Valuations for gyms, fitness studios and franchise clubs.

A gym valuation in Australia prices the recurring membership annuity, not the equipment: a fitness business's goodwill lives in its direct-debit book, so churn, contract mix, lease terms and franchise conditions drive the EBITDA multiple far more than the gear on the floor. Owner-operated clubs commonly trade at roughly 1.5 to 2.5 times adjusted owner earnings, and facilities that genuinely run under management nearer 2 to 3 times normalised EBITDA. Oliver Group prepares independent, evidence-led valuations for gyms, 24/7 clubs, boutique and franchise studios and PT businesses — concluding at the most supportable position within a defended range, on fixed fees from $1,495 + GST.

When a gym or fitness studio needs a formal valuation

Gyms and studios change hands constantly, and the fitness sector produces more owner exits, partner splits and franchisee transfers than most SME categories its size. A formal valuation is warranted whenever the number will be tested by someone other than the person who wrote it. The common triggers are a club sale or acquisition, where a defensible price has to survive a buyer's billing-export diligence; a partner, co-founder or franchisee exit, where both sides need a figure they can test rather than argue over; a related-party transfer of the operating entity or the fit-out between family or holding structures; a small business CGT concession claim on exit; bank or equipment finance; and family law. The basis of value is the same market-value standard in almost every case — what a willing but not anxious buyer would pay a willing but not anxious seller, the Spencer v Commonwealth (1907) principle carried through IVS 104 and the ATO's 'Market valuation for tax purposes' guidance — and the report has to say so, because a partnership deed formula or a franchisor's buy-back clause can deliberately depart from it.

• ·Sale or acquisition of a club, including price-testing a broker's information memorandum or a franchisor resale figure
• ·Partner, co-founder or franchisee entry and exit under a shareholders or partnership agreement
• ·Related-party transfer of the operating entity, fit-out or freehold between family or holding entities
• ·Small business CGT concession claims on exit (Div 152 ITAA 1997, including the s 152-40 active asset test and the $6m maximum net asset value test)
• ·Restructures under Subdiv 328-G and Division 7A compliance where loans sit between related entities
• ·Bank finance, equipment finance and lender security reviews
• ·Family law property settlements, estate planning and succession

Why EBITDA multiples land where they do: the membership annuity underneath

A gym's economics look less like hospitality and more like a rent roll: a base of weekly and fortnightly direct debits, collected automatically, that decays at a measurable rate and must be refilled by a join engine. Expressed monthly, that base is the club's monthly recurring revenue (MRR) — and it, not the equipment or the fit-out, is the asset the multiple is applied to. That is why a knowledgeable buyer's first diligence request is the export from the billing platform reconciled to the bank, not the profit and loss. Owner-operated clubs commonly trade at roughly 1.5 to 2.5 times adjusted owner earnings — 'adjusted' meaning a genuine market wage for the owner's management and floor hours has already been deducted — while facilities that demonstrably run under management sit nearer 2 to 3 times normalised EBITDA. Those bands are narrow, so the multiple itself does little of the work; where a specific club lands inside or outside them is set almost entirely by the quality of the book underneath. A stable debit run where joins and cancellations balance is a maintainable annuity worth the top of the band; the same revenue with joins trending down is a melting book worth the bottom of it or less. A valuation that quotes a multiple without reading the book has described the market the gym sits in — it has not valued the gym. For realistic multiples and a full worked example, see our companion analysis on how much a gym is worth in Australia.

Reading the book: churn, tenure, contract mix and the enforceability trap

Member attrition is the single biggest driver of a gym valuation: industry commentary routinely puts annual churn for mainstream Australian clubs in the region of 30 to 40 per cent, with average tenure often under two years, so a typical book substantially replaces itself over a two-to-three-year horizon. Maintainable earnings therefore rest on the join engine as much as the current roster. Contract mix is the next cut. Members inside a minimum term are contracted revenue; month-to-month members are revenue at will; casual and pay-as-you-go visitors are not annuity at all; and paid-in-advance memberships are a liability the buyer inherits — an obligation to provide service already paid for — not an asset. One caution on lock-in books: since 9 November 2023 unfair contract terms in standard-form consumer contracts have been not merely void but illegal and penalty-bearing under the Australian Consumer Law, and the ACCC has a long enforcement history with gym cancellation, auto-renewal and cooling-off practices. A contracted book is therefore only as strong as its terms are enforceable, so the cancellation policy and complaint history belong in the file alongside the contract count.

