The Little Gym franchise unit economics
The Little Gym franchisees run children’s motor-skill development gyms that sell class enrollments, memberships, camps and pro-shop merchandise.
The Little Gym in the news
- Unleashed Brands Reports Strong First Half of 2026 with 73 Franchise Agreements Across Seven Brands · Webull (PR Newswire) ·
The headline above on The Little Gym is the publisher's own and links to the publisher. Averan Advisors checked this Little Gym link on 11 October 2026. Franchise news lists news on 88 brands, including The Little Gym. The Little Gym is in the Swim Schools and Youth Sports franchise guide.
The Little Gym franchise at a glance
The Little Gym’s Item 19 reports 2025 gross sales, occupancy cost, wages, advertising and EBITDA by quartile for 166 US gyms, with private-equity-backed owners shown apart from everyone else.
The Little Gym franchisees averaged $658,446 of sales in 2025, according to Item 19 of The Little Gym’s 2026 FDD, issued 24 April 2026. The 166 in that group are 65%* of The Little Gym’s 255 locations. Fees paid to The Little Gym come to about 9%* of sales. The Little Gym franchise costs $420,324 to $722,773 to open.
- A Little Gym franchise costs $420,324 to $722,773 to open, including a $59,500 initial franchise fee, according to the brand's 2026 FDD.
- The Little Gym charges a royalty of 8% of sales and a 1% brand fund contribution.
- The Little Gym’s 166 franchised gyms open all of 2025 averaged EBITDA of 25.7% of gross sales on Averan’s weighting of the FDD’s quartiles. The Little Gym’s FDD defines EBITDA as earnings before interest, taxes, depreciation and amortization, with payroll excluding owner pay.
- Work out The Little Gym's fees at your own sales with the minimum fee calculator.
These figures come from The Little Gym's 2026 Franchise Disclosure Document, as the brand reported them, and were read by Averan Advisors.
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Talk to Averan → Averan The Little Gym Conversion Package →- The bottom quartile loses $10,654 of profit on $321,067 of gross sales. That is a filed margin of −8.8%, and the lowest-selling gym in the system is at −163.8%.
- Private-equity-backed franchisees earn more in every quartile. That is $250,962 of profit on $774,763 of sales against $158,375 on $634,923, a 32.4% margin against 24.9%.
- The backed gyms spend 5.6% to 8.4% of sales on advertising; everyone else spends 3.6% to 5.9%. That is $41,969 against $18,375 in the bottom quarter of each group.
- Building costs run 15.1% of sales at the top quartile and 35.0% at the bottom. That is $157,219 against $112,279, a $44,940 difference in rent against a $722,589 difference in sales.
- That is 100 gyms opened across three years against 20 departures. The franchised network grew from 173 to 255, with 93 signed agreements still unopened.
How much does a Little Gym franchise make?
The average Little Gym unit reported $658,446 of revenue in the 2026 FDD. The brand’s disclosure document’s quartiles put EBITDA at 25.7% of revenue on Averan’s weighting. Fees come off the top first, at about 9% of sales across royalty, brand fund and the rest of the stack. Revenue is not income. Rent, wages, cost of goods and the franchise fees all come out before an owner is paid. The figures for the highest-selling and lowest-selling businesses are below.
Top performers
What separates the top Little Gym performers
The Little Gym splits its locations into groups instead of publishing one average. The top group averaged $1,043,656 a year. The lowest averaged $321,067. Both run the same brand, on the same agreement, paying the same fees.
Decided before you open
- Site and trade area.The top band sells 3.3× the bottom band. Catchment, daytime population and neighboring businesses affect where a location falls.
- Territory.This model sells from a territory, with no storefront. Population density sets how much driving sits between jobs.
- Opening cost range.Opening costs $420,324 to $722,773, a 1.7× range inside one brand.
Live operating levers
- Membership drives the model.Track how many members join, how many cancel, and what each member spends beyond the plan.
- Gift cards.Gift cards are sold before the service is delivered, and sales peak around the holidays. A gift card is deferred revenue until it is redeemed, so cash and earned revenue arrive in different periods.
- Service and retail mix.Retail sales and the share of customers on higher service tiers raise revenue per hour without adding hours or rooms.
- Fees and the minimum.Fees run about 9.0% of sales. A minimum fee also applies, so lower-selling locations pay a higher effective rate. Work out the sales level where the percentage overtakes the minimum.
