A 2014 report on the fitness sector revealed a more personal approach to training proving popular after the massive growth of the access-at-all-hours 24/7 gyms. Here we find out how two franchise fitness brands are approaching the new-look gym arena.
Fitness Enhancement
“This sector is in a price war, no-one wins except the company with the deepest pockets. Bigger ones will eat up the smaller brands.” That’s the view of Fitness Enhancement’s Scott Hunt. “They are now offering more service but more costs could break the business model; 24/7 is low expense,” he says.
He believes it isn’t all about convenience, customers want to go somewhere where the staff know their names.
Other customer considerations when choosing a gym are help, support, the care factor and diet, he suggests. “People get the best from care factor, from exercise tailored to you, what motivates you.”
Gym chains fail when they over promise and under deliver. “We get more clients from full service gyms,” he says. “it’s like Tiger Airways, we don’t expect service, we get what we pay for. If you give someone Tiger Air service but promise Qantas…”
The investment level reflects the business model, with the popular mobile option a $30,000 entry, and studios priced between $130,000 and $190,000 for a turn-key business. A typical studio will comprise three rooms, each with one trainer to a single client – or group sessions like a bootcamp, but with a care factor, says Hunt.
“Easier, safer, less intimidating,” is how he describes the group fitness offer. “Our core customer is aged over 40 and overweight. I think the mature market has been missed.”
Rather than sign up to monthly memberships, customers at a Fitness Enhancement gym will purchase a number of sessions, with no time constraint. On average a client will spend $5,000 in their time at the gym, says Hunt.
A slow and steady approach has built the business to four mobile franchises, and a Gold Coast studio. While mobile operators may take their equipment to clients homes or outdoors, there are no branded cars – clients value privacy, says Hunt.
Anytime Fitness
The co-founder, with sister Jacinta, of the Australian master franchise of this US based business predicts the chain can reach 550 clubs across Australia, following months of careful mapping of opportunities. “There is still growth in the market,” Justin McDonell says.
But he also expects consolidation of outlets over the next two to three years. The repositioning of the Fitness First model is good news for the market leader, he says. The health club sector in the US and the UK is turning towards a smaller boutique offer, he agrees.
“People will pay more a month for a personalised environment,” he says.
Marketing has always been targeted to fitness enthusiasts but what’s important is how to appeal to the other 80 percent of the population and attract these people to the gyms, he suggests.
Anytime has launched a membership application offering nutrition and exercise advice. “We want to have more communication through mobile and emails. Our focus is on the long term. Clients ideally would exercise three days a week, and eat healthily. We are trying to be part of their lifestyle.”
There’s no doubt prices are creeping up, McDonell says. On average a membership is $58 a month at Anytime. But the increase is not driven by the gym’s costs. “We think we can charge more, it’s driven by the competition,” he says. “We were accused of being a discount chain; we are trying to be affordable.”
What is the customer prepared to pay? The standard of the gym will affect pricing and McDonell says every five years outlets need a refit. “New cardio equipment, bathrooms, a fresh design scheme. We gut and start again so it’s all fresh and modern.”
Anytime has two preferred suppliers who offer five year leases and funding options. “We encourage our franchisees to consider this as a monthly cost,” says McDonell.
When the business launched back in 2008 the earliest franchisees came with an entrepreneurial approach because it was a new concept. “They probably had more of a ‘have a go’ attitude,” he says. “Today it’s a proven concept and we are getting franchisees with more secure backgrounds who are probably looking more into the numbers.
“We’ve evolved our support to suit. We offer a bit more guidance about cost control and marketing plans.”
- Read more about the sector and the 2014 report.