is not "can I fund the Item 7 range," it is "can I fund the Item 7 range and then absorb nine more months of shortfall without a second raise." Budget meaningfully above the disclosed working capital line, because that line assumes an on-schedule opening into a normal season. A permit delay pushing your opening from January to April costs you the entire New Year's enrollment surge, which is the single best member-acquisition window of the year. If your cushion beyond working capital is thin, the new build is not available to you regardless of how attractive the trade area looks. Buy a cash-flowing unit instead.

Trade-area availability second. Pull a five-mile radius around every candidate location and count competing 24/7 access gyms, HVLP competitors, and municipal or hospital-affiliated fitness centers. Tier-1 metros are functionally saturated — the density of HVLP gyms per household in the large Sun Belt metros has roughly doubled since the late 2010s. If your target trade area already has two or more direct 24/7 competitors, a new build is a share war, and share wars in this category get fought with price, which permanently destroys ARPU. In a saturated area, the resale is not just the safer path, it is often the only rational one, because the incumbent already holds the members you would otherwise have to buy.

Operating experience third. Be honest about whether you have run a business where labor, churn, and collections all move at once. Prior multi-unit retail, quick-service restaurant, or fitness-industry management transfers well. A corporate career, however senior, does not automatically transfer to standing in a lobby at 6 a.m. converting a trial member. If this is your first operating business, the resale gives you a functioning operation to learn on, with staff already trained and a billing system already running.

Time horizon last. If you need income replacement inside eighteen months, neither path reliably delivers it and you should reconsider the category entirely. If you can wait, the new build is the better wealth play because you create the asset at cost rather than buying it at a multiple.

The numbers behind each path

Here is where the two paths diverge financially. Use disclosure-document ranges as the frame and your own market as the input — never underwrite off a system-wide median, because the median blends mature clubs in dense corridors with two-year-old clubs in thin ones.

New build capital stack. For a standard club in a Tier-2 market, the initial investment range in the current disclosure runs from roughly $539,000 at the low end to about $905,000 at the high end, with a realistic median build landing near $720,000. The two dominant line items are leasehold improvements and the required equipment package; together they typically account for well over half the total. The franchise fee is a flat $42,500 and is not negotiable. Pre-opening marketing — the pre-sale campaign — is a real and required line, not optional, and cutting it is the most common self-inflicted wound in a new opening.

New build revenue ramp. System-wide median gross revenue sits near $399,000 with a mean somewhat higher, which tells you the distribution is right-skewed: a minority of strong clubs pull the average up. Critically, newer cohorts underperform mature units — a club in its first two years typically runs materially below the system median, often in the low $300Ks. Underwrite your Year 1 against the new-cohort figure, not the system median, or your model will be wrong by six figures in the year you can least afford it.

New build operating structure at roughly $400,000 of revenue. Rent should land near 18% of revenue; if it exceeds 20% your site was a mistake and no amount of operating excellence fixes it. Payroll runs in the mid-20s as a percentage — the brand promise is keyless 24/7 access, not a staffed concierge desk, so front-desk hours beyond roughly 60 per week are usually a margin leak rather than a service investment. Royalty plus brand fund together land near 4% at this revenue level and fall as you grow. Equipment lease, if financed, is a significant monthly fixed cost. Utilities, insurance, and technology together run around 10%. Member management software takes a few percent more.

That structure produces EBITDA in the low-to-mid 20s as a percentage of revenue before owner draw at a $400K club — consistent with company-operated margin benchmarks in the 22–28% band. Translate that honestly: conservative Year-1 owner cash flow of roughly $45,000 to $75,000 before debt service. After an SBA note, a first-year owner is frequently near break-even on cash, which is exactly why the cushion requirement above is non-negotiable. By Year 3 at maturity — call it 1,300–1,500 members with healthy ARPU — the same structure supports $130,000 to $180,000 to a working owner, because the fixed-cost base (rent, royalty, brand fund, technology, base payroll) barely moves while revenue grows.

Resale capital stack. You pay a multiple of trailing twelve-month EBITDA rather than a build budget. Tier-3 and secondary-market clubs commonly trade in the roughly 3.2–3.8× range; stronger clubs in dense suburban corridors go higher. Add a franchisor transfer fee, legal and accounting diligence, and — this is the line buyers forget — a capital reserve for equipment refresh. Cardio equipment has a finite service life, and a seller who has deferred replacement for two years has effectively borrowed from you. Price a full cardio refresh into your offer if the fleet is aged.

Resale economics. A club generating $110,000 of trailing EBITDA at a 3.5× multiple costs roughly $385,000 plus fees and reserve — well under half the median new build, with revenue arriving in Month 1 rather than Month 14. The trade is upside: you inherit a member base and a lease, and if the club is already near its trade-area ceiling, the growth you can create is limited. The resales worth buying are the fixable underperformers — clubs with a good lease, a good site, aged-but-serviceable equipment, and an absentee or burned-out owner who stopped calling lapsed members. Under a flat royalty, essentially all of the recovery you drive is yours.

