To celebrate Franchise Chatter’s first year anniversary, I wanted to reconnect with the people who played a major part in the growth and influence of this blog thus far. These company founders, franchise executives, and top franchisees captivated you the most, as measured by the number of page views received by the interviews I did with each one of them. I named the series “One Year Later” because these new Q&As will pick up where we left off about a year ago. And let me tell you, so much has happened since then!
First up is Peter Taunton, the founder and CEO of Snap Fitness. I enjoyed learning about the company’s recent purchase of Kosama, a group training program that will be a new standalone franchise opportunity (Peter says they also plan to open co-branded Kosama/Snap Fitness locations across the country). With the introduction of Fitness on Demand and the integration of nutrition plans and supplements into their fitness programs, it’s no surprise that Snap Fitness has enjoyed significant growth, both domestically and overseas, over the past year.
Franchise Chatter (FC): Can you tell us about the growth of Snap Fitness internationally this past year?
Peter Taunton (PT): We’ve grown considerably both domestically and overseas this past year, with new clubs opening in Canada, Mexico, India, Australia, and New Zealand, as well as our first clubs in the United Kingdom scheduled to open next month. Aside from just opening new locations, we’ve seen membership numbers increase significantly in our international clubs, and one of our locations in India is actually in the top 5 of our best performing clubs in the system. I see this as a testament to our model and the fact that fitness translates to any language or culture.
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This year, we plan to enter several additional countries, while expanding our offerings in the countries we’re currently operating in. It’s a very exciting time for Snap Fitness.
FC: How has your domestic business been since we last spoke? What regions of the country have seen the most impressive growth?
PT: Domestic business has also seen an increase over the past year, as membership numbers for Q1 of this year were up from where they were last year. In terms of where we’re seeing the greater growth, it’s tough to pinpoint specifically, but we’ve seen terrific numbers in the South and Northeast regions, along with steady growth near our home base in the Midwest.
FC: Please tell us about the new technology initiatives that you introduced last year, like Fitness on Demand. How have these programs been received by your membership base?
PT: Fitness On Demand is a program we rolled out last year that allows members to participate in a variety of group fitness classes 24 hours a day, 7 days a week with the touch of a button. It allows our clubs the ability to provide more variety and value to members, and creates a real point of difference in the marketplace. Several hundred of our clubs have already adopted this technology, with many more in the pipeline for 2012.
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This introduction has seen an increase in membership retention in clubs that have adopted the program, along with stronger member referrals. This year, we plan to continue to find new ways for members to utilize technology to not just work harder, but smarter. We want them to be able to understand their workouts and work at the level that will help them get the most from their efforts.
FC: Can you talk about your efforts to incorporate nutrition plans and supplements into your membership experience?
PT: Absolutely. This year we partnered with a company out of Canada called Truestar, to provide our members with a customized nutrition profile and a quality vitamin/supplement plan. For years, our staff and trainers have provided great advice in terms of nutrition, but never really had a consistent solution or plan to offer up. Now with Truestar, we can offer members a complete wellness profile and help them incorporate nutrition and vitamins to achieve results.
FC: Can you share the story behind your recent acquisition of Kosama, a group training program? How do you plan to integrate Kosama into the Snap Fitness system?
PT: I made the decision to acquire Kosama because it is a concept that I believe in. The idea of being able to offer personalized group fitness is an attractive, unique value proposition that also fits perfectly in line with Snap Fitness and our mission. I plan to keep Kosama a standalone franchise opportunity, but also plan to open several joint Snap Fitness/Kosama facilities, allowing members the opportunity to take advantage of both great concepts for one price. We actually have our first one open in Shakopee, MN and plan to open many more moving forward.
FC: What were some of the challenges you’ve had to face over the past year, and what did you do to deal with them?
PT: I think the challenges of this past year were the same as they’ve been in our industry for a long time: increased competition, member engagement, and staying ahead of the curve with new technology. We’re constantly finding new ways to differentiate ourselves from the competition while improving engagement, with programs like our recent $10,000 Lose Weight Challenge as an example. It’s important for us to keep in mind what it is our members want – results – and find ways to help them get there.
FC: Has the lending environment improved over the past year? How are your franchisees financing their new Snap Fitness centers?
PT: It’s coming back slowly but surely, but I think we still have a long way to go. Our in-house financing program has helped fund 29 new locations since beginning the program back in January 2010, and plan to ramp that number up even higher in 2012. We believe in our franchisees, and providing them with the financing assistance they need to expand their businesses is our way of putting our money where our mouth is.
FC: In your experience, what are the top 3 factors that contribute the most to the success of a Snap Fitness club?
PT: This is going to sound cliché, but I think it all goes back to the basics. You need to keep your club clean, engage your community, and engage your members. I always tell our franchisees those very same things. If you can do those well, you’re in business.
FC: What are your thoughts on the influx of new fitness franchise concepts?
PT: I think it’s a testament to the fact that people are becoming more health conscious, which is terrific. The industry is always changing and evolving, and the reality is that everyone is looking for that next great idea. That’s part of the reason we acquired Kosama; it’s a unique concept that caters to a different segment of the population, and ultimately helps us achieve our goal of helping more people get healthy.
FC: What are your growth targets in 2012, and what regions of the country and the world are you targeting for further expansion?
PT: We plan to open another 150-200 locations worldwide, including several new countries that we’re entering for the very first time. Additionally, I plan to expand on our in-club tools and offerings, to help franchise owners continue to grow revenues while providing members with more value for their money.