Gold's Gym, is the Famous Franchise Finished?

Has Gold's Gym, once the epitome of bodybuilding camaraderie, become a faceless corporation in it only for profits? It is alleged that Gold's Gym recently strong-armed bodybuilding great, Lee Priest, into paying an ungodly sum for he and his wife to work out. What do you think? Have you had a Gold's Gym experience?

Gold's Gym first started back in 1965 when former bodybuilder an US marine Joe Gold opened the first location in Venice. It was really more of a place for he and his friends to train rather than a commercial enterprise. He charged $60 a year and kept costs down by making his own gym equipment. At the time there was some political pressure to move the weights off the beaches and into clubs, and Bodybuilding at the time was still frowned upon by the majority of the general population. As a bodybuilder himself Joe Gold's gym attracted many greats and became the place to go for the serious bodybuilder. It was as much as a lifestyle as a business. Joe Gold sold the gym in 1970 for the $50,000 and became a merchant marine. The new owners ended up selling a couple of years later toi Ken Sprague who started holding bodybuilding contests.
In 1973 Ric Drasin, who has a channel right here on YouTube https://www.youtube.com/user/ricdrasin/ , designed a logo on the back of a napkin, that logo with the bodybuilder and barbell became the world famous logo that we all know today. At the time Gold's was only for hardcore bodybuilders, in fact an Ironman magazine article stated Gold’s is a bodybuilders’ gym. "Here you won’t find business men types who work out just to stay in shape. Most members are bodybuilders who work hard to gain bulk, density and symmetry, and they work hard with minimum time for kibitzing or goofing-off"
It wasnt until the movie pumping iron came out that bodybuilding began to slowly achieve mainstream acceptance. Sprague sold the gym to new partners who throughout the 80's expanded the name and brand across the nation. By 1993 they had over 1 million members worldwide and as some of you may remember a host of major celebrities who pushed the brand. In 2004 Gold's was sold to TRT Holdings for $150 million and TRT still owns the brand today.

From an investment perspective is owning a Gold's gym a good idea and how much money could I make? If you wanted to invest in a Gold's location they are one of the most expensive gyms to buy, Between 2.2 million up to 5 million, that is without a pool, those figures taken from their 2018 FDD. Average footprint for a Gold's is about 35,000 square feet so these are big gyms, Royalties are 5% of gross ad fee 2% co-op ad is 3%. I looked through the rest of the FDD and Gold's does have a liquidated damages clause, meaning if your business goes under you could be on the hook for a lot more. Gross revenues have frankly been for the most part flat-lining the past few years, in 2014 average gross was 1.628 million for franchised units, 2017 it was 1.663. Company owned units were down from 2.6 million to 2.1 million in the same time period. There are about 350 locations 200 owned by franchisees and the rest are company units. Now here is the really troubling data, the franchise closures, and this is the net change so the actual closures could be higher. In 2015 they closed 31 locations, 2016, 12 locations, nd 2017 43 Gold's gyms closed. I couldn't find the most recent FDD so not sure how 2018 fared and these reports are always 1 year behind.

So is Gold's a good investment? That's your decision, but it would appear that the glory days of Gold's are over. Flat-lining revenues, closing locations, and just in general being weenies, I think Lee Pries would use the C word, but we'll stick with weenies for sake of our viewers. And frankly with 3 million dollars you could open 5-10 gyms in another franchised system with arguably better market positioning, and future growth potential. If you need help finding and researching gym franchises, or any franchise give the experts a call at Franchise City. link is above to learn more. Lee Priest the Franchise City gym always open, And we'll pay you $440 a week to work out. Special thanks to Dave Palumbo at RX Muscle for drawing our attention to this story. https://www.youtube.com/channel/UCKL0xpOE1oYZytV2_och_jQ Thanks for watching.
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