“You adapt, evolve, compete, or die.” — Investor Paul Tudor Jones
As new IHRSA data shows, the state of the fitness industry is the best it’s ever been. According to the 2018 IHRSA Global Report, the health club industry totaled $87.2 billion in revenue for 2017. That report also states that health club membership in the U.S. grew to 60.9 million, an increase of 33.6% since 2008. More recent research published in the 2018 IHRSA Health Club Consumer Report puts the membership total at 70 million—a record high.
Despite the success of the industry, launching a health club is no slam dunk. Some estimate that as many as 81% of fitness studios close or fail in the first year. Even brands with long track records need to continue evolving their business models to keep up with emerging trends.
Startup struggles and a fast-changing marketplace could be one reason why health club franchising is on the rise. In the U.S., fitness franchises generate an estimated $4 billion of the industry’s $34 billion in annual revenues, according to the IBISWorld 2018 Gym & Fitness Franchises Report. Between 2013 and 2018, this segment grew at an annual rate of 5.2%, a figure the industry is set to maintain until 2023.
“Fitness franchises offer individuals, who often have no formal fitness education or background, a purposeful platform to make a difference,” says industry expert Brent Darden of Brent Darden Consulting. “In addition, many fitness franchises have a proven track record of success and can generate significant profit margins with relatively low startup costs.”
If you’re looking for a franchise opportunity, how do you know you’re signing on with a brand that transforms themselves in order to remain competitive and avoids the mistakes that lead to customer attrition?
First ask yourself this: Is the brand a Netflix or a Blockbuster?