Debt structure matters on both paths. SBA 7(a) financing is the dominant funding route for this category, and the rate spread against vendor or equipment-captive financing is substantial — often several hundred basis points. On a $600,000 note, a 300-basis-point difference is roughly $18,000 a year of pure margin, which is a meaningful fraction of a first-year owner's entire cash flow. Get a conditional approval letter from an active franchise lender before you start site hunting, both because it disciplines your budget and because landlords negotiate differently with a qualified tenant.

The churn variable that overrides everything. Industry annual member churn in this category runs high — the high-30s percentage range is a reasonable planning assumption. Every model above assumes you actively manage it. An owner who does not personally work the lapsed-member list sees churn climb well past that, and because your cost base is largely fixed, a ten-point churn swing does not reduce your profit proportionally — it can eliminate it. Churn is not a background statistic in this business; it is the primary operating variable.

Sequencing the first 90 days

Whichever path you choose, the first ninety days follow the same disciplined sequence. The mistake pattern is almost always the same: people fall in love with a site or a listing before they have financing or diligence, then negotiate from weakness.

Days 1–7: Read the actual disclosure document. Get the current franchise disclosure document from the franchisor or your franchise consultant — not from a third-party blog summary. Read Item 5 (initial fees), Item 7 (estimated initial investment), Item 19 (financial performance representations), and above all Item 20, which contains three years of unit openings, closures, terminations, and transfers, plus contact information for current and former franchisees. Item 20 is where the truth lives. A rising transfer count in a region is a signal. If you cannot get through the document yourself, a franchise attorney will review it for a few thousand dollars, which is trivial against a six-figure commitment.

Days 8–14: Pre-qualify financing. Approach lenders with active franchise lending desks. Bring a personal financial statement, two years of tax returns, and a draft use-of-proceeds. Ask specifically what they will lend against a new build versus a resale — many lenders prefer resales because there is collateral and cash flow already in place, and the terms can be better.

Days 15–30: Call existing franchisees. Use the Item 20 contact list and call twelve to fifteen operators, weighted toward clubs opened in the last three years and toward anyone who transferred out. Ask three specific questions: what your monthly cash burn actually was in Months 4 through 9; what the return has been on the coaching and programming attachments; and how equipment service response times have been. Vague answers are answers.

Days 31–45: Engage a tenant-rep broker and shortlist sites. For a new build, target suburban and exurban trade areas with rent under $22/sqft NNN, strong daily traffic counts, co-tenancy that generates repeat visits, and household density supporting north of 1,200 members within five miles. For a resale, engage a broker who handles franchise transfers and pull every listing in your radius, including clubs not formally listed — the franchisor's transfer desk knows who wants out.

Days 46–60: Attend Discovery Day. Go to headquarters, meet the development and support teams, and see the technology stack demonstrated rather than described. Ask to observe a member-acquisition process end to end. You are evaluating whether the support organization is real, because on a flat royalty you are paying a fixed fee for it regardless of revenue.

Days 61–75: Negotiate the lease or the purchase agreement. On a new build, push for a free-rent period covering build-out plus ramp, a meaningful tenant improvement allowance per square foot, and a five-year initial term with two five-year options. Resist a personal guarantee extending beyond the initial term — an unlimited-term guarantee on a ten-year lease is the single largest uncompensated risk in this deal. On a resale, structure a portion of the price as a seller note or earn-out tied to member retention through the transition; sellers who resist that are telling you something about the member base.

Days 76–85: Execute and order long-lead items. Sign, pay the fee, form the operating entity in your state, and place the equipment order immediately — lead times of roughly eight to ten weeks mean the order must go in during build-out, not after. On a resale, close, and in the same week meet every staff member individually, because turnover at transition is the fastest way to lose the members you just bought.

Days 86–90: Launch the pre-sale or the retention campaign. New builds should start pre-selling founding memberships roughly 90–120 days before opening; a club that opens with a few hundred founding members reaches breakeven materially faster than one that opens cold. Resales should immediately work the lapsed-member list — the cheapest member you will ever acquire is one who already knows where the building is.

What disqualifies this deal regardless of the numbers

Some conditions make the decision for you. If any of these are true, the correct answer is not "build" or "buy" — it is "not this deal."

You intend to be absentee from day one. The 24/7 keyless model is marketed as low-labor, and it genuinely is compared to a staffed big-box club. Low labor is not the same as low attention. Churn management, trial conversion, and staff accountability all require an owner physically present through the first eighteen to twenty-four months. Semi-absentee is a Year-3 outcome, not a Year-1 structure.

Your only viable site is urban-core. At $35–$60/sqft NNN, rent consumes a third or more of revenue against a target in the high teens. There is no operating fix for that. The membership pricing model in this segment is built for suburban rent, and no amount of ancillary revenue closes a fifteen-point structural gap.

