Gym and fitness franchises account for approximately $4 billion of the massive $34 billion health and fitness industry. Fitness is one of the most exciting areas to be involved in, in the franchising world. Every fitness entrepreneur has dreams of growing their business and developing into a thriving gym franchise.
Transitioning from a business owner to gym franchise owner is a step that needs a considerable amount of thinking and planning. The most successful fitness entrepreneurs all share a similar trait which is ambition. Every part of owning and running a gym revolves around growing and being as successful as possible. The journey you take to grow your business further is essential. In this article, we will discuss the steps you need to take to open a gym franchise. Skip ahead to:
Why Should You Open a Gym Franchise?
The top three spots of Inc.5000’s list of fastest-growing franchises in the U.S. all belong to the health and fitness industry. Gyms have seen a steady increase in membership, American’s interest in a healthy lifestyle has only continued to grow, resulting in the search for the best place to work out.
If you’re in the processing of expanding your business, you basically have two options. The first being that you could go down the route of a multi-location model. This is where you open two or more locations all under the same management team. The other option is to enter into the world of franchising which allows an external person to use your business model and branding for a fee.
Over the past few years, fitness franchises have exploded with the like of F45, OrangeTheory and Fit36 opening up gym franchises in the boutique fitness space. Since opening in 2010, OrangeTheory began franchising the very same year. Now, the boutique fitness brand has over 1,000 studios and growing with a goal of operating 2,500 studios serving 2.5 million people by 2020.
There are three elements that really define what a franchise is. The franchisor gives permission to the franchisee that they can use any branding, trademarks, and symbols. The franchisor also provides support and training throughout the process and has a certain level of control over the operations of the franchise. The third being that there is a fee charged by the franchiser. This franchise fee changes greatly from brand to brand with startup costs varying massively as well.
From Fitness Entrepreneur to Franchise Owner
Moving from fitness entrepreneur to franchise owner is a complex process. Whether you’re a gym business, personal trainer or studio owner, franchising presents a huge opportunity to expand your business in a way that you may not have considered before.
Daniel and Georgia Farah, Poste Nove Studio
Poste Nove is a pilates studio based in Beirut in Lebanon. The couple took the decision to open its first franchise location, thousands of miles away on the Ivory Coast in Africa. Franchising was never on the cards until one of their clients came knocking and wanted to start her own location on the other side of the world. Daniel and Georgia took the time to make sure the franchisee ticked all their boxes and was ready to go.
After the first initial three months of success, the franchise on the Ivory Coast started to slip due to the intensity of the work. The franchise owners then took the next step and implemented stronger support, training and improved their strategy. This process helped the franchisee get back on top of the studio which is now thriving. Now that Poste Novo has successfully franchised out one location there will be another one opening in Lebanon very soon.
9 Steps to Take to Open a Gym Franchise
With so many franchise opportunities and fitness businesses out there, you can learn from other franchises mistakes and really figure out if opening a gym franchise is for you. If you want to grow and expand into a franchise, here are nine steps to take to make it a reality.
Decide If You Are Franchise Ready
Before you even consider franchising your fitness studio or gym, you need to take the time to review the current state of your business. If you’re in a good position, it means that your business model is ready to go. Refine every part of your company, document how every aspect of it works and iron out any problems before you begin franchising.
Make sure to build a business model that can be easily replicated and sustainable without having to manage it yourself. This is crucial to the success of a franchise as it’s what your franchisees will use to build their business and achieve success. There’s a big difference between owning an independent studio and owning a fitness franchise and you need to understand how you to attract the right franchisees and create an easy to follow business plan.
You may not have thought about opening a gym franchise but like Daniel from Poste Nove, the opportunity arose and gave him the chance to expand rapidly. “We were nowhere near ready at all. Until someone comes knocking at your door, you try to focus on bettering the business and solidifying it instead of growing. However, when the opportunity comes along, you end up working 24 hours a day and making it happen” he explains.
Do Your Research
Research is so valuable in any part of the business, it tells you everything that you need to know. Your research may look at what has and hasn’t worked for other franchises in the past and to learn from their mistakes. You need to understand how franchises work on every level of the business and what your position will be. You may be thinking that your fitness center is already doing very well and you love the location but, franchising offers up the opportunity to further expand and build a loyal brand following.
