In this day and age, buying into a gym franchise is a great business decision – and it is a great ethical decision as well, being that it supports the health and wellness of the general population. There are several things to consider that can add up. Here’s how to buy a gym franchise in your budget and what to be aware of in your decision-making process.
About the Gym Industry
It’s no secret that the gym and fitness franchise business has exploded in the past several years – it has grown by over 6% to be exact, and it doesn’t seem to be slowing down. This is undoubted because of a rising health-conscious population, but more importantly, it is a health-conscious population that knows exactly what they are looking for in the way they choose to exercise.
We have seen improvements and enhancements in traditional health club models like Planet Fitness and Gold’s Gym, to newer or trendier models, like Orange Theory and SoulCycle. Improvements, meaning the extra effort to cater to their members and guests, and enhancements, meaning the addition of things like free massage chairs, personalized routines, and even branded merchandise.
How to Open a Gym Franchise
If you are wondering what drives the gym industry’s growth, and how did many gym franchises become success stories, the answer is simple: preparation. Many business owners, investors, and franchisors prepare for every decision they make and for every process that their gym businesses would go through.
So if you want to own a gym franchise and turn it to be another success story in the industry, you need to make excellent preparations. Before getting into the hype and opening a gym franchise, you must familiarize yourself with how gym franchises operate. Here are the other important things that you need to do:
Be ready to invest
Like most investments, gym franchises take sufficient money and huge amounts of patience from the investor. Make sure that you can commit your time and financial resources to your franchise for many years to come before you start searching for gym franchises to start with.
Draft your business strategy
Once that you have decided that you are ready to devote your resources and attention to owning a gym franchise, it is time to plan out how your gym franchise would operate. You should also set a blueprint of how you, as the franchisor, can attract and maintain franchisees, and how your franchisees can make their franchises profitable.
Your strategy should be easy to follow and safe to replicate because your franchisees would rely on your business strategy during their early stages.
Buffer up against risks
Businesses and investments always come along with risks, most of which are immediately felt during the early business stages. You should take these risks into account, assess how much risk would cause your franchise to fall over, and start taking precautions or drafting contingencies.
By preparing against events that can bring down your gym franchise, you are taking care of the investment you spent for your franchise, and you are making your franchise to be versatile as it can adapt from multiple situations, and to be resilient as it can bounce back from various setbacks.
Complete necessary legal processes
Another thing to consider is that all businesses must be legal and must be recognized by authorities to be relevant. If you want your franchise to succeed and not be blown out of the industry due to expenses incurred battling lawsuits and other legal predicaments, make sure that your franchise is operating within the boundaries of the law.
You must also draft the legal contract between you, as the franchisor, and your potential franchisees. This legal contract should include the roles and responsibilities of each party so that when the time comes for you to collect the fruits of your investment, you can do so smoothly.
Gather promising prospect franchisees
Obviously, your franchise would not be complete if you have no franchisees. Before you launch your franchise, you should contact private individuals or organizations that you think have good potential to contribute to your franchise’s growth.
Make sure that your prospects have a good background in business matters, and are not engaged in illegal undertakings during their past. You have to find out all the information about prospect franchisees before you grant them a franchise.
Choose the Right Gym Franchise for You
With so many companies to choose from, it is important to select one that is reflective of your beliefs, culture, and vice versa. For example, Planet Fitness is known for being free of intimidation and “gym meatheads” – so it wouldn’t make sense to have someone who is too serious in a management position. This principle also goes for gyms that focus only on bodybuilding; someone who is too casual for that kind of environment probably wouldn’t be the best fit.
Choosing the right gym to invest in will take some homework and research on your part, but making sure your management and guests flow together is very important. The satisfaction of your guests is the only way you will get a return on your investment, after all.
Most people choose gyms based on convenience for their lifestyle, and location has everything to do with convenience. Think about neighborhoods rather than the center of the city. Some people like to get up early to exercise, while others enjoy an after work or after school workout. Regardless of preference, most enjoy having a gym to go to on or down their block. Depending on the demographic you want to reach and serve, you will need to do some market research to decide on the best spot for your franchise.
Something else to consider about location? Find out where other franchises of your company are. Part of the convenience factor is the ease of being able to use multiple locations. This goes for you, your staff, and your guests.
Let’s say you want to cross-train employees or management between two locations – or you want to get a better look into an existing franchise to see how it runs as you are starting up. This would be difficult to do if the closest location was 20 miles away!
