Cvp Analysis Snap Fitness

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CVP Analysis Introduction According to “Snap Fitness,” (2011), “economically, the health club industry has proven to be recession-proof, averaging an 8% annual growth rate since the early 1990’s across all health clubs and gyms,” (Fitness Franchise Opportunities). Snap Fitness franchising offers opportunities for entrepreneurs to open a successful business that has already allocated the following benefits and services for consumers and for the franchisee:  Location of fitness needs is open 24/7  Can be easily operated with one employee  Affordability for the owner and consumer  Business training and start-up marketing include  Snap Fitness clubs that have been open for 2 years as of December 31,2012 o (13%) have more than…show more content…
Most of the staff is paid an hourly wage, and these costs are dependent on the size of the health club and the number of hours of operation. The managers of the facility are paid a salary plus a percentage of business revenues. In addition to variable labor costs, there are some facility and equipment expenses that are variable. The major expenses in this category are the utilities. Additionally, equipment is depreciated, retired, and purchased on a continual basis. According to data from the health/fitness facility industry, startup fitness equipment costs range between $20 and $25 per square foot. Club owners also invest in equipment upgrades or replacement machines to stay current with equipment trends. According to the International Health, Racquet & Sports Club 2010 Profiles of Success, the median reinvestment allocation in 2010 for fitness equipment was 1.3% of revenues with some operations investing as much as 4.7% of revenues (American College of Sports Medicine, 2011). Repairs and modernization costs are usually services purchased by fitness clubs to provide repairs on existing equipment or installation of new equipment from trained technicians. Additionally, fitness owners have insurance to pay for some of these variable expenses according to the amount and types of equipment. Some taxes, like property taxes, are fixed. Others are variable costs, tied to income and some expenses. Sales taxes are paid on income from members and

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