You are planning to compete on price. If there is a value-tier competitor across the parking lot and your plan is to undercut them, stop. Price wars in this category permanently reset ARPU expectations in the trade area, and under a fixed-cost structure you cannot shrink your way back to profitability. Compete on access, cleanliness, coaching, and personal relationships — the things a national value operator structurally cannot deliver locally.

You cannot fund the equipment refresh. On a resale especially, the equipment is a depreciating asset with a hard replacement clock. A deal that pencils only if you never replace a treadmill does not pencil.

You will not enforce the membership agreement. Soft enforcement of cancellation terms feels like good customer service and reads on the P&L as involuntary churn. Note also that several states have tightened auto-renewal and cancellation notice requirements — California and New York both moved in this direction recently — so if you operate there, your billing flows and disclosures need to be compliant by design, not retrofitted after a complaint.

Related questions

Is the flat royalty really better than a percentage royalty?

Above a crossover revenue level, yes — decisively, and the gap widens as you grow. Below it, a percentage royalty is cheaper and cushions bad years. Model the crossover for your own projected revenue before treating the flat fee as an automatic advantage.

How many members do I need to break even?

It depends entirely on your rent and ARPU, but a useful frame is that a suburban club with rent near 18% of revenue typically needs roughly 700–900 paying members at healthy ARPU to cover fixed costs and debt service. Solve it from your own lease, not a benchmark.

Should I buy a struggling club to turn around?

Often yes, if the site and lease are good and the problem is operational neglect rather than trade-area saturation. Under a flat royalty you keep nearly all of the recovery you create. Verify the trade area first — you cannot operate your way out of a bad location.

What is the realistic exit?

A mature, well-documented club sells to another franchisee or a multi-unit operator at a multiple of trailing EBITDA. Build the business to be sellable: clean books, low owner dependency, a documented member-acquisition process, and equipment with remaining life.

Do I need fitness industry experience?

No, but you need operating experience — labor scheduling, local marketing, collections, and firing underperformers. Multi-unit retail or restaurant background transfers well. Passion for fitness without operating experience is the most common profile among owners who exit early.

FAQ

What is the total investment to open a new location in 2027?

The disclosure document puts the initial investment range at roughly $539,000 to $905,000 for a standard club, with a realistic median build near $720,000. That includes the $42,500 franchise fee, leasehold improvements, the required equipment package, technology and signage, permits and insurance, training, pre-opening marketing, and an initial working capital allowance. Plan to hold meaningful liquid capital beyond that range — the working capital line assumes an on-schedule opening.

How much should I expect to make in Year 1?

Against system median gross revenue near $399,000 and EBITDA margins in the 22–28% band, conservative first-year owner cash flow lands around $45,000 to $75,000 before debt service. After an SBA payment, many first-year owners are close to cash break-even. Newer clubs also run below the system median, so underwrite Year 1 against new-cohort performance rather than the blended figure.

What are the ongoing fees?

The distinguishing feature is a flat monthly royalty rather than a percentage of revenue, paired with a fixed monthly brand fund contribution and a monthly technology fee. If you finance the equipment package, that lease payment is a further fixed monthly obligation. Add all four together and express them as a percentage of your projected revenue before comparing against percentage-royalty brands.

How long until breakeven and payback?

Breakeven commonly lands around eighteen months for a well-sited new build with a real pre-sale campaign, with payback on invested capital in the two-and-a-half to three-year range. A resale can be cash-positive in Month 1, though your payback is measured against the purchase price rather than a build budget. Both are multi-year wealth plays, not income replacement.

Is a resale safer than a new build?

Usually, for a first-time owner. You get trailing financials for that specific address, revenue from day one, and a trained staff — but you inherit the lease, the equipment age, and whatever caused the seller to exit. Do full diligence on the trade area, the remaining lease term and escalators, and the equipment replacement clock before agreeing to a multiple.

Can I run it semi-absentee?

Not in the first eighteen to twenty-four months. The keyless 24/7 access model reduces staffing needs but not ownership attention — churn management and trial conversion both depend on an owner working the floor and the phone. Semi-absentee is achievable at maturity with a strong general manager, and it is the normal structure for multi-unit operators, but it is an outcome you earn rather than a starting condition.

Sources

• https://www.ftc.gov/business-guidance/resources/franchise-rule-compliance-guide
• https://mn.gov/commerce/business/securities-franchise/
• https://www.sba.gov/funding-programs/loans/7a-loans
• https://health.gov/our-work/nutrition-physical-activity/physical-activity-guidelines
• https://www.bls.gov/oes/current/oes399031.htm
• https://www.census.gov/programs-surveys/acs
• https://www.ibisworld.com/united-states/market-research-reports/gym-health-fitness-clubs-industry/
• https://www.healthandfitness.org/
• https://oag.ca.gov/consumers
• https://www.irs.gov/businesses/small-businesses-self-employed/starting-a-business

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