Gym Initiation Fees ...

I would suspect that part of the initiation fee goes to subsidize the cost of lower memberships. Plus, this time of year that is how they make their money.I also bet commission is tied into that fee (plus number joined)

I have NEVER visited a gym where EVERYTHING wasn't negotiable. Given that you are already at a gym they should try to meet YOUR needs. Go back, negotiate and if they still don't yield, stay at your current gym. No loss.

Well, to keep the fees lower is one aspect, and, yes, it's a money-maker for them, just like how Best Buy sells you those 3-year extended warranties - it's a profit for them.

But, having to pay last month's fee?  Give me a break!  That's bull!

Tony,

I used to work for LTF, Bally's and Wheaton Sport Center in Sales.

A percentage goes to the salesman for thier time in "finding" you and getting you to join the club.  Most sales people in Gyms do not receive a salary or a very small one.  THIS IS WHY YOU WILL NOT GET AWAY in most cases WITOUT the initiation fee.  The person sitting in front of you does not get paid. 

The rest is left to paying the bills and profit.

The upfront costs can offset and keep membership monthlies lower.  It's a business.  profit is king. 

I'm guessing here, but I've always assumed the initiation fee is their way of ensuring they don't get the bouncers in and out of membership from one month to the next.  If you join, you're more likely to stay if you've put some up-front cash down.

My gym didn't really advertise it but they waived it for me when I offered to pay a year in advance.  I've since learned that's their standard policy, but again, it wasn't promoted to me in any way, I had to pry it out of them. 

Interestingly enough, when I was done with surgery and wanted to join a Gym I went to the one that has the most places in our town and talked to them.  They wanted an initiation fee.  I said no way and they explained that it was their way of amking sure they didn't have people that just came in for one month because set up and all that with their account was alittle bit expensive.  I told them I was willing to pay for the full year and they waived it.

At the beginning of this month there was a charge on my credit card for my gym (21.20 or something like that).  It's not a lot of money - but I have a HUGE issue with companies charging things to my credit cards without clearing the charges with me first.  So I called the club and asked about the charge.  The lady that answered the phone told me that it was for "club upgrades" and theey charge it to all members once a year. 

I sent an email to the VP of Operations and ripped into them about using my card without my permission.  They refunded my money.  Nothing is set in stone.

Tony,

You are right...It is hard t straighten those issues out on a one off basis.

The formula works though.  The first three years we made 1.2m each year in ebitda.  That was after we paid the "Home Office" 9%.

That is usually paper profit though as a lot of money is thrown back into the business, capital expense and again profit for the owner.

Small Gyms will wave initiation fees if you pay in adavnce as they can get needed capital faster. 

Also the gym only sees about 30 - 40 percent of its members consistently.   They can continue to sell "space".

No One really "caps" thier membership either. There is a point when members leaving and members joining even out.

I've been a member of 3 different gyms and I've never paid an initiation fee. Now, I did have to sign a one year contract, but I never was charged a separate one time fee for signing up with them.

The newest one I signed up for last weekend. brand new 16000 sq ft luxury gym with 25m pool. Right across the street from the entrance to my neighborhood. $94 per month for my husband and I. $150 initiation fee waived.

I agree this is iritating to a point (noone makes you join).  It is iritating to me because when I first looked to join a gym years ago I saw an add for $XX a months so I went in and then I was informed of the initiation fee/signup fee.  Unfortunatley when watching TV you can't see their small print intime. 

The reason it is charged as others have said I am guessing is 1.) extra money 2.) pay sales reps and 3.) to keep you from jumping ship after one month.  My current gym charged last month also and I basically think that just gives them one extra month.

I would imagine most gyms will waive the fee if you sign long term.

Your last option is just don't join.  I know the fees suck but noone twists your arm to join and if  you are a member for 10 years that is like $1 amonth.

Reading your post makes me feel very happy about my 24 Hrs Fitness membership...I negotiated like other have said and payed (2) years upfront, with a 3rd year free, and after that I'll pay just about $15 in a month to month basis...and I can go to any 24 Hrs Sport club...so for my wife and I, I forked about $1,500 for 3 years of gym...but the $15 a month after the 3 yrs is a sweet deal!!

Good luck!

"I was going to sign up for $115 a month to use any gym in the city..."

And you're balking at the initiation fee? Mine is $20 a month now, going down to $10 a month in September...