When franchises of the same company are located closer together, it is also easier (and more successful) for guests to recommend them to their friends and family, and have an influence on their choices in membership, too.
Buying into a gym franchise and having it be a huge or immediate success is not usually something that can be done overnight; you must be prepared to offer a great customer experience, promising amenities, etc. to bring people in, and then keep them coming through the door.
Before opening any business, you must determine a couple of things:
Do you have any big payments in your personal life coming up that could steer you away from your planned budget? Things to consider: holidays, vacations, bills, subscriptions, etc.
Total Expected Budget
This includes anything and everything in this business venture; interior design of your health club (offices, front desk, kids club, or cafe if you have one), contingency for possible damages or the need for new equipment, and a basis to get things up and running. Don’t forget about marketing costs either, whether you choose to advertise with social media ads or printed flyers.
Looking into your financial options, such as a bank loan may be helpful to you during this process if this was not already in your plan.
Gym franchise owners need to make sure they are providing comfort, cleanliness, safety and enjoyment to anyone who walks through the door of their fitness club. People who are shopping for a new gym membership are often doing it by surveying their friends who use gyms, reading online reviews, and sometimes by even scoping them out in person.
First impressions really do matter. When you take into account that exercising in public can make some people feel vulnerable or anxious, it is very important to make sure that you are offering an experience that they will want to return to.
How to Buy a Gym Franchise
Now that you know the different factors to consider in choosing a gym franchise, it is time to discuss how you can actually buy one. Since you already know what to expect in terms of location, startup costs, and customer experience, you can start taking these steps to secure the gym franchise of your dreams.
Submit franchise application
After you have chosen the gym franchise to apply for based on your research, you have to submit your complete franchise application. Make sure to provide detailed information and all the requirements for easier and faster processing.
Prepare a work plan
Once your application is approved or pre-approved, you can start preparing a business plan. The work plan should include your short-term and long-term for the gym franchise. It must also state your expected costs and projections, location, and even the number of people you plan to hire. It is beneficial to have a business plan because this will serve as your proof of intent to the company which indicates your desire to succeed as a franchisee.
Study the contract
Like any other business, it is critical to fully understand the contract first before signing it. The terms and franchise agreement are stated here. You cannot retract it anymore after signing the contract, which means you have to comply with the terms whether you agree to it or not.
As soon as your franchise application is processed, you should also receive the government-mandated Federal Disclosure Document (FDD). You need to read this thoroughly to understand more about the company and its background. This will also disclose the fees and other payments you need to fulfill.
Secure your finances
The most important step is to settle your finances, especially the down payment. As a franchisee, you should be aware of the fee you need to fulfill as stated in the contract. A smart franchisee must already anticipate and prepare for the financial aspect. In case you are in need of assistance, some franchises such as Special Strong offer loans and other lines of credit through a third party.
Owning a gym franchise is definitely worth the investment since the fees already cover most of the startup costs and equipment.
Complete the training
Buying a gym franchise does not end with the payment. A lot of gym companies require their franchisees to complete the training and accreditation. The process is not that difficult, especially for companies that give hands-on assistance to their franchisees.
Apply for a permit
It is also important to take note of the things you do after your franchise is granted. One of the most critical requirements is the permit.
You need to secure a permit in order to entertain clients and be fully operational. This may involve a building permit or sanitary permits from the local municipality to ensure the health and safety of your clients. It will be helpful to do this in advance because some gym franchises require a permit first before you can install equipment in the space.
Promote your gym
Lastly, you need to get the word out and promote your gym. This is to utilize as many marketing strategies as you can and reach out to your target audience. You need to attract clients to have a positive stream of income, which will allow you to sustain the gym franchise. However, the promotions must always be aligned with the branding of the gym.
Customer Experience for Special Needs
How can you go above and beyond to provide a great customer experience? Aside from a clean and welcoming environment, there’s something else to make sure you master: inclusiveness.
When you are striving for great inclusivity, it is important to remember that those with special needs such as autism, or other disabilities, may not be able to go to any gym in town. Having certified personal trainers (CPTs) on your staff that also have a Special Strong certification is beneficial, because it offers help and essentially, happiness, to a larger audience.
The Bottom Line for Smart Buying
With all of this being said, buying a gym franchise in your budget requires a plan that has several parts to it. Remember to be aware of important factors like location and customer experience – plus any add-ons for amenities, marketing, or contingency. Apply them to an appropriate price range according to your financial plan (or business loan) for the best possible business model of your gym franchise. Good luck!