How gyms make money

Most gyms sell the same thing: a membership, paid every month. What changes is how much each member pays, and how many members one location needs to pay its bills.

A low-price gym sells cheap access to a big room of machines. Planet Fitness, a chain of low-price gyms, charges new members $15/month for its basic Classic Card or $24.99/month for the Black Card, which 66.5% of its members paying monthly chose. Its members paid $19.51/month on average in 2025. That works only with a big room, about 20,000 sq ft, and thousands of members: about 7,200 members per club.

A full-service club has fewer members who each spend much more. Life Time, a chain of large clubs with pools, classes, a café and childcare, took in about $294/month per membership in 2025, counting dues and everything else members bought there.

A boutique studio sells classes in one small room: Pilates, cycling, barre. At Club Pilates, one of the studio brands of Xponential Fitness, a typical room lets up to 12 people work out together. Xponential's North American studios open more than a year sold about $695,000 each in 2025. For comparison, the average US gym with staff sold $929,000 in 2022, by the Census's count, in a group that also includes sports clubs, climbing gyms and pools.

Members can cancel, and they do. Churn is the share of members who leave each month. Planet Fitness expects a membership to last about 24 months. If members stayed that long on average, about 4.2% of them would leave each month; in real life, quitting comes in bunches, not evenly.

Picture a bucket with a hole in the bottom. Sign-ups pour in at the top and members leak out below, so a gym has to sign new members every month just to stay level. A club with 7,200 members loses hundreds of them a month this way, before it grows at all.

The leak has a season. Life Time's annual report says more of its member growth comes at the start of the year, and more members quit in the second half. Planet Fitness says it doesn't treat quitting as a key number of its own; it watches net member growth, the members it adds after the ones who leave.

Members also tend to stop coming before they stop paying. In a study of 7,752 members at three New England health clubs (members joining from 1997), many monthly members kept paying for months after their last visit. That money still comes in, but a member who never visits cancels in the end. The free lesson lets you plan your own gym's first year of members, with sign-ups and quitting.

A gym spends most of its money before the first member walks in: the lease, building out the space, the machines. Xponential's franchisees put in about $554,000 on average to open a studio in 2025, and Xponential asks them to have $270,000–$1.2M to build one out, depending on the brand. A big club like Life Time's costs many times more, since the company builds the whole building.

The bills last for years. Planet Fitness's own clubs usually sign leases of 10–12 years for a first term, and its franchisees replace their fitness equipment about every 5–9 years. Planet Fitness also sells that equipment to its franchisees: $310.1M of it in 2025, on top of the 7% royalty new US franchisees pay on dues and annual fees.

Then members come slowly. Life Time says its new clubs have taken 3–4 years on average to reach the results it expects. Until the members cover the bills, rent, staff and loan payments come out of savings or borrowed money, and the owner's own pay has to wait.

Many gyms sell memberships before they open, so they have members on the first day. Some states set rules for that money. In California, it has to sit in a trust account, or be covered by a bond, until shortly after opening, and a buyer can cancel for a full refund until the end of the fifth business day after the gym opens. Large chains with established California clubs can be exempt from the trust.

The room and the machines cost about the same every month. The people are the other big cost: US gyms with staff paid 31.9% of their sales in wages in 2022, by the Census's count.

According to the BLS, the government's labor statistics agency, 55% of fitness trainers' and instructors' jobs were in fitness and recreational sports centers, and 15% were held by self-employed workers.

Trainers and classes are also how a gym earns more than dues from the same members. Life Time averaged more than 220,000 sessions a month of personal training in 2025, and extras like training, swim and kids' programs, the spa and the café made up 27.4% of its clubs' revenue.

Gyms pay trainers and instructors in a few ways: by the hour, by the class or session, sometimes with extra for each person in the room. Whether a trainer counts as an employee or a contractor isn't the gym's choice alone: the IRS has its own test, and some states, like California, use a stricter one.