In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Anytime Fitness franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for an Anytime Fitness franchise, based on Item 7 of the company’s 2020 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an Anytime Fitness franchise, based on Items 5 and 6 of the company’s 2020 FDD
- Section IV – Number of franchised and company-owned Anytime Fitness outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD
- Section V – Presentation and analysis of Anytime Fitness’ financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:
- 2019 average, median, lowest, and highest monthly membership fees, pay-per-visit revenues, personal training revenue, and total revenue for the 647 Anytime Fitness centers that had (i) operated the entire year and (ii) implemented the Training Suite to the point that they had an average of at least $1,500 per month each month in revenues during the year from the program
- wages and payroll, personal training expense and payroll, rent and CAM, royalties, Training Suite training fees, local advertising, advertising/marketing fund, Healthy Contributions, bad debt, processing/credit card fees, utilities, insurance, proximity cards, technology support, travel and training, and miscellaneous expenses, based on the expense information from the 14 company-owned Anytime Fitness full-service centers, as well as information provided to Anytime Fitness by its franchisees concerning their leasing costs
Section I – Background Information
24 Things You Need to Know About the Anytime Fitness Franchise
Becomes First and Only Franchise with Locations on All Seven Continents
1. Anytime Fitness kicked off 2020 with a bang when it announced that it had made history with the launch of its Antarctica gym. Onboard Antarctica’s newest cruise ship, Magellan Explorer, Anytime Fitness is now the only franchise to have locations operating on all seven continents.
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2. Tickets sold out in June 2019 for the Magellan Explorer’s inaugural sail. The cruise ship left shore for its first voyage on Thursday, November 28. Anytime Fitness co-founders Chuck Runyon (CEO) and Dave Mortensen (president) were onboard the Magellan Explorer during its inaugural sail.
3. Runyon said, “We’re truly taking our mission, ‘To improve the self-esteem of the world,’ to another level. It’s something our brand takes incredibly seriously, and it’s up to our leadership team to make our vision a reality. Being the only franchise to operate on all seven continents and land a gym on the coldest, windiest, driest region of the world was no easy feat but was a necessary step in contributing to our mission. Having the opportunity to be the featured gym on the one-of-a-kind Magellan Explorer was the perfect way to bring health and wellness to the South Pole.”
4. The gym is equipped with top-of-the-line cardio and strength-training equipment from Life Fitness, along with a wide array of free weights. Every guest aboard the ship will have access to the facility 24 hours a day, allowing the opportunity to keep health and wellness a priority while enjoying their travels.
5. The Magellan Explorer departed from Punta Arenas, Chile, for a trip spanning 10 days. The itinerary is filled with exploration to help advance research and development of the region. Travelers first cross the famous Drake Passage, a great spot to witness the migration of different sea birds and species of whales. The goal is to explore off ship as much as possible, so guests are able to venture on excursions twice a day to visit scientific research stations, check out wildlife areas, kayak, snowshoe, and experience the region to the fullest.
6. Alongside its Anytime Fitness gym, Magellan Explorer is equipped top to bottom with amenities to help guests feel surrounded by adventure. The vessel was not only constructed for comfort during exploration, but with the environment in mind, as the ship utilizes an energy recovery system to recycle and redistribute heat throughout the ship.
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7. According to Mariano Curiel, Antarctica21’s director of expedition operations, “Magellan Explorer has been designed with input from an international team of polar expedition experts. As the Expedition Leader, it’s been an honor and a pleasure to set off to Antarctica on the inaugural voyage of this spectacular ship, a ship that I have helped design. Together with my team, I look forward to welcoming guests on board Magellan Explorer and to introduce explorers to the majestic beauty of the White Continent.”
8. From anytime to now anywhere, the Anytime Fitness gym provides guests the opportunity to work out and keep health and wellness a priority even while they explore the southernmost continent – sticking to their daily routines, warming up for excursions, building stamina for explorations, or providing a space to stretch and recuperate from adventures.
