Mark Stevens and his wife Kristie own 6 Anytime Fitness clubs located in Mississippi (Tupelo, East Tupelo, Meridian, and Starkville) and Alabama (Florence and Muscle Shoals). They joined the Anytime Fitness franchise system in 2003.
Mark was the very first franchise owner that agreed to be interviewed on Franchise Chatter. I still remember how impressed I was with Mark’s responses, and his willingness to be open and honest about what it really takes to run a successful Anytime Fitness franchise. The original Q&A was published in June of last year, and it’s still the most popular franchisee interview on the blog to this day. So when the time came to do a round of follow-up interviews with my most memorable subjects, Mark was at the top of my list.
Mark has a lot of new things to share, and I particularly enjoyed his commentary on the photos he sent. It’s really such a treat to follow Mark as he grows his business one year at a time. Here’s hoping we get the same opportunity next year.
Franchise Chatter (FC): How has this past year been for your Anytime Fitness business overall?
Mark Stevens (MS): All of my locations are doing better than last year. While the economy is about the same, our team has gotten their bearings and they are making a huge difference by fostering a great club culture and working hard on community marketing. If the year finishes as well as it started, this could end up being our most profitable year so far.
FC: What would you consider to be the high points of your business since we last spoke?
MS: I guess the best way of saying it is that we’ve gotten our lives back. Although things were good last year, they were still very busy. Over the past year, our regional managers have taken on more responsibility and the staff in the clubs have stepped up to the plate as well. That has allowed us to spend more time with our family and still see profits improve.
FC: Have there been any changes to your day-to-day routine in managing your Anytime Fitness clubs?
MS: We have made a few small tweaks, but the biggest change has been just becoming more consistent at doing what we were supposed to be doing all along. As for my wife and I, we are now able to spend more time working on improving our business rather than just managing it. It is also making it easier for us to expand to new locations.
FC: What are your thoughts on the current state of the economy and how this has affected your business?
MS: While the economy isn’t really doing much better, it has at least stabilized so people aren’t so afraid of what “might happen.” We have fewer cancellations and new sales have picked up to near pre-recession levels.
FC: What is your opinion on the influx of new fitness franchise concepts, and the level of competition within the fitness industry today?
MS: Certainly the competition is ramping up, especially with the growth of the low-cost, no-commitment models. I’m generally a fan of competition because it challenges us all to innovate and improve, but I’m concerned that this new wave will end up hurting the industry and discouraging customers that pay their $10 to $20 per month but never get the service and support they need to succeed. Those models rely on large numbers of members paying but not using, which I think hurts everyone in the long run.
On the other hand, there seems to be a smaller movement in the higher service “boutique” market, which I actually like. In those clubs, there is more focus on individualized service, which requires a higher price and higher commitment from the customer, but most often leads to better results.
FC: How would you rate the performance of Anytime Fitness corporate this past year? What have they done to strengthen the business further?
MS: With the recession giving the low price clubs a boost, there was a strong temptation for us to drop our prices as well. Our corporate office, however, had the courage to lead us (sometimes kicking and screaming) the other direction. They raised our facility design standards, which are being implemented on all new clubs as well as those renewing their franchise agreement. We are also offering new amenities like Fitness on Request (a video-based group exercise system) and more of our clubs are adopting a more structured approach to personal training like Bodyworkz. While those latter two have not been mandated, corporate has integrated them as options to our model. The end result has been that our membership numbers as well as our profit per member have both increased at the same time.
FC: Can you tell us about your current marketing strategy at the local level to attract more members to your clubs?
MS: While what works for each market still differs more than I would have expected, in general we are relying more on social marketing and guerrilla tactics than big media. We are also working harder at earning referrals from our existing members. We still do TV, newspaper, mailers, and billboards on occasion, but we don’t rely on them.
FC: Last time we spoke, you were very happy with the team you had in place. How has your staff performed since then, and what have you done to solidify the team further?
MS: One of the best things that happened was promoting one of our high performing club managers to be a regional manager over a few of our clubs. This young man not only had a good work ethic, but some great leadership skills from his team sports days. We allowed him to take the lead in picking his team. He didn’t have any tolerance for “C” team members and only limited patience with “B” team members, who either turned into “A” players or were asked to leave. He also selected people that “clicked” with each other and had great “can do” attitudes. Over time, they turned around the club culture and began to really enjoy their job.
Recently, I took them and the staff from some of our other clubs to a training seminar put on by our franchise. We spent some time hanging out together outside of the sessions and their good attitude was contagious. Now, they are much more like one big team rather than several small ones. Going forward, we will be meeting together more often as one big group, both for additional training and some fun.
FC: What are your growth targets for 2012, and what is your strategy for achieving these targets?
MS: For the rest of 2012, we plan to open one more club and are shooting to maintain the current membership levels through the summer and early fall. Our strategy for this is focused primarily on taking even better care of our existing members and earning the business of their family and friends. We are also working hard to grow our personal training program to help our members be more successful at their personal goals, and thereby improve our bottom line as well.
FC: What would you consider to be the biggest lesson you’ve learned over the past twelve months?
MS: I’ve learned that people will pay for quality, even when money is tight. Earlier this year, we moved one of our clubs to a new facility. This time, rather than focusing as much on keeping the costs to a minimum, we made a few upgrades that increased the cost by around 20% over the minimum requirements of the franchise. The result is that the club looks very classy and our membership has surged by over 30% in just four months. The only downside is all the “I told you so’s” I’ve had to endure from my friends in the corporate office, but this is one time I’m glad my skepticism was wrong.