Low Cost Franchise Model Grows Globally Across The Fitness Industry

Things are heating up in health club global development and it seems low cost models are making most of the development moves. As Ray Algar's research on the UK market has reflected, there is a squeeze going on in health clubs and it isn't isolated to the UK. Ray's group Oxygen Consulting has some keen insights on this trend.


I recommend you check out Silverstein's book on consumer trends in trading up and trading down. What Algar's graphic above reflects is happening in all consumer markets and its impact on health and fitness is just starting.

Here is a recap of recent developments in the global health club market.

Europe

Fresh Fitness, a new budget concept, has been launched in Denmark by Rasmus E. Ingerslev, founder of Fitness.dk, with SATS as a co-investor. The new chain offers monthly fees of DKK 99 (€13), reduced costs by excluding all luxury and free services. Many of the fitness classes, such as yoga and spinning, will have no live instructor but will be conducted with the help of video. The company will open the first two fitness centres in Copenhagen, but aims to become the cheapest fitness chain in Denmark.

Budget club operator Pure Gym opened a new site in Smethwick, West Midlands. The new gym will be open to users 24 hours a day, offering users full access for a £15 monthly payment and a £20 joining fee. There are currently six additional sites in the pipeline, with Aberdeen, Belfast and Derby among prospective Pure Gym locations.

United States

Crunch Fitness announced the appointment of Keith Worts, current COO, as its new president. The company also announced that they have started to offer franchise business opportunities as part of their expansion programme. The first franchise is due to open in Autumn 2011 in California and more than 50 franchise locations are also underway in the US and internationally.

Town Sports International released Q2 2010 results, with revenues for Q2 2010 down 5.2% from the same period last year and LFL revenues down 4.2%. Memberships also decreased by 3.8% compared to June 2009. Membership attrition averaged 3.3% per month in Q2 2010 compared to 3.7% per month in Q2 2009. Capital expenditure has been scaled back, with FY 2010 expenditure expected to be $26-28 million, down from $49.3 million spent in 2009.

Asia and Elsewhere

Anytime Fitness announced a number of deals that will see the chain expand into Benelux and Japan, as well as into the UK and Ireland. A master franchise agreement has been signed with Petro Hameleers of the Netherlands, with plans for 150 clubs in Belgium, the Netherlands and Luxembourg over the next 10 years. The company also announced plans to open 300 new clubs in Japan over the next 10 years, where a consortium led by Toru Yamazaki, former CEO of Megalos (the fifth largest health club chain in Japan), has taken on the master franchise. Fast Fitness Japan, will now do business as Anytime Fitness Japan. Anytime Fitness expects to open its 2,000th club by the end of next year.

The énergie Group has appointed Nathan Gardiner as its new general manager for the Middle East. He will relocate from Dubai, where he worked for Fitness First, and will join the énergie team in Doha, Qatar where énergie is currently planning to open a number of clubs. Gardiner started his career in the fitness industry in 2001 with Fitness Exchange. He has also worked for LivingWell Health Clubs and Fitness First.

Evo Fitness Personal Training - an independent, personal training-only facility in Cape Town, South Africa - is scheduled to open this month. Evo Fitness has aligned itself with adidas with an eye to joint involvement in projects going forward.

Australian fitness chain, Genesis Health Clubs, is to open three sites in Sydney. The company, owned by the Melbourne-based Belgravia Group, already owns 38 clubs in Victoria, New South Wales, Queensland, South Australia and Tasmania.

Vivafit, the women-only fitness chain, has signed its first master franchise deal to expand the brand into India. The master franchisee, Manisha Ahlawat, will open the first Indian Vivafit in Delhi in October 2010. The aim is to reach 25 new centres in 2011, and to open more than 1,000 gyms across India over the next 10 years. In the European marketplace, the brand plans to extend its presence to countries such as Italy and Germany.

Tags:Ray Algar, silverstein, fresh fitness, rasmus e ingerslev, pure gym, crunch fitness, keith worts, anytime fitness, toru yamazaki, nathan gardiner, evo fitness,vivafit, manisha ahlawat,

Source: bryankorourke,

Fitness Industry - Low Cost Model Growth Continues

MONDAY, SEPTEMBER 27, 2010

This Blog/News/Press Release/Information is posted by Sparkleminds, A End To End Franchise Solutions Company, Based at Bangalore, India.We offer customized services to businesses seeking expansion through the franchise route and over the last decade have helped numerous clients to scale up their businesses.We also work closely on international master franchise expansions.Visit us on www.sparkleminds.com and speak to us, and we are sure you will be more than glad to understand how we could grow your existing business multi-fold times.

