In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the GNC franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a GNC franchise, based on Item 7 of the company’s 2019 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a GNC franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned GNC outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of GNC’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- 2018 average, median, highest, and lowest gross retail sales for the 1,013 franchised GNC Stores that were open and operating in the United States as of December 31, 2018 and had been in business continuously from January 1, 2018 through December 31, 2018
- number and percentage of franchised GNC Stores that attained or surpassed the average gross retail sales for the calendar year 2018
Section I – Background Information
26 Things You Need to Know About the GNC Franchise
Launches Personalized Daily Vitamin Packs
1. In mid-October 2019, GNC announced the launch of its new personalized wellness program, GNC4U – a monthly subscription service with vitamins and supplements specifically recommended based on individual health needs and lifestyle goals, conveniently delivered to consumers’ doors.
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2. Based on an individual’s age, gender, and personal and family health history, GNC will create a science-backed wellness plan curated with the industry’s leading vitamins and supplements to aid consumers in their quest for healthy living.
3. The vitamins and supplements included in GNC4U packs are made from the highest-quality raw materials and ingredients available. GNC works to ensure these ingredients meet quality standards and give consumers the best products and results.
4. In addition to the vitamins and supplements, GNC4U provides an in-depth diet and exercise program customized for a consumer’s individual wellness needs and designed for what their bodies require to achieve peak performance. Whether the goal is to manage weight or to improve heart health, focus, or sleep, GNC4U offers a plan for anyone seeking a healthier lifestyle.
5. Ryan Ostrom, chief brand officer of GNC Holdings, Inc., said, “When it comes to wellness, everyone has different aspirations that no single nutrition plan, exercise routine or vitamin and supplement regimen can help achieve. For over 80 years, GNC has been a leader in innovative offerings for living well, and GNC4U is just the first step in our quest to provide the most personal nutrition solutions for today’s consumer.”
6. GNC4U takes personalization to the next level by allowing consumers to share genetic information via a GNC4U DNA Test kit or provide previously sourced DNA information. This unparalleled offering for a vitamin and supplement subscription service looks at an individual’s genetic traits, such as fat metabolism, in addition to their goals to create a wellness plan uniquely tailored for them.
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7. While packs are tailored to each individual, all packs will include up to eight different vitamins and supplements, which are divided into once or twice daily packets.
8. The following is how GNC4U works:
- Customers visit https://www.gnc4u.com and take the free lifestyle quiz, which focuses on wellness, sports nutrition, and weight management.
- Based on the individual’s responses, GNC scientists build a customized vitamin and supplement, exercise, and nutrition plan which can be accessed in their personal online wellness dashboard. Here, consumers order their personalized daily packs.
- GNC ships a 30-day supply of personalized daily packs. The package will arrive with the consumer’s name on it for an extra personal touch.
- A new 30-day supply is automatically shipped each month, no additional work required. Just like the vitamin and supplement plan itself, the subscription pricing is based on individual needs.
Launches Mad Pony Energy Drink
9. In late December 2019, GNC launched Mad Pony Energy, available exclusively at the retailer and on GNC.com. Packing a punch with nature-based extract NeuroFactor, 200 mg of caffeine, and no sneaky sugars, this new beverage delivers unbridled energy and mad flavor to tackle anything during the holiday season and beyond.
10. Mad Pony is available in three flavors: Cherry Berry, Orange Mango, and Watermelon. The energy drinks are available to purchase as individual 16 oz. cans (MSRP: $2.49) or in a pack of ponies (MSRP: $25.99 for a case of 12).
11. Mad Pony Energy contains a unique blend of high-quality ingredients including:
- 200 mg of all-natural caffeine for intense focus, and taurine;
- Essential vitamins such as B6 and B12 as well as CoQ10 for overall energy production, mental and heart health;
- Nature-based extract NeuroFactor, which may impact Brain-Derived Neurotrophic Factor (BDNF), a key neuroprotein involved in overall brain health;
- GABA, a naturally-occurring amino acid that works on neurotransmitters and brain function; and
- No sugar.
12. “I couldn’t be more excited to let MAD PONY™ out of the stable,” said Ryan Ostrom, chief brand officer of GNC Holdings, Inc. “We harnessed an opportunity to use our expertise in nutritional science, and an established supply chain of quality ingredient sources, to create a superior energy drink that we can stand behind. GNC MAD PONY™ is a fun new brand that encourages people to live well and embrace who they are, and not follow someone else’s rules. We like to call it, living the ‘Get Mad. Buck Hard.’ lifestyle – go wild, be eccentric and be proud.”
13. To inspire people to show off their authentic lives, GNC launched the #BuckHardChallenge on TikTok. Capitalizing on the social platform’s inherent dance challenge trend, fans were encouraged to crack open a can of Mad Pony and share with friends how it fuels their inner weirdness – all set to the song “I Want a Pony” by Krause. Fans who stood out from the herd received a special surprise for participating.
