US opening for gym chain Envie Fitness
Women's gym franchise Envie Fitness is opening up a US studio less than 12 months after launching in Australia.
The first US outlet will open in upstate New York in a joint venture that has 20 studios planned over the next two years.
Dave Hundt, CEO of Envie Fitness, told Franchising there is plenty of potential in the US for a new niche gym chain despite the presence of competitors Contours and Curves.
"The market is very cyclical and people are always looking to move to the newest, shiniest thing. This is really exciting but it is just an evolution of our business model."
Hundt said overseas expansion was always projected once the Australian business reached a level of comfort. There are seven studios now, with a goal of 30 to open before the end of 2014.
Hundt [pictured left] said "This is something we could scale, so why wait? We'll learn a lot in the set-up scenario, you have to do it to learn, so let's do it early."
A separate business team will be established in the US once the joint venture partnership is on track with its planned openings.
"We'll be looking to recruit specialists in the US," Hundt said. "We'll keep a dedicated team here and leverage the experience of our Australian team to build in the US, using the learnings about skills sets.
"We don't intend to drain resources here," he added.
Funding the US expansion is not a problem, he said. "We're a venture capital entity so we have finance, and we're experienced in start-ups and in taking other businesses to the US."
The foundation of the business model is ongoing revenue, based on a royalty payment related to the number of members in a franchisee's gym. This means the franchisor is heavily incentivised to help build franchisees' businesses, Hundt said.
"There is more onus on us to do marketing and help grow membership," he said. "We can do this quite cost effectively on a digital base."
The model allows for steady growth rather than rapid expansion, he said. "We've had interest already from Colorado and California. But we have a [plan for] very conservative growth; the opportunities are huge but we have to understand what these are."