How To Open A Gym Franchise

Opening a gym franchise can be daunting; how and where do you begin? This article helps you choose the right franchise and craft a winning business plan.

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Did you know in Europe, only Germany has more gyms than the UK? [Statista]

Despite the enticing market size, throughout the pandemic, the gym sector in the UK suffered greatly. For example, between March and mid-July 2021, fitness centre chain, The Gym Group lost 178,000 members - a fifth of its total customer base. [IBISWorld]

However, as restrictions ease and we all look to get back to doing things we love, gyms are one of the sectors that will be poised to grow significantly over the next few months. If you’re looking to open a gym franchise, and pivot your passion for fitness into your career, this article is what you need to get started with a gym franchise.

Contents

• Why should I start my own gym franchise?
• Who can open a gym franchise?
• What skills do you need to start a gym franchise?
• How to assess your competition?
• How to choose your gym customers?
• Open a gym with a winning business plan
• How much to open a gym?
• What insurance will you need for your gym business?
• What legal structure will you have?
• How to assess your franchise opportunities?
• The best franchise opportunities in the gym sector
• How to start a gym franchise

Why should I start my own gym franchise?

Starting your own business from scratch is difficult. You won’t have the expertise, training, support or contacts that some of your competitors might have. In an industry as dynamic as the gym and fitness sector, this can make a huge difference.

According to Statista, over 10 million Brits are members of health and fitness clubs, meaning the gym and fitness sector generates revenue of approximately £2 billion. In such a lucrative industry, having the know-how and experience is essential.

As part of a gym franchise, you’ll be able to call on the extensive support of your franchisor and franchisee network, you’ll be given dedicated training, a license to an effective brand and marketing strategy, and you’ll immediately be able to start your business. Additionally, you’ll enjoy:

• Being your own boss
• Work flexibly to a schedule that suits you
• Be a part of a market-leading business
• Help people reach their fitness goals

Who can open a gym franchise?

Whether you are a hands-on owner with a background as a trainer, or a physical therapist desiring to extend your client base - even a business professional with excellent time and operational management experience - the gym franchise sector is flexible and welcomes you with whatever background you have.

This also means you can be a boots-on-the-ground owner in your gym or manage it remotely from anywhere in the world. The choice is truly yours.

What skills do you need to start a gym franchise?

To head up a fitness franchise, several different skills will help you manage your operation smoothly. Often, as a business owner, these skills are:

• Organised: managing your employees, processing transactions and staying on top of any other unexpected developments are required. As a gym owner, you won’t be able to foresee every development that could affect your business, but being well-organised and well-prepared for any eventuality will help you respond quickly.
• Enthusiastic: Depending on your franchise agreement and what kind of franchise you want to open, you may need to work long hours initially or permanently. You’ll be spending a lot of time in and around this sector, so enthusiasm and determination to succeed are paramount.
• Ambitious: Big franchisors will always be happy to bring ambitious new franchisees into their network. You’ll be bringing your own unique background and qualities to their business. It’s only natural that you then want your business to do well. And, in a sector as competitive as the gym and fitness, differentiation from your competitors will drive your success.
• Interested in health, sports, and fitness: Whilst not being detrimental, a passion for health, sports, and fitness will also help motivate you when times get tough.

How to assess your competition?

Remember the saying: keep your friends close, but your enemies closer. To succeed as a gym franchise owner, you must know what you are up against, your competition.

And while your franchisor will be able to assist you in assessing your competition, showing that you have done your homework shows incredible entrepreneurial acumen and commitment. Therefore, see if you can figure out the gyms in your area and what they focus on to be unique and attract customers. If you want to be diligent, create a simple Business Model Canvas for each gym chain in your territory to get an intimate sense of what you will be up against and if any gaps in the market exist. We'll delve deeper into Business Model Canvas below.

How to choose your gym customers?

One of the reasons why new startups fail is because they lack focus. Don't become a Jack of all trades, master of none, and prioritise selecting customers over others. Therefore, identify and list the customer groups you can see in your desired area that your fitness facility will cover. Below are some examples to get you started.

• Fitness enthusiasts
• Professional athletes
• Businesses offering their employees gym memberships
• Female business professionals going to fitness before or after work
• Retired seniors

Based on the competition you have analysed, and the possible gaps found, choose three customer groups that would be lucrative to focus on for your gym franchise. For clarity, divide them into an A-Group, B-Group, and C-Group. This will help you design your gym based on who you are targeting - tailoring what you offer.

Furthermore, getting to know your customer groups is paramount for your success, so ask yourself these guiding questions for each of your A, B, and C groups:

• "What drives your customer group to go to the gym?"
• "Are they likely to decrease, stagnate, or grow in size?"
• "Are they likely to decrease, stagnate, or increase in disposable income?"
• "What pivotal three factors does your customer group consider when choosing their gym?"
• "What is the best way to communicate with your customer group?"

