As boutique gym chain Zadi ramps up franchise expansion this year, founder Adala Bolto reveals her strategy for surviving and thriving.

Adala believes the compact size of the business turned out to be an advantage when gyms were hit badly during Covid.

“We know our demographic and having a close community made it easier to pivot into digital as a temporary solution,” she says.

With just two studios and a goal to expand significantly through 2020, when the reality of Covid hit, Adala’s first move was to put the franchise expansion on hold.

She was confident the franchise development would take off in a post-Covid climate.

“I was aware our model is a small boutique offering in a controlled environment for a small group. It’s premium and trainers lead the sessions. I knew that would be a massive selling point post-Covid.

“People are shopping for something that suits them, something that’s getting results. More people are wanting to enrol into studios.”

Adala believes growth in the digital space will create even more opportunities for studios.

“Costs are fixed, we know the market is growing, demand is going up.”

And she’s pleased the value proposition of the upbeat, women-only Zadi model has attracted a lot of enquiries already and 11 sites have been sold to two franchisees.

“We’re reaching the targets we set for ourselves,” she says.

For now, the strategy is to keep the Zadi brand in New South Wales to ensure no difficulties with border closures, but later in the year interstate expansion is expected.

What’s the appeal of the business model for franchisees?

“At an investor level there is low cost set-up, an impactful Instagrammable look, we keep our marketing costs low, and there is brand popularity,” explains Adala. 

“Franchisees recognise the brand identity is marketable, there is a fast return on investment, member retention is quite high – post-Covid it is above the boutique fitness industry average.

“They want to get in and get prime territories and the model is appealing to multi-site owners, they are buying an investment,” she says.

Four sites have been sold to one investor and his marketing, lead generation and pre-sales have all been good, reports Adala.

Now he is looking for a fifth site to join the Sydney locations at Breakfast Point, Drummoyne, Auburn, Burwood. 

Territories have been mapped with learnings taken from current sites to ensure the best chance of success. 

“Commercially we have more choice in the real estate and can do better deals with landlords, incentivising franchisees to be part of what we’re doing now, we’re able to reduce some of the fees.,” she says.

“We want to work with the best people.  If the barrier to entry is financial, we ask how can we help?”