Club Chains Should Level with Potential Franchisees
Rob Bishop and Barry Klein
Do franchise owners worry about competitors who pop up overnight offering the exact same product to the exact same market?
We must be in the wrong business. If we owned a fitness franchise, rather than our privately owned facilities, we'd be wildly successful while rarely going to work. We'd be required to know nothing about business or fitness. We'd have almost no staff to manage, and members would simply arrive at our door because we existed.
Really. It's true. It must be, because we read it on the websites of fitness franchise companies. There's no reason to know anything about fitness or business if you want to start a fitness business. They will teach you everything you need to know, and their support staff will be there for you around the clock to answer your questions. You don't even need money, because their startup costs are so low and their monthly licensing fees are so reasonable that you'll have nothing to worry about. It's all about making your dreams come true.
Is anyone else sick of this?
Let's start with franchisees not needing to know anything about fitness. Can you imagine an immediate care doctor's office opening in your community with no doctors on staff? Of course not. But since the public apparently has little understanding that the people who provide them with fitness services should know something about fitness, we have a gaping hole that the franchisors exploit. As far as they're concerned, if fitness is your passion, or maybe you've lost a lot of weight by exercising, then you are qualified to operate a gym and dispense advice.
Wouldn't it be refreshing if franchisors thought enough of their brand to require at least one member of each franchise ownership group to be a fitness professional? Ha! That would mean that the franchise companies thought of themselves as being in the fitness business. Let's face it: They're not. They are in the business of selling franchises, so the fewer barriers to entry for their customers — franchisees — the better.
That's why they can't require any business qualifications, either. Indeed, they target people without prior ownership experience, which would be fine if they were honest about what it takes to run a business. But they're not honest. They convince their franchisees that running a business is easy, that the franchisor's experience and support will make each new business owner successful, and that the new business owner really doesn't need to be prepared for what he or she is about to undertake. That, friends, is a load of crap, and too many aspiring franchisees are naïve enough to believe it.
The pitches from many fitness franchises seem like they belong on infomercials at 3 a.m., or delivered at a neighborhood networking party: Open one of our locations and your dreams will come true while you help cure the planet's obesity epidemic. You'll have all of the support you need from our family of experts who will always be at your disposal. Because your new business will require only a few hours per day of your time, you'll be able to pursue all of your other passions, and your life will be even fuller with the riches you earn.
Sadly, there are innocent, well-meaning, good-hearted people who believe this, because they forget the simple law that governs things that seem too good to be true.
It's always humbling to see a local business fail. You know — there but for the grace of God. That said, when a fitness franchise is going out of business — and several have come and gone in our small community — we can't help but wonder whether the franchisee could have seen it coming, especially when it's one of the national franchises. Did they see that their franchisor oversaturated the market, because that's what was good for the franchisor? Did they recognize the point at which they lost all credibility with their customer base because they didn't know anything about health and fitness? Did they notice that closing at midday and having virtually no weekend hours was a detriment to their credibility as a real business? How long was it before they realized that equipment breaks and that their physical plant needed much more time and attention than they ever believed would be required? Did they worry about the "me too" competitors who popped up overnight — yet another franchise offering the exact same product to the exact same market?
Whereas witnessing the closing of a local franchise location sobers us, we actually get a kick out of it when a franchisor fails at the corporate level. (Does that make us bad people?) There's typically so much arrogance and hoopla on the way up, it's hard for us not to take a moment to smile when they are on the way down. Our response is somewhat predicated on a brief exchange we had a few years ago with (ironically) a now-defunct fitness publication that asked its readers to comment on whether independent clubs could survive the onslaught of chains. Our response was simply, "Why doesn't anybody ask if the chains will survive?" Entire chains have disappeared, and others will follow.
Certainly, remarkable success can be achieved when a franchise that offers a well-conceived business model is paired with a well-qualified local businessperson. We see examples of that in our industry, and we have several friends in our community who run successful franchise businesses in other industries. But remarkable success is not easy to achieve. We wish our industry had fewer companies pitching "make your dreams come true" franchise opportunities to the unsuspecting public, and that standards were higher in terms of experience and capitalization. We would also like to see more would-be franchisees taking a longer, harder look at what they are getting themselves into.
Otherwise, sign us up. We'd love to get paid for doing and knowing nothing.
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