Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Anytime Fitness Franchise Gearing Up for Long-Term Growth

by Franchise Chatter on August 9, 2016

in Fitness Franchises, Franchise Chatter Guides

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Anytime Fitness Mark Daly

Mark Daly, Anytime Fitness National Media Director

After starting out mainly in rural markets, Anytime Fitness is banking on long-term growth – globally as well as in the U.S.

Anytime Fitness national media director Mark Daly told Franchise Chatter that the chain, which opened its first franchises in its home state of Minnesota in 2002, expects to open 200 new clubs in the U.S. each year for the foreseeable future.

“And, we see the foreseeable future as at least the next 10 years,” said Daly. “So (that means) 2,000 new clubs in the U.S. in the next 10 years. At the same time, we would be expecting to open 200 or more clubs outside the United States each year; and, we think that number, rather than being static, will actually grow each year.”

Fitness Franchise Earnings

International expansion trend not likely to reverse

In 2015, Anytime Fitness opened more new locations outside the U.S. than within the country. If the company’s forecasts hold true, international expansion will outpace the growth of American locations on an annual basis.

“We do not see that trend reversing itself,” said Daly. “We expect, from now on, to be opening up more clubs outside the United States than inside the United States every year.”

He also noted that the natural growth curve flattens out a bit over time, and in the U.S., Anytime is “literally saturated in terms of selling franchise territories in a few states.” In the American markets in which it operates, Anytime Fitness has a gym within five miles of “virtually” every community with 10,000 or more residents.

That is particularly true, he indicated, in the chain’s home state, where it operates 123 gyms. However, Daly said there is room for expansion in almost all other U.S. locations. “So there’s very little room for more Anytime Fitness clubs here in Minnesota,” he said. “That is not true in several states west of the Mississippi and in the northeastern part of the United States.”

Anytime Fitness Minnetonka, MN

“Substantial” growth planned in undeveloped American regions

Consequently, Anytime Fitness expects to see substantial growth in those areas in the next 10 years and will grow in the U.S. while also expanding in international markets.

It is clear that fitness enthusiasts have high demand for Anytime gyms, which are accessible 24 hours per day. Business magazines like the concept, too. In June, for the second consecutive year, Anytime Fitness was ranked No. 1 on Entrepreneur magazine’s annual Top Global Franchises list.

Billed as the world’s largest co-ed fitness chain, Anytime says it has averaged more than 300 new gyms a year for each of the past nine years. The chain recently expanded to China, Belgium, Sweden and Italy and has pledged to open new gyms soon in Colombia, Panama, Saudi Arabia and Bahrain.

“It’s exciting. We are at the mountain top of franchising,” said Daly. “This is Subway, McDonald’s, 7-Eleven (territory). Every franchising giant is considered by Entrepreneur in this ranking.”

Daly said the award shows that the Anytime Fitness business model works “virtually everywhere.” The chain has nearly 1,000 units outside of the U.S., extending its brand to almost 30 countries on five continents.

Fitness Franchise Earnings

Chain provides 24/7 gym access

The recognition from Entrepreneur, he added, shows that individual franchisees are making a good living and “fitness consumers” are accessing high-quality equipment and programming along with 24-hour, affordable and well-maintained facilities every day of the year.

Members can access facilities, which are smaller than most other fitness studios, with keycards after regular business hours. Clearly, the business strategy is working. The chain initially built its brand mainly by opening locations in rural Midwestern strip malls, but has still achieved $1 billion in sales annually.

Anytime Fitness says it serves more than 2.6 million members, and members have completed more than 500 million workouts.

Anytime Fitness tattoos

Gym members and franchisees show support in tattoos

“Anytime Fitness was founded on the idea that exercise should be as convenient and rewarding as possible,” said Dave Mortensen, co-founder and president of Anytime Fitness, in a news release. “We’ve eliminated all of the most common barriers to healthy lifestyles and, by constantly finding new ways to help our members realize meaningful results, we’re well on our way to achieving our goal of helping as many people as possible get to a healthier place.”

Some of the chain’s marketing material says that Anytime Fitness members and franchisees feel so good about their gym experiences that more than 3,000 people have actually tattooed themselves with the company’s Runningman logo.

Dozens of members and franchisees have proudly waved Anytime Fitness flags or worn Anytime Fitness t-shirts atop some of the world’s highest mountains, such as Mt. Everest and Mt. Kilimanjaro, as well as at historic sites like the Great Wall of China and Machu Picchu in the Andes mountains in Peru.