Context you underwrite around
- Locations included.These figures cover 166 of 255 locations. Locations open less than the full year, brand-owned, or not meeting the reporting criteria are excluded.
- What the filing does not include.Item 19 publishes no median, no attainment figure. Ask the franchisor or current owners for cost and profit figures.
Profit and loss
Sales, expenses and profit by quartile, 2025
| quartile | Gyms | Gross sales | Cost of goods | Building costs | Advertising | Wages | Insurance | Other | profit | Filed margin |
|---|---|---|---|---|---|---|---|---|---|---|
| Top quartile | 41 | $1,043,656 | $31,049 | $157,219 | $46,028 | $309,372 | $12,302 | $115,670 | $372,316 | 35.0% |
| Second quartile | 41 | $749,539 | $21,861 | $139,076 | $31,709 | $243,897 | $10,294 | $86,353 | $217,415 | 28.7% |
| Third quartile | 42 | $530,861 | $13,963 | $120,868 | $25,602 | $185,723 | $8,066 | $71,627 | $105,011 | 19.1% |
| Bottom quartile | 42 | $321,067 | $16,828 | $112,279 | $18,931 | $134,073 | $7,507 | $42,683 | −$10,654 | −8.8% |
| All 166 gyms * | 166 | $658,446 | n/a | n/a | n/a | n/a | n/a | n/a | $169,530 | 25.7% |
Every quartile figure is as the brand reported it. The all-gym row is marked *, weighting each quartile by its gym count.
Expenses as a share of sales
| Line | Top quartile | Second | Third | Bottom |
|---|---|---|---|---|
| Wages | 29.6% | 32.5% | 35.0% | 41.8% |
| Building costs | 15.1% | 18.6% | 22.8% | 35.0% |
| Other costs | 11.1% | 11.5% | 13.5% | 13.3% |
| Advertising | 4.4% | 4.2% | 4.8% | 5.9% |
| Cost of goods | 3.0% | 2.9% | 2.6% | 5.2% |
| Insurance | 1.2% | 1.4% | 1.5% | 2.3% |
| Wages and occupancy cost together | 44.7% | 51.1% | 57.8% | 76.7% |
We divided each filed expense average by its quarter's filed gross sales average.
Wages and occupancy cost take 44.7% of sales at the top quartile and 76.7% at the bottom. Every other line put together is 19.6% and 26.8%. So this business has two costs that matter and six that round. A gym sitting at the bottom is carrying 32.0 points more of those two lines than a gym at the top. That is the whole of the margin difference and then some.
Building costs fall from $157,219 at the top quartile to $112,279 at the bottom. That is $157,219 at the top quartile against $112,279 at the bottom. The lowest-selling gyms pay 71% of the rent on 31% of the sales. Because this format needs a specific footprint whatever the enrollment, the rent line is set at lease signing and then either carried or suffered.
The bottom quarter's lowest-selling gym runs a −163.8% margin. That gym had $99,608 of gross sales, the lowest in the system. The quartile's highest-margin gym runs +20.1% on $418,724. Across the whole bottom quartile 29 of 42 gyms beat the quarter's own average margin. That means the average is dragged down by a small number of severe cases.
Cost of goods is 3% of sales and insurance is 1.2%. Combined, less than a third of what advertising costs. This is a service business with almost no inventory. So wages are the first number on any Little Gym operating report and the last one to compromise on.
Fees and what it costs to open
Royalty and marketing costs
| quartile | Gross sales | Royalty | Marketing obligation at 6% | Technology and call center | Total | Share of sales |
|---|---|---|---|---|---|---|
| Top quartile | $1,043,656 | $83,492 | $62,619 | $2,628 | $148,740 | 14.25% |
| Second quartile | $749,539 | $59,963 | $44,972 | $2,628 | $107,563 | 14.35% |
| All 166 gyms | $658,446 | $52,676 | $39,507 | $2,628 | $94,810 | 14.40% |
| Third quartile | $530,861 | $42,469 | $31,852 | $2,628 | $76,949 | 14.50% |
| Bottom quartile | $321,067 | $30,000 | $19,264 | $2,628 | $51,892 | 16.16% |
Ours, built from the filed rates: a royalty of 8% of gross sales or $2,500 a month, whichever is greater, starting 180 days after the grand opening. The national advertising fund contribution is up to 2.5%, currently 1%, and a local marketing expenditure of up to 6% less the fund share, currently 5%. The combined obligation across the fund, local spend and any advertising cooperative is capped at 6% of gross sales.
