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Tom Gilles compares signing franchisees to recruiting new players for a sports team — both tasks require some degree of salesmanship. The analogy is certainly apt for the director of franchise sales for Anytime Fitness, a former college basketball coach who has been with the company seven of the 10 years it has been in business.
And while Gilles will take some of the credit for his role in the company’s growth, he’s quick to point out that it’s the Anytime Fitness concept and franchise program that is most responsible for its success.
When Entrepreneur magazine announced its Franchise 500 list of top franchises for 2013, Anytime Fitness broke into the top 10 for the first time, landing in the No. 6 spot among mostly food and service companies. Its closest competitor, Snap Fitness Inc., was at No. 35.
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An accompanying story noted that Anytime Fitness had also reached a milestone in 2012 by opening its 2,000th unit. But that number is already outdated and Anytime Fitness now has 2,035 clubs in North America, Gilles says, and more than 280 units in 10 other countries. And the numbers continue to increase as steadily as a member using a Stair Climber.
“There’s certainly no letup in sight and that’s because (owners) continue to do well for us. We’re nowhere near where we can or think we can be,” he said.
Among other endorsements, Forbes.com has named Anytime Fitness No. 18 on its “Top 20 Franchises for the Buck”; CNN Money listed the fitness center on its “10 Great Franchise Bets”; and for six consecutive years, Franchise Business Review has given Anytime Fitness its top rating and an “FBR 50” Franchisee Satisfaction Award.
Concept is Based on Convenience
Co-founders Chuck Runyon and Dave Mortensen started Anytime Fitness in 2002 basing their concept on convenience and opening small neighborhood gyms that provided members 24-hour access with a keycard. As the units multiplied, members could use the facilities at their home gym, but also had keyless access to any other Anytime Fitness gym when they were away on business or in another city.
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“Our whole concept 10 years ago differentiated itself from anything that existed before,” said Gilles, who has a degree in finance and an MBA. “It was different from the big box clubs that existed for 20 or 30 years.”
The founders had learned from previous experience that even though health clubs of 100,000 square feet or more offered such amenities as pools, racketball and basketball courts, those amenities were being used by a very small percentage of members. Most people were using areas that offered cardio and strengthening equipment. So, they shrank the footprint of their health facilities, concentrating on those amenities most in demand and offered 24-hour access in a co-ed environment. The smaller clubs require fewer employees and also create an intimate setting where members get to know one another, Gilles said.
“We’re kind of the corner coffee shop, corner bar and grill, and corner cafe of the fitness industry; and I’d say that’s as much a differentiator for us than anything,” he said. “You just like that feeling of walking in and knowing they know you — kind of like an old ‘Cheers’ episode.”
With smaller facilities and fewer staff, Anytime Fitness is also seen as an affordable investment for franchisees. According to the company’s Franchise Disclosure Document, the total investment necessary to begin operation of an Anytime Fitness center is between $71,599 and $353,899. That includes an initial franchise fee of $26,999 for a new franchisee. For an Anytime Fitness Express center, the initial investment should range from $56,299 to $263,999 for a new franchisee.
Return on Emotional Investment
Gilles said Anytime Fitness tries hard to be a one-stop-shop for its franchisees by offering in-house design, real estate services, and financing through preferred lenders. The services allow the company to maintain consistency and standardization from one club to another.
Once they sign an agreement, the new franchisees are introduced quickly to the company’s keys to success, which it sums up as the four p’s: people, profit, play, and purpose. And when company executives talk about return on investment, they don’t mean only monetarily. They talk about the ROEI — the return on emotional investment — which is provided by a franchise that allows owner/operators to spend more time living their lives.
“It’s a hair different from a sandwich shop where you’re tied to it,” Gilles said. “Our franchisees have more freedom to do those things that we all want to do; and that return on emotional investment is part of our appeal.”