How to Expand Your Gym: A Step-by-Step Guide

TL;DR: Growing a successful fitness studio and now thinking about opening a second location? This is an incredible achievement, but you need to approach gym expansion carefully and implement the lessons learned from your first location.

You’ve done it. After overcoming all the initial obstacles, you’re now running a successful and profitable fitness business with an ever-expanding membership base and high retention rates. 

Time to open a second location, right?

The answer isn’t that clear cut. The decision to open a second location shouldn’t be taken lightly and should only be done under a certain set of circumstances, which we’re going to cover in today’s article.

Why this topic matters: According to IHRSA, 81% of fitness businesses fail within the first year. And while there are no clear stats on the success rate of second and third locations, some of the same challenges remain as with opening your first studio location.

What you’re going to learn: In this article, we’ll cover the reasons behind why you would open a second location, the potential challenges that come with gym expansion, and the steps you need to take if you decide to open a second location. We’ll also hear from fitness studio owner Mehdi Elaichouni, who has successfully gone through the process of opening a second location.

Here’s what’s coming up:

• Should You Open a Second Location?
• What the Experts Say: Mehdi Elaichouni, Carpe Diem BJJ
• Common Mistakes When Opening a Second Location
• A Proven Gym Expansion Guide to Opening a Second Location
• FAQ – The Process of Expansion Gyms

Should You Open a Second Location? Signs You’re Ready

Once your existing gym or studio has become a success, the temptation is to open a second location and replicate this success. After all, the most well known fitness brands in the world got to where they are by taking that leap and expanding out from their original studio!

As most fitness business owners will tell you, there are a couple of reasons why the time is right to open a second location. Here are 4 of those reasons:

1. The first location is a proven success. Your first location is making a profit and you have high retention rates. This proves your concept works and can be applied to a second location. 
2. There is higher demand than you can handle. If wait lists for your classes are common and your timetable is at full capacity, it may be a sign you need to open a second location to meet demand. 
3. You have new ideas not suited to the first location. If you have new class ideas and concepts that aren’t possible in your original location, you may need additional space or a more suitable facility.
4. You’re ambitious. It’s simple—you aren’t satisfied with one location, you want to build a fitness empire! The first step to getting there is opening a second location. 

In the next part, we’ll share expert advice from a fitness studio owner who has grown a profitable first location and applied those lessons to opening a second location. 

📝 Read More: Gym Expansion at Scale – A Strategic Guide for Multi-Location Fitness Operators

What the Experts Say: Mehdi Elaichouni, Carpe Diem BJJ

“My first location was kind of a proof of concept. It really gave me the confidence to open a second location.”

Mehdi Elaichouni is the founder and owner of Carpe Diem BJJ. Based in Singapore, Mehdi bought into the Japanese franchise to open his first location and soon followed up with a second studio. 

When he joined us on The Fitness Founders Podcast, he talked about his journey to becoming a fitness entrepreneur and how he juggles this role with a full-time job at a prominent advertising agency. In particular, Mehdi gave some great insight into the lessons he learned about gym expansion when he opened his second location. 

Here are some key points he made: 

• Use the first location as a proof of concept. Once Medhi had proven the concept with his first location, he felt confident in opening a second location. He learned from the mistakes of his first studio and applied these lessons to his second location. 
• Standardization is crucial. Medhi looked outside the fitness industry to restaurant brands such as Nandos and saw that the key to their success was a standardized playbook for every location, which kept the quality of the product and the overall operations at a high level. This framework applies to running multiple fitness studios, too.

Common Mistakes When Opening a Second Location

Gym expansion isn’t a straightforward journey. While you may have produced a winning formula with your first location, new challenges can pop up with your second location. Before we continue, here are a few potential pitfalls to be aware of when considering gym expansion:

Mistake #1 – Stretching your financial resources too thin ❌

A common problem with opening a second location is that your financial resources can be stretched to a breaking point.

