AusLeisure

With franchising in Australia facing a series of challenges, newly released research from IBISWorld show that gyms and fitness centres are a consistent success in the sector.

With Australia’s than 4,200 fitness business recording annual revenues of $2.2 billion, the IBISWorld report Gyms and Fitness Centres in Australia suggests that much of the industry’ growth has been as a result of franchised 24/7 chains.

The international market research company’s report advises “franchises like Anytime Fitness and Jetts Fitness have undergone exceptional growth over the past five years, attracting new customers with their affordability and accessibility.”

IBISWorld predicts industry revenue to continue to grow, attributing the success of these franchises to increased awareness surrounding health and obesity.

In contrast, IBISWorld says the general franchising industry in Australia “has faced challenging trading conditions over the past five years” due to instability in financial markets and “negative consumer sentiment”.

Peter Harris, Chief Executive of franchise marketing platform Digital Stack, said the most successful franchises usually had the highest levels of online engagement, while poor performers struggled to maintain an online presence at all let alone one that resonated with customers.

Harris explains “you need to really understand the type of customers you want to deal with and you have to be passionate about it - if you don’t know why you’re getting into a business and you don’t want to make a difference, then just don’t do it.”

Harris says the key to buying into a successful franchise is finding one that had a healthy, active online and social media presence and which also gave franchisees the freedom to “do their own thing” at a local level.

Adding that brand consistency was another essential, Harris advised “if you look around and see different stores at different locations that look completely different but are part of the same brand, that’s a big warning sign - if branches at multiple locations don’t look the same, it’s a massive no-no.”

Retail analyst Geoff Dart, of DGC Advisory, cautioned “the franchise industry allows bad businesses to be flogged on to poor consumers who think the brand is great and think it will succeed when they won’t.

“There needs to be more regulation around what franchises can and can’t do.”

Warning that franchises were not always assets, Dart added “even McDonald’s is declining worldwide and is not what it used to be as people get more health conscious and find it a bit passé.”

This changing trend is reflected by the report highlighting that “spending on gyms and fitness centres positively correlates with increased health awareness across the population” and that that “rising health consciousness means that consumers are increasingly concerned about their health and are more likely to exercise.”

Click here for more information on IBISWorld Industry Report R9111: Gyms and Fitness Centres in Australia (Exercising power: Establishment numbers have bulked up due to the popularity of 24-hour gyms), November 2017.

Images: Anytime Fitness (top) and Jetts (below). 

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