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Anytime Fitness
Anytime Fitness, based in West St. Paul, Minnesota, has grown rapidly from its founding in 2002. The unique concept has already fielded 40 franchise operations with more than 18,500 members. Cofounder and CEO Jeff Klinger and his partner, Chuck Runyon, created the company because of what they regarded as the unmet need for small full-service fitness centers that, while offering 24-hour access, also minimized staffing costs, traditionally a major club expense.
By making use of technology, Anytime Fitness provides members with a 24-hour workout window without requiring a 24-hour front-desk staff. 'Club members simply swipe their membership card at the door, and a computer checks the database to see if they're currently in good standing,' explains Klinger. 'If so, the door lock opens, and the member enters; but, if they're not current with their payments, they’re denied entrance.' The swipe-card process can also be used to access tanning services.
The system makes use of security monitors to ensure members’ and the club’s safety, and also boasts an e-mail retention program; if the member hasn’t used the club for a while, an e-mail is sent to them to invite them to return. Some 60% of Anytime Fitness’ current members are women professionals between the ages of 25 and 60.
Klinger expects to have 180 franchises operating by the end of the year.
Bally Total Fitness
While the industry’s leading franchise companies—e.g., Gold’s Gym International and Curves International—first made their mark in the U.S. and have only recently begun to explore opportunities overseas, Bally Total Fitness (NYSE: BFT), based in Chicago, launched its franchise program with international markets in mind. In 1995, the company, which had built, owned, and operated all of its domestic facilities, turned to franchising to plant the Bally brand, in a cost-efficient way, in countries (or areas in the U.S.) with modest, but growing, demand. It utilizes a regional model, permitting a franchisee to establish a number of Bally clubs within a specified territory. It now has one franchised operation in the Bahamas, one in Mexico, three in South Korea, and nine in China, as well as six in the U.S.
Bally supports its franchisees, in part, with its own proprietary Club-Management System, which provides automated back-office administrative services, encompassing customer service, contract processing, dues collection, membership renewal, and management analysis. Franchisees pay 4% of annual gross revenues to use it.
The Blitz
Taking his cue from the remarkable success of women-only miniclubs, but adding his own spin, Scott Smith, the founder and CEO of The Blitz, has produced a similar product for men. Scott introduced his concept in July 2002 and, by January 2003, his first franchise was open for business; by December of that year, he had 52 sites—35 in the U.S. and 17 in Canada—and was negotiating rights in India and Korea.
'As the owner of two women-only fitness centers, I was constantly being asked, 'Why isn’t there something like this for my husband, for men?’' he explains. 'The idea made a great deal of sense, particularly given the fact that men lead the statistics with respect to heart disease and a whole host of other degenerative diseases.' Utilizing his kickboxing, martial arts, and strength-training expertise, Scott combined a hydraulic strength circuit—the heart of most women-only operations—with a heavy bag to create an efficient guy-specific regimen: The Blitz 20-Minute Total Fitness for Men. 'As the name suggests, the ‘blitz’—an all-out attack on a quarterback—allows members to make the workout as aggressive as they like.'
The Blitz targets men between the ages of 30 and 50 (generally busy, family-oriented executives) and sedentary 50-plus males. Smith describes them as 'guys who are tired of competing with ‘Joe Muscle’ and waiting for equipment at the gym, but who still want to tone up, trim down, and get healthy.' Smith expects to be at 300 locations by the end of the year.
Blue Bead Fitness
Brad Downing, an attorney, former professional athlete, and the founder and CEO of Blue Bead Health Clubs, says that, in 2001, when he created the company, his goal was 'to blend the best features of existing clubs to create a unique boutique-style facility.' This fitness franchise, he explains, offers a number of advantages, including a relatively modest startup cost ($99,000-$255,000 depending on build-out), and its unique name, signage, interior décor, and approach to merchandising.
'We’ve negotiated national-account pricing with all of our vendors and pass all of the savings along to our franchisees,' he points out. 'We’ve also created a national charitable event to benefit the franchisee's community, which generates sales and helps establish a strong local presence. At the moment, we’re concentrating on developing proprietary items for our clients, including a point-of-sale/membership software system, and a Web-based nutrition program tied to a line of weight-management products.'