9. Runyon added, “Our partnership with Antarctica21 is game-changing. Not only have we upped the ante when it comes to accessibility, we’re really bringing the vision of Anytime Fitness to life. Anytime Fitness has come a long way since our first gym opened in Cambridge, Minnesota in 2002. The fact that Dave and I had the opportunity to experience this historic milestone first-hand is almost surreal. But, at more than 4,500 locations on all continents, we continue to push each other to think of even more ways to make health and wellness available to everyone around the globe.”
Implements Anti-Racism Education Following Termination of Trainer Who Promoted Insensitive Workout
10. In mid-June 2020, amid the ongoing protests in the United States that were sparked after the death of George Floyd, Anytime Fitness co-founders Chuck Runyon (CEO) and Dave Mortensen (president) released a joint statement addressing a controversial “I Can’t Breathe” workout promoted by the Anytime Fitness franchise location in Wauwatosa, Wisconsin. After Runyon and Mortensen learned about the incident, the trainer who promoted the “I Can’t Breathe” workout was terminated by the owner of the Wauwatosa location.
11. According to Runyon and Mortensen, the Wauwatosa owner has taken full responsibility for the actions of his location, and he and his entire staff have volunteered to be the first ones to participate in the anti-racism training that Anytime Fitness announced a week before the statement was released. Anytime Fitness will be providing the anti-racism training for all franchise owners across its portfolio of brands. Anytime Fitness is owned and operated by Self Esteem Brands, which also owns Waxing the City, Basecamp Fitness, and The Bar Method.
12. The statement continued, “Under the Anytime Fitness franchise model, owners make independent decisions about local promotional activities for their gyms. However, regardless of their original intent, the actions of the Wauwatosa location were offensive, insensitive and inconsistent with our brand values. We understand the deep hurt that this gym’s actions have caused for many of our members, and we truly apologize that this happened.”
13. Runyon and Mortensen ended their joint statement by saying, “This experience has further galvanized our commitment to anti-racism education within our franchise network. To our employees, franchise owners, members and communities – especially those who are Black, Indigenous, and people of color – we deeply regret this week’s events, and we will continue to learn from these experiences. Our commitment to eliminating racism within our business is stronger than ever.”
Featured on Undercover Boss TV Show
14. In mid-January 2020, Anytime Fitness announced that it was getting ready to be featured in an episode of CBS’ award-winning series Undercover Boss, which was set to air on January 15. Disguised in a blonde wig, false eyelashes, and over-the-top makeup, Stacy Anderson, brand president of Anytime Fitness, embarked on an undercover journey to get an inside-look at the company’s franchise operations.
15. Anderson describes the experience as “eye-opening,” providing new insights and a profound appreciation for team members as Anytime Fitness continues to grow its global footprint and help millions of members lead happy, healthier lives.
16. Anderson said, “As we look to evolve and elevate our brand experience to better compete in a growing competitive environment, there are both great assets we have in our clubs as well as challenges that lie ahead of us. Undercover Boss provided an unprecedented opportunity to identify our company strengths and areas for improvements so we can make refinements as we continue on our aggressive growth path. It became clear from this experience that our assets are in our people who care deeply about their members, their employees and their businesses. They are the heart of this brand and it’s their caring, coaching and connecting with people, and dedication to our business, that will form the foundation for a strong future.”
17. In the episode, Anderson is inconspicuously disguised as a woman working for a papermill company who was displaced by tech updates and is now looking for her second act career. During her undercover mission, Anderson worked as club manager and trainer in various Anytime Fitness gyms. Throughout her journey, she got the opportunity to learn and grow alongside team members on the front line while also getting an inside look at the brand from the perspective of the employee, franchisee, and customer.
18. As a result of her Undercover Boss mission, Anderson has identified various opportunities for enhancements as the brand enters this period of evolution. This strategic insight will allow Anytime Fitness to fine-tune its operations as it continues to stake its claim as an industry leader in the future of fitness.
19. Chuck Runyon, co-founder and CEO of Anytime Fitness, added, “Anytime Fitness is always looking for ways to improve and zero-in on delivering an unmatched member experience, and will continue to push the limits as it grows and innovates – Undercover Boss provided Stacy an unparalleled opportunity to help us do so. As a company, we came away from this experience with an incredible sense of pride for our employees on the front lines. When it boils down to it, it’s our people who have helped us grow our brand to what it is today.”