As Medhi noted in his interview, you are going to be making a loss in the first year or two of business in your first location. This could happen in the second location, too. Make sure you have enough capital to fund your gym expansion.

📝 Read More: How Should I Get Financing for My New Gym?

Mistake #2 – Not having a playbook ❌

Another key point Medhi makes is ensuring you have a playbook to follow for both locations. 

Document every successful process from start to finish in your first location so this can be replicated in the second location. You may have to tweak certain things based on the potential new market you’re entering, but don’t dive in without a proven roadmap written down.

Mistake #3 – Underestimating the market ❌

While you may have hit on a winning formula with your original location, it doesn’t mean it will automatically work 100% again. This is especially true if you are opening in a new town, city, or state. Do plenty of market research as there might be differences in what kind of messaging people respond to.

Mistake #4 – Scaling too fast ❌

Another effect of success with your first location is the belief that you can build quicker in the second location as you’ve “done it all before.” However, keep in mind that scaling too fast could lead to mistakes and shortcuts that will ultimately cause issues. Scale at a similar pace to your first location and pay attention to every last detail. 

Now that you’re aware of common mistakes with opening a second location, let’s go through a step by step guide to opening a second studio space for your fitness business. 

A Proven Gym Expansion Guide to Opening a Second Location

Mehdi applied all the lessons he learned from his first location when opening his second Carpe Diem BJJ location. In doing so, he sketched out a guide for every studio owner to follow. We’ve taken some of these insights and mapped out a proven step-by-step guide to gym expansion below. 

Ready to dive right into the exact steps you need to take for expansion gyms? Get our FREE resource:

Do your market research

Before you open a studio or gym, research the market you are entering. Even if you are opening a location in the same city, the demographics and competition may be different depending on your specific location or neighborhood. Adapt your concept if necessary to ensure you have the right fit for the market you’re entering. 

An example would be if you are entering a more affluent area, you may need to raise the price of your membership to reflect the higher standard of membership this kind of market prefers.

📝 Go Deeper: How to Create a Market Analysis For Your Gym

Secure a source of capital 

Gym expansion costs money—a lot of money! As with your first fitness center location, a lot of investment is needed up front to cover costs such as rent, insurance, wages, and equipment. The reality is you could be making a loss in the first year or two before turning a profit, so you’ll need a source of capital to keep the business running. 

Mehdi was able to fund his first location from his own resources until he turned a profit. For his second location, he secured investor capital. This was possible because he was able to clearly demonstrate his ability to run a profitable business in his first location, which made it easier to secure outside investors. 

Before you go forward with your gym expansion plans, make sure you have enough internal and/or external capital to cover all the business costs before it becomes profitable.

Make sure your insurance and taxes are in order

The thought of doing taxes and insurance forms can send most people to sleep. However, they are the most vital parts of the business to get in order—especially before securing outside investment.

In his interview, Medhi explains the three broad types of insurance you may need: 

• Insurance mandated by your landlord to protect everything on the premises. 
• Insurance to protect workers and raw materials during any renovation and construction you may do. 
• Insurance to cover accidents and injuries to staff and members when you’re up and running.

While this example is for Singapore, it will largely be the same in most countries—check out the rules around insurance in your area. 

Another point, made by the Small Business Association in the US, is to check which taxes you need to pay in your new location as this may be separate from the taxes you pay in your first location. This will be the case if you set up in a new state.

Start pre-sales early

Pre-selling memberships is an incredibly important part of setting up any studio—whether  it’s your first location or your last. There are two key reasons for this: 

• Capital flows into your new location immediately. Selling memberships early means you’re generating revenue before the doors open. In turn, you’re able to ease the pressure associated with the costs you’ll incur with wages, rent, and other expenses.
• Powerful social proof. If you open the doors and only two people turn up to your first class, your reputation immediately takes a hit. Full classes from day one, however, show that people want what you’re offering and word of mouth will spread. Indeed, social proof is one of the most powerful factors in early growth.