Tide Dry Clean Franchise From P&G to Roll Out Across America

P&G Looks to Franchise Tide Dry Cleaning:

The world's largest consumer products company attached its branding to car washes three years ago. Now it wants to open hundreds of franchised Tide Dry Cleaners


Procter & Gamble (PG), long dominant in detergents to wash clothes, wants to dry clean them, too. The world's largest consumer products company plans to roll out franchised Tide Dry Cleaners across America. Some franchising vets say the strategy could be a hit. Andrew Cherng, founder of Panda Restaurant Group, which operates Chinese fast-food outlets in U.S. malls, plans to open about 150 Tide-branded dry cleaners over the next four years. "I wasn't around when McDonald's (MCD) was taking franchisees," he says. "I'm not going to miss this one."

P&G wants to put its brands to work selling services to boost U.S. revenue and promote its products. Three years ago the company launched Mr. Clean Car Wash; nine franchisees are now in business. In 2008, P&G opened three test Tide Dry Cleaners in Kansas City. Having fine-tuned the concept, the company is now going national. P&G is moving into services "that are virtually unbranded," says Michael Stone, head of The Beanstalk Group, a brand-consulting firm. "One would think consumers would trust a Tide Dry Cleaners because they know P&G is behind it."

The Tide and Mr. Clean ideas sprang from P&G's FutureWorks unit, which identifies and develops new businesses. Nathan Estruth, who runs the division, says his staff must get "comfortable with ambiguity" and accept that most projects "get shut down." P&G says not just any brand can be hitched to a service. It looks for a fragmented market where consumer expectations aren't high. (Don't expect Pampers Day Care centers.) Its research showed that both cleaners and car washes fit the bill.

P&G lacked franchising experience so it broke its decades-old practice of internal promotions and hired William Van Epps, who had managed franchising at Pepsico (PEP). P&G set up a company called Agile Pursuit Franchising with Van Epps in charge. His team put a premium on consumer convenience. Each dry cleaner features a double-lane drive-through and lockers accessible for after-hours pickup. There are lollipops for kids and Iams biscuits—yes, a P&G product—for the family dog. The company hopes to lure eco-conscious consumers with proprietary technology that doesn't use the solvent perchloroethylene. P&G says its stores will charge about the same to dry clean clothes as the industry average ($2.25 for a man's shirt; $11.50 for a dress).

Opening a Tide Dry Cleaners costs a franchisee about $950,000; a Mr. Clean Car Wash up to $5 million. Don Nix, a former accountant, operates a Mr. Clean Car Wash in Marietta, Ga., and plans to open a second one next year. People won't necessarily identify with "Don's Car Wash," he says. "The brand and the logo of Mr. Clean [has] huge value for attracting new customers."

While franchising allows P&G to off- load much of the financial burden, the model is still risky. Corporate parents and owner-operators don't always agree. And dirty stores or lousy service could hurt Tide, which consulting firm Millward Brown ranks fifth globally as measured by value derived purely from brand equity. "If we did anything to damage that," says Chief Technology Officer Bruce Brown, "we'd stop."

The bottom line: P&G is putting its Tide and Mr. Clean brands on dry cleaners and car washes. The risk is that franchising could tarnish their reputations

Tags:Tide Dry Franchise, PandG Franchise,MrClean Car Wash, Tide Dry Clean Franchise,Nathan Estruth,William Van Epps, Agile Pursuit Franchising, Laundry Franchise, Laundry Franchising, Car Wash Franchise,

Source:By Lauren Coleman-Lochner and Mark Clothier,Business Bloomberg Week,September 2, 2010, 5:00PM EST

This Blog/News/Press Release/Information is posted by Sparkleminds, A End To End Franchise Solutions Company, Based at Bangalore, India.We offer customized services to businesses seeking expansion through the franchise route and over the last decade have helped numerous clients to scale up their businesses.We also work closely on international master franchise expansions.Visit us on www.sparkleminds.com and speak to us, and we are sure you will be more than glad to understand how we could grow your existing business multi-fold times.