Only One In Five Americans Belongs To A Gym!
Entrepreneur|Startups Spring 2018

But with aggressive expansion strategies and low membership costs, clubs like Planet Fitness, Crunch, and Anytime Fitness think they can double (or even triple) that, and franchisees are lining up to get in on the action.

Clint Carter

BACK IN FEBRUARY 2012,

Anna Dey called her dad in Cleveland with what seemed like an impulsive request. “You’re not happy with your career, and you’re still 10 years away from retiring,” she said. “I want you to help me open a gym.” 

His reply? “Hell, no.” 

She’d expected as much. Her dad, Von Hollingsworth, had spent 30 years in the electronics-distribution industry. He had a comfortable, stable career, and he wasn’t going to throw it away on a lark. But to Dey this was no lark. Then 24 and just two years out of college, she was a sales manager for Altria, which used to be known as Philip Morris. Basically, she sold cigarettes. But her real passion was fitness. All day, she thought about her workouts. And when she worked out, she envied the manager of her gym, thinking, Gosh, I wish I had that job. She hired a personal trainer, then got certified as a trainer herself.

Eventually, Dey decided she wanted to open a gym of her own. The way she saw it, she had the drive and sales-training charisma to be a successful gym owner. She just needed someone with business smarts and the savings to pitch in. Her father fit the bill.

A month after the initial rejection, Dey sat her parents down for a formal pitch. She presented cash-flow and startup-cost estimates for different gym models, along with reports showing that Americans were becoming increasingly interested in fitness. She showed them a building she’d picked out in Concord, Ohio, and she compared the nearby residents with those in Columbus, which was similarly affluent but boasted far more gyms per capita. Finally, to prove her commitment, she told her parents, “If you provide the startup costs, I’ll move back home and work 12-hour days for free until we start turning a profit.”

Hollingsworth paced while his daughter spoke. The plan seemed too wild, too expensive. He was ready to shut it down until his wife turned to him. “You need to make this work, Von,” she said.

That was it. Within a few months, the father-daughter team was in contract with Anytime Fitness, a Minnesota-based outfit with 4,000 locations globally. They signed a lease on the 5,500-square-foot building Dey had picked out and started stuffing grand-opening flyers into newspaper boxes around town. By the time the gym opened later that year, they’d already secured 196 one-year memberships. A year later, they had 1,000 members, and Dey and her dad were both earning more than they had at their previous jobs. Plus, they were happier and healthier

“We both know how beneficial this has been for our lives,” Dey says. “Franchising is the best decision we made.”

IT’S AN EXCITING time to be selling fitness: The U.S. market currently brings in about $31 billion annually. About one in 10 of those dollars comes through a franchise, but in recent years, franchise growth has outpaced the overall industry. According to the market research firm IBISWorld, the fitness market as a whole will grow at 1.5 percent between now and 2022, and franchise brands will grow about twice that fast, as they become stronger and entrepreneurs look for more turnkey opportunities.

Analysts categorize Anytime Fitness as a midmarket fitness club, which means that, alongside its franchise competitor Snap Fitness, it offers memberships in the $25-to-$74-a-month range. While these gyms are thriving in many locations, the biggest growth is happening at the high and low ends. A report from the International Health, Racquet & Sportsclub Association (IHRSA) found that in 2015, memberships to midmarket clubs grew by 2 percent, while during that same period, premium clubs (with $75 to $99 dues per month) experienced 21 percent growth, and budget-club memberships (less than $25 per month) shot up by an astonishing 69 percent.

On the luxury side, brands like Equinox charge $100 or more per month for fitness bundled with spas, cafés, and juice bars. These tend to be corporate-run facilities that don’t franchise. But on the budget end, franchise opportunities abound. Growth is robust among low-frills, high positivity gyms selling memberships for $10 and $20 a month.

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