For the fifth straight year, gym business mentorship company Two-Brain Business has released its annual State of the Industry Report, a comprehensive look at all things related to running a gym.
This year’s report, which included data from software companies Wodify and Kilo, covered 8,800 gyms worldwide. Of these, 67% were “big group” gyms, meaning largely CrossFit and functional fitness gyms.
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Three Key Takeaways
1. Client Retention Has Improved
In 2023, the average length of client engagements [client retention] was 7.8 months worldwide. This year, this number jumped to 18.6 months in the United States and 23.7 months in Europe.
This is particularly notable because, according to the report, the average gym owner can earn an extra $45,000 a year simply by increasing their length of client engagement by two months.
Two-Brain owner Chris Cooper thinks this jump is a testament to gym owners making a conscious effort to actively work to improve their client retention.
- “People are finally coming around to the fact that they’re not going to get 300 members…that’s just not how a coaching gym is going to work,” Cooper said.
2. Coach Pay Needs Improvement
In 2023, coaches earned an average of $27.36 an hour to lead a group class at a CrossFit gym. This year’s report saw this number jump to $32.50 an hour, up by 15%.
While this might seem like a positive statistic for the coach, it’s misleading because overall coach income has not increased.
- In 2023, the average annual wage of the highest-paid coach at a CrossFit gym was $30,408. This number actually decreased slightly this year to $29,338.
Further, the industry as a whole still lacks full-time coaches.
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Both this year’s and last year’s reports showed that the average CrossFit or functional fitness gym only has one full-time coach.
- Cooper went so far as to say there’s a “looming crisis” in terms of gyms being able to find good full-time coaches who stick around.
This essentially comes down to money: Coaches simply aren’t paid enough to be able to pursue a full-time career at most gyms.
3. Membership Rates Are Still Too Low
Membership rates have largely remained stagnant at CrossFit gyms in the last year.
- In 2023, the average cost for a group class membership was $165. This year, the average revenue per member at a CrossFit gym (where 88% of their revenue comes from group class membership fees) is $167.76.
If you haven’t raised your rates, Cooper said it’s time to do it.
- “If you’re still [charging] the same rates that you were five years ago, you’re losing ground, and unfortunately, that could be the thing that kills you,” Cooper said in an interview on the Sevan Podcast.
One Big Thing: The Top Gyms Are Doing Well
When it comes to owner benefit — meaning owner take-home pay plus business profit — the top gyms are doing well and making most of the money.
- The mean [or average] owner benefit in 2024 was $7,291 a month, while the median [middle number in the data set] was just $4,000 a month.
What this means is that while an average of $7,291 a month sounds decent for the average gym owner, more than half of the 8,800 gym owners in the report are taking home $4,000 or less.
And on the flip side, the top gyms — many of which are Two-Brain gyms — are making way more than the average gym owner, thus skewing the mean.
- Fun fact: Out of Two-Brain’s 1,000 gyms, almost 25% (230) of their owners are earning $100,000 a year, while 59 of their gyms have $1 million in assets.
Cooper explained that making gyms more profitable is his top focus because it leads to long-term sustainability.
- “The reality is when you interview people who have left the industry, it always comes down to money,” he said.
They might blame it on the landlord raising the rent or coaches leaving or otherwise, but it all hinges on money, he said.
- “The ultimate measure of the gym is going to be net owner benefit,” Cooper added.
Thus, to gym owners whose owner benefit isn’t yet at least $100,000 a year, getting there “has got to be your first focus,” he said.
- “You can’t make a career for somebody else until your career is secure,” he concluded.
The Big Picture
According to the State of the Industry report, there are some hopeful trends in the industry right now: Clients are staying longer, and the top gyms are earning a good living.
That being said, there’s still a lot of work to be done. There still aren’t enough full-time coaches earning a professional wage, and many gyms still aren’t charging enough for long-term success.
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