What to Look For In a Fitness Franchise Model

Hold your horses!

Before you go and sign that franchise agreement with whatever fitness franchise that you’ve been looking at, read this blog post first.

If you’ve ever read the book E-Myth by Michael Gerber then you know that in the first chapter he talks about how franchise businesses have a five times higher success rate than starting your own private small business.

True on all counts.

It doesn’t matter if you’re starting a fitness boot camp franchise or a sandwich franchise – your success rate, as in the odds of you being in business after another two, three, or five years is tremendously higher if you get on board with a franchise.

It’s not rocket science. The reason for this is because franchises usually start out with their own locations to prove the concept, build the systems, and create an operations process before becoming a franchise and selling their “model” to others who are looking at opening a small business… in your case a fitness business.

The problem however is that not all fitness franchises start off with a proof of concept. Instead some franchises will go right to market with their IDEA of what the business should be without proving it.

That’s a BIG red flag for you because if you’re looking for fitness business opportunities and they haven’t taken the time to prove their business concept then you might end up as a “test subject” for them, and not even know it.

That’s just one thing to look out for…

Here are four other things to lookout for before signing the deal with a fitness franchise.

Now, full disclosure: I myself am the president of Fit Body Boot Camp, a fitness franchise based out of Southern California and we offer franchise opportunities for ambitious and entrepreneurial minded people who are looking for the right franchise to partner with. So you might argue that I’m biased toward FBBC and what we do here… and you know what? You’d be right.

But that’s because I believe that we do things better. We’re customer focused and for us it’s all about exceeding industry standards and not just meeting them – so yeah, I am biased.

So without further ado, here are the four key things to look into when reviewing fitness business opportunities that might be right for you.

Thing 1. What does the franchise cost to get on board with? Now this price varies from franchise to franchise. And while some of the “buy in” money is contribution to cost and overhead, the rest of it is profit. I’m not anti profit mind you. In fact, I’m totally for profit, but only when we put people before profits by giving them more than they expected for the purchase they made. So, the question to ask a fitness franchisor is: How much is your buy in fee and what do I get for that?

Thing 2. All franchises have a monthly fee or royalty. That’s the fee that covers being apart of the brand, support, marketing, sales and operation guidance, a protected territory and so on.

The thing is most franchises will change you a percentage of gross revenue. The going rate for this percentage is usually around 6-8 percent. In other words if your fitness business was generating $20,000 a month is total gross sales, and your royalty fee was set at 6% then you’d pay $1,200 a month in franchise royalties.

Now here’s the kicker!

When you work hard and increase your gross sales to $30,000 a month, now that same 6% goes from $1,200 month to $1,500 a month. I look at that as getting punished for working harder and making more money. No thanks. I’m all about a small flat monthly royalty fee. If a franchisor wants to make more than that, they should earn it – we certainly do, and I’m very proud of that fact.

Thing 3. What do you really get with new franchise? Here at Fit Body Boot Camp do these things called “getting to know you calls” with people who are interested franchise opportunities, specifically in owning a Fit Body Boot Camp location.

I’ve taken hundreds of these calls personally and I really enjoy them. It gives me a good opportunity to meet someone who may be a potential FBBC owner, and it gives them the opportunity to get to know me, us, and what we’re all about.

Anyhow, most of these calls go the same way… the same questions from me and the same few questions from them. But the three questions that some people forget to ask are…

1. What’s included in the monthly franchise royalty fee?

2. Are there other additional fees that I’d have to pay or can be responsible to pay?

3. Other than the basic level of support that you’re required to give to a franchisee, are there other levels of support that I’d get?

You’ve gotta know what you’re getting for your money and you’ve gotta know if there are other “hidden” costs that can influence your profit margins. Think of it this way, you’re entering a relationship here.

Thing 4. One of my most favorite quotes comes from Ronald Regan; “trust, but verify.”

Truer words have never been spoken. And when you’re looking for a fitness franchise business to start then you really need to verify what that you’re getting. You may not know this, but franchises are governed for the FTC (Federal Trade Commission).

And while the FTC does it’s best to keep all franchises on the up and up. The fact of the matter is that some franchisors have gotten away with some pretty shady stuff. For example, you should check if the particular franchise that you’re about to get on board with has rights to sell franchise locations in your state.

Most people don’t know this, but every year franchisors must reapply to specific states before they can sell locations in those states. This means that the individual state has looked into the financial standings of that particular franchise and has deemed it “safe” to sell franchises in your state. Trust, but verify.

Another very important thing to do is to speak with other owners of that particular franchise. Don’t just call up the two or three names and numbers that you get from the franchisor – go to their directory and call up a dozen or so random location owners and ask them how they like the business model, the support, and working with the franchise corporate office.

I remember one time when a perspective Fit Body Boot Camp owner was shocked and surprised to hear me say: “why don’t you go to our directory, pick out several FBBC locations across the map and call them up and ask them about their experience owning a FBBC location.”

It just makes sense to do that. After all, if you’re going to get into a relationship with a franchise, then you’ll want to make sure that they are going to be a good fit for you and the vision that you have of your fitness business.