Owning a Fitness Franchise vs. an Independent Studio

Published on: 
09 July 19
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10 min read

This year fitness juggernaut Anytime Fitness will make history. 

Why?

Unbelievably they will be the first franchise to be spread across seven continents! In November of this year, they will be aboard the Magellan Explorer, a luxury arctic cruise liner that will be anchored of the coast of Antarctica’s King George Island.

This amazing piece of news really shows how far fitness franchises have come in the last thirty or so years. Anytime Fitness is an example of a fitness franchise that allowed easy access to fitness for the masses. On the other hand, they have also permitted fitness entrepreneurs to run their own businesses without the hassle that sometimes comes from starting a studio on your own. Even in Antarctica! 

man pulling a big boat with ropes in the snowSource: observer.com

However, starting and running an independent studio is not something to be looked down on either. For some, the highs and lows that come with owning their own business make them jump of bed in the morning. So in this article, we will take a look at the main differences between a fitness franchise and an independent studio and the things you need to consider before choosing which career path is right for you. 

What Is the Difference Between the Two?  

Both independent studios and existing franchise models are both good but different options for getting started in the fitness industry. There is an abundance of opportunities out there as the industry itself continues to grow. According to the IHRSA, there has been a 33% growth in gym and health club memberships between 2008 and 2017. Not only that, but there has been in a rise in the choice of fitness experience with boutique fitness, especially gaining popularity in recent times. This means that hopefully, you will be able to run a business that you are passionate about, and that will have a viable market. First, let’s have a look at each of the options. 

Independent Studio

Fitness legend Joe De Sena, founder of the Spartan Race, is no stranger to adversity. According to him, “no adversity has been confronted and handled because everything came fast and easy.” And this is very much the case when setting up a fitness business by yourself. The fitness industry is hyper-competitive, and while there is massive potential in owning a fitness business, 8 out of 10 will fail in the first year.  

So starting a business by yourself can be an enormous challenge. You have to source a location, equipment, staff, and most importantly, members. This is where your sales and marketing comes in you more than likely will have to take care of that yourself in the first few years.  We found out as much in a recent episode of the Glofox Fitness founders Podcast 

In a recent episode of the Glofox Fitness Founders Podcast, we talked to Britanny Welk, owner of the independent studio Ladystrong. Among other things, Britanny told us about the hard lessons she learned about setting up in the first year of business and the importance of brand when you are an independent studio. You can listen to it here:

Fitness Franchise 

First of all, let’s explain the concept of a franchise. A franchise is a license that a person or company (also known as the franchisee) purchases which allows them access to a business’s (the franchisor) proprietary knowledge, procedures, and trademarks. The franchisee is then entitled to sell a product or service under the business’s name. In exchange for acquiring the franchise, the franchisee typically pays the franchisor an initial start-up fee plus annual licensing fees.

In fitness, buying into a franchise means the franchisee has an established brand to work with and all the industry expertise that comes with this. However, this does not mean its all plain sailing. Often you have to stick to the rules and regulations laid out by the franchisor and lose the independence you would have with your own studio. On the positive side, brand-name recognition will give you a solid foundation you can build on when it comes to lead generation. Big brand franchises owners as F45, Planet Fitness, Orangetheory, and Soulcycle are some of the best franchise opportunities globally. To find out more read our piece on the ten best fitness franchises to invest in according to Fitness Business Review

The Different Aspects of Each Business Type

Regardless of what you choose, you will need to to have a passion for fitness and the entrepreneurial spirit to become successful. Let’s delve a little further into how to choose between setting up your own venture and buying into an existing franchise model. 

Customers Looking for Consistency vs. Curious Customers 

Many consumers are wary of anything new, be it a new gym or a new exercise style. This is where a franchise can provide some sense of security. Customers will often come to you as they are buying into consistency or stability. For those who are committed to their barre practice or Bikram Yoga, they will only want to visit studios which offer these classes. Becoming a franchisee is a great way to obtain customers who are already aware of your product. 

However, having said that there will be customers who really want to back local businesses or are merely curious to try out new places or styles of exercise. People may feel that a franchise business may be too busy and that they will get more specialized attention in a smaller, less popular studio.

