In this FDD Talk 2015 post, you’ll learn the following:
- Section I – Background information on the Fitness Together franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Fitness Together franchise, based on Item 7 of the company’s 2015 FDD
- Section III – Presentation and analysis of Fitness Together’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
- 2014 average annual revenue for Fitness Together studios in the franchise system open as of December 31, 2014 and open for at least 12 months as of January 1, 2014 (174 Studios), and the number and percentage that met or exceeded the average
- 2014 average annual revenue for the top third of Fitness Together studios in the franchise system open as of December 31, 2014 and open for at least 12 months as of January 1, 2014 (58 Studios), and the number and percentage that met or exceeded the average
- 2014 average annual revenue for the bottom third of Fitness Together studios in the franchise system open as of December 31, 2014 and open for at least 12 months as of January 1, 2014 (58 Studios), and the number and percentage that met or exceeded the average
Section I – Background Information
Many successful chains have surprisingly humble beginnings, and that is definitely true for Fitness Together. Rick Sikorski opened the first Fitness Together studio in 1983 in Scottsdale, Arizona. Putting the first location together cost him everything he had, which meant he couldn’t even afford an apartment, so he had to sleep in a sleeping bag at his tiny personal training studio.
But he knew his concept was solid: Offer people personalized workout routines individually or in small groups with professional fitness trainers. It’s about pushing people just hard enough to get the results they want. Throw in nutritional guidance and what you end up with is an approach that helps people achieve optimal health and fitness.
Headquartered in Highlands Ranch, Colorado, under parent company Wellbiz Brands (which includes two other franchises – Elements Massage Therapy and the new FIT36), Fitness Together has more than 175 locations scattered throughout the US and Brazil.
Here’s how the chain brings customers and trainers together for fitness success:
Weathering the Great Recession
In 2006, private equity firm Enhanced Equity Fund paid a premium price to Fitness Together’s founder to acquire the chain. In 2008 it brought on Jeff Jervik to be its president and CEO to keep its solid growth moving in the right direction. Instead, what it got was the Great Recession.
Personal fitness budgets tend to tank in an economic downturn, and things looked grim for Fitness Together. What the chain was lacking was solid business process foundations – it had been growing rapidly, but wasn’t building the organizational infrastructure to match that growth.
After closing more than 100 studios in 2009 and 2010, Jervik put in place solid business processes that now have the company back on track for growth.
New Offerings for the New Normal
But more had to happen in responding to the Great Recession than just building up business basics. The plain fact of the matter is that people aren’t willing to shell out as much for personal training as they were before.
In this post-recession, increasingly price-conscious environment, the response was a new offering in 2011 called PACK training – small group training sessions that still give plenty of personalized training for about half the cost of individual training.
The chain also gave people the option to pay a monthly membership fee that felt like less of a hit than packages of one-on-one training.
Working Together on Fitness Together
Rather than viewing each other as competitors, multiple franchises in metropolitan areas are working together, particularly on marketing. The poster child for this approach is Charlotte, NC, where 11 Fitness Together studios pool resources for bigger media buys like radio and billboards, all of which drives traffic to a single website for all of them at ftcharlotte.net.
Section II – Estimated Costs
- Please click here for detailed estimates of Fitness Together franchise costs, based on Item 7 of the company’s 2015 FDD (updated).