Blue Bead, based in Fort Myers, Florida, targets professionals ages 25-65, with a median age of 40. However, Downing notes, 'This concept can be successful in any market. As a result, some franchises will have a much younger or, conversely, much older median age.' Currently at 32 locations, Blue Bead is expected to have 60 sites by the end of the year.
Butterfly Life
A 24 Hour Fitness brand, Butterfly Life is one of the newest and most novel entries in the women-only fitness market. The franchise, introduced in December, takes a 'balanced approach to women’s health,' focusing on 'mind, body, and spirit.' As a result, in addition to traditional fitness and weight-management programs and equipment, Butterfly Life also offers club members access to experts in a variety of fields, including nutrition, psychology, beauty, and fashion.
The company's founders, executives, and directors are a blue-ribbon group: Mark Golob, a founder and CEO, is also the founder and CEO of the Linda Evans Fitness Centers, a women-only operation with 18 sites in California. Bruce Fabel, the president, is a former executive vice president of Calvin Klein Global Retail and vice president of Nike Global Retail. Butterfly Life’s other founders and directors include: Thomas Gergley, the president of the Linda Evans Fitness Centers and former president of the New York Health and Racquet Club; and Mark Mastrov, the founder, CEO, and chairman of 24 Hour Fitness.
Contours Express
Contours Express, based in Nicholasville, Kentucky, is a fitness concept created for, and targeted at, a very specific member demographic—working women and stay-at-home moms ages 25-65. Like those of other women-only franchises, the Contours Express program makes use of a strength and cardio circuit (the 16-piece CardioFit system) that provides a comprehensive workout in a short period of time. 'Our machines are built for women,' notes founder and CEO Daren Carter. 'They’re scaled down in size to fit a woman’s body, and provide both positive and negative resistance; the seats don’t need to be adjusted, and the weights can be changed easily from a seated position.'
Contours Express provides extensive educational and support services for its franchisees, including: assistance with real estate selection and club design; an intense four-day tutorial at the company’s 10,000-square-foot training facility; annual conventions; and quarterly, camera-ready marketing materials. In addition, when a new club opens, the company dispatches a team of advisors to deliver three days of on-site instruction.
Contours Express has grown to 270 units during the past six years, and expects to be at 400 locations by the end of the year.
Curves International
Curves International is the market leader not only in terms of women-only fitness, but also in the fitness-franchise category overall. The company was created by Gary Heavin, the CEO, and his wife, Diane, who were perspicacious in recognizing that women wanted a club that offered a convenient location; a friendly, nonintimidating environment; a simple, straightforward, and short workout that produced real results; and the opportunity to socialize.
Like many of the women-only offerings that it has inspired, the Curves program is predicated on a basic strength-and-cardio circuit.
The Heavins launched Curves in 1992 and began franchising in 1995. Since then, the company has distinguished itself as the best-known and fastest-growing fitness franchise in the world. (In March, Heavin was honored as IHRSA’s first-ever Visionary of the Year.) The company now has more than 7,000 clubs, with over 3 million members, that generate some $1 billion in revenues a year; new locations open at the rate of 70-80 a week.
Heavin expects to reach Curves’ saturation point (approximately 8,500 locations) in the U.S. this year, and, within five years, expects to have that many more operating in 20 foreign countries
Cuts Fitness for Men
Like The Blitz, Cuts Fitness for Men is a men-only fitness franchise that’s based loosely on the popular women-only offerings. Founder and CEO John Gennaro also noticed the dearth of exercise options for guys and the disturbing bottom line it led to: 80% of all men don’t work out, he notes with concern. Alarmed by the statistics, and excited by the opportunity they suggested, Gennaro created his own formula to provide men with a complete workout in a limited amount of time. 'In just 30 minutes, you can enjoy a high-quality, top-of-the-line strength and cardio session with our exclusive Body Cuts Circuit,' he explains. 'It’s a quick, easy regimen that utilizes hydraulic equipment, so there aren’t any weight stacks to adjust.'
The company, based in Clark, New Jersey, requires franchisees to become Body Cuts Certified Trainers, so each club member is supervised by a personal trainer.
Cuts Fitness for Men targets males ages 30-65 with little or no fitness experience, and has quickly sold 35 franchises. Gennaro’s ambitious goal for 2004: 500 locations by the end of the year.
