Weighing the Advantages and Disadvantages of Owning a Fitness Franchise

 In Opening a health club, Strategy

Type “Start your own gym” into Google, and an overwhelming amount of business start-up information and advice pops up. However, you’re likely to see a plethora of franchise opportunities as well.

Buying into a fitness club or boutique fitness studio franchise can be seen as ashortcut to getting your fitness facility up and running.

But for anyone considering launching their own fitness facility, there are advantages and disadvantages of going the gym franchise route, so it takes some due diligence to make sure that franchising is right for you and your long-term fitness business goals.

It is imperative that prospective fitness club and studio entrepreneurs weigh the advantages and disadvantages of entering into a franchise agreement so they are best set up not only for success as a gym or studio owner but happiness as a business person.

Gym Franchise Advantages

  • By becoming a gym or studio franchise owner, the franchisee owns and runs their business but have the advantage of support from the franchisor and the existing franchise network.
  • Joining an established fitness brand can help with customer confidence at the outset because even if the franchise isn’t in your area currently, there will be name recognition, and if not, a quick search can show the prospective member the brand’s track record.
  • The processes, procedures, market testing, and other operational standards should have already been done by the franchisor, taking some of the guesswork out of opening and running a health club.
  • As a gym franchisee, you can benefit from marketing initiatives and business development strategies put in place by the franchisor that will support your launch and ongoing membership recruiting efforts.
  • Securing funding for a health club franchise may be easier than starting from scratch as lenders can base decisions with the franchisor’s success included in the mix.
  • Being part of a wider franchise network can give a health club owner the ability to compete against bigger gym chains due to increased buying power for fitness equipment, advertising expenses, and more.
  • As a gym franchise owner, you will be able to tap into a network of other franchisees that either have or are going through many of the same challenges and opportunities as you and can lend plenty of free advice.
  • This all adds up to the rate of business failure being lower with franchises than independent startups.

Gym Franchise Disadvantages

  • The franchise agreement – which is legally binding — will restrict the way that the franchisee can run and develop the health club. There can be a range of things from geographical restrictions, what or how service is delivered, group fitness class offerings, pricing, and so on.
  • The fitness company’s brand reputation is dependent on the performance of the whole franchise network. Other poorly performing franchisees anywhere in the world may have impact on the franchisee’s own success as news travels fast in the internet age.
  • There are ongoing fees associated with owning a franchise that you would not have to pay if opening a truly independent club or studio. This can add expenses to the business that you will need to budget for and you’ll need to make sure you are getting your ROI from the franchisor. In the end, a franchise can prove to be more expensive in the short and long-term.
  • If you’re motivation in opening a gym or studio is to do it your way, you may not be thrilled with the constant monitoring and guidance that typically comes along with a franchise.
  • If the franchisee’s circumstances change, selling or leaving the business is likely to be met with termination clauses that can carry some hefty financial costs.
  • At the end of the franchise term, the franchisor could decide not to renew the franchise further, leaving the owner stuck trying to build a new fitness brand and all the costs that go along with that.
  • There are likely to be a restraint of trade conditions on the sale of the business or termination of the franchise agreement.
  • The franchisee would be at risk if the gym franchisor were to go out of business or face a public relations emergency.

A franchise allows you to go into business for yourself but not by yourself, and there are risks and rewards inherent in it as with any business model. The key is to look at the potential advantages and disadvantages of opening a franchise and make sure it is the right business decision for you. Feel free to reach out to us (john@atwoodconsultinggroup.com) and our team of fitness industry expert consultants can help guide you through the decision and help you get up and running whether you decide to do a fitness franchise or build your own gym brand from scratch.