What to Look For in a Fitness Franchise

Flexibility in the face of challenging trading conditions for one, as budget brands thrive.

It's widely assumed that the fitness sector struggles during economic downturns, however, it has performed robustly since the 2008 financial crash and survived the economic and political turmoil associated with Brexit.

Even during the biggest squeezes on spending power, people are still finding enough money to maintain their gym membership as they cut back elsewhere.

According to Leisure DB's 2017 State of the UK Fitness Industry Report:

  • There are now 9.7 million fitness members in the UK - meaning that 1 in 7 people in the UK is a member of a gym. 
  • There are now 6,728 fitness facilities in the UK, up from 6,435 last year (2016).
  • The total market value is estimated at £4.7 billion, up 6.3% from 2016.
  • 272 new public and private fitness facilities have opened in the last 12 months, up 224 in 2016. 

So, fitness franchises are still an attractive investment in the age of austerity, even though gym memberships are 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 flexibility 

As in many other sectors since the credit crunch, the budget tier of the gym sector has performed strongly in recent years.

The no-frills model has continued to be the main driving force behind the growth. This has been adopted by many leading players and there are now over 500 low-cost clubs across the UK. 

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.

Now, 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 ‘essentials’ 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.

2. Facilities

Check out the facilities yourself, as a customer. If you use gyms regularly, 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 need to know how to use the equipment. 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 alarm bells 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.

Due diligence on 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 your 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? 

Adam Bannister

About the author

Adam Bannister writes for all titles in the Dynamis stable including BusinessesForSale.com, FranchiseSales.com and PropertySales.com as well as other industry publications.