It seems like gyms and fitness centers are popping up everywhere, like fast-food restaurants or convenience stores. Drive past one shopping center, and there’s a boutique studio. On the next block, XYZ Sports. Around the corner, maybe, an old standby gym. Fitness franchises are continuing to see growth, and they’re also fragmenting in ways that appeal to specific types of consumers—just as McDonald’s, Chipotle and Subway each have their own market appeal.
The growth is driven by the burgeoning wellness movement in general and by the decline of brick-and-mortar retail, a disruption that has opened up affordable real estate for fitness facilities. Franchise proliferation outpaces growth in the overall fitness industry, with luxury brands (on one end of the scale) and budget brands (on the other) growing faster than midmarket fitness centers (Carter 2017).
If you’re thinking of opening a gym or fitness studio franchise, you likely have many questions. How much will it cost? What’s the required commitment level? How can I make my own imprint on a place that’s already branded? Most importantly, how do I get started?
Exploring the Franchise Model
To raise awareness about the kind of issues you’ll need to consider, representatives of franchises with a range of target markets and business models shared their advice with American Fitness on sorting through the wealth of possibilities. Despite some differences between these representatives’ companies in terms of physical size, niche and marketing approach, several key lessons emerged. Chief among them:
- Starting a franchise business is an entrepreneurial effort that will take time and commitment.
- Businesses succeed in fitness by showing an ongoing commitment to their clients and communities.
The major benefits of franchising are that it gives a business a leg up on marketing and brand recognition and often includes some level of coaching and support, depending on the specific company and agreement. You’ll probably pay an initial fee and a monthly percentage of your revenues, although that varies, too. It’s important to note that some companies prefer franchise partners who can invest in multiple locations.
Keep these next factors in mind as you explore the franchise world.
DECIDE WHAT KIND OF FITNESS FACILITY YOU’RE PASSIONATE ABOUT. Is it a traditional weightlifting room? A women-centric studio? Something trendy and high-tech? Do you want to offer daycare and a juice bar? What about a full set of weights, racks and cardio equipment?
Having a “core product” or service offering is important, says Jamal Gibson, training manager at Burn Boot Camp® in North Carolina, since consumers have so many options nowadays. A core offering makes you distinctive in your community. “You want to have a brand that’s going to support the customer experience you’re trying to create,” he says.
DISCERN WHAT TYPE OF FACILITY IS RIGHT FOR YOUR COMMUNITY. If you’re passionate about helping older people stay healthy, for instance, but your city’s demographics skew heavily young, then you may want to reconsider your choice of location.
RESEARCH THE FRANCHISE BRAND. Once you decide on a brand that you might like to own as a franchise, do your research. Check out its track record, ownership, leadership, press clippings and social media. Then go to a location and try it out, talk to the clients, and get a good feel for what it’s about.
CONSIDER THE DIFFERENCES BETWEEN A FAD, A TREND AND A LONG-TERM BUSINESS. Fitness trends pop up all the time, and many of them offer franchise potential if quickly acted upon. But be aware of the difference between a passing fad and something with staying power. Do your research, anticipate when the tipping point might come, and consider if “the latest thing” will still drive your entrepreneurial passion in, say, 5 years. Will your community still want to support it then? Will the overall brand be able to sustain itself?
LEARN ABOUT THE INITIAL COSTS AND ONGOING FINANCIAL COMMITMENTS. These will vary among brands based on business size, niche and equipment needs. One estimate is that total startup costs for a fitness franchise can be anywhere between $30,000 and $300,000 (CostOwl 2018), so you’ll need to be informed about your particular choice of franchise to properly prepare.
FIGURE OUT THE FINANCING. Funding is a key concern, no matter which brand you go with. Both you and the company want to make sure it’s a match for your financial resources. (Note: A lack of information is a red flag for either party.) “Make sure you have the capital to get through the tough times,” says Gibson. “Do you qualify as a franchise partner? That means someone who doesn’t have to put their last dime into it.”
The following two models show how space and equipment needs, finances and the core fitness offering can vary for franchises serving different markets.
The Lower-Overhead Model
“Everyone has uniqueness to them; every person has their niche,” says Cristal Lizama, executive director of franchise operations for Fit Body Boot Camp (FBBC), based in Chino Hills, California. “So the first thing is, you’ve got to find something that really is your passion. This is a business, and you’re going to be spending a lot of time there as an entrepreneur.”
FBBC crafted its franchise business model around the needs of trainers who want to open a fitness facility with less investment. The initial costs and overhead are designed to be relatively low, since the centers don’t rely on a lot of equipment that can be expensive to acquire and maintain. The program focuses on 30-minute group workouts.
Fit Body Boot Camp offers a “classic, hands-on” approach, says Lizama, with a highly personal touch aimed at supporting each individual member. Most of its clients are women, who find the 30-minute workout model highly appealing because work and family obligations often leave them pressed for time. Also, the centers typically don’t have a lot of mirrors on the walls or other potentially intimidating décor. “We want to be that comfortable place,” Lizama says.
The More Complex Business Model
UFC GYM comes from a different angle, with a strong brand in its title: Ultimate Fighting Championship.
“Have you ever watched the UFC?” says Shanie Rusth, a franchise development associate for UFC GYM, based in Orange County, California. Most people who consider opening a UFC GYM probably have. “Mixed martial arts people come in and want to train like a fighter. You have to connect, like an athlete.”
UFC GYM offers a more complex business model, with three levels of facilities to consider, higher startup fees and recurring royalties. Each level has different target clients, styles and approaches as well as franchising costs. The largest gyms can cover as much as 25,000 square feet.
The gym’s leaders help with market research to make sure the right kind of facility opens in the right area. “We want to see our franchisees affect the lives of people in their communities just like it has changed me,” Rusth said. “We offer the ultimate fitness community. It changed my life.”
Rob McCullough is a former UFC champion known as Razor. He’s now senior director of mixed martial arts programming and an international master instructor with UFC GYM. “It’s a really cool experience (for franchisees) to be a part of the UFC GYM brand,” McCullough said.
Consider the Potential
Franchising may now be one of the preferred pathways to entrepreneurship in the fitness industry. The franchise business model can be a profitable venture—or at least a more attractive prospect for entrepreneurs than establishing a brand from scratch (Bailey 2016).
“You’re buying branding, systems and methods,” says Gibson. “When you have a brand, it gives you more reach. That’s a huge advantage to you in terms of marketing and exposure.” Gibson advises that dedication and vision are crucial—success takes time in this industry. “I’ve seen people think they can just spend money to make it, but they’re not really in it like they need to be,” he says.
Lizama agrees. “Try the workout, check out the headquarters team, consider the business model,” she says. “Do you love the workout being offered? Remember how important your personal passion is to making the right choice. If you’re passionate about something, you’re going to go that extra mile.”
Bailey, R. 2016. Fitness Franchise Industry Report 2016. Accessed Jan. 8, 2019: franchisedirect.com/information/fitnessfranchiseindustryreport2016/.
Carter, C. 2017. Why fitness franchises are booming. Accessed Jan. 8, 2019: entrepreneur.com/article/299678.
CostOwl. 2018. How much does it cost to start a gym franchise? Accessed Jan. 8, 2019: costowl.com/b2b/franchise-fitness-cost.html.