Franchises

Jazzercise Still Thrives After 50 Years... and Its Startup Fee Is Only $1,250

The workout franchise is still growing, still evolving and still dancing.
Jazzercise Still Thrives After 50 Years... and Its Startup Fee Is Only $1,250
Image credit: Courtesy of Jazzercise
Magazine Contributor
13 min read

This story appears in the September 2019 issue of Entrepreneur. Subscribe »

It is 9:45 a.m. on a Wednesday morning in Oceanside, Calif., and the crown jewel of the Jazzercise class schedule is hitting its stride. It’s called Dance Mixx, and it’s taught by Shanna Missett Nelson, the daughter of Jazzercise’s founder and CEO. Nelson says that Jazzercise prides itself on having “a little sprinkle of everybody in class,” and the more than 60 women who gather in this studio next to a Buffalo Wild Wings indeed represent a little bit of everybody. There’s one in the front row with hair dyed neon red, another near the windows dancing in her sandals, a lanky 18-year-old in sleek, forest-­green leggings, and a group of 40-somethings who call themselves the Mom Squad, who whoop and rib each other throughout the session.

“We try to come Monday through Friday,” explains Stephanie Rosenthal, one of the moms, as she cools down after class. “Saturdays are for sports, and Sundays are for church.” She first took to Jazzercise three years ago after she had a baby, but her friend Mindy Batt -- another Mom Squadder -- had been trying to get her to come for 20 years. “You get made fun of at first because they think it’s for old ladies,” says Batt. Rosenthal rejoins: “But I started coming, and my friends said, ‘You look amazing -- what are you doing?’ ”

Such is the challenge and opportunity for Jazzercise, the brand that practically created the fitness class as we know it -- but that doesn’t always feel like it’s kept up with industry changes. The 2019 fitness landscape teems with boutique studios, data tracking technology, and organized feats of strength. Jazzercise, meanwhile, has fallen out of the cultural conversation -- enough so that people may be surprised to learn it still exists. But it does, and it attracts millions of fans. The company did $98 million in sales in 2018 and has almost 1,800 locations, represented in every state in the U.S. and 25 countries.

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How is that possible? The answer, it seems, can also be found in Nelson’s class. Nelson is 50 years old, now the president of Jazzercise, and teaches three days a week -- and her class feels local and small-knit. She carries a big, white smile, a high blonde ponytail, a six-pack, and a buoyant, can-do demeanor. She punctuates her choreography with rhetoric that ranges from the instructional (“Right shoulder back!”) to the quotidian (“Is anyone going to the Shawn Mendes concert?”) to the empathetic (“Are these sit-ups over yet?”). At one point, Nelson calls out a woman in the class who would be teaching her daughter at school in the fall. Later, she brings someone up on stage to dance for her birthday.

All of which is to say: While Jazzercise has been overtaken by faster-growing, polished operations, it has clung tight to the comfort of familiarity. “We try to create an atmosphere that’s friendly, nonjudgmental, and noncompetitive: Come on in and do what you can; make it work for yourself,” says Judi Sheppard Missett, the company’s founder and CEO. “People get a sense of community out of it. They meet each other in that class and become friends. They’ll have a big luncheon on a holiday where 50 people will go to the Olive Garden.”

It all works for now. The question is, will it work forever?

Image Credit: Cara Robbins

Jazzercise didn’t always have a snappy name. It began with a longer one: Jazz Dance for Fun and Fitness.

It was 1969, and Missett was teaching dance classes for moms in Chicago. But people kept dropping out. As she sought ways to keep them in class, she came upon the insight that would transform her life: Women aren’t interested in being trained like dancers -- they’re interested in looking like them, having fun, and feeling good. Missett simplified routines, taught facing participants (instead of with her back to them, like a dance instructor), and took an interest in their lives. 

Her timing was perfect. The previous year, Kenneth Cooper’s book Aerobics began to demystify fitness for Americans, explaining what exactly constituted aerobic exercise. “Cooper defines fitness as something that involves your heart, gets you sweaty, and gets you red in the face, and Judi plugs into that moment,” says Shelly McKenzie, fitness historian and author of Getting Physical: The Rise of Fitness Culture in America. “If you look at what was acceptable for women to do during that time for exercise, it’s not weights and jogging.”

