Fitness franchise accounting Accounting for Crunch Fitness franchisees. Royalty on dues as they draft, and a local ad floor to prove.
Crunch Fitness franchisees pay a 5% royalty and a 2% Brand Marketing Fund contribution on monthly gross sales, and must spend at least $15,000 a month on local advertising in the first year — then the greater of $10,000 a month or 7% of gross sales. That makes membership dues, and the local marketing account, the two figures the books have to get exactly right. Kite keeps those rules for Crunch operators.
Operators of this brand run their back office on Kite
What the Crunch Fitness agreement charges
| Fee | Amount | Charged on | When |
|---|---|---|---|
| Royalty | 5%[1] | Monthly gross sales | Monthly |
| Brand Marketing Fund | 2%[1] | Monthly gross sales | Monthly |
| Local advertising (first year) | $15,000 minimum[1] | Per month | Spent by the franchisee |
| Local advertising (after year one) | Greater of $10,000 or 7%[1] | Per month / gross sales | Spent by the franchisee |
The rules that change the books
The local advertising floor
The minimum is a spending obligation, not a payment to the brand: $15,000 a month in the first year, then the higher of $10,000 a month or 7% of gross sales[1]. It needs its own account at every club and a running comparison against the floor, so a club can show it met it.
Dues, annual fees and enrollment
Monthly dues draft on a schedule; annual fees and enrollment fees arrive once for a service delivered over months. The royalty follows the agreement’s definition of gross sales; revenue follows the service. Both have to be kept.
Where Crunch Fitness books go wrong
The card batch with no deposit
A dues draft that processed in the club software but never settled to the bank looks like revenue that arrived. Matched batch to deposit daily, it is a named exception; matched monthly, it is a hole in the P&L.
Annual fees booked the day they draft
An annual fee drafted across the whole membership in one month spikes that month’s revenue and flattens the rest. Deferred and released monthly, each month carries its share.
Local ads coded everywhere
Local advertising split across marketing, sponsorships and promotions makes the floor impossible to evidence. One account, the same way at every club, makes it a report.
Questions
Questions Crunch Fitness operators ask.
Does Kite connect to our club or studio software?
By export today, not by API — a day of sales by location dropped in and read, the same way a bank statement is. The banks, the cards and your ledger connect directly.
How does Kite treat annual fees and enrollment fees?
As deferred revenue released over the period they cover, from the club software’s earned-revenue report at close, while the royalty is computed on the basis your agreement defines — often the fee as collected — with the clause quoted beside it.
Can we start with a few clubs?
Yes. Two to five locations through one full month-end close, beside your current bookkeeper, at the same price.
Sources
- [1]Franchise FAQ — Crunch Fitness · the franchisor’s or a filer’s own document
Start with a few studios.
Four fields. A person replies within one business day.