The fitness sector, which was widely assumed to struggle during economic downturns, has actually performed surprisingly robustly since the 2008 financial crash.
Amid the biggest squeeze on spending power since the Second World War, people are still finding enough money to maintain their gym membership as they cut back elsewhere.
Since 2008 the sector has actually increased in market value by 4% and grown its member base by 2%.
Fitness franchises are still an attractive investment in the age of austerity then, even though gym memberships were assumed by many to be an expensive luxury.
How a fitness franchise has responded to challenging trading conditions is surely among the salient considerations for an aspiring franchisee who is examining opportunities in the gym and fitness sector. What follows are some of the key areas to assess if you want to buy a fitness franchise.
1. Price and flexiblity
As in many other sectors since the credit crunch, the budget tier of the gym sector has performed strongly in recent years. Accordingly, the no-frills model has been adopted by many leading players.
This is not to say that one should automatically eschew the top end of the market. A profusion of no-frills players is meeting rising demand in the budget end of the market, while in theory falling demand in the luxury price bracket will eject a few of the least efficient chains from the marketplace, potentially giving remaining participants the chance to grow their market share.
A profusion of no-frills players is meeting rising demand in the budget end of the market, while in theory falling demand in the luxury price bracket will eject a few of the least efficient chains from the marketplace
No, the key consideration is whether a franchise is well positioned to serve the growing appetite for value, or survive the squeeze at the top end of the market and ultimately emerge stronger for it.
In the same way that premium-quality supermarket Waitrose has launched its own ‘value’ range, fitness chains have sought to cater for cash-strapped customers by supplementing their regular membership with no-frills options, or to cut costs where possible to keep membership fee rises below inflation.
Evidence of flexible thinking in the face of diminished spending power among your customers should is a major plus point – especially with a sustained recovery expected to be several years off.
2. Facilities
Check out the facilities yourself, as a customer. If you use gyms regularly yourself, you’ll be better placed to form a judgement about the facilities on offer.
Either way, also ask your friends and acquaintances who frequent the gym which ones they’ve used, which they liked and which they didn’t.
This is important because as a franchisee you’ll be obliged to use the equipment used across the network. You might fancy your chances of running the operation more efficiently than existing franchisees, but where facilities are concerned you may well be stuck with what you’ve got – so choose carefully.
3. Sales and marketing
This is vital. When someone is feeling unfit and pondering doing some exercise, will they become aware of your brand?
Marketing is invariably among the foremost duties of the franchisor; if you form an impression that they are deficient in this department and leave much of the marketing burden to you, then alar, bell should ring.
By all means you’ll probably contribute to the marketing drive, but your ability to promote the brand is constrained by the marketing spend and reach of the franchisor, as well as their aptitude and imagination.
Of course, word of mouth counts for a lot in any field and the gym sector is no different. If you provide good customer service and agreeable facilities then much of your new custom will come via recommendations.
Much due diligence of a franchisor’s marketing strategy can be done very easily. Explore their website and test how high it appears for key phrases like ‘gym membership’ and ‘find a gym’ on Google and other search engines.
And how convincing is the website’s pitch? If you were seeking a gym to join, would this brand entice you to part with cash every month?
Also look out for special offers, such as gift vouchers, email campaigns promoting discounted or free hours, referral incentives to existing customers and so on. How imaginative are they in their marketing?
Again, innovative thinking is important in such challenging trading conditions.
Read about Owning a fitness franchise
