Snap Fitness
Snap Fitness
ACC/566
July 16, 2012
David Kochevar
Snap Fitness
Executive Summary Owning a business is a dream for many people and one way to obtain that dream is to take advantage of a franchise opportunity. Work-out centers are a rapidly growing business. “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”(Snap Fitness, 2012). The following paper will reflect information concerning owning a fitness center and benefits to an individual who seeks to own a business in this industry. Individuals across the country who want to be fit often join fitness centers and most people want a no commitment month to month membership. Snap Fitness offers memberships such as this at a reasonable cost.
The purpose of this paper is to describe Snap Fitness and identify cost-volume-profit analysis as well as break even analysis. Snap Fitness estimates each location will have $4,000 expense for fixed operating expenses and $2000 to lease equipment. In order for an individual looking to own a franchise such as Snap Fitness, in order to make a profit the business may only need 300 members. The paper will provide an estimate of variable costs, monthly sales in dollars and members will be identified to determine what is needed to achieve a target net income of $10,000 for the month. Five examples of variable costs for a fitness center will be identified and discussed. Lastly, the paper will discuss summarized information concerning purchasing a franchise and will conclude with a decision whether purchasing a fitness franchise is a wise decision or not.
CVP Analysis
CVP (Cost Value Profit) Analysis allows an investor to determine if an investment is profitable and at what point the total revenues are equal to the total costs (Kimmel, Weygandt, & Kieso, 2009). CVP are very basic analysis that provide a very quick and easy to ready snap
ACC/566
July 16, 2012
David Kochevar
Snap Fitness
Executive Summary Owning a business is a dream for many people and one way to obtain that dream is to take advantage of a franchise opportunity. Work-out centers are a rapidly growing business. “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”(Snap Fitness, 2012). The following paper will reflect information concerning owning a fitness center and benefits to an individual who seeks to own a business in this industry. Individuals across the country who want to be fit often join fitness centers and most people want a no commitment month to month membership. Snap Fitness offers memberships such as this at a reasonable cost.
The purpose of this paper is to describe Snap Fitness and identify cost-volume-profit analysis as well as break even analysis. Snap Fitness estimates each location will have $4,000 expense for fixed operating expenses and $2000 to lease equipment. In order for an individual looking to own a franchise such as Snap Fitness, in order to make a profit the business may only need 300 members. The paper will provide an estimate of variable costs, monthly sales in dollars and members will be identified to determine what is needed to achieve a target net income of $10,000 for the month. Five examples of variable costs for a fitness center will be identified and discussed. Lastly, the paper will discuss summarized information concerning purchasing a franchise and will conclude with a decision whether purchasing a fitness franchise is a wise decision or not.
CVP Analysis
CVP (Cost Value Profit) Analysis allows an investor to determine if an investment is profitable and at what point the total revenues are equal to the total costs (Kimmel, Weygandt, & Kieso, 2009). CVP are very basic analysis that provide a very quick and easy to ready snap
References: Anytime Fitness. (2012). Retrieved from http://www.anytimefitness.com/franchise-opportunities Busan, G., & Dina, I. (2009). Using cost-volume-profit analysis in decision making. Annals Of The University Of Petrosani Economics, 9(3), 103-106. Kimmel, P.D., Weygandt, J.J., & Kieso, D.E. (2009). Accounting: tools for business decision making (3rd ed.). Retrieved from The University of Phoenix eBook Collection database. Snap Fitness (2011) About Snap Fitness. Retrieved from Snap Fitness (2011). http://www.snapfitness.com/corporate/about Snapfitness.com (2012). Fitness Franchise Opportunity. Retrieved from http://www.snapfitness.com/corporate/franchise-opportunities