Want To Franchise A Gym? Here’s What You Need To Know (2025 Updated)

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Fitness is a multibillion-dollar industry that continues to grow in 2025. If you’re considering joining the industry or expanding your own gym business, it’s crucial to understand your legal and operational obligations.

Whether you’re a franchisor looking to expand your business or a franchisee planning to capitalise on emerging market trends, you should always be armed with the right knowledge. At Sprintlaw, many of our clients come from the fitness industry and our lawyers are well versed in meeting their specific needs. If this sounds like you, you’ve come to the right place. For comprehensive guidance on business setup, see our Business Set Up section.

What Is A Franchise?

The best way to define a franchise is to consider some familiar examples such as McDonald’s, KFC and Plus Fitness. These are all commercial businesses with various branches spread out across Australia and internationally.

The main concept is that there is a primary business (the franchisor) which establishes the brand, strategies, and operational systems, and there are the individual branches (the franchisees) that operate under those established guidelines. However, the world of franchising is nuanced. Franchisors and franchisees need to be well versed in their obligations under the Franchising Code of Conduct and must have a well-crafted Franchise Agreement that is rigorously reviewed before any commitment is made.

The process can be complex if you’re not familiar with franchising laws, so it’s wise to do thorough research and seek expert legal help. Let’s delve into this in a little more detail.

What Is The Role Of The Franchisee And Franchisor?

As the franchisor, you are the owner of an established business with a proven model, structured processes, a clear business plan, registered trademarks, and a defined brand identity. In 2025, innovation and digital engagement are also key aspects of your strategy.

When a franchisee invests in your business, they agree to operate their branch according to your established rules and protocols. This means that as the franchisor, you set the standard for what the franchisee can and cannot do. A strong franchise relationship hinges on clear communication and mutual respect, which helps in avoiding disputes and conflicts.

The franchisee has a number of obligations to ensure the smooth operation of the franchise, and these should be clearly outlined in both the Franchise Agreement and the applicable sections of the Code.

Ultimately, both parties share the same ultimate goal: to make the business as successful and sustainable as possible.

What Are The Pros And Cons Of Starting Or Buying Into A Gym Franchise?

Whether you’re a franchisor or a franchisee, there are several factors to consider before investing your time and resources into this business venture.

Pros

Franchises are typically well established, saving you the extensive groundwork required when starting from scratch.
The brand name and reputation are already in place, which can significantly ease your marketing efforts.
You benefit from an existing business plan and model that has already proven successful in the market.

Cons

An established business model does not guarantee success for every franchise location.
For a franchisee, there is less flexibility compared to running an independent business – you must adhere to predetermined procedures and processes.
Franchisors may face challenges ensuring all franchisees consistently meet their obligations and uphold the brand’s standards.

Clearly, there are both advantages and drawbacks to starting a gym franchise, and much depends on who you partner with as well as various market factors. For additional insight into effective business structures, see our Business Structure Guide.

However, your primary responsibility is setting your gym franchise up for success by engaging the right professionals. The legal team at Sprintlaw has extensive experience in providing personalised advice to both franchisors and franchisees.

Franchise Code In Australia

The Australian Competition and Consumer Commission (ACCC) details and enforces the Franchising Code of Conduct. This code governs the conduct of both franchisees and franchisors, ensuring that gym franchises adhere to strict legal standards for a robust start. For more detailed legal requirements, you might also review our insights on starting a business legally.

The code is extensive and might seem overwhelming at first, but non-compliance can lead to severe penalties. This is why consulting with franchise lawyers is highly recommended.

I Want To Franchise A Gym – Where Do I Start?

Many industry veterans will tell you that franchising a gym is no simple task, but don’t let that discourage you. Much like achieving peak fitness, success in franchising requires persistence, planning, and expert guidance.

What Documents Do I Need?

When expanding your gym through franchising, you must ensure that all contracts and documentation are in order. This includes employment contracts, non-disclosure agreements, working with children checks, trainer qualifications, and gym membership contracts. Each document is critical to protecting your interests and ensuring smooth operations. Be sure to get professional legal advice from our team if you’re unsure which documents are necessary.

What Fees Do I Need To Pay?

Franchisee Expenses

A franchisee typically pays fees to the franchisor for the use of the business name, model, trademarks, and overall support. The franchisor determines the fee structure, including initial instalments and ongoing payments. It is essential that these fee arrangements are clearly outlined prior to signing the Franchise Agreement.

Franchisor Expenses

Expanding your gym into a franchise in 2025 can be expensive. Costs such as leasing new premises, legal fees, marketing campaigns, and technology integration are all factors that must be considered. For guidance on managing these expenses, refer to our Commercial Lease Drafting Guide.

Franchisor Obligations

Alongside receiving fees, as a franchisor, you have a duty to clearly communicate your payment responsibilities and operational procedures to your franchisees. This includes providing ongoing support and ensuring that all legal documentation is up-to-date, especially as industry standards evolve in 2025.

What Is In A Franchise Agreement?

A franchise agreement is the contract that binds a franchisor to a franchisee. This agreement outlines the obligations of both parties, key aspects of the business, operational procedures, and the overall structure of the franchise. It is important to review this document thoroughly as it forms the backbone of your business relationship.

