The fitness franchise category is super hot right now. Eleven different fitness franchise companies landed in Entrepreneur Magazine’s Top 500 List this year. Some of the brands I am familiar with — like Gold’s Gym and Planet Fitness — but most of them I’d never heard of. I decided to explore this category further. But before I dig in, let me briefly share with you a little about my own fitness journey.
I’ve struggled with my weight since I was a kid. It was only when I discovered yoga 3 years ago that things began to change. I had just moved to Vancouver and noticed a yoga studio across the street from where I lived. I wanted to see for myself why yoga is so popular here, so I signed up for a 2 week trial. I found myself enjoying yoga so much that I ended up attending classes 3 to 5 times a week. Within 6 months, I lost 30 lbs and have kept the weight off ever since. I’ve been a loyal member of the same yoga studio to this day.
Why am I telling you this? There are so many people like me who want to lose weight, so a fitness franchise has a huge market. But what makes the fitness franchise really lucrative is the potential for consistent, stable, recurring monthly revenues from loyal customers.
Unfortunately, there are no yoga franchises on the Top 500 List. But the top 3 fitness franchises have some very unique elements to their business models that call for a closer look. The top 3 fitness franchises in the US today, according to Entrepreneur Magazine, are Jazzercise (#17), Anytime Fitness (#18) and Snap Fitness (#33).
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1. Jazzercise Franchise
- Jazzercise is a 60-minute group fitness class that combines cardio, strength training and stretching to sculpt, tone and lengthen the muscles. The routine is choreographed to today’s hit songs and fuses elements of jazz dance, resistance training, Pilates, yoga, and kickboxing.
- There are several kinds of franchises offered: the Instructor Franchise (for those who want to teach classes) and the Business Franchise (for those who don’t want to teach, but would like to own and manage classes taught by Instructor Franchisees or Substitute Instructors). The franchise fee for both is $1,000 ($500 outside the US).
- An Owner Instructor owns and teaches classes, and may hire Substitute Instructors to teach. Substitute Instructors do not own their classes and may either work for many different owners as needed (Floating Substitutes) or work for a single owner on a regular basis (Associate Substitutes).
- The monthly royalty fee is 20% of gross sales, with a minimum of $50/month for the Instructor Franchisee and a minimum of $500/month for the Business Franchisee. I’ve never heard of a royalty fee of 20% — it’s insanely high! — but considering that the expenses to run a class are minimal, it seems to work for them. After all, the company has been franchising the concept since 1983!
- The total initial investment for this fitness franchise can be as low as $2,980 if using public facilities rented by the hour, and can be as high as $9,190 to $38,400 if the franchisee opens a Jazzercise Fitness Center.
- Initial training and certification for Instructor Franchisees come in the form of 2 to 3 day workshops (conducted worldwide) which cover a wide range of topics from health and fitness to the Jazzercise teaching technique. As part of their continuing education, every 10 weeks, Instructor Franchisees get a DVD containing approximately 28 new Jazzercise routines choreographed by Jazzercise founder Judi Sheppard Missett.
- This franchise is a great low-cost and homebased franchise option (if using facilities rented by the hour) for those who enjoy dancing and teaching group fitness classes. There were 6,627 US franchisees in 2010, and they grew steadily even at the peak of the recession in 2008 and 2009.
2. Anytime Fitness Franchise
Curious about the average member numbers, projected revenues and projected earnings for Anytime Fitness clubs? Please click here.
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- Anytime Fitness and Snap Fitness basically have the same business model. Both are gym franchises located in convenient strip mall locations, with a smaller footprint (on average, 4,000 sq. ft. for Anytime Fitness and between 1,200 to 2,500 for Anytime Fitness Express) compared to the big box gyms like 24 Hour Fitness.
- The thing I find most intriguing about these gym franchises is that they offer customers access to their facilities 24 hours a day, 7 days a week, without a corresponding increase in payroll. They do this by giving their members a special key which grants access to the fitness center even when there are no employees on-site. This is possible through surveillance cameras that are monitored remotely when the gym is not staffed. To offer greater security and peace of mind to their members, they also offer personal security devices which gives members 1-click access to the police in case of emergency. Pretty neat, eh?
- Another unique aspect of this gym franchise is the fixed royalty fee of $499 a month — not a percentage of gross sales, like most other franchise concepts. So once the franchise clears more than $10,000 in revenue a month, the royalty fee will come out to less than 5% of gross sales.
- The total initial investment for Anytime Fitness is also surprisingly affordable: anywhere from $$44,074 to $300,074. They do this by keeping the gym design very simple so that the required tenant improvements are kept at a minimum.
- Anytime Fitness also offers 24-hour tanning to members for an additional fee. Members can use the same access card to enter the fitness center and activate the tanning session within the center.
- Anytime Fitness opened their first facility in 2002 and they’ve grown steadily to 1,291 centers in 2010. What I find most fascinating is that most of their growth came during the recession (they only had 444 gym franchises in 2007!).
- A note from Ambrosio: A few days after publishing this blog post, I had the opportunity to interview the Co-Founder and CEO of Anytime Fitness, Chuck Runyon. It was a very informative and inspiring interview, so if you are interested at all in the fitness franchise business, this is a must-read.
3. Snap Fitness Franchise
Let’s Take a Closer Look at the Average Member Numbers, Projected Revenues and Projected Earnings for Snap Fitness Clubs. Click here.
- Snap Fitness has essentially the same concept as Anytime Fitness: 24/7 access, small footprint, remote surveillance, security devices, and a fixed royalty fee ($449 for Snap Fitness versus $499 for Anytime Fitness). These 2 gym franchises started out at about the same time: Anytime Fitness opened its first fitness center in 2002. Snap Fitness was founded in 2003 and sold its first franchise in 2004.
- I get the impression that Anytime Fitness and Snap Fitness are going after the same markets with the same concept, and Snap Fitness is competing with the older gym franchise chain by offering everything at a slightly lower price. The total initial investment for a Snap Fitness ranges from $49,000 to $250,000, which is less than Anytime Fitness (except in the case of a few Anytime Fitness Express locations with a tiny footprint).
- In terms of the number of gym franchises in 2010, Snap Fitness is the smaller of the 2 gym franchise chains (972 gyms for Snap Fitness versus 1,291 for Anytime Fitness).
- A unique thing that Snap Fitness highlights is the fact that they do not require their members to sign contracts. Members pay on a month-to-month basis.
Jazzercise, Anytime Fitness and Snap Fitness all offer the individual investor the opportunity to tap into the growing and lucrative fitness trend at an affordable price.
Are you a current franchisee of Jazzercise, Anytime Fitness or Snap Fitness? Is your fitness franchise profitable? Do you work for the Jazzercise, Anytime Fitness or Snap Fitness franchise organizations? Can you share anything about the profit potential of your fitness franchise concept?