By Khadija Cochinwala, FRANdata

In 2024, the U.S. health and wellness industry was growing at a rate of 5 percent to 10 percent annually and was valued at $480 billion.

The industry is also one of the fastest growing spaces in franchising with FRANdata recording nearly 680 active brands operating in 2024. Although the health and wellness franchised industry encompasses a diverse category of segments, 60 percent of these brands belong to health and fitness related concepts such as fitness studios & gyms, home health care, massage spas, sauna and recovery centers, diet and weight control centers, etc. The U.S. fitness sector is dominated with large, franchised players since nine out of the top 10 largest fitness concepts according to system sizes belong to reputed franchises such as Anytime Fitness, Planet Fitness, Orangetheory Fitness, etc. Moreover, the top 10 percent of these franchises own 82 percent of all franchised units. The beauty related brands that include cosmetic, hair care, and tanning salons account for 22 percent of the franchised health and wellness industry market share. Sport and recreation related brands and franchised medical and dental facilities account for 15 percent and 4 percent of the industry brands, respectively.

Health and Wellness Franchises’ Fast-Track Growth

Although the forced closures due to the pandemic in 2020 adversely impacted the industry’s unit performance, it also positively influenced consumer sentiment and their proactive approach towards preventive and holistic health and wellness services.

According to a McKinsey survey in 2024, 82 percent of U.S. consumers considered personal health and well-being a top priority in their everyday lives. In addition, favorable macroeconomic factors such as low unemployment and an increasingly young working age population with rising disposable incomes and the propensity to spend on multiple facility memberships has fueled the expansion of franchises in the segment.

According to FRANdata’s records, the number of new brands entering the industry has grown at a compounded rate of 18 percent from 57 new concepts in 2020 to 94 in 2023. The market’s potential to scale as well as the fragmentation and diversification of the industry segments has also presented ripe opportunities for private equity investors to drive consolidation in recent years. Not only established brands like Woodhouse Spa (backed by TSG Consumer Partners) and Massage Envy (backed by Roark Capital Group), but also emerging brands like SweatHouz/SWTHZ (backed by Prospect Hill Growth Partners) are attracting investments for expansion and growth.

Source: FRANdata

Interestingly, the increasing market saturation and competition has not impacted the AUV and unit growth trends, highlighting the sustained consumer demand driving the industry’s resilience and growth. Between 2021 and 2023, while franchised locations grew at a CAGR of 3 percent to over 63,000 units, the AUV grew at a rate of 2 percent and peaked at $871,000 in 2023.

Source: FRANdata

Trends in the Industry: Fitness Franchises Flex for Growth

Despite the rise in digital and virtual home workouts during the lockdowns, consumers are now returning to in-person gyms and training sessions on account of the need for social interaction and the accessibility to a variety of fitness equipment. A rising demographic of Millennials and Gen Zers are moving away from traditional social environments (e.g., bars) and seeking healthier and more meaningful ways to connect.

As reported in the 2024 U.S. Health & Fitness Consumer Report by The Health & Fitness Association (HFA), in 2023 the industry hit an all-time high with nearly 72.9 million Americans availing a fitness facility membership, which grew the fastest since 2017 at a year-over-year rate of 5.8 percent. High-value, low price (HVLP) gyms are aggressively attracting consumers with discounted memberships rates and are the first choice for a majority of consumers who are dual or multi facility gym members. In the beginning of 2025, Planet Fitness, which operates over 2,600 locations in the country, offered a limited-time membership deal of $1 down and $15 per month for new members. Another notable trend is the resurgence and immense growth potential of Pilates which has led to international brands, such as Australia based Studio Pilates, and emerging brands, such as Jet Set Pilates, to venture into and ambitiously sign new locations in key U.S. territories. According to an Athletech news report, the Pilates market is forecast to grow from around $150 billion in 2022 to nearly $277 billion by 2028.

With consumers prioritizing both physical and mental well-being, franchises are expanding into holistic wellness options. Brands are increasingly integrating their service offerings to include mental health, nutrition guidance and recovery therapies in addition to fitness classes, personalized trainers and even retreats into their overall programs to cater to consumers looking for complete health services in a single space. Although franchised wellness brands, such as Restore Hyper Wellness, have been in operation for more than a decade, the health, recovery and wellness sector brands offering niche services that help individuals recover, de-stress and manage chronic pain through massages, cryotherapy, IV drips, contrast therapy, cold plunges, and flotation tanks have witnessed accelerated growth post the pandemic. For instance, Perspire Sauna Studio, which offers infrared sauna and red-light therapy, is rapidly expanding with 200 signed franchise agreements in addition to its already open 55 studios as the brand targets 500 locations by 2027.

Franchisors are also adopting AI and smart technology to efficiently manage customer analytical data, track insights into member behavior and offer more personalized and tailored experiences for superior customer satisfaction. In addition to virtual coaching and hybrid memberships that combine in-person and digital workouts, AI powered workouts, wearable technology and app-based digital platforms are helping increase member retention, foot traffic and sign-ups. For instance, Anytime Fitness’s strategic adoption of its SmartCoaching technology, the AF App, and its partnership with Apple Fitness+ is enabling its members to incorporate fitness into their busy lives regardless of their location or daily routine thereby boosting the company’s overall brand presence, member engagement and customer loyalty.

In conclusion, as consumer demand continues to surge and brands adapt to offer comprehensive health and wellness services that are supported with newer and smarter technologies, the health and wellness franchised industry is poised and predicted to continue its positive growth trajectory in 2025.

Khadija Cochinwala is a research analyst at FRANdata. She is part of a team of analysts who measure, track, and analyze franchisor performance. Khadija is committed to producing quality franchise insights that enables strategic decision making and propelling business growth. She graduated with a degree in Communications and enjoys gardening and visiting exotic destinations around the world whenever she isn’t researching data. For more information about IFA supplier member FRANdata, please visit franchise.org/suppliers/frandata/.

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