The $2,500 monthly royalty minimum binds on every gym below $375,000 of sales. That covers the bottom quartile, which averages $321,067 and would pay $25,685 at the 8% rate against the $30,000 minimum, $4,315 more. With the 6% marketing obligation added, a bottom-quarter gym hands over 16.16% of sales and a top-quarter gym hands over 14.25%.
14.4% of sales is the whole brand and marketing obligation at the system average. That is $94,810 on $658,446. Against weighted EBITDA of $169,530, that means the brand and the market between them take 56% of what a gym earns before it earns it. The mitigating detail is that five of those fourteen points stay in the franchisee's own market as local advertising. The private-equity comparison suggests the gyms spending well above the minimum are the ones that win.
The royalty is 8% with a 6% marketing obligation. Across thirty-six health and wellness brands the median royalty is 6.5% and the top of the range is 10%. The Little Gym's 8% plus a hard 6% marketing obligation is a heavier headline load than most. What makes it work at the top quartile is a 35.0% margin. Is also at the top of the range.
Cost to open a gym
| Item | Low | High |
|---|---|---|
| Initial franchise fee | $59,500 | $59,500 |
| One month's rent and deposit | $12,000 | $30,000 |
| Leasehold and tenant improvements | $135,240 | $325,644 |
| Architectural and construction management | $16,700 | $25,000 |
| Signage | $24,000 | $35,000 |
| Initial inventory and equipment package | $65,000 | $75,000 |
| Furniture, fixtures and equipment | $15,000 | $18,000 |
| Computers, audio-visual and security | $7,000 | $9,000 |
| Training-related expenses | $17,500 | $22,500 |
| Legal, accounting and professional | $5,000 | $11,000 |
| Technology and call center | $244 | $289 |
| Insurance deposit and premium | $2,440 | $2,840 |
| Licenses and permits | $500 | $1,000 |
| Grand opening marketing | $20,000 | $25,000 |
| Initial supplies | $1,200 | $2,000 |
| Additional funds, first three months | $39,000 | $81,000 |
| Total | $420,324 | $722,773 |
As the brand reported it.
Building work swing $190,404 and everything else swings $112,045. That is $135,240 to $325,644 on the build against a $302,449 total range. As with every fitness format in this library, the deal is made or lost on what the landlord contributes. The occupancy cost table above shows what happens over the following decade when that conversation goes badly.
Three months of working capital is carried at $39,000 to $81,000. The bottom quartile loses money over a full year, and the royalty holiday ends 180 days after opening. The private-equity comparison on the previous tab is, read plainly, an argument for the top of that range.
$144,500 to $159,500 reaches the franchisor before opening. That covers the $59,500 franchise fee and the $65,000 to $75,000 equipment and inventory package. $20,000 to $25,000 of grand opening marketing that may be routed through the franchisor's media partner. That is 34% to 22% of the total investment.
Private equity
Private-equity-backed gyms against all others
| quartile | Backed gross sales | Backed profit | Backed margin | Other gross sales | Other profit | Other margin |
|---|---|---|---|---|---|---|
| Top quartile | $973,509 | $396,853 | 40.7% | $1,038,088 | $356,346 | 33.8% |
| Second quartile | $860,635 | $275,352 | 32.0% | $710,336 | $204,542 | 28.5% |
| Third quartile | $767,482 | $238,521 | 31.3% | $493,695 | $87,306 | 17.4% |
| Bottom quartile | $497,426 | $93,120 | 14.7% | $310,507 | −$8,097 | −8.6% |
| Weighted average * | $774,763 | $250,962 | 32.4% | $634,923 | $158,375 | 24.9% |
Sales, profit and the filed margins are as the brand reported it.
| quartile | Backed advertising | Other advertising | Backed occupancy cost | Other occupancy cost |
|---|---|---|---|---|
| Top quartile | 5.6% | 4.0% | 12.2% | 15.3% |
| Second quartile | 6.8% | 3.6% | 17.4% | 20.1% |
| Third quartile | 7.0% | 4.8% | 15.4% | 24.6% |
| Bottom quartile | 8.4% | 5.9% | 21.2% | 36.1% |
We divided each group's filed advertising and occupancy cost averages by its filed gross sales average.
The backed gyms spend more on advertising at every level, and the gap widens as you go down. That is 1.6 points at the top quartile and 2.5 at the bottom. In dollars the bottom-quarter comparison is $41,969 against $18,375. The backed gyms spend 2.3 times as much marketing money on a gym that bills 1.6 times as much. Whatever else capital buys, it buys the ability to keep spending on demand generation when sales are low, which is the point when an undercapitalized owner stops.
