The fitness franchise industry is growing massively and is showing no signs of slowing down. The major benefit of this business route is knowing that someone else has already done the most difficult things, therefore, you can leverage their concept without investing years to build it from the scratch.
Investing in a proven business model entails that the business strategies have been tried and tested. According to experts, franchises have a 15% higher survival rate in the first year than start-ups. A good franchise option will ensure you have all the necessary support you need to achieve your business goals.
This may include everything from ensuring you scale through the planning stages to helping with property purchases, operational support, and ongoing marketing. Truth be told, a fitness franchise will attain success faster than independent businesses.
The already built reputation of the company, a well-recognized name, and expert marketing will go a long way to ensure that your franchise gains from a healthy membership even before you attend to your first client.
Franchising opportunities can provide assorted background business information, which might not be available if you start from scratch. Indeed, with careful planning and a full understanding of the requirements, you can buy into a thriving fitness business and reap the rewards.
Tips to Help You Choose the Best Fitness Franchise
A good number of people choose to start a fitness franchise because they have a lifelong interest in fitness. It is normal if your main objective is to achieve business success, and a franchise can be the ideal route to help make this happen. However, you will need to choose the most suitable franchise for you, and to do so, here are tips to consider.
Table of Content
- Check If There Is an Active Franchisee Organization
- Choose the Perfect Brand for You and Your Area
- Search for Passion and Profit Together
- Analyze Business Costs Carefully
- Find Out Their Unique Selling Proposition
- Evaluate Your Finances in Detail
- Explore Finance Options
- Talk to Franchisees
- Consider the Systems In Detail
- Consider Your Exit Strategy
- The Track Record of the Company Selling the Fitness Franchise
- Get Real-Time Information from Current Franchisees
- Look at the Average Running Cost of the Fitness Franchise
- What Permits and Licenses Will I Have to Renew?
- The Franchise Agreement (Terms and Conditions) Attached to Buying the Fitness Franchise
- Look at the Mode of Payment
- Find Out If There Are Ongoing Fees Attached to Buying the Fitness Franchise
- The Benefits You Stand to Gain When You Buy the Fitness Franchise
- Know the Territories (Locations) Open for Business
- You Must Know How Disputes are Resolved
Check If There Is an Active Franchisee Organization
Although a franchise offers you a template to succeed, but you may not be able to effect much change in most franchise systems. Your power will mostly depend on numbers and one way to take advantage of that is through an active and engaged franchisee association that’s working in unison with the franchisor.
Note that this can be in form of a mobile-friendly website design available to all franchisees or even an operational improvement such as new training protocols or nationally negotiated vendor discounts.
Choose the Perfect Brand for You and Your Area
There are numerous fitness franchise opportunities available, so you must carry out detailed research on each one. Take your time to analyze every element, from start-up and running costs to public perceptions about the brand, commission rates, and also how long it will take to get the franchise up and running.
Search for Passion and Profit Together
Have it in mind that your passion and interest in fitness won’t be enough to guarantee success in this industry. The numbers will also have to make sense, and the power of name recognition is not something to second guess. When searching for the best fitness franchise opportunity, ensure to find out what the return on your investment will be and also confirm it is as healthy as the fitness services you intend to offer.
Analyze Business Costs Carefully
Take your time to analyze the total cost of each franchise before you commit to anything. This might seem very obvious, but there are usually hidden costs and you don’t want to be caught unawares. These hidden costs may include location costs, cost of permits or regulations, business tax, parking costs, equipment costs, employee costs, business insurance, and more. Always remember that more planning entails lesser unfortunate circumstances.
Find Out Their Unique Selling Proposition
There are numerous fitness centers so potential clients are blessed with a vast array of choices that includes gyms, health clubs, yoga studios, etc. Most often, these businesses offer the same services, with little or nothing to differentiate. However, you will want a franchise that has a well-defined niche that is underserved or the demand is expected to keep growing. Always look for a franchise that’s doing something different.
Evaluate Your Finances in Detail
You have to understand that fitness franchises take a while before they start generating substantial income. Owing to that, you need to know your budget properly. Consider making a spreadsheet of all your monthly outgoings. Ensure you add your mortgage or rent, average weekly food expenses, childcare, travel and petrol, family outings, bills, insurance, and subscriptions.
Also consider other one-off expenses that you are expected to pay in a year, such as a car tax, MOT, pet vaccinations, birthday and Christmas gifts, holidays, and your TV license. Once you are done, subtract any income you intend to earn, for instance, a partner’s monthly wage, and all that is left is the minimum amount you will need to make every month. Don’t forget this figure when putting together your business plan.
Explore Finance Options
If you realize that you don’t have savings or investments to meet your upfront costs, you must look into other finance options. A good number of fitness franchisors help prospective franchisees with their financing needs—or at the very least make available lender recommendations or support through the U.S. Small Business Administration (SBA). Ensure to consider this when choosing the best possible fitness franchise for yourself.
Talk to Franchisees
Franchisors are mandated to provide the contact information of both current and past franchisees. Note that consulting with both can give you a clearer perspective on how the franchise system operates and its pros and cons.