20. Anytime Fitness was founded in 2002 by Chuck Runyon, Dave Mortensen, and Jeff Klinger in St. Paul, Minnesota. Runyon, Mortensen, and Klinger had first met in the early 1990s while working for the same fitness club. In 1995, they purchased Southview Athletic Club and ran it together for the next six years until they sold it in 2001.
21. While Runyon, Mortensen, and Klinger were running Southview Athletic Club, they also worked for a consulting firm focused on improving under-performing athletic clubs across the United States. After asking gym members what they wanted out of their gyms long-term, Runyon, Mortensen, and Klinger developed the idea for Anytime Fitness.
22. Franchising started right away and Eric Keller, a former Southview Athletic Club employee, became the first Anytime Fitness franchise owner. The next few Anytime Fitness locations were also sold to former Southview Athletic Club employees. Over the next few years, Anytime Fitness grew rapidly around the United States. The first international locations were opened in 2005 in Canada, followed by Mexico and India.
23. By 2010, there were over 1,200 Anytime Fitness clubs and later that year the company announced that it would be expanding to more countries. Today, Anytime Fitness has grown into one of the largest fitness franchises in the world and there are locations in over 32 countries.
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24. Anytime Fitness ranked No. 22 on Entrepreneur’s 2020 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Anytime Fitness franchise costs, based on Item 7 of the company’s 2020 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Anytime Fitness’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 2,231
- Outlets at the End of the Year: 2,355
- Net Change: +124
- Outlets at the Start of the Year: 2,355
- Outlets at the End of the Year: 2,423
- Net Change: +68
- Outlets at the Start of the Year: 2,423
- Outlets at the End of the Year: 2,455
- Net Change: +32
- Outlets at the Start of the Year: 33
- Outlets at the End of the Year: 33
- Net Change: 0
- Outlets at the Start of the Year: 33
- Outlets at the End of the Year: 28
- Net Change: -5
- Outlets at the Start of the Year: 28
- Outlets at the End of the Year: 14
- Net Change: -14
Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis
Historical Results for Anytime Fitness Centers
- Several years ago, Anytime Fitness implemented a Training Suite (also referred to as Anytime Fitness Live Programming), and recommended that Anytime Fitness full-service centers implement this program. In March 2019, Anytime Fitness made the program mandatory for new and renewing Anytime Fitness full-service centers.
- As of December 31, 2019, Anytime Fitness had 2,332 Anytime Fitness centers in the United States, and 647 of those centers had (i) operated the entire year and (ii) implemented the Training Suite to the point that they had an average of at least $1,500 per month each month in revenues during the year from the program.
- The earliest to open of these centers opened in May of 2002 while the last one opened in December of 2018.
- 297 additional centers had voluntarily implemented the Training Suite but had not done so in a manner so as to produce an average of $1,500 per month each month in revenues during the year from the program. Since the average personal training revenue from a member participating in this program in 2019 was $107 per month, Anytime Fitness excluded these centers from its calculations as they were not fully implementing the Training Suite.
- Anytime Fitness also excluded 301 centers that opened after January 1, 2019. Anytime Fitness did not have any centers that had implemented the program and closed during the year.
- Anytime Fitness gathered information provided to it by these centers to compile the information below concerning the revenues from various sources in 2019. Those centers received monthly revenue from 3 primary sources.
- One source is monthly membership fees from ongoing members. Another source is pay-per-visit fees, which are typically paid by employers or insurance companies who pay a nominal fee on behalf of their employee or insured for each visit. A third source is personal training revenue.
- The following represents information on regular monthly membership fees, pay-per-visit fees, and personal training fees reported to Anytime Fitness by these 647 Anytime Fitness centers. The information has not been audited, and Anytime Fitness did not independently verify the information.
- A fourth source of revenues is one-time enrollment fees for new members, but these fees are not charged by all centers and the fees are not consistent between centers. A fifth source is vending income, which some centers do not have and is, in any event, minimal. Thus, Anytime Fitness does not provide information on these additional revenue sources.
Monthly Membership Fees