The backed gyms also have lower occupancy cost at every level. That is 12.2% against 15.3% at the top and 21.2% against 36.1% at the bottom. Part of that is arithmetic, the same rent against higher sales. The third quartile shows the largest gap. Those gyms pay $118,229 of rent on $767,482 of sales, against $121,284 on $493,695. The rent is almost the same, and the sales are 55% higher.
The bottom quarter of backed gyms bills $497,426; the bottom quarter of everyone else bills $310,507. A 60% difference, and it converts a −8.6% margin into +14.7%. That is the most useful fact here for anyone weighing how much working capital to bring. The difference between a gym that struggles and one that works looks a lot like the difference between funding a ramp and running dry part-way through it.
Twenty gyms of 166 sit in the backed group. A twelfth of the reporting system, and small enough that one higher-selling owners moves a quartile of five. Read the direction of the comparison.
The network of locations
Gyms opened and closed, 2023 to 2025
| Year | Start | Opened | Terminations | Non-renewals | Ceased, other | End | Net change |
|---|---|---|---|---|---|---|---|
| 2023 | 173 | 18 | 0 | 1 | 6 | 185 | +12 |
| 2024 | 185 | 39 | 2 | 1 | 4 | 218 | +33 |
| 2025 | 218 | 43 | 0 | 1 | 5 | 255 | +37 |
As the brand reported it.
That is 100 openings against 20 departures across three years. Five gyms arrive for every one that leaves, and the network has grown 47% from 173 to 255. Terminations are almost absent, two in three years, and the departures that happen are recorded as ceasing for other reasons.
Openings accelerated each year: 18, 39, 43. Against a filing showing a quarter of gyms below zero profit, that pace is worth holding in mind. 39 gyms opened during 2025 and are excluded from the financial tables, alongside 50 that reported incomplete data. So 89 of 255 gyms sit outside the numbers above.
93 signed agreements sit unopened against 37 projected openings. That is two and a half times the expected openings. On a base of 255 that pipeline would add 36% to the network if it all converted.
What territory you get
Your protected area typically holds 8,000 to 10,000 children aged nought to four with household income above $70,000. The Little Gym defines the area using postcodes, geographic boundaries or a radius, with a stated minimum size of zero. The grant is explicitly other than exclusive: inside the area the franchisor will refrain from operating or franchising another Little Gym, subject to its reserved rights. Any gym already operating or in development there when you sign is carved out.
Protected areas may overlap with each other. So long as no other Little Gym business sits in the overlap. Boundaries change only by written consent of both parties, except on your own default. The franchisor keeps the right to sell gym equipment, audio programs, toys and music anywhere through retail, wholesale, mail order and every electronic channel, inside your area as well as outside it.
Questions we get asked
Questions owners ask.
How much does The Little Gym franchise make?
The Little Gym franchisees averaged $658,446 of sales in 2025, according to Item 19 of The Little Gym’s 2026 FDD, issued 24 April 2026. The 166 in that group are 65%* of The Little Gym’s 255 locations. Fees paid to The Little Gym come to about 9%* of sales. The Little Gym franchise costs $420,324 to $722,773 to open.
What should a Little Gym location be billing?
The 166 US gyms trading the full year averaged $658,446 of gross sales on Averan’s weighting of the quartiles. By quartile, The Little Gym locations averaged $1,043,656, $749,539, $530,861 and $321,067, with medians of $980,161, $758,371, $525,883 and $334,756. The system's highest gym billed $1,900,457 and its lowest $99,608.
What does a Little Gym location earn?
The Little Gym's profit was $372,316 at the top quartile, $217,415 at the second, $105,011 at the third and minus $10,654 at the bottom, filed margins of 35.0%, 28.7%, 19.1% and minus 8.8%. Weighted across all 166 on Averan’s calculation, that is $169,530 of EBITDA a gym, a 25.7% margin. The two lines that decide it are wages and occupancy cost. That take 44.7% of sales at the top quartile and 76.7% at the bottom.
What is the private-equity split about at The Little Gym?
The 20 gyms whose franchisees obtained private equity financing stand against the other 146. The backed group earns more in every quartile: 40.7%, 32.0%, 31.3% and 14.7% against 33.8%, 28.5%, 17.4% and minus 8.6%. Weighted, that is $250,962 of profit on $774,763 of sales against $158,375 on $634,923. The visible difference in the expense lines is advertising, where the backed gyms spend 5.6% to 8.4% of sales against 3.6% to 5.9%. Twenty gyms is a small sample, so read the direction.
