Business-in-a-Box: Create a Successful Franchise
As a fitness pro you may have already hit the mark with a personal training studio or an exercise class. Now, you’d love to take your business model to the next level. The big question: Is creating a franchised fitness brand your best next move?
With the last decade’s surge in brand-based programming, more and more industry entrepreneurs are creating franchise-based business models. But what brings fitness franchise fame to some, while others fade away? Read on to discover what it takes to turn your fitness sensation into a profitable franchise formula.
Franchising: The Business-in-a-Box
A franchise is a replicable business model; it can also be described as a salable system for making money. Established fitness franchises range from facilities (Curves®, Gold’s Gym®, Anytime Fitness®) to group exercise–based studios (Barry’s Bootcamp, Sunstone Yoga®, The Bar Method™) to prepackaged class or program concepts (Jazzercise®, Stroller Strides®).
The franchisor creates the successful business model, working out logistical problems to arrive at a proven way of making money. The franchisor sells this business system (or “franchise unit”) to franchisees, who pay the franchisor both one-time and recurring fees for the right to use the model.
In return, the franchisor offers logistical and business support. “We give our franchisees the right to use our brand, and they get all the tools and resources they need to run their business,” explains Lisa Druxman, MA, of San Marcos, California, who is the founder of the group exercise–based program Stroller Strides. The tools she provides are a Web-based business center, an email campaign program, a public relations program and more.
Becoming a franchisor expands your brand’s reach while essentially using someone else’s money, says Druxman, whose franchise targets new moms and has over 1,000 locations nationwide. “You get to grow your business and take a percentage of the profits,” she says.
It certainly sounds appealing to receive regular payments from franchisees, but setting up a franchise requires serious capital, sweat equity and major change. How do you set yourself up to be a profitable franchisor?
What You Need to Succeed
Before you become a franchisor, make sure you have completed the following—or are well into the process.
Change Job Descriptions
The business skills required to oversee a successfully franchised brand are completely different from the skills you need to be a small-business owner. “Going from running a successful business to running a successful franchise is not a natural progression,” explains Brandon Hartsell, MBA, cofounder and CEO of Sunstone Yoga, a franchised yoga studio. “They are two, 100% entirely different activities and competencies,” says Hartsell, whose chain has grown to over a dozen locations in Dallas and Austin, Texas, since 2002.
And while your franchisees will enjoy delivering your fitness concept, your new role will be to promote and support your franchisees. “When you decide to franchise, you're no longer in your original business,” says Druxman. “If your business was selling widgets, now your business is selling franchises and supporting franchisees. [The franchisee's] business is selling widgets.”
Create a Proven Prototype
A franchise typically stems from a business that has grown so much that the owner can no longer expand it single-handedly, usually because more financial capital and human capital are required.
In other words, your concept needs to
Devise a Systematized, Teachable Model
For your model to work as a franchise, “your [business] systems need to be well thought out, teachable and easily replicable,” explains Druxman.
“Ask yourself, ‘Do I have documented systems (i.e., for administration, operations, marketing, sales, programming) that are in a format such that someone who knows absolutely nothing about this business would be able to follow and implement [them] on his or her own?'” says Conrad. “If not, you better get to work [on your systems] before you even consider franchising.”
For more suggestions, please see “Creating a Profitable Fitness Franchise” in the online IDEA Library or in the February 2012 issue of IDEA Fitness Journal.
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