Fitness Together
Fitness Together is a unique franchise program created for personal trainers who want to run their own business. Founded by CEO Rick Sikorski, the company, based in Castle Rock, Colorado, has grown by nearly 40% a year since its inception in 1996, and now boasts 121 locations throughout the U.S.
'The major difference between Fitness Together and the programs offered by most clubs or independent trainers is that our clients have their own coaches, who work with them in private, fully equipped training rooms to achieve mutually agreed-upon goals,' notes Sikorski. 'Our clients never share a trainer, never share equipment, and are never distracted by other people. Our ideals are summed up by our corporate slogan: ‘1 Client, 1 Trainer, 1 Goal.’
'We train only 3-4 people at a time, so private suites are a must,' he explains. 'To that end, we work hard to take all of the guesswork out of site selection. We conduct demographic studies within the franchisee’s area of interest, pinpoint the ideal location, and use our proprietary CAD system to help them create the most efficient layout for their studio.'
Fitness Together hopes to expand into Canada and Spain in 2004, ending the year with a total of 200 sites.
Gold's Gym International, Inc.
Gold’s Gym, in Venice Beach, California, founded in 1965 by Joe Gold, is the mythic foundation on which Gold’s Gym International, Inc. (GGI)—the industry’s oldest and largest franchise company—has been built. Though Gold himself subsequently went on to develop another competing franchise (World Gym), GGI has, in many ways, blazed the franchise trail for clubs and, today, seems to be reaping the rewards. It has some 100 company-owned and 550 franchised facilities with more than 3 million members. (It has recently been reported that Brockway Moran and Partners, Inc., the private equity firm that owns GGI, has put it up for sale.)
As the industry and its franchise component have grown more sophisticated, so, too, has the typical Gold’s franchisee. While most franchise companies appeal to independent operators, GGI now courts a smaller, more select audience. 'Over the past 4-5 years, our target market has shifted towards corporate multi-unit owners,' explains Luis Campalans, GGI’s senior vice president of franchising. 'Years ago, the industry—especially on the franchising side—was regarded with some suspicion, but, today, serious investors view it as a viable opportunity. That’s made us more attractive to the business-oriented, multi-unit operators that we’re interested in. In fact, last year, they accounted for 50% of our growth.'
The next area is which GGI expects to see rapid growth is the international market. 'In this case,' says Campalans, 'we’ll deal with regional master franchisers only; we won’t offer any direct franchises.'
Healthy Inspirations
In 2000, industry consultant Casey Conrad founded Healthy Inspirations to fill what she considered a serious gap in the industry's inventory of business models. 'As a consultant, doing a lot of traveling and visiting a lot of clubs, I discovered that there weren’t any facilities that offered both fitness and healthy weight-loss programs beneath the same roof, which, to me, seemed problematic in two important ways,' she explains. 'First: it forced people to travel to several locations to try to achieve their goals. Second: it seemed to discount the fact that exercise and good nutrition are both required for good health and proper weight maintenance.
'Healthy Inspirations,' she claims, 'addresses the two goals, meets both needs, in the same facility, helping members achieve long-term success.'
The company has franchisees in the U.S., Canada, the U.K., Brazil, and Australia, and expects to have 121 locations by the end of the year. Conrad’s own corporate goal is 200% growth per year.
IM=X Pilates Studios (Xercize Studio LLC)
Some fitness industry franchises do women-only, or men-only, or personal training, but this brand-new entry is betting on the promise of Pilates. For the past eight years, cofounders Elyse McNergney and Heather Craig have prepared the foundation: creating a series of exercise programs; developing teacher certification courses; and designing and patenting their special Xercise equipment. Now they’ve launched IM = X Pilates Studios (the corporate sibling of their Xercise Studio LLC) and are hoping to sign their first franchisee in the near future. They expect to sell at least 10 franchises this year.
Jazzercise
Founded in 1969 by Judy Sheppard Missett, who still heads the firm, Jazzercise was the forerunner of—and provided the model for—the thousands of aerobics studios and clubs that have materialized since. The company, based in Carlsbad, California, remains a dominant force in the niche, with nearly 6,000 franchisees, who teach hundreds of thousands of students a year; it expects to have 6,100 operators by 2005.
