The Franchise Fitness Craze

by Ed Teixeira

The fitness industry continues to be one of the fastest growing concepts in the franchise industry. This article provides a look inside the fitness franchise craze and why this sector will continue to grow.

As Americans become more health conscience and focus greater attention on diet and exercise, the personal fitness industry continues to benefit from this healthy trend.  According to its 2010-2011 forecasts, the Bureau of Labor Statistics predicts employment of fitness workers is expected to increase 29 percent over the 2008–18 decade, which is much faster than the average for all occupations. These workers are expected to gain jobs because an increasing number of people are spending time and money on personal fitness, as more people recognize the benefits of health and fitness programs.

The United States Department of Commerce reports that there are approximately 31,000 fitness centers and health clubs in the United States and franchises represent almost 65% or 20,000 of the total, which includes personal fitness programs unique to franchising, such as Jazzercise. There should be little doubt that the personal fitness industry will continue to provide significant opportunities for individuals looking for franchises with a strong upside.

Market Potential is Key

When considering any franchise opportunity, market potential is an important factor. A strong and vibrant market for a franchise provides the right climate for sales and earnings. The personal fitness industry passes this test because of some important factors:

• As baby boomers age they are increasingly concerned with staying healthy and physically fit.
• Concepts like yoga and Pilates are expected to grow driven partly by the aging population, which demands low-impact forms of exercise and seeks relief from arthritis and other ailments. Expect new franchises to sprout up in these segments.
• A reduction in the number of physical education programs in schools will motivate parents to enroll their children in health and fitness programs. There are now franchised fitness programs designed for children.
•  Some people prefer more personalized services which can lead to franchises that offer personal training and special group exercise programs.
• The awareness of the link between fitness and health, and the desire to control healthcare costs.
• Technological improvements are making exercise more accessible, enjoyable and easier to manage.
• Health club membership among young adults has grown steadily as well, driven by concern with physical fitness and by rising incomes.

Perhaps one of the most compelling factors in the future growth of the personal fitness industry is the following statistic from the Center for Disease Control and Prevention:

Adults aged 55 and older now make up a quarter of the health club memberships in the United States. From 1998 to 2005, the number of 55-plus fitness participants increased by 33 percent while the 35- to 54-year-old age group posted a 13 percent gain and the 18- to 34-year-old group showed no growth. Since our population continues to age expect more and more seniors to join health and fitness clubs. Recently, franchised fitness centers that focus primarily on seniors have begun to emerge.  Live2B Healthy provides fitness programs to seniors at various settings and Club50 Fitness Centers franchisees operate centers that cater to the over fifty population.

There are approximately 30 franchised fitness center concepts in operation and I expect that number to double over the next few years. The demand for services that has driven the rapid growth of homecare franchises will serve to boost the growth of fitness franchises as well.

These means that there are and will continue to be significant opportunities in the franchised health and fitness segment.

Recent Growth in Health and Fitness Franchises Indicates Strength

From 2009 to 20010 the number of new franchisees in fitness companies that were franchising less than five years grew over 120%.  This growth on the part of new fitness franchises is a result of the popularity of the health and fitness industry and the fact that large fitness franchises have less franchise territories available.  Snap Fitness, which has been franchising since 2004, has grown to over 1,000 locations in that short span. I reference this growth not as an endorsement of the Snap Fitness franchise, but rather as an example of the growing popularity of personal fitness franchises. Source: The Entrepreneur 500 January 2011 edition.

Individuals that seek a franchise opportunity with broad market appeal and an upward growth trend should consider a health and fitness franchise. The estimated investment needed to acquire and start up a fitness franchise can range from as little as $50,000 to as much as $4 million. This range of investment opportunities can fit various types of franchise investors.

As more people become aware that exercise improves health, the demand for fitness programs will increase. The Federal Government, insurance companies and healthcare professionals will continue to beat the drum for people to exercise more. Mary Furlong, EdD, author of Turning Silver Into Gold: How to Profit in the New Boomer Marketplace and a market expert on the Baby Boom Generation, believes that the enormous size of the Boomer market translates into enormous business opportunities for fitness professionals. This is another indicator of the opportunity for fitness franchisors and their franchisees.

Putting it All Together

When we consider the fact that the personal fitness industry appeals to a large and growing market and provides a product with health benefits, the result is a franchise segment that offers significant opportunities. However, for prospective franchisees to capitalize on this opportunity they need to find a franchise that fits their budget and business skills. Although a personal fitness franchise can be packaged to provide the new franchisee a manageable business, the franchisee is still responsible for the day to day operations of the business. This is whether they are an owner operator or absentee owner.

Given the maturity and size of some fitness franchises, a new fitness franchise program might provide a choice of territory not available from the more mature franchisors.

Although the market for personal fitness is healthy there have been some fitness franchises that were not successful, one notable franchisor tried to capitalize on the popularity of Curves for Women by introducing a similar concept for men and failed. Although the personal fitness industry and the franchise component can provide a door to future success, the same requirements and standards for any franchise still exist. There needs to be a viable franchise model that when properly managed will result in a high probability of success.

There is little doubt that personal fitness franchises are operating within an industry that will continue to grow. The benefits that a franchise model provides can increase the number of franchise opportunities in the fitness industry.  It’s the right time and the right market for the continued growth of fitness franchises. However, the key is that each franchise candidate match up to the right fitness franchise for them.

© 2011 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at franchiseknowhow@gmail.com