August 18, 2012
Gold’s Gym franchise claims to be the #1 Brand in Fitness.
No doubt, Gold’s Gym has been a powerful brand in health and fitness since Joe Gold opened the first location at Venice Beach in 1965.
The Gold’s Gym franchise website claims
“We are the most recognized brand in fitness because we have a proven business that offers franchisees instant competitive advantages:
“Over 45 years of experience and brand recognition
“Award-winning marketing programs
“State-of-the-art training systems to support operational and sales needs
“Industry-leading real estate and construction tools and models
“Significant group purchasing “
“Our franchisees benefit from proven systems and innovative resources that have been developed and improved over the last 45 years.
“We provide the structure, tools and resources to help you build and maintain a successful business…”
How well is fitness icon Gold’s Gym weathering the recession?
According to Entrepreneur, Gold’s Gym U.S. franchise locations fell from 465 in 2008 to 388, a net loss of 77 locations (17%)
According to data released by the Small Business Administration (SBA), Gold’s Gym franchise owners who qualified for SBA-backed franchise loans have a loan failure rate of 20%.
That just barely qualifies Gold’s Gym for inclusion in UnhappyFranchisee.com’s list of WORST FRANCHISES IN AMERICA (by SBA loan defaults)
Are you familiar with the Gold’s Gym franchise opportunity? If so, please share your experience, opinions or insights with a comment below.
If you are a Gold’s Gym franchise representative or employee, please leave a comment or email us at UnhappyFranchisee[at]gmail.com.
Gold’s Gym franchise owners have a 20% SBA loan default rate.
The inability to repay an SBA-backed loan (or any franchise loan, for that matter) indicates a serious situation for the franchisee.
It’s especially serious with a franchise investment as high as Gold’s Gym: between $898,500 – $3,890,000 according to Entrepreneur.
It’s likely that Gold’s Gym franchise owners who received SBA loans may have collateralized their franchise loan with their homes or other personal assets, and many were unable to repay those franchise loans… despite the serious incentive to do so.
|SBA loans granted since 2001:||116|
|SBA loan failure rate:||20%|
|Sources: Coleman report (SBA)|
Gold’s Gym franchise chain shrunk by 17% between 2008-2012 in the U.S.
The closure rate and loan defaults of Gold’s Gym could be seen as franchise due diligence red flags.
|Gold’s Gym Franchises 2008-2012|
|Franchises open 2008:||465|
|Franchises open 2012:||388|
|Franchise growth 2008-2012 (locations)||-77|
|Franchise growth 2008-2012 (%)||17%|
What do you think of the Gold’s Gym franchise?
Are you familiar with the Gold’s Gym franchise opportunity?
What do you think accounts for the SBA loan failure rate of Gold’s Gym franchise owners?
What steps should Gold’s Gym be taking to stop further franchise failures?
Has Gold’s Gym and Gold’s Gym International (GGI) taken serious action to address the problems that led to these loan failures?
Please share a comment (anonymous is fine) or Contact UnhappyFranchisee.com.
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Tags: Gold’s Gym, Gold’s Gym franchise, Gold’s Gym franchise complaints, Gold’s Gym failures, Gold’s Gym complaints, personal training franchise, fitness franchise, health club franchise, gym franchise, franchise failure rates, SBA franchise loans, worst franchises, unhappy franchisee, Gold’s Gym International (GGI)