Open a gym with a winning business plan

One of the most crucial aspects when designing your business plan is creating synergies between the different sections of your franchise makeup. This means that when you use the Business Model Canvas template for your business model, think of the whole model rather than the individual parts. Here are the different parts of Business Model Canvas:

What will make you different from the competition?

• Value proposition: why is your gym unique from the competition in one or two sentences?

How will you deliver an excellent service and product?

• Key activities: what pivotal, ongoing actions are needed to execute the value proposition better than others?
• Key resources: what assets would be of value to your gym and customer groups?
• Partner network: which suppliers and partners would bring increased value to your business? I.e., energy bars, pool, or physical therapy clinics.

What will your offer be?

• Customers: simply write down your three A-B-C customer groups.
• Channels: How many ways can you connect with your customer groups? For example, a fitness app developed by you or YouTube videos for training.
• Customer relationships: What ongoing relationship will you have with your customer groups? For example, a 24/7 gym is more self-serving, whereas a gym focused on extra features requires hands-on personnel and trainers.

How will your financial structure look?

• Cost structure: will you be cost-driven, i.e., focused on keeping costs to a minimum? Or value-driven, meaning less concerned with costs and more focused on delivering quality?
• Revenue streams: think of how many potential cash flows you can create, like one-time paid visits, ongoing subscription packages, paid extra services, exclusive offers, vending machines, and so on.

It is crucial that you see each of these elements as tightly integrated and connected. Building a successful business plan can be a daunting task, so if you want to learn more on how to build a business plan for a gym franchise, then Point Franchise has numerous more resources to help you. Nevertheless, remember every component in your model must funnel into your value proposition.

How much to open a gym?

Certain franchisors don't accept unsecured governmental funding, while others do. While, some franchise opportunities have requirements on your liquidity and net worth. Nevertheless, a gym franchise in the UK depending on size, location, and franchisor has a total investment between £185,000 and £315,000. So knowing your options of financing will help you in choosing the best gym franchise for you.

• High street banks based on your credit score and liquidity.
• Governmental grants and programs.
• The franchisor might offer financial support.
• Angel investors
• Family assistance and co-signers

Note that you can funnel finances from all or one of these options. It is always beneficial to diversify your financial liabilities and risks.

What insurance will you need for your gym business?

For most franchise agreements, you will need two insurance types:

• Professional indemnity insurance: helping you with damages related to a customer or client, such as injury from one of your workout machines.
• Public liability insurance: covers financial liabilities related to public claims.

What legal structure will you have?

Most of the time, the franchisor will stipulate the legal structure required through the Franchise Disclosure Document (FDD). However, some franchisors offer flexibility in choosing an ownership structure befitting you. Here are the basic four legal structures your business can have:

• Sole Trader
• Partnership
• Limited Company
• Limited Liability Partnership (LLP)

How to assess your franchise opportunities?

There are many different gym franchising opportunities in the UK, some won’t be the right fit for you or the way you want to do business. So, before taking the plunge, research the pros and cons of each gym franchise opportunity. For example, always check what operational areas the franchisor offers and if any of them fit your wishes and abilities.

You should also be well-prepared for the demands that working as a franchisee brings. Although starting a franchise comes with many benefits, being a business owner is never easy and will inevitably come with some stresses and strains. Be well-prepared for what operating a gym franchise could throw at you.

You are a business owner, but you are also in contract and partnership with another party and network of other franchisees. At the same time, always check the franchisor's growth plans and strategies, so it doesn't create potential conflicts. Remember that your success is their success and vice versa.

The best franchise opportunities in the gym sector

There are some great opportunities in the gym sector. Here are some of our favourites:

• Hybrid Fitness: Combine the best fitness equipment with leading classes and great facilities, all packaged into an affordable and flexible franchise, and you have a Hybrid Fitness store. To open as a Hybrid Fitness franchisee, you must make a minimum investment of £50,000, with an expected revenue after two years of £250,000. No prior experience in the gym sector is needed, just ambition, determination and a will to succeed.
• TRIB3: Invest in a TRIB3 franchise and join an industry valued at £95bn. With over 300+ years of combined management experience and a presence in seven countries, choosing TRIB3 means you choose a proven model. It has developed a distinct visual aesthetic and brand strategy. The initial investment is a £35k franchisee fee and can then be between a £137,000 to £280,000 investment, depending on the location and size of your facilities.
• Iron Body Fit: Focused on electrostimulation and over 40 years of the technology used within medicine, Iron Bodyfit places convenience, high-impact results, and innovation at the centre of its franchise model. Spanning the UK with 107 outlets and ready to open more. All you need is £50,000 in franchise fees to receive the ground-breaking equipment, and then depending on the location and size, it is between £30,000 and £160,000 in total investment. To help you get started, Iron Bodyfit offers financial support, and the expected revenue after two years is £400,000.

How to start a gym franchise

If you have come this far, you are ready to become a gym franchisee. And if so, you realise the incredible opportunity it can be to open a gym business in the UK.

Check out our gym franchise opportunities here, and remember to use this resource as your guide when reaching out to franchisors.