Initially, Missett taught all of the classes herself, but, by 1981, the success of her program and the firm’s increasing reliance on “independent contractors” led her to begin franchising. Today, Jazzercise provides a wide range of products and services to promote and deliver professional aerobics services, including instructor training, publications, videos, conventions, etc. The material covered encompasses everything from music selection to the financial performance of the franchisee’s business.
A unique aspect of Jazzercise is its commitment to help franchisees become an integral part of the towns and cities where they work. 'Perhaps the most valuable opportunity our franchisees enjoy is the chance to reach out to local communities and become an important factor in the health and well-being of residents,' observes Missett. To that end, Jazzercise has created a number of community-service initiatives, including its Kids Get Fit program for local schools and sponsored benefit classes to raise funds for local charities.
Ladies Workout Express/Lady of America
In 1984, after having spent a number of years operating coed health clubs, and after having listened attentively to all of the grievances that women had about such facilities, Roger Wittenberns founded Lady of America to better meet their needs. The appeal of his two approaches to the women-only market is attested to by the fact that the company, based in Ft. Lauderdale, Florida, already has 1,000 franchised operations up and running and another 300 in development, and expects to hit 2,000 units by the end of 2005.
'Our core member group consists of women between the ages of 35 and 65,' Wittenberns explains.
'However, we also have large numbers of teenagers using our facilities, as well as women who are in their mid-80s. The reason we can satisfy such a large and diverse consumer base is because our models have been designed to cater to everyone from the fitness novice to the workout fanatic. We have a personal training staff at each location, and they’ve been trained to attend to the needs of each and every woman who uses the club.'
Liberty Fitness
Though she’s still in her early 20s, Liberty Harper has already been involved in the fitness industry, in a variety of capacities, for years, and now thinks she’s come up with a winning formula. By the time she was 19, she had taught aerobics and worked as a personal trainer at 14 gyms in the San Diego area, and, in 1998, she and her family opened the first of two Curves facilities. In 2001, however, they gave up that franchise in order to concoct a women-only product of their own.
Harper and her brother, Joe, a successful Internet entrepreneur, opened the first Liberty Fitness Center in Aliso Viejo, California, in October ’01, had a franchise program in place by the following June, and sold their first franchise in December ’02. Her business plan calls for them to have 339 franchises sold and 277 units operating by the end of the year, and, Harper notes, they’re confident that they’ll sell a total of 1,500 within five years.
'I have an intense interest not only in the fitness field, but in helping women reach their goals by providing them with personal guidance and an environment that avoids the problems posed by conventional gyms,' she explains.
The Liberty Fitness franchise package encompasses: site selection; lease negotiations; floor-plan layout; fitness equipment; proprietary reMember club software; on- and offsite training; a list of preferred vendors; and technical and operational support relating to advertising, marketing, vendors, etc.
Lucille Roberts
Lucille Roberts is one of the oldest names in women-only fitness, having operated clubs in New York, New Jersey, and Pennsylvania for more than 32 years, but one of the newest in terms of franchising. Before her death last year, founder Lucille Roberts had built and successfully presided over a 50-unit chain; her son, Kirk, who now manages the business, made the decision to leverage the company’s experience and expertise via franchising.
'Two of our unique selling points are our track record in the industry and our ability to leverage our brand name,'he explains. 'We're able to utilize the advertising we already do on behalf of our franchisees. We currently spend more than $2 million a year on television advertising. This has proven, over the years, to be the best way to drive store traffic and grow revenues. Our franchisees will profit from all of the work that we’ve done—and continue to do—to build our brand.'
The Lucille Roberts franchise package includes: training in marketing, sales, exercise and nutrition, customer service, and accounting and legal issues; real estate and equipment purchasing assistance; monthly promotions; billing and collections services; and access to additional profit centers (e.g., books, videos, clothing, and weight-loss products).
The company’s first franchised unit opened in January, and Roberts expects 30 to be operating by the end of the year.
Powerhouse Gyms
Powerhouse Gyms is an acknowledged “powerhouse” in the prepackaged fitness arena. Founded by siblings William, Norman, and Krystal Dabish, Powerhouse opened its first club in the Highland Park section of Detroit in 1976. Today, the company, based in Farmington Hills, Michigan, has its name and familiar logo emblazoned on some 300 facilities in 36 states and six countries.