Fitness Franchise Earnings

More change on the way

As more franchises open, change will accompany them. As part of their agreement with Anytime, franchisees are required to improve equipment each year, and upgrade and remodel their locations every five years.

Locations could also get bigger. In the chain’s early years, Anytime gyms were about 4,000 square feet. Now, they typically range from 5,000 to 6,000 square feet.

In addition, Anytime is changing the way that it provides fitness services. Daly said the chain is evolving from a simple convenience model to a “convenience-plus coaching” that includes things like free personal assessments for members when they join a club so that they have a starting point. In turn, Anytime Fitness franchisees can learn more about their gym members.

“We know what individuals’ skills and limitations might be and whether there is, maybe, room for improvement,” said Daly. “They need a get-started plan. A lot of people join other gyms and, after they write their first cheque, they are simply left on their own.”

Following the personal assessment, members receive a free 30-day, get-started plan to help them stay motivated rather than quit. More importantly, said Daly, the Anytime Fitness braintrust is developing tools that allow its trainers to provide virtual training for members so that they can work out effectively on their own when not receiving one-on-one training at a franchise outlet.

The company has developed a virtual training program that is being tested in a pilot project and will be rolled out in 2017. Plans call for roll-out to occur in the U.S. only. Then the program could be introduced in international markets later.

Personal trainers will be able to devise workout plans and deliver them to their members’ cell phones so that they will have a customized workout plan when not working out with a trainer.

Anytime-Fitness-Club-Interior- Richfield, MN

Helping to fight obesity

But Anytime’s emphasis on individualized plans and workouts are not oriented towards pushing super-fit athletes. Co-founder and CEO Chuck Runyon has said that the chain is more about giving hugs than kicking butt.

However, the chain is still keen to help Americans achieve high fitness levels – and curb obesity. “Despite education, despite a number of initiatives and despite everything that the fitness industry is trying to do, our obesity crisis is only worsening,” said Daly.

A recent Centers for Disease Control and Prevention (CDC) report shows that obesity is on the rise among Americans. An average American male weighs 15 pounds more today than 20 years ago, while women are 17 pounds heavier on average.

The CDC has also reported, based on a 2013-14 study, that 40 percent of American women are obese.

Meanwhile, the Journal of the American Heart Association reported in July that obese Americans are becoming more prone to health problems. The report’s authors found that blood-sugar disorders are worsening among obese Americans, leading to more diabetes and cardiovascular disease. The report was based on a study of 18,686 obese adults who participated in the U.S. National Health and Nutrition Examination Survey, conducted over almost 30 years.

Using body mass index to gauge body fat, researchers found that, between 1988 and 2014, rates of diabetes rose to 19 percent from 11.3 percent. The rate of obese Americans without diabetes, dyslipidemia and hypertension – three risk factors for cardiovascular disease – held firm at a modest 15 percent. However, the rate of obese Americans with all three of those risk factors – rose 37 percent to nearly one in four (22.4 percent).

Daly said fitness club operators are obligated to help Americans lose weight. “This industry needs to do everything it can to help people renew their lifestyles,” said Daly. “There is room for fitness centers to play a leading role in reversing the crisis and eventual chronic diseases and coronary illnesses.”

Fitness Franchise Earnings

Headquarters site offers multiple workout options

The chain also strives to help its employees keep fit at its Woodbury, Minn., base. Along with its parent company Self Esteem Brands and “sister franchise” Waxing the City, Anytime Fitness operates an 80,000-square-foot campus that is home to nearly 200 corporate employees. The location features a full-size gym, hiking trails surrounding 26 acres of forest and wetlands, stand-up desks, and healthy eating options. Plans were underway to unveil rock- and rope-climbing walls and a 1,200-foot zip line.

While trying to fight obesity, Anytime is banking that fitness club growth will balloon over the next decade. Citing information from CEO Runyon, Daly said that consumers will spend 300 percent more of what they’re spending today on fitness programs 10 years from now.

And, it is a given that Anytime Fitness will revise its offerings to gym users considerably in the meantime. But the chain plans to make sure that members do not feel lost in the expansion shuffle. The average number of members at each Anytime Fitness gym is 825, which Daly called a “manageable” number.

“Customers are demanding more from gyms,” he said. “You can’t simply expect to build it and (assume) they will come. (Gyms) must provide the type of services and programming that customers these days have come to expect.”

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