The verdict in three sentences
A chain of 12 clubs and 18,000 members in New York paying 3 % of revenue to a vendor sees that bill grow with its own expansion, while the member data stays on someone else's servers. A custom platform costs, as a 2026 order of magnitude, 150,000 to 250,000 USD and covers recurring billing and failed payments, QR code access control, class booking and a branded member app. With about 120,000 USD in net savings a year, payback lands within 18 to 24 months.
What a percentage-based licence really costs
The percentage model feels painless at launch. At 18,000 members paying an average of 45 USD a month, membership revenue reaches about 9.7 million USD a year, and 3 % means roughly 290,000 USD paid to the vendor. Each new club raises the bill without changing the service.
| Criterion | Percentage vendor licence | Custom platform |
|---|---|---|
| Annual cost at 18,000 members | About 290,000 USD (3 % of revenue) | Hosting, maintenance and payment fees: about 170,000 USD |
| At 24,000 members | About 390,000 USD | Nearly flat |
| Member data ownership | Vendor holds it, limited export | Database owned by the chain |
| Offer flexibility | Preset plans | Free-form plans, referrals, add-ons |
| Member app | Vendor branding | Your own brand |
| Exiting the contract | Notice period, hard migration | No lock-in |
| Upfront investment | 0 USD | 150,000 to 250,000 USD |
The 170,000 USD on the custom side is an order of magnitude for card and ACH processing, hosting, maintenance and yearly enhancements; the exact maintenance fee is set in the quote.
The modules you cannot skip
The founder has to decide module by module. Access control and billing are critical: a turnstile outage at 6 pm on a Monday or a failed billing run costs money and reputation immediately. New York State rules on cancellation and automatic renewal also shape the billing design.
| Module | Functions | Share of budget | Timeline |
|---|---|---|---|
| Memberships and plans | Contract, month-to-month, freeze, referral | 15 % | 5 weeks |
| Recurring billing | Card and ACH, retries, dunning | 20 % | 6 weeks |
| Failed payments | Declines, account updater, access suspension | 10 % | 3 weeks |
| Access control | Dynamic QR, turnstiles, multi-club | 15 % | 5 weeks |
| Class booking | Schedule, caps, waitlist, no-show fee | 15 % | 4 weeks |
| Member app | iOS and Android, booking, access pass | 15 % | 6 weeks |
| Reporting | Churn, attendance, revenue per club | 10 % | 3 weeks |
The 8-month plan covers 1 month of scoping, 5 months of development, a 1-month pilot on 2 clubs and 1 month to migrate the other 10. Stored payment methods move through a secure token migration between processors, to be agreed with both providers about 6 weeks before switchover.
Migration without losing members
The riskiest moment is the first billing run on the new platform. The standard approach is to run both systems in parallel on the 2 pilot clubs for one full cycle, compare every charge line by line, and only then cut over. Members receive an email and a push notification 14 days ahead explaining the new app, with their access pass already active. Front-desk staff get a half-day of training and a printed fallback procedure. In practice, chains that follow this sequence see fewer than 1 % of members contacting support during the switch.
Mini case study
Jason Miller, founder of a 12-club chain in New York, compares two 3-year scenarios against a 200,000 USD project.
- Current licence: 290,000 USD a year, or 870,000 USD over 3 years, more with growth.
- Custom: 200,000 USD upfront + 3 x 170,000 USD running costs = 710,000 USD over 3 years.
- 3-year saving: 160,000 USD, then 120,000 USD a year from year two.
- Failed payments: cutting unrecovered declines from 4 % to 2.5 % of 9.7 million USD recovers about 145,000 USD more per year through automated retries.
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On licence savings alone, payback comes around month 20. With better recovery, it drops under 10 months.
FAQ
Do we need new turnstiles?
Rarely: most turnstiles accept a QR reader through a standard access controller. Budget 1,000 to 2,000 USD of hardware per entry point if replacement is needed.
Will members have to re-enter their cards?
No, if stored cards are migrated through a processor-to-processor token transfer. Plan it about 6 weeks before go-live.
What if the internet drops in a club?
The access controller keeps a local list of active members, refreshed every 5 minutes. Entry keeps working through several hours of outage.
Can we run group classes with caps and waitlists?
Yes, with automatic release of a spot 2 hours before class and a configurable no-show fee. Fill rates often rise by 10 to 15 points.
Who owns the member app?
The chain does: the code, the database and the app store accounts are in your name.
Related reading: our article on block management software in London and our custom web applications service.
Let's scope your project. We scope your membership, access and class platform from your 12 clubs, your vendor contract and your payment processor, with an 8-month migration and no service interruption. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