CEO Henry Dabish notes, however, that, unlike most of its competitors, Powerhouse is a licensing—not a franchising—organization.
While Powerhouse has traditionally been associated with bodybuilders, its image is evolving. “Our target demographic varies a great deal depending on the geographic location,” Dabish points out. “A licensee can use our traditional marks, logo, and approach to appeal to serious young lifters, or they can build an upscale, multi-million-dollar facility and employ our ‘softer’ mainstream logos to attract a professional clientele.'
Dabish reports that this sort of customization is creating new business for Powerhouse. 'Everything is really coming together for us in the licensing office,' he says. 'We’re growing steadily in the U.S., and are experiencing rapid growth overseas; we expect to add 60 new licensees this year, and to be at 500 locations by 2009.'
Ray Wilson’s Healthy Exercise and Figure Magic Express
There is little in the fitness industry that Ray Wilson hasn’t tried and triumphed at. In the ‘50s, working with Vic Tanny, Wilson helped create the prototype for the modern health club; he was involved in the development of the original Lifecycle; he launched and successfully operated chains in the U.S. and Asia. And now—now he’s turned his attention to franchising. (In March, IHRSA honored Wilson with its Dale S. Dibble Distinguished Service Award.)
Noting that, over the years, the industry has evolved to better target specific populations, Wilson explains that his two new companies, based in Coronado, California, “are designed to help the industry break into the mass nonconditioned market.” That needy audience, he observes, encompasses approximately 80% of the entire population in the U.S. and “even more” in the rest of the world.
Ray Wilson’s Healthy Exercise is a coed concept, while Figure Magic Express employs a women-only approach.
Since embarking on his new initiative in 2002, Wilson has managed to bring 17 franchises online. 'We’re not attempting to expand very fast this year,' he reports. “We believe that too many franchise companies are simply trying to sell franchises. Our goal is to develop successful clubs that will appeal to the nonconditioned masses.
'We’ve discovered that these people will respond to a small nonintimidating facility,' he continues. 'At the moment, because our 2,400-3,000-square-foot coed facilities require experienced management, we’re working primarily with industry veterans. Within the next few months, however, we intend to develop a smaller model for both the coed and women-only franchises that an inexperienced operator will be able to handle.'
Wilson predicts that he’ll wrap up approximately 150 franchises and/or joint ventures during the coming year.
Shapes30
Brothers Christian and Carlos Babini, the owners of two World Gyms, in Rochester and Shelby Township, Michigan, recognized the promise of women-only miniclubs and believed they had some valuable ideas to contribute. The result is the Shapes30 Circuit Training and Weight Loss franchise, based in Rochester, which has 10 units up and running and 24 more in the pipeline.
The Babinis’ approach, they note, is designed to fill what they regard as 'the void in the 30-minute women's fitness space . . .
'The Shapes30 business model generates more revenue per square foot by providing programs that deliver real results for members,' points out Christian, the company’s CEO. 'The model and the programs also help users avoid becoming bored or getting stuck on plateaus, which increases loyalty and retention.'
Shapes30 achieves its goals by making use of a unique, three-part, studio-within-a-studio concept. 'Level 1,' Babini explains, 'is for members who just want to take part in our Metafit circuit training. Level 2 offers personal training in a separate studio. And Level 3, essentially a behavior modification course, involves circuit, core, and functional training, and a customized nutrition program, presented in the Shapes Zone studio.'
The Babinis predict that 120 Shapes30 franchises will be operating by the end of the year.
Shape Up Sisters, Inc.
John Crowley and Maria Rodriguez, the cofounders of Shape Up Sisters, Inc., are convinced that they have something special to offer the women-only niche. Most of the women-only minis, Crowley contends, are carbon copies of one another, but Shape Up Sisters, he says, delivers something distinct and different, beginning with its catchy name. 'We’ve made this franchise opportunity unique by virtue of our name and logo, and by creating a more sophisticated, upscale environment for club members,' he explains. 'Our franchisees receive high-quality equipment, which affords a better workout and greater longevity. They also receive a proprietary, club-licensed software program, called SUSDat, which is designed to efficiently track club and member functions. No other franchiser that I’m aware of has created a software program specifically for the women-only market.'
