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Monday
Jan092017

Looking Ahead: A View of 2017 from The Fitness Industry Trenches 

Normally, at this time of year, CBI turns to consultants, researchers, and other industry gurus to obtain their sense of—or best guess about—what the coming year might hold.

This year, though, we chose to pass on the venerable experts and go with a group of individuals who are working long and hard, deep in the trenches—men and women who are operating a single independent club, a small regional chain, and a thriving franchise enterprise. All have recently become members of IHRSA.

Their personal, heartfelt stories, describing daily reality on the always challenging front lines, are, in many ways, more revealing than all of the metrics, stats, and data in the world.

Shannon & Kendra Short: Co-Owners
B Defined Fitness

Belleville, KS

In January 2012, the husband and wife team of Shannon and Kendra Short purchased their club, founded in 1993, which then was known as The Gym. They revamped its business model, transforming it from that of a standard gym to that of a family-friendly fitness center, and renamed it B Defined Fitness.

Today the 5,000-square-foot facility boasts an impressive array of amenities, including a basketball half-court, a full-size racquetball court, a fitness classroom, an exercise equipment room, locker room and shower facilities, and a massage therapy room. It employs two part-time office assistants, one maintenance person, an equipment maintenance staffer, and two fitness class instructors. Massage therapy and personal training are provided by outside contractors.

B Defined has some 150 memberships, many for families.

During the past year, B Defined has seen steady growth, and, looking forward to 2017, doesn’t see that changing.

“We’ve seen a huge growth in people’s awareness about the benefits of being physically active,” says Shannon, “but, at the same time, keeping members engaged and involved in healthy lifestyles isn’t easy.”
To meet the challenges, the Shorts stress personal connections, keeping a close eye on emerging trends, and are planning to expand their facility and add more equipment.

“We make it a part of our routine to talk to members not only when they come in the door, but also out in public when we see them,” he explains. “We reach out to them regularly, and ask them if there’s anything they want or need, and what we can do for them.

“We sincerely believe that, if you support someone and help them to remain accountable, they’ll continue to come in, and work to reach their fitness goals.”

Among the trends that seem to be coming on strong in the Belleville market are circuit-style routines and ones requiring minimal equipment. “Both seem to be popular,” observes Shannon. “One of the ways we’ve addressed these trends is by offering a ‘Workout Idea of the Week.’ And now, in addition to our standard equipment, we’re providing our members with calisthenic and plyometric tools they can use to create any type of workout they like.

“This month,” Shannon points out with pride, “we’re celebrating our fifth year in business.”

James Baker: Owner
Brenham Fitness
Brenham, TX
Fitness Plus
Bellville, TX

In 2006, James Baker acquired the Brenham Fitness Center, which had first opened its doors in 1992. While Brenham, TX, is a relatively small community, with a population of just over 15,000, today Baker’s two clubs, with approximately 2,300 members, boast a penetration rate of about 15.3%. One of the facilities measures 8,000 square feet in size, and the other, 16,000 square feet.

In 2011, working with an operating partner, Baker launched Fitness Plus of Texas, a 7,000-square-foot club in Bellville, TX (population 4,170), which has some 600 members. All told, the three sites employ about 13 people.

“I’d been a divisional manager for Bally Total Fitness in the late 1980s, so I had some solid experience,” says Baker. “I came into a community where there was only so much competition to go around, took over my competitors, and consolidated locations, which helped us really take off.

”
Some serious developments in 2015 and 2016—the oil business bust and a Listeria infection at a Brenham creamery, the area’s major employer—applied the brakes to the club’s growth. “The fitness industry isn’t totally recession-proof,” observes Baker, “but it can be recession-resistant. ... So we didn’t lose anything. We didn’t have our typical growth, but we were fine.”
Today, his attitude could, perhaps, best be described as cautious optimism.