Professional Freedom and Growth

One of the biggest questions you must ask yourself when trying to choose between a franchise and setting up your own company regards your personal freedom and growth. If you decide to go with your startup idea, you are not tied to anyone or anything, meaning that you can work anytime you want, and anywhere you want. There is no need to report to other people, and you are entitled to full professional freedom.  

If you choose to go down the franchise route, you must accept that you will not have the liberty to change the product, the gym space, or anything else. It can be very limiting, and there are specific rules in place that if broken, can terminate your license. 

Structure vs. Freedom

If you are new to running a business and would prefer some guidance throughout the process, a franchise might be the best choice for you. Franchises tend to have sound support systems and offer a lot of education and training. Many franchises also encourage franchisees to engage with their network where you can chat with other franchisees or attend networking events to exchange ideas and help each other out. 

Many enjoy having a framework and guidelines to follow. Others can feel suffocated by this.  To make the best decision for you as the owner, you must thoroughly read all the fine print.  

As they say, “with great freedom comes great responsibility!” Investing in an independent studio will mean that you are responsible for pretty much everything. While this is an exciting and challenging task, it can also be very daunting. Ensure that you have a great team and a support network in place. 

Upfront Investment

The amount of money required to start up your business (whether a franchise or an independent gym) depends on many factors. Franchises range massively in price, and for those investing in independent studios, it is ultimately within the hands of the owner to keep costs low when investing in equipment, renting the physical space and hiring their team. Take a look at our article on the cost of opening a gym for more information on startup costs involved in getting a studio up and running.

However, buying into a franchise does come with considerable upfront costs. First, there is a licensing fee that you must purchase if you wish to obtain the franchise, and this can be very expensive. Further expenses include a percentage of the revenues earned and a fee for collective advertising. If you choose to open an independent studio, you will not have the initial cost of the license, nor will you be subject to monthly or quarterly fees.

Brand Recognition 

As we have discussed before in this article, the significant advantage of buying into a franchise is that you are starting with a recognizable name. This establishes a level of trust with prospective members that makes sales and marketing slightly less complicated. With a recognizable brand, establishing a company culture becomes less difficult as the values you need to implement are part and parcel of the brand.

Starting a brand from scratch, however, can take a long period of time. In the beginning, the focus is getting leads in the door, and developing a brand may take a back seat for a while. It has to be said though that there is something exciting about starting a brand and the trial and error that goes along with that. Check out our very own 5 Step Fitness Studio Branding Framework, which helps you develop a unique brand of your very own. 

Constraints for the Owner 

A benefit of buying into a franchise is that customers will know exactly what to expect. All franchise locations offer the same features and services; they have the same classes, same equipment and more importantly have the same prices. This security can also act as a double-edged sword as franchise operations, philosophies, vendor relationships, and marketing must mirror that of the franchisor.  On top of that, the franchise disclosure agreement holds you to certain conditions. 

If you are an independent studio owner, you have total freedom of choice over classes, equipment, amenities, marketing strategies, and so on. You can pick and choose the things they believe to be the most fruitful. With that, you may be fumbling around in the dark sometimes and will have to make mistakes and learn as you go. 

Marketing 

Marketing is a significant aspect of setting up one’s own business, be it a franchise or an independent company. As a franchisee, you will receive plenty of guidance and support from the franchisor regarding marketing techniques and tactics. Franchisees also benefit from cooperative advertising. 

If you choose to go down your own path, you will be responsible for all marketing which on the one hand can be very daunting, but on the other allows people to pick and choose their own strategies based on what they feel is best for their business. 

Success Rates 

A franchise is an established idea, all franchisees work under a common organization, and they are purely accountable for the day to day tasks.  Franchisees will also receive full training about the service, marketing, how to train staff members and all other aspects of their roles. They have constant support. 

This does not apply for startups, who unfortunately tend to have a higher failure rate in comparison with franchise businesses. Starting up your own business certainly comes with higher risks, but don’t forget that with high risk often comes high reward!

In Summary

As you can see, both options have their fair share of pros and cons. An independent studio gives you a chance to bring your vision to life and allows you to control every aspect of the business. The trade-off is that while you own the success, you must own the failures too. Buying into a franchise offers more security and support on top of the recognized brand name. However, there is less control, and there could be potential for conflict if there is a difference in management styles between franchisor and franchisee. 

 

 

 

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