The current popularity of exercise and fitness makes ownership of a gym franchise worth considering. Evaluating the pros and cons of running a franchise can provide the basis for making a business decision. CNN Money reported that startup costs for a gym franchise may range from $46,299 to $321.899, depending on variables that include size and location. Only four of 147 loans from the Small Business Administration defaulted in a five-year period.
Considering the Advantages of Buying a Gym Franchise
One of the most advantageous aspects of a gym franchise is the use of a proven business model. A franchisee gets immediate access to the fitness marketplace with clear instructions for setting up and running a successful business. Some benefits of owning a gym franchise include these:
- Site Selection and Leasing
Franchisors may assist with selecting a site location based on market analysis of its potential for attracting customers. Expert help in negotiating a lease and specifying an interior site plan can save time and money.
- Operations Manual
Franchisors have clearly defined rules of operation that cover every aspect of owning a successful gym. Statements of company policy for hiring and firing procedures, placement of televisions, frequency of cleaning the exercise equipment and loudness of music provide guidance for franchisees in complying with the franchise brand.
- Training and Recruiting
Keeping operating costs at a minimum often relies on successful recruiting and training of reliable and experienced personnel. A franchisee receives a plan for personnel policies that enhance retention of employees.
- Corporate Identity
Franchisees have the advantage of using a corporate website that is often included in a contract. Advertising, promotional material and corporate stationery provide instant recognition of a new entry into the fitness marketplace.
Understanding the Disadvantages of Franchise Ownership
While a franchise provides a safety net that a new owner may appreciate, it may also present some factors that are less than desirable. A franchisee who enjoys independence and making decisions may encounter frustration in running a business according to the requirements in an operations manual. Some disadvantages of owning a gym franchise include these:
- Paying Franchise Fees
For an inexperienced owner, paying for guidance in running a new business may seem worth the price. However, the fees may become burdensome when an owner no longer needs direction or support.
- Visits from the Home Office
Franchisees can expect regularly visits or inspections from a support team. When a business is succeeding and experiencing no problems, an inspection may seem more like a hindrance than a help.
- Controlling Expenditures
A franchisee must comply with regulations from corporate headquarters regarding a change in prices, computer systems, brands, logo design or any other aspect of a business.
- Obtaining Permission to Act
On occasion, a franchisee may need to respond promptly to a request from jurisdictional authorities regarding changes in parking regulations, noise abatement or other local matters. Waiting for approval from corporate headquarters can present difficulties for a franchise owner.