Crowley and Rodriguez spent 2002 testing their concept in the U.S. and Puerto Rico, and launched their business last November with a company-owned store in St. Augustine, Florida. The first franchise was scheduled to open in Port St. Lucie, Florida, in February, and the two hope to sell the rights to 15 more by the end of the year.
Slender Lady
Slender Lady, based in San Antonio, Texas, was created in 1996 as the result of founder Bruce Sharpe's recognition of the 'growing problem of obesity and its dangerous health consequences for women.'
CEO Dr. John Verdugo notes that, at the time, 'Your standard, typical gyms, fitness centers, and weight-management programs didn't offer both fitness and nutrition programs beneath the same roof.' Sharpe, he explains, corrected that shortcoming with Slender Lady, which focuses 'on the whole woman—not just on appearance or attaining a certain look.' The company’s target audience, he says, consists of 'candidates who have to lose 15 or more pounds; women who aren’t comfortable in a coed setting; and ones with medical issues that prevent them from using ‘conventional’ types of programs.'
Slender Lady has sold 350 franchises, and 150 units are already up and running in the U.S. and Canada. Verdugo estimates that 200 more will open this year.
Velocity Sports Performance
Velocity Sports Performance, based in Alpharetta, Georgia, may well be unique among fitness franchise companies. The firm, founded in 1999, markets the sophisticated end product that’s been refined from the training protocols devised by Loren Seagrave, a former Olympic athlete and coach. Seagrave, widely regarded as one of the best sprint and hurdle coaches in the world, has also worked with pros involved in baseball, basketball, football, soccer, and ice hockey. The goal of Velocity Sports Performance is to make his techniques available to a wide and diverse audience, including toddlers (the Start Smart Sports Development Program), and student, recreational adult, elite amateur, professional, and occupational athletes (e.g., police, firefighters).
'We offer training that teaches the basic fundamentals of athleticism,' explains CEO David Walmsley. 'The training is not sport-specific, as participants in any sport can benefit from the increased speed, power, and agility that our programs provide.'
Velocity Sports Performance currently has 17 facilities and expects to have 60 by the end of the year.
World Gym
Joe Gold enjoys the singular distinction of being the only person in the industry to have launched not one, but two, major franchise companies. The first, of course, was Gold’s Gym International, Inc., and the second, World Gym, which made its appearance as a single club in Santa Monica, California, in 1977, and successfully transitioned into franchising four years later.
The majority of World Gym facilities are 9,500-18,000 square feet in size, and some 15%-20% are 20,000-plus-square-foot “supergyms.” Recently, however, the company introduced a new-concept club, the World Gym Express, a compact (4,000-6,000-square-foot), no-frills facility that offers cardiovascular and selectorized strength-training equipment and targets people in a hurry (e.g., soccer moms and busy executives). The approach has proven popular not only with the public, but with franchisees as well. The smaller facility footprint and reduced equipment requirements mean a lower cost of entry and leaner operating expenses.
'Last year, we licensed over 70 new World Gym Fitness Centers and World Gym Express Centers,' reports CEO Mike Uretz. 'We expect to license 45 new Fitness Centers and 45 World Gym Express Centers in 2004.'
WOW! Work Out World
WOW! Work Out World is the realization of founder Mary Roma's notion of what a perfect health club should be like. Her experiences at another club left her wanting more—particularly in terms of service and amenities conceived with a 40-year-old woman in mind. “After being a member there for about a year, and coming to understand better exactly what she wanted in a club, she decided to open one that was different—one that was big, beautiful, perfectly clean, with lots of equipment, and, most importantly, tons of service,' explains CEO Stephen Roma. Her concept, brought to life in 1991 in the vibrant form of WOW!, not only provided the basis for a successful chain, but for a solid franchise as well.
The company, based in Brick, New Jersey, now has seven owned and 18 franchised facilities in the U.S. and Japan. Its plans for 2004 are to grow to 10 owned and 23 franchised units.
Roma attributes much of the firm’s progress to the power of its brand, including its colorful logo, which features two monkeys wea
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