Missett, her journalist husband, and their 3-year-old daughter, Shanna, soon moved to Oceanside, Calif., and brought Missett’s new “Jazz Dance” class with her. She started teaching so often at a Parks and Recreation Center in Carlsbad that the man who cut the checks withheld her pay for four weeks, embarrassed that he was writing such large sums to a woman. Missett threatened to go to the press, but she also saw an opportunity to remove the bureaucratic hitch entirely. She’d sign up and bill participants herself, and cut the rec center a percentage for rent.  

This business agility -- what Illinois-born Missett calls her Midwestern work ethic -- would prove key to the growth of Jazzercise. By 1977, her schedule of 25 classes per week caused her to develop nodules on her vocal cords. She realized she needed to hire instructors but wondered how she’d possibly train enough of them. She turned to a new technology: VHS cameras and players were just arriving in the U.S., so Missett started using them to film her routines. In 1980, still hoarse from teaching, she implemented the first wireless lapel microphones, and then, in the 1990s, the first headset mics, pioneering their use in the fitness industry. Around that time, Jazzercise started integrating weights into the workout. (Today, a class promises a cardio workout that integrates strength training with free weights and resistance bands.)

Jazzercise would become a uniquely female story -- one that hinges on interpersonal networks, the realities of child-rearing, and ingrained resourcefulness. “Women are the organizers of life,” says Mary Wadsworth, who owns two Jazzercise centers in Houston. “So you put us in business and we just do that.” From the beginning, Missett offered free childcare. “I thought if I need it, all these moms need it, too,” she says. (The service remains at many centers today.) This helped draw military wives from the nearby Navy base in San Diego; then, when their husbands would be transferred to a new post, the wives would train as Jazzercise instructors and open a studio in their new hometowns. 

Image Credit: Courtesy of Jazzercise

By 1982, there were more than 1,000 certified instructors teaching classes in almost every state. This raised red flags with tax attorneys who knew the IRS would not look kindly on the fact that Missett treated her far-flung instructors as independent contractors. So Jazzercise made two decisions that would come to determine its future. First, it converted all those instructors into franchisees. Then, to maintain Jazzercise’s low barrier to entry, Missett set minuscule startup fees for future franchisees. That kept the door wide open for women of all kinds, and, perhaps as a result, Jazzercise and Missett became widely beloved and world-famous. She led a performance at the 1984 Olympics, danced at the Statue of Liberty rededication ceremony in 1986, and was featured at the 1991 Great American Workout alongside Barbara Bush and Arnold Schwarzenegger.

This low barrier to entry has helped Jazzercise survive in an era of change. Its fee now is only $1,250 -- plus whatever costs might be incurred from renting a space, securing liability insurance, buying a microphone and possibly a sound system, and paying for songs. By contrast, building out a Pure Barre studio requires initial costs of between $198,650 and $446,250. Anytime Fitness, considered a relatively inexpensive gym brand, will set you back at least $78,012. For plenty of women who want to run their own fitness business, most brands just aren’t available to them. Jazzercise is.

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That means Jazzercise franchises are a varied swath of class sizes, prices, locations, and ambitions. Some classes are held in YMCAs or school gyms, and some in dedicated centers with nine classes a day. For many franchisees, Jazzercise is a side hustle. Natalie Feilland, a 34-year-old instructor in Oregon, is a classic case. She teaches two classes a week to supplement her livelihood as a farmer. She likes getting paid to work out, and it’s proven a reliable source of income as the circumstances of her life evolve. “I’ve moved several times,” she says, “and with Jazzercise, I knew I could always get a job.” Because the company is so flexible, its franchisees’ revenue varies widely. Some women do just $4,000 in gross sales in a year, but the top earners -- ­people for whom Jazzercise is a full-time pursuit -- are bringing in up to $600,000. The company takes 20 percent of a franchisee’s sales.

This arrangement has also created great longevity. Some franchisees have been teaching classes for decades, shrinking their workload as they (and their customers) age. But only one Jazzercise instructor has been teaching since the very beginning: Missett. At age 75, in addition to leading the company, she leads classes three times a week. 

