The stellar performance of 24/7 fitness franchises on Australian high streets and in shopping malls and suburban areas is showing no signs of slowing.
Over the past five years, the shape of the fitness product has changed dramatically. Not only have programs such as Yoga, Zumba and Boot Camp continued to grow, but new trends such as combat-based programs, functional training and CrossFit have arrived on the market – and thrived.
With over four million participants in fitness activities, this growth has, in part, been supported by the rise of adventure, mass exercise, multisport and obstacle events, with participation events such as Miss Muddy, The Stampede, Tough Mudder and The Colour Run increasing their volume of participants each year while also driving participants to be in shape and prepared for their event.
The fitness industry has grown steadily since 2009, with Fitness Australia/ Deloitte Access Economics Australian Fitness Industry Report for 2012 reporting a $1.4 billion contribution to Australia’s GDP, and the economic outlook of the fitness industry expecting continued growth in conjunction with increasing levels of community participation in fitness.
Ezypay’s 2014 Fitness Industry Survey recently highlighted the rise on 24/7 clubs in 2013, with 11% of gym members belonging to this growing group of clubs while creating 80% of the sector’s growth in the past five years.
Unlike traditional ‘big box’ clubs, with a wide range of services and high overheads, 24/7 clubs have far lower costs and the various franchise models available allow entry into the market with a relatively small investment – generally less than $500,000.
24/7 clubs’ ‘no frills’ approach and low operating costs mean they can be profitable with relatively small membership numbers while their convenient locations can cater for specific demographics and user groups.
As a result of the arrival of 24/7 clubs, membership catchment areas across the fitness industry have generally shrunk, with members’ travel times to gyms reducing as they take advantage of convenient locations.
Coupled with Australia’s love of franchising (based on population numbers, Australia is the most franchised nation in the world), Australia’s major fitness franchisors are growing, with reputable brands such as Anytime Fitness, Jetts, Plus Fitness, Snap Fitness and Vision Personal Training are backing their franchisees with training and ongoing support thus increasing the likelihood of success for both the franchisor and franchisee.
In addition, specialist franchisors are focussed on specific product areas. These include F45 Training (functional training), KX Pilates, Ready Steady Go Kids (children’s fitness), Sportybots (children’s fitness), True Blue (franchised clubs in country towns) and Xtend Barre (a fusion of dance and Pilates).
Equally, operators of women-only networks, where the fitness franchise model was born, such as Envie Fitness and Fernwood Fitness have thrived, although growth of the pioneering Curves network has slowed while with Contours Express International’s Australian master franchise agreement having recently expired, the owners of many former Contours clubs are removing their businesses from the franchise, and are now either trading independently or looking to join other franchise networks.
Many of Australia’s fitness franchises are loved by the business media, with Anytime Fitness, Jetts and Plus Fitness each have received awards for being fast-growing and high-performing operations.
Having opened over 100 gyms around Australia in the past three, the Plus Fitness 24/7 franchise model prides itself on having no lock in contracts, and providing 24/7 access for 365 days a year.
While the 24/7 Plus Fitness franchise model aims to satisfy customer needs, it also satisfies the needs of its franchisees with its low staff model leading to fast break-evens and potential for further investment and growth either inside or outside the Plus Fitness brand.
Jetts has consistently ranked highly on BRW’s Fast Franchise list, with average annual revenue growth of over 200% over the past three years. Revenue in the company, which started with one Gold Coast gym back in 2007, grew from $3.834 million in 2008/09 to $74.496 million in 2011/12.
Currently, Jetts operates over 250 clubs across Australia and New Zealand with close to 250,000 members.
Since launching Anytime Fitness Australia in 2008, Justin McDonell and his sister Jacinta McDonell-Jimenez (pictured above) have seen the network has grown to 350 clubs nationally, with company plans to keep on growing with 400 clubs scheduled to open by December 2014
McDonell says becoming a master franchisor for Anytime Fitness – the US company’s first outside North America – instead of developing a business from scratch was the best business decision the siblings have made.
He explains “we took a winning formula from the US, tweaked it slightly to the Australian market and had the advantage of a systemised business.
“We are able to see what is going to happen to our business just by looking at our American master. It provides great insight to the future.”
Coupled with the rapid growth, Anytime Fitness has also shifted from a sales culture to a more deliberate support culture, with a focus on having the managers and staff to support the growing franchisee base.
The company’s Lane Cove, Sydney, head office has grown from, what McDonnell describes as, a “very lean and mean operation in the early years” to a team of 30, including a franchise support manager and internal operations manager as well as professional staff covering property, legal compliance, accounting, marketing, information technology, and events and training.
Australia’s expertise in franchising also has export potential.
Children’s fitness franchisors Ready Steady Go Kids and Sportybots have each licensed their models overseas with Sportybots programs licensed in China, Indonesia, Kuwait, Malaysia, Singapore and Thailand; and Ready Steady Go Kids in China, the Philippines and Vietnam.
Similarly, 24/7 chains are also looking overseas, with at least on operator expected to make an announcement on an expansion into international markets in the coming days.
8th August 2014 - CONTOURS SHEDS AUSTRALIAN FRANCHISEES
16th July 2014 - 24/7 GYMS TO DRIVE FITNESS INDUSTRY REVENUES DOWN
22nd June 2014 - SPORTYBOTS EXPANDS WITH NEW ASIAN LICENCEES
30th May 2014 - ANYTIME FITNESS AUSTRALIA CELEBRATES SIXTH BIRTHDAY WITH 350TH CLUB OPENING
14th May 2014 - TRUE BLUE TAKES 24/7 FITNESS FRANCHISING TO COUNTRY TOWNS
17th September 2013 - PLUS FITNESS CONTINUES EXPANSION WITH NEW CLUB OPENINGS
11th November 2011 - PLUMMER WARNS OF THE DANGERS OF LOW-COST FITNESS MEMBERSHIPS
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