How one Anytime Fitness franchisee ramps up his multi-unit business

By Sarah Stowe | 27 Oct 2017 View comments

Inside Franchise Business: Rhys Cutifani manages multiple gym outlets with a stringent management structureAn Anytime Fitness franchisee has found that tracking measurements helps his business do  some heavy lifting – and not just on the gym floor.

Five Anytime Fitness outlets might seem a good number of gyms to have in your portfolio, but it is a breeze for franchisee Rhys Cutifani, who peaked at 15 fitness units. And yet again, in a growth phase, he has added new sibling brand Orange Theory Fitness to his network.

“My uncle owned a gym. I moved to Canberra to finish school and was working as a cleaner in his gym when I was 17,” he says. “Then I had different roles: maintenance, reception, working the gym floor, teaching classes, then membership sales.

“I had the opportunity to buy into Anytime Fitness…we knew Jacinta and Justin who bought the business here through the industry, and I was sold straight away. There was nothing like this at the time.”

When the industry was very labour intensive, the concept of all-hours access with limited staffing to run the 24/7 gym was innovative.

Teaming up with his wife Bridie, parents, family members and friends, Cutifani bought and sold several Anytime Fitness gyms.

“Our first club was the fifth Anytime Fitness in the country, in 2009. By the end of the year we were at full capacity. In fact, by August we knew were on to a good thing and opened a second store in September.”

Gym growth

The business grew rapidly from there, with Cutifani opening one club on average every two to three months, for two years.

“I had 15 at one point, then we scaled back. I had about 10 for two years until 2014, then when Bridie was pregnant we sold off a big chunk of the clubs to focus on the family.”

What has stood Cutifani in good stead has been a stringent management structure he instigated about three years in, when opening his seventh store.

“I was doing site selection, managing the builds, had one staff member selling memberships before a site opened, and once it was up and running I would start the next one.”

Regional and metro gyms were spread as far apart as Bathurst and Cooma in New South Wales, and the ACT. Business was going well, but he made a conscious decision to focus on store performance and operations.

Each club has its own manager and a personal trainer manager. In the overarching business there is an operations manager for the group and a personal training director, plus an admin assistant and financial controller.

The gym membership model equates to a fairly reliable and consistent turnover, which allows for reliable predictions and an accurate understanding of the business financials.

For instance, Cutifani knows that each month the business will lose about 3 per cent of its membership. Depending on the maturity of the club and the company’s goals, the team works back to find out how many prospects are needed each month, and how many contacts need to be made each day.

“The flow-through will achieve the targets we’re aiming for each month,” says Cutifani. “We have a truly powerful system. It aggregates in real time across all the clubs, on an hourly basis. I look at it two or three times a day.

“If there’s a red flag, I’ll snapshot it then try to dig a little deeper and work with the managers, who will take action.

“We set all our targets each month – for instance, how many calls an individual staff member needs to make. If we’re halfway through the month and only 30 per cent on target, it will affect us somewhere down the line.”

To act swiftly and deal with underperformance in any measured area, managers can draw from a menu of remedies to deal with particular issues.

While the clubs remain geographically apart, every six months there is a face-to-face planning meeting to review,identify and set key measures. Each week there is a 30-minute video conference that is compulsory for all club managers and open to any staff members.

“What is key in the meeting is that managers must be able to explain how their commitments will improve a lead measure toward our goal,” says Cutifani.

Three measures are tracked on a weekly basis: the total number of personal-training clients (these become more engaged and therefore good ambassadors for the brand, they stay longer, spend more and spread the word); the number of members; and, most importantly, he says, the “Belong score”.

“This is the Anytime Fitness version of the net promoter score, giving us a great idea of customer satisfaction, where we are sitting in the national ATF group ranking and feedback on both what our members like and don’t like, which means we can act accordingly.”

Member focus

Cutifani says the first 18 months of any gym is the big growth period.

“We discovered the 24-hour model is no different to any other gym. You need to have a focus on member satisfaction, not just offer convenience. You have to look after members and look after facilities.”

That includes the tangible and the intangible, like music and the environment, which might change during the day according to the clientele profile. “It’s really important to try and keep the right people and look after them. Our staff members are empowered to make changes.”

It is the “magic combination” of a great structure feeding detailed data, and a strong team delivering the service, that makes it work, he says.

So now the business is ramping up again. Cutifani wants to own 10 Anytime Fitness outlets. The explosive growth he experienced was not backed up in the early days with a long-term success strategy, and he would like to have a second go at that. “We didn’t set it up for long-term success, and now we understand more about membership levels and what members want.”

Both Anytime Fitness and Orange Theory Fitness sit under the Collective Wellness umbrella group. Both run network promoter-score schemes, and Cutifani taps into the overarching business aims to set his own goals.

He would like to establish 10 Orange Theory Fitness gyms, too.

“We have an advantage because we’ve run Anytime, but we need to know more in depth about Orange Theory success. Until we’ve mastered the basics, we’ll keep them separate. My goal is to combine them in my management structure,” he says.

“I’m really lucky, I have a great team and structure. I help from a high level and guide as needed, and I still run the weekly meetings. There’s always something that needs to be done.”

But the structure allows Cutifani and his wife Bridie (who runs her own boutique cycle and yoga studio and athleisure wear businesses) to share time with their two-year-old and five-month-old children, and work through weekends or late nights if need be.

“Being a franchisee with the Collective Wellness Group gives me access to a network of peers that both challenge and support me to constantly improve my business’ performance.

“By taking away the guesswork I can focus my energy on what is important, and that means I have the freedom to spend more quality time with the people important to me.”action, not just offer convenience.”