Image Credit: Courtesy of Jazzercise

“I guess I never doubted myself,” Missett says, reflecting upon what it took to build Jazzercise. “I knew I had this incredible group of people around me. I always believed you need people who lift you up, who are positive, smarter than you, and believe in what you’re doing.” 

It’s late June, and Missett has just wrapped up teaching a low-impact fitness class, where a group of septuagenarians lifted weights to a Billie Eilish song. Now she’s sitting in a conference room at her company’s headquarters in Carlsbad, just outside San Diego. She’s tall and very tan, with striking blue eyes and blonde hair that swoops upward. Her nails are painted glittery pink, and she reaches for a wineglass that’s embossed with her initials and filled with cherry Dr. Pepper. Soda, she says, is her only vice, and she has always believed that if you have nice glassware, you should use it.

Missett belongs to several elite organizations for women in business, but so far, she hasn’t met another female founder who has maintained complete control of her company for as long as she has. She’s still involved in every aspect, right down to choreographing new routines for her instructors, which happens every 10 weeks. 

In many ways, Missett represents the enduring charm of Jazzercise. The brand runs on personal relationships, and here she is, still the face of her company all these decades later. But the charm of the personal relationships can also be an Achilles’ heel. It prevents longtime owners from charging what they should for classes, for example. Customers who entered at a membership fee 20 years ago may pay outdated fees -- and because of how their agreement is structured, Jazzercise can’t require owners to charge a minimum.

Two years ago, the company had an internal reckoning. There were instructors who needed to retire and facilities that weren’t up to snuff. Jazzercise made owners send in pictures of their facilities and required changes. Some balked and closed down. For those who remained, the company enacted something called the Promise. “The industry is harder than it’s ever been,” says Nelson. “We need to be at the top of our game teaching, and with our facilities, so we made a promise to franchisees that we’ll ensure consistency from our end, but they’ll need to make sure it happens from theirs. We made those changes so that, hopefully, when someone comes to a Jazzercise class, it’s on par with all the other programs out there.”

The company is also encouraging its franchisees to scale. Some see instruction as a business and some as a hobby, a community, or their own narrative in the gig economy. That’s been good for keeping people involved with the brand but not so good for the bottom line. A part-time franchisee, after all, is bringing in part-time money. So Jazzercise has been promoting an incentive program called the President’s Club, which gives high earners part of their franchise fee back at the end of the year. The program began decades ago. “In a time when we were losing franchisees and decreasing in sales, it made people feel more committed,” says Nelson. “They stayed, and our sales increased.”

Image Credit: Courtesy of Jazzercise

While the company continues to be profitable, it’s aware of its aging demographic and that 20-somethings are much more likely to try different fitness classes than devote decades step-touching in one community center. Missett says they plan to launch an on-demand video service for $19.99 a month before the end of 2019, with the goal of using it as a gateway workout to drive people into studios if one is nearby.

Related: These Franchisees Really 'Kicked It' in Their Choice of a Fitness Franchise

Jazzercise also realizes that its brand may not resonate with the next generation. So it’s exploring an offshoot fitness brand aimed at women in their 20s. As Nelson sees it, promoting the name isn’t nearly as critical as promoting what the brand represents. “It’s really important that there’s human contact, and that you go to class, that you’re with people,” says Nelson. “I feel like that’s never going to go away, and I want Jazzercise to continue to be that place for people.”

But in the meantime, the Jazzercise legacy goes on, and so does Missett. In June, Jazzercise held an event at the San Diego Convention Center, where 3,000 fans gathered to celebrate its 50th year. Missett stood onstage with her daughter and granddaughters -- all dancers -- as they watched tributes and choreography. Afterward, in interviews, many instructors broke into tears talking about it.

Missett admits she’s starting to think about stepping to the side. She’d like to spend time with her dogs and her husband, and travel. She dances every day, however, whether or not she’s working. “It’s an absolute joy, to dance,” she says at the company headquarters. “When you start to move physically, it gives you the courage to move in different directions in your life.”

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