When Mehdi opened his first location, he started pre-selling a month out. He learned from this and expanded the timeframe to 6 weeks so he could pre-sell more trials and memberships—in turn generating more pre-opening revenue than he had for his first studio.

Decide who will run the second location

One of the challenges of running more than one studio location is spreading yourself too thin and burning out. 

As the owner of both locations, you obviously want to oversee everything that happens as the responsibility for the business ultimately lies with you. However, it can be a good idea to step back and delegate some responsibilities in the new location. 

Consider appointing a gym manager, either from within or outside, for your second location. This will ease the management burden on you and will allow you to focus on the overall success of both locations. Give the manager of the second location the same responsibilities you would give yourself while also regularly checking in to give advice and support. 

📝 Read More: Staff Management in Multi-Location Gyms

Use gym management software that can run multiple locations seamlessly

The foundation of every successful fitness studio is robust gym management software. This software needs to be able to give you the insights across all your locations so you can make the right decisions at the right time—and fast. 

Check out how studio owner Victoria Thomas uses gym management software to run multiple locations successfully. By using powerful data-driven insights to keep her studios performing at a high level, she was able to increase revenue by 36% in the last 12 months. 

📝 Check Out: Why User-Friendly Software is the Secret to Scaling Your Fitness Studio

FAQ – The Process of Expansion Gyms

What’s the best way to expand my gym to a second location?

Start by treating your first location as a proof of concept. 

Once you’ve proven your model works with strong retention and profitability, document everything that made you successful—this becomes your playbook for the second location. 

Next, research your new market thoroughly, even if it’s in the same city. Secure enough capital to cover 1-2 years of potential losses, get your insurance and taxes in order, and start pre-selling memberships at least 6+ weeks before opening. 

Finally, decide whether you’ll manage both locations or hire a dedicated manager, and invest in gym management software that helps you work smarter, not harder at managing multiple locations.

How much does gym expansion cost and how long until it’s profitable?

Expect significant upfront investment for rent, equipment, insurance, wages, and marketing. 

The reality is you could make a loss for the first 1-2 years before turning a profit—similar to your first location. That’s why securing adequate capital is crucial, whether from your own resources or outside investors. 

Having a proven track record from your first location makes it easier to secure funding, as it demonstrates your ability to build a profitable business.

What checklist should I use before opening a new fitness studio?

We’ve got you covered. 

Our FREE step-by-step guide, The Fitness Studio Expansion Cheat Sheet, walks you through the entire expansion process—from assessing whether your business is ready to grow to choosing between opening a second location or franchising.

You’ll learn how to create a playbook that documents your winning strategies, research new markets effectively, decide on the right second location, and more! Each step includes practical questions and considerations that successful multi-location owners use to avoid costly mistakes and build sustainable growth. 👍

Is franchising better than opening another gym myself?

The answer depends on your goals. 

Franchising offers a proven model, built-in support, and easier financing, but you’ll pay ongoing royalty fees and have less control over operations. 

Opening independently gives you complete control and keeps all profits, but requires you to create your own systems and carries higher risk. 

If you’ve already built a successful first location, you have proof your concept works, and opening independently lets you scale your vision on your terms. Read our complete guide on opening a gym franchise for a deeper comparison.

In Summary – Gym Expansion

Opening up a second location can be a challenging and exciting prospect. However, you need to make sure you are in the right place both financially and operationally to make this big next step in your entrepreneurial journey.

Here’s an overview of what we covered today:

• The reasons you would open a second location  
• Expert insight from a studio owner who has opened a new location
• The potential pitfalls of expanding your business
• A proven guide to opening a new location
• FAQs about the process of expansion gyms

What’s Next? 

• For more information on how to expand your gym or studio, download our step-by-step guide which covers each phase of expansion as well as the top considerations and questions to ask at each step.
• Speak to a member of our team if you’d like to know more about how ABC Glofox can drive your sales and marketing strategy—simply click on the Demo & Pricing button at the top of this page.