Gym or fitness club businesses have been very popular in the USA throughout the last decade. The gradual improvement in revenue spiked till 2019, with nearly 64.2 million members countrywide.
But COVID-19 dropped it to half its initial number, taking it back to square one. In 2022, there were only 32.8 million health club members. However, growth is still there, and the industry has been relatively steady ever since.
You will find the fitness studio franchise business worthwhile If you are a fitness enthusiast. The blend of passion into business can work well for new business owners. With the proven track record of renowned fitness franchises, there’s potential for success.
However, there are still many factors to consider and steps to follow. That’s where Small Business Journal comes to help.
How to Start a Fitness Studio Franchise?
Before you start any business, it’s best to look into what’s in it for you and what might not work.
This applies to franchisees as well. The franchisors indeed come with a proven track record, and success is almost a given. But you can’t leave such a big decision to profit prospects.
Consider the Pros & Cons
Try and talk to some current franchisees in the fitness industry. You can even discuss your doubts with previous franchisees. Analyze and evaluate the pros and cons of starting your franchise before going all out.
Pros
The following are some advantages of starting a fitness studio business. Let us read about all the advantages of starting a business related to fitness.
Brand Recognition: If it’s a fitness studio franchisee you want to establish, go for a bigger brand name. This way, you’ll leverage the pre-established customer base. Also, you’ll eliminate the biggest challenge – customer acquisition and revenue. Franchise owners also benefit from the marketing that the franchisor takes care of.
The only big thing left is – the day-to-day operation.
Training & Support: This works for the fitness trainer turned gym owner. You have made a name for yourself as a fitness coach. But running the business may be challenging if you are new to this. Running operations is hard, even within the niche of your choice.
With a franchise, you get the training and support you need to run the business. While your franchisor takes you through every step of the process, you can keep engaging with the customers on the business front.
Higher Profit Margin: A loyal customer base and a successful business plan for a fitness studio franchise work as a success formula. You don’t have to struggle to retrieve your initial investment if you are going with a franchise.
Cons
Here are some drawbacks of starting a fitness studio business. Let us go through all the disadvantages of fitness studio and how it can negatively impact your lifestyle.
Lack of Independence: With a franchise in the fitness studio industry, you may need more independence to do things your way. The franchisor sets up the business strategy, marketing, and business location and takes care of the decoration.
So, as far as innovation is concerned, you only have a little room for it. It doesn’t give shape to your vision, both in terms of pursuing the business and the aesthetics. If you want to do something innovative, there may be other options than a franchisee.
Initial Investment: small fitness studio owners can start their business with as little equipment as possible. There’s an option to start from scratch and buy used gym equipment initially to cut costs.
But that’s not the case with fitness studio franchises. In fact, you must provide financial quality for the franchise. Plus, you are bound to buy a lot of fitness equipments. So, the investment is heavy.
Fees: Franchisees must pay a set of ongoing fees. For example, renewal, marketing, royalty, etc., make sure that you are comfortable paying all these different fees.
Find Your Options
Once you are done evaluating the pros and cons and choose to invest in a fitness studio franchise, start with your options. There are many fitness studio franchises to consider in the USA market.
It’s best to understand the saturation of gym memberships in your locality. If the locals were to consider a gym subscription, which door would they go to? The fitness market is currently saturated, and it calls for enough personalization on your part. You can try offering specialized services. But, if you are going with a franchise, go with a name the locals in your area would prefer.
Also, consider the fees, royalties, and initial investment required from your franchisor before settling for an option.
Contact a Franchise
Once you have chosen your franchise, go ahead and initiate the conversation. Initially, you might fill out their contact information through their website. The franchisor might just provide you with their initial information for the partnership.
When the application process is underway, it’s the turn for the interview. Remember, this interview should be a two-way interview. You should have as many questions as the franchisor.
Just as it is important for them to know if you are the suited franchisee, you must also know if this is the franchisor you’ll partner with.
If you continue with the application process, the franchisor will provide you with the FDD (franchise disclosure document).
The FDD entails the franchisors and the franchise’s responsibilities and the liabilities. The FDD should be transparent and discuss all the essentials of the contract. Bring your business attorney along and discuss the feasibility of this contract. Once you agree to all the terms, you can sign the contract.
Write Your Business Plan
, you already have a business plan prescribed by your franchisor for a fitness studio business. So, why bother writing one?
There are perks to writing your franchisee business plan. The reasons?
- You have better visibility over your expectations and the efforts needed.
- There’s clarity about how to start your fitness franchise.
- You have a better understanding regarding how to operate and grow your business.
If you are writing your fitness studio franchise business plan, here are a few key components to touch upon –
Research: use the best of both worlds. Take the market research data provided by your prospective franchisor and do your own research. Use both data to secure your place in the market.
Business Concept: Define the business idea you have in mind. Detail out the data about your target market here.
Financial Plan: Financial plan is essential to your fitness franchise business. Include your financial projection, your financial standing to qualify for the franchise, and the fees.
Operations: Develop a plan for how you will run your fitness studio on a day-to-day basis.
Funding Your Fitness Studio Franchise
The cost to get your business off the ground varies based on the franchisor you choose to work with. In some cases, you can expect some assistance from your franchisor.
But a chunk of the investment must come from you. You can consider breaking your bank for a portion of the funding and mixing it up with loans.
Try considering the following options if you want to secure funding from legitimate institutions
- The SBA 504 and SBA 7(a) loans help you with a long repayment tenure, lower interest rates, and high amounts.
- You can also choose a business line of credit to fund your fitness studio franchise.
- Alternative lenders provide you with high amounts of loans with quick turnaround time and fewer restrictions.
- Some venture capitalists also lend startups money at low interest rates.
Choose a Location
A key to your success in any business is the location you consider. If you want to sell the most memberships, try setting up near residential localities or work hubs. Your target audience is probably looking for convenient options near their office or home.
You can consider several metrics to settle down on a location. For example, the accessibility of your location through public transportation. The crime rate in the locality, the traffic rate, the average age of the area, and more.
Try checking out platforms like StatsAmerica to run your research about a location. In addition, check the location preferences of your potential franchisor before choosing any location.
Permits for Your Fitness Studio Franchise
When starting your fitness studio franchise, you need to obtain several permits. The best way to proceed with this would be an open discussion with your franchisor. They should be equipped with the ability to suggest the number of permits you have to obtain.
For example, you might need a building or health and safety permit. Detail the extent of your business and the amenities included to develop a list of permits you need.
Hiring Staff for Fitness Studio Franchise
The last phase in the process is hiring. Your fitness studio needs human resources to keep it operational. It would help if you had someone at the front desk, some employees to clean up the spaces, and additional trainers to help train your gym members.
Before hiring, analyze a few details to know the number of people you need. For example, how many hours will your gym remain open in a day? You’ll need more people if it’s open 24 hours. Evaluate the number of customers, gym equipment, and space to understand the human resources you used to run the gym.
Revenue of the fitness, health, and gym club industry in the United States from 2010 to 2022, with a forecast for 2023
Final Thoughts
It’s always wise to go for a safe option. Although it might not seem as entrepreneurial as starting a fitness studio from scratch, it’s still feasible. Especially if you have the upfront capital and the financial standards for setting up your fitness studio franchise, go for it. It’s a crowded industry, and a franchise business is a good decision to secure revenue flow. Plus, you don’t have to start from the bottom.
Although you get enough help from the franchisors, a fitness studio franchise still needs to be improved to set up. Consider the points suggested in this article to help you get started. Let us know about your feedback in the comments. Thank you for reading.
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