Now, as a result, Baker seems focused on local, rather than industry-wide, issues and 2017 prospects. One of his principal concerns is that, while he enjoys something of a monopoly, he recognizes that Brenham couldn’t accommodate a third fitness provider. “It can support two fitness centers, but, if another one came in—well, there’s just not enough to go around,” he says. “So either they wouldn’t make it, or one of mine wouldn’t make it. ...

“But I’ve been in business for a long time, so my wife and I have the ability to hunker down. We don’t really have any debt service on equipment anymore, so that’s a big help as far as cash flow goes. We own the real estate that we’re in—one of them is in a strip center, and the other one’s a standalone. She could work one of them and I could work the other.”

For the coming year, Baker predicts growth of 2% to 3%, similar to that for 2016, which matches the relative growth of the community as a whole. “Unless somebody has more money than sense, and they don’t do any market research—which has happened before, and we got through that—we’ll be fine,” he notes.

He adds that it’s tough to play catch-up with his facilities because they try to cover so many niches for the community, offering amenities such as group exercise, a kid’s circuit, free babysitting, and a separate women’s workout area. “If you have a heartbeat, you’re in my target market,” he says.

But, turning serious, he assures, “We can weather the storm.”

Anthony Geisler: Owner
LAG Fit, Inc.

Santa Ana, California
Club Pilates Franchise:
 CEO

Anthony Geisler is a true fitness franchising veteran. In 1992, while a member of the original LA Boxing gym in Costa Mesa, California, he broached the idea of expanding the brand to the owner, Sean McCully, and, subsequently, became the first franchisee.

Having transformed his venture into an 81-unit success by 2012, he sold his LA Boxing franchise in 2014 to the UFC Gym division of New Evolution Ventures (NeV), the Lafayette, CA–based private equity firm.

After selling the business, he took some time off, but then, in 2015, his franchise development firm, LAG Fit, Inc., acquired Club Pilates. The chain had been founded by Allison Beardsley in 2007, and, by then, had some 25 locations. Beardsley remains a part owner in the firm.

“It was funny,” Geisler says. “I wasn’t looking for another deal at the time. I was building homes and doing a couple of other things to stay mentally active. But when I saw Club Pilates, I realized that there was nothing else like it in franchising.

“Pilates doesn’t need an introduction,” he explains, “so I didn’t have to get anyone to believe in it. And I didn’t have to reinvent the wheel.” Within a year, he’d flipped the Club Pilates concept into franchising, and quickly grew to about 325 locations in 30 states. The number currently stands at 450, and Geisler’s now averaging over 40 new franchises per month.

“After reassembling my team from LA Boxing, and developing a franchise model that makes money for franchisees, and, also, given the excitement we’ve seen with the recent acquisitions of Pure Barre, Barry’s Bootcamp, CorePower Yoga, and Orangetheory Fitness—which represents nearly a billion dollars in deals—you can understand how we were able to grow so quickly,” says Geisler. Given his track record of success, it’s hard—perhaps impossible—for Geisler to be anything other than optimistic about the prospects for Club Pilates or the industry as a whole.
He sees a rosy future for 2017, and anticipates adding 300 to 400 more locations, bringing the total to 750 by the end of the year. At that point, he says, Club Pilates should be close to its ceiling. “We’re not looking for mega growth,” he says. “We watched Curves do it, and then lose momentum. And we don’t want to be Starbucks.

“We’re fortunate because people who want to get into our franchises, and into fitness franchises in general, already have a passion for the industry,” he continues. “It’s not like you’re opening a dry cleaning business. You do this because you love it. The return on Club Pilates is excellent, which is one of the reasons it’s been so popular.

“If the economy holds—and there’s no reason to assume it won’t—franchising as an industry will continue to do well in 2017.”

Reader Comments (2)

wow! Great post! Thank you so much! We have the fitness time at our company http://lordofpapers.com/ , and we`ll use your tips for our exercises!
January 10, 2017 | Unregistered CommenterKatty
Great insights here into the challenges faced by fitness businesses and some great opportunities too!

Thanks from the http://exercises.com.au team :)
January 10, 2017 | Unregistered CommenterExercises.com.au

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