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Fitness Franchises Muscle Up

January 6, 2012
URL: http://www.entrepreneur.com/article/222563
Barre3

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Barre3

Headquarters: Portland, Ore.
Year it began franchising: 2010
Number of franchises: 10
Startup costs: $200,000 to $300,000

By combining the three disciplines of yoga, Pilates and ballet barre work, Barre3 classes strive to help participants achieve the strength, length and grace of a dancer. After a decade running group-exercise programs and developing global sales and marketing for another club, 24 Hour Fitness, founder Sadie Lincoln debuted the concept in Portland in 2008. Three years later Barre3 is going global with 21 franchised studios open or in development domestically, four studios in the Philippines and one studio slated to open in Australia in 2012. Couch potatoes needn’t apply; would-be franchisees should have at least five years of experience in dance, yoga or group exercise.
 

Anytime Fitness

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Anytime Fitness

Headquarters: Hastings, Minn.
Year it began franchising: 2002
Number of franchises: 1,764
Startup costs: $46,000 to $321,000

Anytime Fitness is the 800-pound gorilla (all muscle of course) of fitness franchises. Even in the face of the recession this 24/7 concept has opened roughly 300 clubs a year and is now on pace to open its 2,000th location in 2012. At the same time new clubs are opening, per-club membership has steadily increased. In 2007, the typical club had 650 members; in 2011 it was 740. Thanks to state-of-the art technology, the clubs needn’t be staffed around the clock. As a result, payroll represents just 10% of operating costs. Virtually no market is too small. The Anytime Fitness Express model, for example, is designed for clubs under 2,500 square feet and in markets with fewer than 5,000 residents.
 

Snap Fitness

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Snap Fitness

Headquarters: Chanhassen, Minn.
Year it began franchising: 2004
Number of franchises: 1,186
Startup costs: $76,000 to $362,000

Former racquetball pro Peter Taunton founded Snap Fitness in 2003 with the idea that a large segment of gym-goers didn’t want to pay for racquetball courts, steam rooms or smoothie bars. What they wanted, he surmised, was a small, convenient and clean club that offered cardio and weight equipment – sans mandatory contract. Instead, members pay month-to-month for facilities that typically top out around 3,000 square feet. He was on to something. The franchise is adding 15 to 20 new clubs a month. Franchisees enjoy royalty and marketing fees that are set at flat rates, rather than a percentage of sales. While the club works as a bare-bones concept it has room for such value-added services as personal training, tanning and wellness programs.
 

Koko FitClub

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Koko FitClub

Headquarters: Rockland, Mass.
Year it began franchising: 2008
Number of franchises: 58
Startup costs: $143,000 to $258,000

Rather than pay $50 or more an hour for a personal trainer, members of Koko FitClub get coached by a virtual fitness guru using the company’s patented “Smartraining” system. For a monthly fee, typically $79 depending on the market, members gain access to the club and receive a USB drive that contains information about who they are and what they did during their last workout. When they plug the device into any of the club’s cardio or strength machines, they get personalized instructions on how long and how intensely they should work out, and can track their progress online. (Turns out, technology might just improve how we work out.) With nearly 250 franchises sold, Koko FitClubs expects to have 120 clubs open and operating by mid-2012. (Updated Jan. 9)
 

Planet Fitness

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Planet Fitness

Headquarters: Dover, N.H.
Year it began franchising: 2003
Number of franchises: 473
Startup costs: $1.2 million to $1.7 million

Average monthly membership fees of just $15 and a “no grunting or weight throwing” policy have helped Planet Fitness capture a growing share of clients looking to be fit and frugal. In 2011, membership in the no-frills, no-attitude gym increased a whopping 30% to 3 million. For franchisors that kind of volume translates into average annual membership revenue of $1.7 million per club versus about $1.2 million for the industry average. Meanwhile, average payroll expenses of 28% are quite a bit leaner than the industry’s average of 43%. The higher start-up costs are attributed to considerably larger gyms, which range from 17,000 to 25,000 square feet and can have 80 to 100 pieces of cardio equipment and two full circuits of strength equipment.
 

Welcyon

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Welcyon

Headquarters: Edina, Minn.
Year it began franchising: 2011
Number of franchises: One franchise, plus two corporate-owned locations
Start-up costs: $125,000 to $225,000

One of a few franchises catering to the over-50 set, Welcyon has customized the gym experience for clients who are interested in low-impact strength and aerobic workouts in a non-intimidating environment. Coaches are trained to work with all levels of fitness and experience, while fitness programs are geared toward the needs and wants of seniors. Air-powered strength-training equipment reads members’ keycards to automatically set the appropriate weight load and track their progress. The concept appears to be working: Welcyon boasts an impressive 80 percent membership retention rate, and doubtlessly some fit, healthy and happy clients.