How much rent should you pay for your gym?

Happy Valentine’s Day Gym World,

Expanding your gym is a big decision. You have to consider:

• Location - Is it the right spot for your business to grow?

• Local demographics - Who lives nearby? Are they your target market?

• Rent - Can you afford it based on expected revenue?

• Size & layout - Will it fit your gym’s needs and operations?

• Renovations - How much work (and money) will it take to make it gym-ready?

• Parking & accessibility - Will members find it easy to get to and park?

That’s why we brought back Stu Brauer, a gym real estate expert and good friend of the pod.

He’s already shown us how gym owners can achieve financial freedom in 10 years or less through real estate. Now, he’s sharing his best tips and tools for expanding into a new space.

Here’s what he said:

Choose your market wisely

Top multi-location gym owners keep their gyms close together. We’ve seen this work for:

• Engage Personal Training - 4 locations in PA

• Alpha Fit Club - 17 locations in NJ

• GameChanger Fitness - 10 locations in NJ, 2 in MD

Stu says clustering gyms is a smart strategy because it:

• Strengthens brand awareness – Multiple locations in a small make you look bigger and more established, which builds authority and trust.

• Simplifies staffing & operations – Staff can be shared between locations, helping cover sick days or turnover.

• Speeds up growth – More brand recognition means more people willing to try your gym.

However, you should avoid locations competing with each other. While some overlap is fine, too much means:

• You’re not reaching new members

• You’re competing with yourself for leads

• You’re limiting growth by saturating the same market

At the same time, you don’t want to expand too far apart. Jeff Schumacher opened an Engage Personal Training in California—on the opposite coast from his other locations—and it’s been one of the hardest to run due to:

• No brand recognition

• No shared staff

• Different regulations

• Logistical challenges

Offer a simple & attractive model

If you’re expanding, you need to think like a landlord. Large group training gyms often struggle to lease new space because they tend to:

• Require more members to stay profitable (which means aggressive marketing and consistent retention)

• Have high operating costs (due to more equipment, larger spaces, and higher insurance requirements)

• Make more noise

• Require more parking (landlords covet parking spots)

A leaner, more profitable model makes expansion easier because it:

• Is easier to lease, since landlords prefer businesses that don’t require excessive space or parking

• Has lower operating costs, making it easier to sustain and potentially scale faster

• Fits into smaller retail spaces, which are more available and affordable

If Stu were expanding, he’d find a space under 2,000 sq ft, offer semi-private personal training, and pitch it as personal training. That’s far more appealing to landlords than a large gym with unpredictable class sizes and inconsistent revenue.

Know what rent you can afford

A common question gym owners ask when expanding is: How much can I afford to spend on rent?

Stu shared a simple tool that helps gym owners break down key metrics and calculate exactly how much they can afford in rent.

Before we dive into the math, let’s talk about the terms:

Serviceable SF: This is the actual training space your members use.

Class/Session Capacity: This is the maximum number of members you can serve per class.

Avg. SF per Member: This is how much space each member takes up during a session (Serviceable SF ÷ Class Capacity).

ARPC (Average Revenue per Class): This is how much you make per member per session (Membership price ÷ Sessions per month).

ARC (Average Revenue per Class): This is your max revenue per class (Class Capacity × ARPC).

Classes per Week/Month: These are the total session your gym runs each week/month.

Capacity per Week/Month: These are the total number of available training spots (Class Capacity x Classes per Week/Month).

Rent per square foot (All-In Rent/SF): This is how much you’re paying per square foot of your space.

Utilization rate: This measures how much of your gym space is actually being used compared to its total capacity. Tracking it helps you avoid overpaying for space you don’t need and ensures you’re maximizing every square foot.

To calculate utilization rate:

1. Determine how many people your gym can serve per class (class/session capacity)

2. Track how many people actually attend each session

3. Divide actual attendance by total capacity to get your utilization rate (total sessions booked ÷ total available sessions) x 100

Once you know your utilization rate, you can:

• Estimate how much you make per session

• Calculate your total monthly revenue (TMR)

• Project your total annual revenue (TAR)

• Determine how much rent you can afford based on TAR (below 25%)

• Model out how much you can pay per square foot based on your gym’s needs

Expected Revenue (Est. TAR): This shows how much you can expect your gym to make based on the number of sessions, class size, and utilization rate. You need this number to determine how much rent you can afford.

If you already have a space, you can input your gym’s numbers (membership, attendance, and revenue) to see if you’re using your space efficiently or overpaying for unused square footage:

• High utilization (70-85%) → You’re maximizing your space (more revenue per square foot) and may need to expand before your gym gets too crowded.

• Low utilization (below 65%) → You’re paying for space you don’t need or offering too many classes. Before expanding, focus on fixing pricing, class schedules, or lead generation to boost revenue.

Your little summary 🔎

There’s a lot to consider before opening or expanding a gym, but a few key factors can make the process less stressful:

1. Location matters – Keep your gyms close enough to share staff and resources but far enough to tap into a new market.

2. Your model needs to be sustainable – Whether you plan to stay at one location or expand, your gym should be profitable, space-efficient, and appealing to landlords to set you up for long-term success.

3. Run an efficient space – Use the right numbers (revenue, utilization rate, and square footage) to avoid overpaying on rent and make sure every square foot is working for you.

Stu has helped countless gym owners make smart real estate decisions, so if you want more insights, be sure to watch or listen to his full interview on Gym World.

love,

j

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