What does The Little Gym cost a franchisee each year?
A royalty of 8% of gross sales or $2,500 a month, whichever is greater. The marketing obligation is capped at 6% of gross sales, currently 1% to the national fund and 5% spent locally. Technology and call center fees come to roughly $2,628 a year. That totals 14.25% of sales at the top quartile and 16.16% at the bottom, where the royalty minimum binds. The minimum royalty applies to any gym below $375,000 of sales and starts 180 days after the grand opening.
Who does bookkeeping for a Little Gym franchise?
Two ratios matter most at The Little Gym, and both belong at the top of the monthly pack. The first is wages as a percentage of trailing twelve-month sales, benchmarked against 29.6% at the top quartile and 41.8% at the bottom. The second is building costs as a percentage, benchmarked against 15.1% and 35.0%. Together they account for the entire margin range across 166 gyms. They move slowly enough that a drift is visible a quarter before it becomes a problem. Advertising deserves a third line, tracked against the 6% obligation instead of against the 1% fund contribution, because the private-equity comparison is essentially a comparison of who kept spending. On mechanics, the royalty is the greater of 8% or $2,500 a month. So a gym near $375,000 of sales needs the minimum modeled. Gross sales count gift card redemptions but exclude the initial sale. That puts the royalty base out of step with the revenue line in the books. The 180-day royalty holiday after opening also means the year-one and year-two cost bases differ by up to $30,000. Averan provides bookkeeping, controller, and fractional CFO support for franchise owners and has Certified QuickBooks ProAdvisors on the team.
- The filing gives no median. Only an average is published, which a few large locations can lift on their own.
Questions worth putting to The Little Gym
The filing answers what it answers. These are the gaps an owner or a buyer should close directly.
- Is the profit figure in Item 19 before or after owner pay, and how many locations sit below it?
- Which factors does The Little Gym see in its highest-selling locations, such as trade area, years open and size?
- How long does a new location take to reach the average you publish, and what does the build-up look like month by month?
- At what level of sales do the minimum charges stop applying and the percentage take over?
- How many Little Gym locations closed, were sold, or changed hands last year, and why?
Run your own numbers.
The Franchise Numbers Check runs the same checks on your own numbers. It scores where you stand and compares you with Item 19 of your brand’s FDD. It works out what one location earns and spends, and builds a 13-week cash forecast. Checks whether you are ready to open another one. It is free and it runs in your browser.
Launch the diagnostic →What are wages and rent costing you at The Little Gym?
We review your unit economics, cash forecast and reporting, built around the two lines that decide this model.
Talk to AveranWhere these figures come from.
Every figure here comes from TLGI, LLC's 2026 FDD, covering the 2025 calendar year. The document is unaudited by us. The revenue and expense figures are self-reported by franchisees to the franchisor. We are unaffiliated with the brand. The figures describe past performance at other gyms. Calculations of our own are labeled where they appear. The private-equity-backed group holds twenty gyms and is small enough that individual results move it. This page is an educational summary and is not legal or tax advice. The LITTLE GYM® is a registered trademark of its owner. How Averan reads a Franchise Disclosure Document.
These figures come from the brand's disclosure. They are not a forecast, an offer to sell a franchise or advice. Source: TLGI, LLC, 2026 Franchise Disclosure Document, issued 24 April 2026.
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The Little Gym reads against the rest of the swim schools and youth sports group:
- Aqua-Tots
- Big Blue Swim School
- British Swim School
- Goldfish Swim School
- i9 Sports
- KidStrong
- SafeSplash Swim School
- Skyhawks Sports Academy
- Water Wings Swim School
The swim schools and youth sports guide compares all of them on the same figures.
Questions owners ask next
The figures above raise these, and each one is answered on its own page.
- Money arrives before the service does. How should that be booked?It explains deferred revenue and why the bank balance and the profit line disagree.
- At what level of sales does a minimum fee stop costing me more than the percentage?It works out the sales level where a minimum fee stops applying.
- How much cash do I fund before a new location covers its own costs?It builds a 13-week forecast for the months before break-even.
- How much of Item 19 can I rely on?It explains what an Item 19 financial performance representation tells you and what it leaves out.
- What should I be looking at every week?It lists the handful of numbers that move before the P&L does.