Locks in New Multi-Year Partnership with TV Personality and Performance Training Guru Jay Glazer
14. At the end of January 2020, GNC announced a strategic partnership with Jay Glazer, NFL insider and analyst for Fox Sports, MMA coach/trainer, and owner of Unbreakable Performance Center, a gym known for training some of the world’s top celebrities and athletes.
15. GNC’s expertise in nutritional science and an established supply chain of quality ingredient sources, combined with Glazer’s passion and immense background in fitness and training, makes this an unstoppable duo. Together, GNC and Glazer will inspire people to find their inner champion and achieve personal success to get well, stay well, and live well.
16. According to Ryan Ostrom, chief brand officer of GNC Holdings, Inc., “We share the same commitment as Jay. Through his Unbreakable Performance gym and our innovative products, we fuel people to become the best versions of themselves through hard work and smart recovery. Personalization and commitment-driven results are at our core. Coupled with the expertise of our coaches, we believe that anything is achievable with courage, support and a will to succeed.”
17. Inspired by his Los Angeles-based gym, Glazer and GNC are co-developing a new line of pre-workout and recovery products called “Unbreakable Performance Fueled by GNC” that will be available later this year.
18. “GNC is one of the world’s leading brands in nutritional supplements, and their innovative approach to health and fitness made them the perfect partner,” said Glazer. “Together our passion, determination and innovation represents the best in exercise, recovery, nutrition – and all around living well.”
19. Both partners are also united by their support for the nation’s veterans and using fitness as a tool to transition them to civilian life – GNC through its Live Well Foundation and Glazer through his nonprofit, Merging Vets & Players (MVP). A percentage of all “Unbreakable Performance Fueled by GNC” sales will benefit MVP, which brings veterans and former professional athletes together in their transitions to life after the uniforms come off.
20. GNC began as a small health food store called Lackzoom, which was founded by David Shakarian in 1935 in Pittsburgh, Pennsylvania. Lackzoom specialized in yogurt, a food that Shakarian’s father helped introduce in the United States, but also sold other healthy foods such as honey, grains, and “healthy sandwiches.”
21. Shakarian’s store did well enough that he was able to open a second store six months later. Unfortunately, both of Shakarian’s stores were completely destroyed during the 1936 St. Patrick’s Day flood. Undeterred, Shakarian opened a new health food store the following year and eventually started shipping health foods and later vitamins and prescription drugs throughout the country. This was the beginning of the GNC of today.
22. Shakarian’s business thrived over the next few decades especially during the 1960s when people began really focusing on their fitness. To keep up with demand, Shakarian opened more stores around the United States and changed the company’s name to General Nutrition Centers (GNC).
23. By the early 1980s, GNC had grown to more than 1,000 locations around the country. GNC also began producing its own vitamin and mineral supplements as well as foods, beverages, and cosmetics. In 1984, Shakarian stepped down as CEO, but continued as chairman until his death later that year.
24. Following Shakarian’s death, GNC changed owners several times. The company was sold to Royal Dutch Numico in 1999. Then in 2003, GNC was acquired by Apollo Management. Just a few years later, GNC was sold to the Ontario Teachers’ Pension Plan and Ares Management.
25. More recently, in 2018, Harbin Pharmaceutical Group Holding Co., a company controlled by the Chinese government, agreed to acquire an approximately 40% stake in GNC. The next year, GNC announced that it would be shuttering 900 mall locations in 2020 due to slumping sales.
Entrepreneur’s Franchise 500
26. GNC ranked No. 195 on Entrepreneur’s 2020 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of GNC franchise costs, based on Item 7 of the company’s 2019 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on GNC’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 1,084
- Outlets at the End of the Year: 1,178
- Net Change: +94
- Outlets at the Start of the Year: 1,178
- Outlets at the End of the Year: 1,099
- Net Change: -79
- Outlets at the Start of the Year: 1,099
- Outlets at the End of the Year: 1,041
- Net Change: -58
- Outlets at the Start of the Year: 3,374
- Outlets at the End of the Year: 3,293
- Net Change: -81
- Outlets at the Start of the Year: 3,293
- Outlets at the End of the Year: 3,173
- Net Change: -120
- Outlets at the Start of the Year: 3,173
- Outlets at the End of the Year: 2,984
- Net Change: -189
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
- Below is an historical financial performance representation that is based on information from existing franchised GNC stores that have been open for business to the public within the United States for at least one year during a one-year measuring period from January 1, 2018 through December 31, 2018.
- As of December 31, 2018, there were 1,041 franchised GNC Stores that were open and operating in the United States. Of those 1,041 franchised GNC Stores, 1,013 of them had been in business continuously from January 1, 2018 through December 31, 2018, and the franchisor used the financial performance data from those 1,013 franchised Stores for that period in arriving at the financial performance representation below.
- The financial performance representation does not include information for franchisees who were terminated, reacquired, not renewed, or left the system for other reasons during the 2018 calendar year, nor does it include information from GNC stores operated by the franchisor or GNC/Rite Aid or from GNC stores located on military bases.