GNC Franchise Cost, Earnings and Review

Today we are looking at the GNC franchise,
or general Nutrition Centers. How much does a franchise cost? How much can you earn? Is it a good investment? All that and more on todays video. The total investment necessary to begin operation
of a single new GNC franchise store ranges from approximately $180,504 to $347,270. To convert a single company-owned store to
a franchise store ranges from$145,050 to $855,550. You will need to have at least $130,000 in
liquid assets to qualify for your own GNC. Royalty is 6% of gross sales, ad fee is 3%
of gross sales. Once your contract is up with GNC you have
options for renewal by paying an amount equal to 37 1/2% of the original franchise fee. You will possibly be awarded a protected territory
which will vary depending on if you are situated in a mall or standalone location. If you are off put by lawsuits GNC may not
be your best choice for a franchise. Class action lawsuits against GNC include
complaints of “Unlawful Business Practices” and “Consumer Fraud” relating to how GNC offers
discounts on alleged “regular priced” items. The plaintiffs claiming the regular prices
are illusory and overstated and this led buyers to believe they were receiving a substantial
discount when they were in fact not. There are several lawsuits related to this
pricing scheme. There were also a lawsuits seeking class action
certification relating to their Gold Card program which was discontinued and members
allegedly were not compensated. Lawsuits relating to deceptive advertising
and allegedly misleading benefit claims of products, lawsuits concerning GNC’s policy
of calculating minimum wage and overtime. There have been of course many lawsuits related
to negative health effects allegedly caused by products sold at GNC stores. In fact the GNC franchise FDD reveals almost
30 pages of lawsuits both ongoing and concluded. So how much does an average GNC store make? In their 2017 FDD GNC includes a financial
representation that included revenues from 1021 stores that had been in business the
entire 1 year reporting period of 2016. Average gross sales for that period were $487,358
with 421 stores exceeding that amount, and of course many stores not making that amount. Now what you should know when we go back to
the 2014 FDD we have on file, average earnings back then were $535,901 for the year 2013,
and $513,260 for 2014. We see a very clear trend of year over year
declining revenues Now if you are thinking $480,000 in gross
revenue is still not that bad let’s explore that. Don’t forget you have to pay almost 10% right
off the top to corporate for royalties and ad fees. Then back out your rent, payroll, taxes, cost
of goods sold, insurance, licensing, etc what are you left with? Well that number will be highly variable based
on the size of your store, number of employees, what state you are in etc. Fortunately we did find an approximation in
the GNC FDD of what your rent and maintenance might be based on what other stores have experienced
and I’ll post that chart on the screen, pause the video if you want to take a closer look. Now to give you all a point of reference,
and this really is an apples to oranges comparison so take it for what its worth, but the 2nd
lowest earnings franchise on the QSR50, which is a list of the top 50 fast food stores,
shows Subway stores earning $422,000. Thats the second lowest amount you can earn
out of all 50 franchises with only Baskin-Robbins lower and they are often seasonal. If we reverse the sort from highest to lowest
we see Chick-fil-A franchises earning 10 times that amount at 4.4 million per store. But Chick-Fil-A is a different story altogether
and I’ll put a link at the end of this piece to our Chick-fil-A video for anyone that is
interested. So to wrap up there has been a definite decline
in overall store revenue which GNC holdings attributes to decline in sales, pressure to
slash prices on expiring products, and challenges within the sector. Most analysts and we would wholeheartedly
agree, suggest the market is oversaturated with brick and mortar options, and competing
with online retailers with much lower expenses will become increasingly difficult. How many people will drive to a store when
they can get same or similar products online for a lower cost delivered right to their
door? And we all know the trend of people making
purchases online. If you didn’t already know GNC has plans to
divest themselves of over 1000 company owned stores over the next few years that they will
sell to franchisees. Can I ask you a question, when you have highly
profitable stores with an amazing future is your first thought to sell them? You can make your own decision. Hope you found this information helpful don’t
forget to like and subscribe and if you need help identifying or researching franchises,visit
the experts at yes thats .city not .com. and you can also browse 600 franchise
opportunities Ill put that link at the top right of your screen

15 comments on “GNC Franchise Cost, Earnings and Review”

  1. UnderdoggRising ENT. says:

    Love the channel! I worked at a nutrition store franchise for several years. Dying industry and business, especially brick and mortar, just like you said, everyone buys supplements online now. Thanks!

  2. Danny Zuehlsdorf says:

    30 pages of lawsuits? Sign me up!

  3. sunnohh says:

    You should make this for a wider audience. Always knew a lot of this stuff as an economist, always wondered the actual numbers. Great work

  4. Ryan Finchum says:

    This company's financials are abysmal.. So abysmal that it is worthy of shorting its stock..

  5. Truthfears Guilty says:

    sad to say but today, FRAUD RULES and it's allover the world. mirages being sold and bought in good faith.

  6. Ronald Smith says:

    I went into GNC a couple of times and found they were super-expensive, limited choice, all private brands, the owner / manger knew little or nothing about nutrition. Never again, there are Walgreens, CVS, Krogers and others that are cheaper, larger choices, national or regional brands and a lot more of them.

  7. mi ke says:

    This is a terrible business concept in the internet age. Too narrow of a niche. I would be surprised if they are still around in 5-10 years.

  8. feweqf wefwef says:

    As a gym goer/fitness goru, the last place I would shop is gnc. Overpriced, fake deals, only gnc own brands, trying to sell you memberships. $75 for a 5lbs tub of on whey protein unless you paid for the membership to get some discount, lol I can get it from amazons for $49-55 depending in their deals. I predict gnc will be the next blockbuster/toys r us

  9. sophocles says:

    I'm surprised that any of these stores make money. Charmless, sterile stores with all the appeal of hospital rooms. But I suppose if there are enough bodybuilders in your neighborhood regularly buying huge containers of supplements you can get rich.

  10. RedRecordings says:

    Figures… I dropped the drugs and went with rest, working out and better food! Interesting vid!

  11. Mike MakesRight says:

    A great franchise if you are living in 1986. I am amazed the one near me is still open. Not hating just saying.

  12. Mark Soberay says:

    Heck this would be easy to start that type of business and get a great website…especially if you were a sports star in that community or other contacts

  13. Sean F says:

    If you go to Amazon, you can search "GNC Protein powder" and you can buy it online. I am just curious if GNC is bypassing their stores and selling all of their products on Amazon?

  14. super nerd says:

    vitamins and supplements the snake oil of the post world war 2 generation and their offspring.

  15. Alex Doge says:

    I used to work in one when I was in college.
    Even with the 30% employee discount I buy my proteins online at a cheaper price.
    They also have a weird policy so that we only get commission from third party product instead of GNC home brand, making a awkward situation where we’re all actively trying to talk customer out of buying GNC brand product and get third party product instead.

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