• ·The billing-platform export reconciled to the financial statements and the bank — active debiting members, average net debit and arrears ageing
• ·Twelve months of joins against cancellations, month by month, with the trend stated rather than assumed
• ·Tenure distribution — a long-tenure book is a different asset from one propped up by a recent join campaign
• ·Contract mix: minimum-term versus month-to-month versus casual, and when the lock-ins expire
• ·Suspension, freeze and hold rates and the policy that governs them — held members are not revenue
• ·Legacy pricing: the share of the book paying old rates below the current card, which caps yield growth
• ·Reliance on joining fees and paid-in-advance revenue, both of which flatter the P&L without adding to the annuity
• ·Ancillary income and its transferability — PT floor rent, class packs, casual visits and retail

Franchise, independent, 24/7 and boutique: the model sets the risk

Fitness formats are not priced on the same evidence, because the model determines what kind of book the buyer receives. Low-staff 24/7 clubs run lean labour and access-control technology, so margins can be strong, but the product is commoditised, price is the competitive axis, and the book is exposed to any operator who opens nearby — the valuation weight falls on churn discipline and whatever territory protection exists. Full-service independents carry equipment intensity and staff cost but own their brand outright. Boutique and functional formats — F45, CrossFit affiliates, reformer Pilates and single-instructor studios — carry the opposite risk: earnings that depend on individuals. Where members attach to the owner or a head coach rather than the facility, part of the goodwill is personal, and personal goodwill does not settle with the sale; the test is whether the timetable holds and the book keeps debiting when the owner is absent, and whether key coaches transfer under restraints and a transition. The PT-contractor ecosystem adds a related wrinkle: where trainers rent floor space and hold their own client books, the valuer has to establish how much of that revenue is transferable business goodwill versus the individual's. Franchise resales bring a system join engine, national marketing and — usefully — internal resale evidence, but royalties and marketing levies permanently reduce the earnings the buyer inherits and must sit in the normalised figure, not be footnoted around; remaining term, renewal rights, transfer consent and territory exclusivity all bound the value, and the franchisor's disclosure document and current site pipeline are direct evidence on it. For the general framework, see our industry page on valuing franchise businesses.

Equipment finance, lease liabilities and landlord risk: the standing deductions

Gyms are space-hungry, equipment-heavy tenants, so two documents sit just behind the billing export: the lease and the equipment register. Start with what is actually owned. Cardio and strength gear is frequently under a chattel mortgage, finance lease or rental agreement, and equipment financed but not paid off is not a clean asset — the residual liability has to be netted off rather than the gear counted at face. Three figures then have to be kept apart: the written-down value in the accounts (a tax artefact), replacement cost (the insurer's number) and value in use to the purchaser of the going concern — usually the smallest of the three. A club facing an imminent cardio refresh, or a franchisor-mandated refurbishment cycle, will see a knowledgeable buyer price that outlay as a deduction regardless of the depreciation schedule. The lease drives the rest. Remaining tenure plus options must at least match the period the earnings assumption runs for; misalignment between the lease term and a franchise term is a recurring, underpriced risk. Rent has to be tested against the debit run, because an above-market rent is an earnings problem the buyer inherits at the next review, and make-good — reinstating flooring, showers, amenities and HVAC across a big fit-out — is a real contingent liability behind the goodwill. One accounting trap deserves a flag: since AASB 16 most leases sit on the balance sheet as a right-of-use asset and a lease liability, and 'EBITDA' reported on a post-AASB 16 basis strips rent out of expenses and replaces it with depreciation and interest — so it is not comparable to pre-AASB 16 EBITDA or to a broker's rule of thumb. The file has to state which basis it is on before any multiple is applied.

Which Oliver Group engagement fits a gym or studio

Essential (from $1,495 + GST, 10-14 business days) suits a single-site independent gym or studio with a clean, reconciled direct-debit book, low churn and straightforward owned or leased equipment — one methodology, applied properly and senior-reviewer signed. Comprehensive (from $3,995 + GST, 15-25 business days) is the natural tier for most trading clubs: dual methodology with cross-check, full membership-book analysis, owner-wage normalisation, PT-revenue treatment and franchise-agreement review. The Defensible Valuation File (from $8,995 + GST, 25-35 business days) is built for positions likely to be tested — multi-site operators, 24/7 franchise territories, contested membership data, partnership disputes, family law and CGT positions the ATO may review — prepared with the ATO's market valuation expectations in mind. Operators weighing a franchisor resale against an open-market sale, or a single-club exit against a portfolio, are usually better served by the Valuation Range & Scenario Review (from $12,995 + GST). Situational extras are defined, not hourly: a retrospective valuation date adds $495 per date, each additional entity $750 (relevant where multi-site operators trade each club through a separate structure), and rush turnaround +30%; an Indicative Snapshot is available from $990 for early thinking. Every report is prepared under APES 225 Valuation Services and IVS 104, reviewed and signed by lead valuer Jackson Wilson, whose personal practice spans more than 3,000 business valuations. Fees are fixed at engagement and never contingent on the outcome, and we pay no referral fees or commissions to accountants who send us work — paying for referrals would compromise the independence the report depends on. Oliver Group prepares independent valuations only; we are not a registered tax agent and do not provide tax, legal or financial advice — your accountant and lawyer apply the report in their domains. For a full breakdown of what a formal gym valuation costs and what moves it up a tier, see our gym valuation cost guide.