This may include details such as:

Intellectual property ownership and usage rights.
Confidentiality and non-disclosure requirements to protect trade secrets.
Payment structures and fee schedules.
The extent to which franchisees can modify the gym’s operational model.
Consistency of gym membership terms across all locations.
Procedures for handling disputes between the franchisor and franchisee.

Each franchise agreement is unique to the business, reflecting the specific relationship between franchisor and franchisee. As required under the Competition and Consumer Act 2010 (as amended for 2025), it is essential to involve a lawyer when preparing your Franchise Agreement.

Lease Agreements

If you are franchising your gym or becoming a franchisee for a new location, securing a suitable venue is crucial. A commercial lease that permits you to operate a gym is essential. The lease must account for heavy gym equipment, noise levels from music and exercise, lease duration, and any required modifications to the space. For advice on negotiating these terms, refer to our Commercial Lease Drafting Guide.

How Should I Manage My Intellectual Property?

When franchising your gym, protecting your intellectual property is paramount. You are essentially sharing your trade secrets with your franchisees, so it is crucial to have safeguards in place to prevent unauthorised disclosure or misuse.

Start by securing your business name and trademark, and consider updating your intellectual property protections in line with current 2025 standards. For more advice on protecting your intellectual property, visit our Intellectual Property page.

How Else Can I Protect My Business?

In addition to robust franchise and lease agreements, consider utilising confidentiality agreements and Non-Disclosure Agreements to safeguard sensitive information such as client data, bespoke training programmes, and internal procedures. Establishing detailed internal policies, including a comprehensive Employee Handbook, is also advisable. For further information on maintaining workplace confidentiality, see our workplace confidentiality guide.

How Does A Marketing Fund Work?

If your gym is thriving and you plan to franchise, marketing becomes an even more critical component of your business strategy. In a franchise model, a marketing fund is often established to support both national and local advertising campaigns, brand development, and promotional activities. This fund helps maintain a cohesive brand image and attracts new customers. For further details on managing marketing initiatives, check out our Consumer Guarantees Compliance resources.

Consider allocating part of your revenue to a marketing fund that covers your gym’s logo design, customer testimonials, and ongoing promotional efforts.

Do I Need An Operations Manual?

The operations manual is one of the most critical documents provided to a franchisee by a franchisor. It details everyday functions, training procedures, and the cultural aspects that define your business. An up-to-date manual ensures consistency and operational success across all locations. If you’re entering into a franchise arrangement, ensure that you receive a comprehensive operations manual from the franchisor as early as possible.

Emerging Trends In 2025

In 2025, the fitness franchising landscape is evolving rapidly with increased digital integration and personalised wellness solutions. Franchisors are now incorporating virtual training platforms, data-driven performance systems, and enhanced mobile apps to improve customer engagement. This digital shift not only streamlines operations but also opens up new avenues for revenue and growth. For more insights into modern business strategies, explore our Business Partners Guide and our detailed advice on legal essentials for startups.

National Fitness Industry Code Of Practice

The National Fitness Industry Code of Practice details the obligations of gym owners toward their clients and outlines the standards expected in daily operations, safety protocols, and membership contracts.

I’m A Franchisor – What Are My Obligations?

As a franchisor, you have a duty to your clients and your franchisees. Your role is to provide leadership by ensuring that all legal obligations and operational standards are met. This includes supplying detailed documentation, comprehensive training, and maintaining clear, ongoing communication with your franchisees. In 2025, integrating digital tools and updated operational protocols is more important than ever.

It is imperative that your business plan and guidelines are communicated effectively to prospective franchisees through a clear Disclosure Document. Your disclosure obligations, as stipulated by the Code, should be reviewed periodically to ensure they comply with the latest regulatory requirements.

I’m A Franchisee – What Are My Obligations?

As a franchisee, your primary duty is to adhere to the operational guidelines and business practices set forth by your franchisor. It is essential that you thoroughly understand and agree to the terms of the Franchise Agreement, which outlines your responsibilities, fee structures, and operational procedures.

Given that exiting a franchise arrangement can be challenging, it is vital to review every detail with your lawyer before signing. Recent changes in 2025 further underscore the importance of having clear contractual terms to protect your investment. For additional guidance on exit strategies, read our article on ending a franchise agreement.

Key Takeaways

Franchising a gym or buying into an established franchise can be a lucrative business endeavour in 2025 when you have a thorough understanding of all legal requirements and obligations. Here are some key points to remember:

Ensure you have a comprehensive, legally compliant Franchise Agreement.
Understand and adhere to the Franchising Code of Conduct as enforced by the ACCC.
Secure all necessary documentation—from commercial leases to non-disclosure agreements.
Stay updated with emerging trends and digital innovations to remain competitive in 2025.
Consult with experienced professionals — like the team at Sprintlaw — for tailored legal advice throughout your franchising journey.

If you would like a consultation on your options going forward, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

Sapna Goundan

Sapna has completed a Bachelor of Arts/Laws. Since graduating, she's worked primarily in the field of legal research and writing, and she now writes for Sprintlaw.

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