New franchise operators struggle to compete with scads of chains. Peter Taunton set his fitness franchise apart with an unusual fee structure.
Less than a year after launching 3 small, independent gyms near Minneapolis, Peter Taunton believed he had a business concept ripe for franchising. His Snap Fitness health clubs cost relatively little in terms of overhead, maintenance, and personnel, and had proved simple for him to run on his own. What’s more, he says all 3 locations had turned a profit less than 90 days after opening. So in 2004 Taunton, experienced in the fitness industry but new to franchising, registered his concept as a franchise and began to court potential buyers of all stripes, emphasizing the gym’s profit potential.
There were few takers at first. The problem, according to Taunton? Fierce competition. Although the number of potential franchisees—unit operators who pay a monthly fee for marketing, technology, and other kinds of structure and support - has grown over recent years, so too has the number of franchises. More than 2,700 companies have started franchising since 2004, according to Arlington (Va.)-based researcher FRANdata.
Snap Fitness » The Issue: New Franchise Is A Tough Sell on March 12th, 2008 at 4:18 pm
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