One of the most common questions gym owners ask is:

“How do I value my business?”

The answer isn’t always straightforward, as different buyers will have their own mechanism for valuing a business. However, in most cases, the value of your gym comes down to its financial performance and stability of the business.

For single-location gyms, the industry standard is a valuation based on a multiple of profits (EBITDA – Earnings Before Interest, Taxes, Depreciation, and Amortisation). Typically, this falls in the range of 1–3x EBITDA. The stronger your business, the closer you’ll be to the top end of that range.

So, what makes a gym more valuable to buyers? Here are the key factors that will influence the valuation.

A Secure, Long-Term Lease

One of the biggest concerns for buyers is whether they’ll be able to recoup their investment. If your lease is too short, uncertain, or comes with unfavourable terms, buyers may see it as a major risk. A long-term lease (ideally 5+ years) provides stability and reassurance that they won’t be forced to relocate or renegotiate under pressure.

A Strong Management Team

Gyms that rely too heavily on the owner are far less attractive to buyers. If you’re the one making all the decisions, running sessions, and handling sales, then what happens when you leave? Buyers want to invest in a system, not a job. Having a competent manager and full team in place means the gym can continue to operate smoothly without your direct involvement, making it a far more appealing purchase.

Recurring Membership Revenue

One of the most important factors in valuing a gym is the predictability of its income. Buyers want to see steady, recurring revenue streams—typically from long-term monthly memberships. If your business relies heavily on one-off payments, short-term packages, or inconsistent income from pay-as-you-go customers, it introduces uncertainty. A strong base of recurring direct debit memberships gives buyers confidence in the gym’s future cash flow.

Multiple Revenue Streams

While membership fees are the foundation of any gym business, additional income sources can significantly boost valuation. Gyms that generate revenue through additional services or by renting space to complementary businesses (such as physiotherapists or massage therapists) are often viewed as more stable. These extra income streams reduce reliance on memberships alone and create opportunities for growth.

Minimal Owner Involvement

The less dependent your gym is on you, the easier it is to sell. Buyers are looking for a business that can run without needing them to be hands-on every day. If they feel they’ll need to step in and work full-time just to keep things afloat, they’ll either offer less money or walk away entirely. Well-documented systems for sales, marketing, operations, and client onboarding make the transition smoother and increase the perceived value of the business.

Strong Branding and Reputation

A well-established gym with a strong local reputation will always be worth more than one that’s struggling for recognition. Brand loyalty, positive online reviews, and a strong presence in the community all contribute to higher buyer confidence. If your gym is known for delivering great results and has a loyal member base, buyers will see it as a safer investment.

What If Your Gym Isn’t Profitable?

If your gym isn’t generating strong profits, its valuation will likely be based on net asset value (the resale value of equipment, leasehold improvements, and other physical assets) plus 1x EBITDA. In other words, without solid financial performance, your gym’s worth may be limited to the tangible assets it owns.

Preparing for a Future Sale

Even if you’re not planning to sell right away, focusing on these areas now will make your business far more valuable when the time comes. A gym with a solid team, predictable revenue, and strong branding will always command a higher price.

If you’re considering selling or need help improving your gym’s value, feel free to reach out. I buy gyms, fix these issues, and turn them into profitable businesses