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Snap Fitness plans for 200 clubs

Snap Fitness plans for 200 clubs
October 4, 2010

Snap Fitness Australia has revealed an ambitious five-year plan to expand to at least 200 clubs. Overseas expansion is also a goal for the Brisbane-based franchisor which currently has six clubs, a further 10 being planned and which has 30 territories sold.

Australia and New Zealand Managing Director, Roz Barker explains "I've been working in the industry for 20 years, selling full service memberships. In the last four years in clubs it's been harder to sell membership. People don't want to use all the facilities like the childcare and the group classes (with) cardio and weights are the prime focus."

Highly experienced in the industry with roles as varied as group fitness instructor, sales representative, and state management, Barker adds "Snap is an easy sell, we have world class equipment."

This focus on the gym basics and day and night access is where the appeal of the 24/7 club lies.

However, Barker appreciates that‘turnkey’ fitness franchising is a competitive sector, stating “Jetts is probably our closest competitor, they have no contract membership and look similar to our clubs. Anytime Fitness runs 12 month membership, on a bigger scale. "

The all-hours access system at Snap is made affordable by the clubs being staffed for just 35 to 40 hours a week and no contract membership.

New members undertake a short induction about equipment operation and gym etiquette. "About 60 to 70% of our members are experienced gym users who just want to get in and get started," adds Barker.

The franchise system works well in regions and areas with lower demographics because it's so affordable, she adds. In a lower demographic a franchisee owner operator works better than a gym with a manager. But the ideal is a higher income membership base and no debt chasing.

A typical location for a Snap outlet is a high profile strip mall, with cafes, small convenience stores and a post office.

Barker adds "our most successful outlet is Milton, which is among 20 complementary businesses with parking and good signage. It's on a well lit, busy road, that's safe to use at night.

"When we look for sites, and we have a property manager who does this and organises the leases, we would not put a franchisee in a site we would not open a corporate club in. It has to tick all the boxes."

With urban centres in Queensland being highly competitive, Barker intends to focus in on Western Australia and NSW, followed by Victoria and Tasmania.

"We're working towards 20 plus clubs opened and 40 sold by the end of the year, and 250 clubs across Australia and New Zealand operating within four years."

Snap aims to have 10 corporate clubs across the two countries in the next two years. Right now there is one corporate club in New Zealand and three franchises sold.

"The market is suffering more there but when finance approval comes through, the model can be more favourable because of costs. There are already 650 memberships at the club in New Zealand."

Snap is in the process of accreditation with both NAB and Westpac. At the moment a financial partner, DLL, funds franchisee equipment purchases from Technogym, guaranteed by the US Snap business.

As for differentiates Snap's franchise offer from the competition?, Barker explained “the first big difference is we're a global company and we've got an aggressive plan. Secondly we have better equipment. And I've been in the business 20 years so we have operations experience in running health clubs.

"We screen franchisees and like to meet them as soon as possible. They have to take a keen interest in the business but a passion for health and fitness is not crucial.”

But building the business is essential and before franchisees undergo what is called the Snap University (a four day training process when franchisees learn about operations), they undertake pre-sales training.

"As franchisors we do the first newspaper ad, we're on a fitness club lead generator, we have the 1800 numbers and our website. We help them with the initial marketing plan," Barker explains.

Local promotions, flier drops, local paper advertisements, and sometimes radio campaigns are ongoing ways to promote local business. Franchisees are encouraged to build relationships with local businesses and communities.

The franchisor also helps recruit managers, and personal trainers recommended by a number of colleges; assistance extends to reviewing and retraining some trainers within the system.

Barker concludes, “in the US every club has an account manager who ranks outlets according to performance. Once we have 10 clubs we'll get an account manager who is there to help.

"It's important to empower staff, especially franchise owners and give them plenty of room to grow, develop and expand their business. There's no big brother mentality at Snap Fitness.”

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