Gym & Fitness Center Business Valuation Benchmarks

Business owners, prospective buyers, and industry investors rely on a diverse set of financial benchmarks to assess the value of a business. We have compiled data from current BizBuySell listings and sold businesses to provide insight into the business for sale market and important benchmarks for pricing and evaluating gyms and fitness center businesses relative to industry standards.

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Highlights of Gyms & Fitness Centers Sold on BizBuySell

Gyms, training centers, bootcamps, and fitness centers listed and sold on BizBuySell all aim to provide customers with the equipment and coaching they need to improve their physical fitness and manage weight. These are primarily locally owned small businesses operating independent brands, though franchise units are commonly sold and included in this report.

These businesses range from small studios offering group fitness classes to large gyms stacked with equipment where members largely serve themselves.

Gym & Fitness Center Business Transaction Trends

The median sale price of gym businesses remained largely flat as the Covid-19 pandemic forced customers to workout elsewhere. Sale prices remained flat until 2023 as these businesses began to see a return to pre-pandemic activity levels. 2024 saw a 23% increase in median sale price as financials and valuations both improved, despite the macroeconomic factors.

In the period from 2020 to 2024, median sale price increased 98%, far outpacing the broader business for sale market sale price growth of 23%.

Gym & Fitness Center Business Valuation Multiples

Valuation, or pricing, multiples are financial tools that allow for comparisons between businesses that have different levels of revenue and earnings. They represent the sales price of a business relative to its financial performance, and given enough individual business sales data, they represent what the market is willing to pay for a business given its revenue and earnings.

Valuation Trends

Business values and associated multiples fluctuate over time, influenced by a variety of macroeconomic factors such as interest rates, inflation, consumer spending, and overall economic growth.

Valuation multiples of gyms and fitness centers have largely followed the broader business for sale market, rising following the height of the pandemic, then cooling as interest rates increased in 2022 and 2023, before improving once more in 2024.

Earnings Multiples

Earnings multiples represent the value of a business relative to its owner’s discretionary earnings or "cash flow". Arguably the most important valuation metric - as seller's discretionary earnings will often dictate how much a buyer is able to borrow to finance the business acquisition - business valuations tend to hinge on the earnings multiple.

Revenue Multiples

Revenue multiples represent the value of a business relative to its overall sales or revenue. In conjunction with an earnings analysis, revenue multiples are commonly used to value a business based on its overall sales.

How to Interpret These Multiples

Recent Listings vs. Sold Businesses

We calculate and provide valuation multiples from two sources: Current and recent listings of gym and fitness center businesses for sale, and our database of "comparable" businesses sold on BizBuySell. Multiples based on listing data are generally higher due to owners setting asking prices above what their businesses might typically sell for. This occurs either intentionally as a negotiation strategy, or incidentally due to business owners’ common tendency to overvalue their own businesses.

Multiples based on comparable businesses - "comps" in business broker parlance - are much more useful as they represent the prices at which businesses ultimately get sold. Business brokers and valuation professionals will always turn to local comps when pricing businesses for sale or evaluating businesses for acquisition. We provide both sets of data at the national level to offer general context. Local business sale comps by sales class suitable for pricing and negotiations are available in BizBuySell's Business Valuation Report.

Quartiles, Median, and Average

No two businesses are identical, and as such, valuation multiples exist in a range. We have carved out four common values within this range: Lower quartile represents the value under which the lowest 25% of valuation multiples fell. Upper quartile represents the value above which the highest 25% of multiples fell. Median is the middle of the range, and average is the mean of the set. Mean is almost always higher than the median, driven by a minority of high volume, high value businesses sold at multiples above the upper quartile.

Businesses with consistent financial performance, above average revenue and earnings, demonstrable growth potential, low owner involvement, unique competitive advantages, and a seller willing to finance will command a multiple at or above the upper quartile. Lower volume businesses with thin profit margins, full-time owner involvement, and many direct competitors will trade at or below the lower quartile. Most businesses will fall somewhere in the middle.

Based on this data, half of gyms and fitness center businesses are valued between 1.7 and 3 times their annual seller discretionary earnings, with 25% of popular, larger gyms trading above this range, and 25% of smaller, less popular businesses trading below.

Financial Benchmarks

To determine how a business compares in terms of revenue and earnings relative to industry peers, it’s necessary to have some insight into industry standards. "Benchmarking" describes the practice of comparing a business’s financial performance to typical industry standards to determine where a business falls relative to other businesses in the same industry. These benchmarks can help guide owners and investors towards appropriate valuation multiples from the range above.

To that end, we have aggregated financial ranges useful for comparing an individual gym or fitness center business to its peers in the market.

Gym & Fitness Center Business Revenue and Earnings Trends

Median revenue of gyms and fitness centers sold on BizBuySell fell after the pandemic-era social distancing guidelines were put in place, then recovered over the following years to peak in 2023 and settle modestly in 2024. In the five years from 2020 through 2024, median revenue increased 27% while median seller's discretionary earnings increased 68%, bring profit margins to a high point.

Earnings Ranges

Discretionary earnings (used interchangeably with the terms "cash flow" and seller's discretionary earnings or SDE) is often the crux of business valuations, so it is important to benchmark it relative to other businesses traded on the market. Below you will find discretionary earnings ranges for gym and fitness center businesses sold over the past five years, as well as recent for sale listings.

Revenue Ranges

Sales volume plays a large role in business valuation, as it measures the size of the potential income opportunity for new ownership. It's not uncommon for buyers to select an earnings multiple range based on overall revenue. The table below includes revenue ranges of gyms and fitness centers sold over the past five years, as well as recent for sale listings.

How Revenue and Earnings Level Affects Business Values

Clearly higher levels of earnings lead to higher valuations, even given the same multiple. However, valuation multiples also tend to rise with business sales volume. Popular gyms and fitness centers that consistently generate higher revenue (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a gym consistently generating sales over $600k annually may sell for an earnings multiple near 3, while a less popular gym with sales below $250k may sell for an earnings multiple closer to 1.7.

This tendency for higher sales volumes to fetch higher valuation multiples is largely driven by the economics of business acquisition financing. Higher volume businesses give buyers more cushion to cover debt service obligations and still have enough left over to pay the new owner a reasonable income.

Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader healthcare and fitness sector when benchmarking gym and fitness center businesses. The chart and table below includes key metrics from sales of select healthcare and fitness businesses on BizBuySell between 2020 and 2024.

Gyms and fitness centers get a very slight premium when it comes to valuations relative to financial performance within the healthcare and fitness category. Provided the business is in good operating condition, and there are no material issues with employees, equipment, or leases, sales volume and earnings will be the primary factor affecting valuation.

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