What is my gym worth? How gyms and fitness studios are valued in Australia.
A gym or fitness studio is usually valued as a multiple of its maintainable earnings. Maintainable earnings are the profit after adding back one working owner's wage and other owner costs. The equipment the business owns is normally part of the price. What moves the price most is the membership base (how many members pay regularly, and how many cancel), memberships members have already paid for, the equipment, and the lease on a large floor area.
This guide covers 24/7 and traditional gyms, boutique studios such as pilates, yoga, boxing and group training, and personal training studios. Franchised gyms follow the same approach, with the franchisor's rules on top.
Start with maintainable earnings
Start from net profit before tax and add back one working owner's wage and super, depreciation (often large, because of equipment), interest, private costs run through the business, and genuine one-off costs. Add-backs explained.
Then deduct what a buyer will have to pay that you don't:
- A second working owner, or a partner who covers the front desk, sales or bookkeeping for little or no pay.
- Your own coaching beyond one role. If you run the gym and take a full timetable of classes or sessions, a buyer who only wants to manage will have to pay a coach in your place.
What moves the price
The membership base
Regular membership payments are what buyers pay for, so the numbers behind them matter as much as the profit. Be ready to show:
- Active paying members, month by month, for at least the last year, and the average weekly or monthly fee.
- How many members cancel each month, and how many join. A steady or growing base is worth more than one that relies on constant sign-ups to stand still.
- How many members are on minimum-term agreements and how many can leave at any time.
- Seasonal patterns, such as the new-year rush, so a buyer doesn't mistake a peak for the normal level.
Memberships and sessions already paid for
If members have paid upfront for memberships, class packs or personal training sessions they haven't used yet, the buyer will have to deliver them without being paid again. That amount is usually adjusted at settlement, so work out what's owed before you set a price.
Trainers and the owner's role
- Many personal trainers work as contractors who pay rent to use the gym. That income is steady, but their clients usually belong to the trainer. Buyers will also check that people treated as contractors really are contractors, because the wrong setup can mean back-pay, super and tax exposure.
- Employed coaches and front-desk staff should be paid under the Fitness Industry Award.
- If members come mainly for you, as the head coach or the face of the brand, a buyer will worry they'll leave with you. A handover period and a strong coaching team reduce that risk.
Equipment
List the equipment included in the sale with its age and condition. A lot of gym equipment is financed or leased: that finance needs to be paid out or transferred at settlement, and leased equipment isn't the business's to sell. Worn-out equipment that a buyer will soon have to replace is priced into their offer.
The lease and the franchise
Gyms need a lot of floor space, so rent is usually one of the biggest costs. A buyer will want enough lease left, including options, to earn back what they pay, and will check the make-good clause and any limits on hours or noise. If the gym is a franchise, the franchisor usually has to approve the buyer and may charge a transfer fee or require upgrades, so check your franchise agreement early.
A worked example
All figures are illustrative, made up for this example, and are not industry data.
An independent 24/7 gym has about 500 members paying fortnightly, with group classes in the evenings. The owner manages the gym and takes some classes. Net profit before tax was $64,000. Members have prepaid $15,000 of memberships and personal training that a buyer would have to deliver.
| Item | Amount |
|---|---|
| Net profit before tax | $64,000 |
| + Owner's wage and super | $72,000 |
| + Depreciation (equipment and fit-out) | $19,000 |
| + Interest on equipment finance | $5,000 |
| Maintainable earnings (PEBITDA) | $160,000 |
If buyers were paying, say, 1.3 to 1.8 times PEBITDA for a gym like this (illustrative), it would be worth about $210,000 to $290,000, including the equipment the business owns. The $15,000 of prepaid memberships and sessions would then usually be adjusted at settlement.
The membership trend decides where it lands. A base that has held steady or grown for a year, with cancellations well covered by new members, supports the top of the range.
What buyers of gyms will ask for
- Two to three years of profit and loss statements, plus the current year to date
- Active members month by month, joins and cancellations, and the average fee
- What members have prepaid and not yet used
- The staff and trainer list with roles, hours and pay or rent arrangements (no names at first)
- A list of equipment, with any finance or leases
- The lease, including options, the current rent and the make-good clause
- The franchise agreement, if there is one
Selling it yourself? How to sell your business yourself in Australia. Other service businesses: hair or beauty salon.
What's your gym worth?
Upload your P&L, and add your lease and roster if you have them. AUS Brokers works out your maintainable earnings with the add-backs explained, applies the multiple range for gyms of your size, and checks comparable gyms for sale in your state. You can add a buyer-ready profile, with photos of your gym, to market it yourself.
An indicative appraisal only. AUS Brokers doesn't provide valuations, and doesn't act for buyers or sellers. Selling in Victoria? Vic Brokers can sell it for you.
Frequently asked questions
How much is a gym worth in Australia?
It depends mainly on its maintainable earnings: net profit plus one working owner's wage and other add-backs. That figure is multiplied by what buyers pay for gyms of that size. A steady or growing membership base, low cancellations, equipment the business owns and a good lease all push the price up.
Is a gym valued on its number of members?
Not directly. Buyers pay for profit, but they look hard at the members behind it: how many pay regularly, what they pay, and how many cancel each month. A shrinking base lowers the price even when this year's profit looks good.
What happens to memberships members have already paid for?
The buyer has to honour them without being paid again, so the value of prepaid memberships, class packs and personal training sessions is usually adjusted at settlement.
Is leased gym equipment included in the sale?
Only if the lease is transferred with the buyer's and the finance company's agreement. Equipment under finance has to be paid out or transferred at settlement, and the price is usually worked out on the equipment the business actually owns.
Can I sell a franchised gym myself?
Usually yes, but the franchisor normally has to approve the buyer and may charge a transfer fee or require upgrades. Check your franchise agreement before you set a price.
General information only, not financial, tax or legal advice. Figures in the worked example are illustrative.