There are a couple of podcasts you can listen to about franchising that can help decide if it’s for you and give you more information. These include:
- Franchise Euphoria – Josh Brown is a franchise lawyer and entrepreneur, on the podcast, you will hear from franchise and business experts as well as franchisors.
- Franchise Today – host Stan Friedman’s weekly episodes give listeners full disclosure about what’s happening in the franchising world today and serve up discussions about strategies and best practices for growing a sustainable franchise brand.
Location, Location, Location
You probably already know how important location is. Whether it’s your first gym or the potential location of a franchise gym, you still need to take location into consideration. After all, the success of your franchise will help to build up your brand’s reputation as members will associate the same branding with the same company.
A good location is easily accessible and convenient for your members. Most gym-goers will live or work nearby and many will pay more for a more convenient location. When you’re trying to figure out what classes as “convenient”, use your target market research and study the data that is already available to you.
Remember to think about the location of your franchisee as well as Daniel from Poste Nove found out. The logistics of dealing with a new franchisee and franchise location become harder when you add over a thousand miles in between the pair of you. Teaching a franchisee the processes and right methods for running a fitness business can be problematic in another county which is something to keep in mind.
Franchising can be done in a number of different ways so the costs you need can vary massively depending on the route you take. The initial investment needed will be dictated by how aggressive your franchising plans. Naturally, you want to grow and expand so you’ll need to understand where your costs are coming from and how much you will need. When opening a new gym franchise, costs can mount up from multiple directions including:
- Legal costs – this could include the costs of your franchise attorney, business insurance and legal expenses such as state registration.
- Planning costs and consideration – an extensive growth strategy requires additional planning. Small mistakes when multiplied by hundreds of franchises could result in a big loss so planning is essential when opening a gym franchise.
- Marketing – your budget should cover promotional marketing that should get the message out there about your new franchise opportunity and social media marketing.
- Quality control – with plans to expand and more franchisees coming through the door, you will need a formalized training program and other tools which will help you manage quality control.
Choose the Right Franchisee
Deciding if someone is serious about being a fitness entrepreneur is a difficult but important decision. Are they looking to get rich quick or plan on upholding the reputation of the business and actually contribute to the success of the franchise? Owning a fitness franchise is different from launching your own independent studio. Your franchisee needs to possess a number of personality traits and interests that will help them to thrive in the franchise environment, with your support, obviously.
Successful franchise owners tend to share similar traits that make them perfect for the job. Here are the best traits to look for when choosing potential franchisees:
- Strong work ethic
- Eagerness to learn
- Team player
- Financial awareness
Draft Legal Contracts
Once the request for the franchise comes in, it’s time to study it and do your research. Is this person right for the job and does their general suggested location tie in with your overall business strategy? After a lot of consideration, if you’ve decided to go ahead with your new franchisee, it’s time to start the legal back and forth. This process can take a while.
“We consult a lawyer on how best to draft a franchise agreement which took a very long time,” explains Daniel.
At this stage, there is a lot of communication between yourself and the franchisee as you agree on terms. Once everything is agreed and decided upon between the two parties, you can then start scouting out the best location. After the location, the next stage is to plan the gym or studio space and put the franchisee in contact with all your clothing and gym equipment suppliers.
Training and Support System
One of the main reasons a franchisee chooses to join a franchise and not open their own gym is down to the training and support systems that are put in place. They’re not going into a business blind, they have an already established business plan with proven success to work from.
The type of training and support can differ from franchise to franchise. With a pilates studio like Poste Nove, you have the added training of pilates so you can teach the class to the exact specifications. A hands-on approach to training is ideal so that the franchisee can feel fully supported from day one.
Get the Word Out
So, you’ve made the plunge to transition your business into a franchise. The next step is to get the word out and attract new franchise applicants. Make sure your website sets out exactly what you need from franchisees to apply with an easy to follow application process. This is where your marketing budget comes in as you will need to promote your franchise and raise awareness to bring in talent.
Future Franchising Plans
Whether you’re considering franchising or have one successful franchise location and are looking to expand, every franchisee involved needs to fully understand your vision and share the same passion and drive for success. Your future franchising plans form part of your overall franchise strategy so keep in mind your target locations and goals.
It takes hard work, time and a lot of planning to open a gym franchise. By learning from the mistake of other businesses, you can take the right steps to make the best decision for your gym. With the right people and correct training and support in place, your gym can grow and expand in multiple locations.