Also, consider visiting various locations and speaking to their owners who are already living your dream. Beyond reviewing the Franchise Disclosure Document, ensure you get a firsthand perspective of the franchise in action by getting out into the market.
Consider the Systems In Detail
When analyzing fitness franchise opportunities, you might come across a few things you feel needs to change for things to improve. However, you must understand that you should not try to reinvent a proven business model. You are only expected to replicate the very things that have made it a success.
Consider Your Exit Strategy
When seeking to find the perfect fitness franchise to invest in; don’t forget that your exit strategy is just as important as the entry. Whether it is a resale, handed down to future generations, or other exit options peculiar to the business model, ensure to consider the staying power of the franchise. Make sure it would last longer than you do.
Things to Know Before Buying a Fitness Franchise?
An investor who is not interested in going through the rigors of starting their own fitness business from the scratch finds solace in the fact that they can own a fitness business by buying a successful fitness franchise.
So, if you intend to buy a fitness franchise in the United States of America, then you need to look out for key areas in the business, or else you will buy a business on its last legs.
No doubt, you might not have all the exposure to know what to look out for or to ask the right questions, but there are business experts that can help you make the right decisions. If you don’t have a budget for that, then you might find this article highly useful. Let us consider 10 crucial areas you should look out for before buying a fitness franchise in the United States.
The Track Record of the Company Selling the Fitness Franchise
The first inquiry to make on a company that is selling fitness franchises is to ask about their track record. If you can’t place a finger on anything significant they have achieved over the years, then you should reconsider your decision of buying the fitness franchise except you have been part of the franchise as an employee and you are convinced that it is a good deal.
Get Real-Time Information from Current Franchisees
The next thing you should do when looking to buy a fitness franchise is to know how satisfied current franchisees are. FDDs include the names and phone numbers of current franchisees. Talk to at least 10 of them. Ask about the pros, cons, and hidden costs of running the fitness franchise. What did they learn that they didn’t glean from the research before they came into the franchise?
How long did it take them to become profitable? How much did they budget for their enterprise, and how much did they wind up spending? What was the toughest part of building the fitness business? How supportive is the headquarters? How challenging is it to hire good staff? etc.
Look at the Average Running Cost of the Fitness Franchise
Another good area to look at is the average running cost of the fitness franchise. The truth is that some businesses aren’t as profitable as they ought to be because of the high running cost of the business. When a business owner fails to eliminate some not too necessary expenditure, they will always fall short of their profit margin or even struggle to make the business profitable.
What Permits and Licenses Will I Have to Renew?
In the United States, almost every business has some sort of licensing and requirements necessary to make it legal. Note that asking the seller of the fitness franchise this vital question will save you a lot of time and possibly a lot of legal troubles down the line.
The Franchise Agreement (Terms and Conditions) Attached to Buying the Fitness Franchise
Please note that when you are buying any franchise or business or signing any contract, there are always terms and conditions attached to the contract document. Some investors fall prey to dubious business owners who sell their franchise with hidden terms and conditions.
The franchise agreement is a contract you agree to for a set amount of time, often five years. It covers exactly where and how you will run your franchise – and it is worth consulting a professional to make sure you understand your rights and responsibilities under every clause.
The FDD offers robust information, like bankruptcy filings by the franchisor, litigation involving the company and/or its executives, the type of training the franchisor offers franchisees, and costs that may not seem obvious, like opening day expenses when headquarters may want you to give away free stuff and do special promotions.
Look at the Mode of Payment
Most franchises that are put up for sale usually make flexible payment plans that will make it easy for people to buy the franchise. In case you don’t have all the money to purchase the franchise, then you should ask to know the mode of payment. Some sellers may give you the option of paying installments over a period of time or writing out postdated checks or even paying in kinds et al.
Find Out If There Are Ongoing Fees Attached to Buying the Fitness Franchise
When it comes to buying a franchise, you should be aware that in most franchise arrangements, you (as a franchisee) would pay a royalty fee to the franchisor on a weekly, monthly, or yearly basis. So, you need to know how this royalty fee works with the fitness franchisor, whether it is a flat fee or a percentage of your sales and whether there are separate fees for advertising and marketing.
The Benefits You Stand to Gain When You Buy the Fitness Franchise
For every seller that has a product or service that is put up for sale, there are selling points they can readily showcase to buyers and that is what is known as the benefits of buying the business. So, if you want to buy a fitness franchise, you should ask the seller to list out the benefits you stand to gain when you buy the franchise. Listing out these benefits might just be the extra push you need to buy the franchise.
Know the Territories (Locations) Open for Business
When it comes to buying a franchise, franchisors usually define the territories (locations) they are looking forward to having their business. So, as a franchisee, your territory is the area you are allowed to serve customers hence you must endeavor to watch out for any overlaps in territories or unclear boundaries, as these could cause major issues with other franchisees.
So, it is advisable to know how many territories the franchisor has, how many are available for sale, how many are planned for the future, whether other franchisees can compete within your territory and the protected territory a prospective franchisee will be buying.
You Must Know How Disputes are Resolved
Lastly, another important thing you must know before buying a fitness franchise is how disputes are resolved between parties. A franchisee should know if the agreement gives them the right to litigate or only seek private arbitration or mediation in the event of a dispute with the fitness franchise.