LA Boxing is a franchisor that blends the offerings of a traditional health club with those of a boxing gym. The company has been around for 20 years and has 71 gyms. Although LA Boxing has traditionally chosen a strategy of steady profits over rapid expansion, it has recently looked to cash in on the growing popularity of mixed martial arts and depressed real estate market (where its franchisees can lease space at relatively low prices) by expanding in high net worth areas like New York City.
Franchisees invest around $200,000 in an LA Gym to get it off the ground, as well as a $25,000 franchisee fee and a 6% annual royalty fee. On top of that, franchisees pay a 2% annual advertising fee to LA Gym. That may sound like a lot of money to fork over, but it appears to be worth it. There seem to be few LA Gyms that run into financial trouble (most have been around for five years or longer).
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