Weighing the Advantages and Disadvantages of Owning a Fitness Franchise

Posted October 12, 2022

There are pros and cons of owning a fitness club or boutique fitness studio franchise. Buying a franchise can seem like a less risky endeavor, but before jumping into purchasing a franchise, consider a franchises advantages and disadvantages and make sure it is right for you and your long-term business and personal goals.

Gym and Studio Franchise Advantages

Brand Awareness: Consumers are more likely to buy from familiar brand names, and even if the franchise isn’t in your geographic area currently, a quick Google search can provide the consumer with confidence in the fact that others exist.
Proof of Concept: A well-established franchise has proved that its business model can be successful which alleviates some of the risk associated with starting a new venture.
Support: As a franchisee, you own and operate your own business and have the support of the franchisor and the franchise network.
Operational Systems: The processes, procedures, and systems have been developed alleviating extensive time and taking the guesswork out of starting from scratch and developing them on your own.
Marketing: You can benefit from marketing initiatives and business development strategies put in place by the franchisor that will support your launch and ongoing membership recruiting efforts.
Funding: Securing funding may be easier since lenders can include the franchisor’s success as part of the decision-making process.
Economies of Scale: Being part of a wider franchise network can give a franchise owner the ability to compete against bigger fitness chains due to increased buying power for fitness equipment, advertising expenses, and more.

Gym and Studio Franchise Disadvantages

Fees and Costs: There are ongoing fees paid to the franchisor which can prove to have quite an impact on the bottom line and your profits. In the end, a franchise can prove to be more expensive in the short and long-term.
Success Rates: All franchisees are not created equal. In selling you on the franchise, the franchisor is going to put their best foot forward and provide you with data and stats that illustrate its potential, but will probably not share the information associated with franchises that have not been successful or are struggling.
Restrictions: The agreement between you and the franchisor is legally binding and will restrict the way the business is run and how it is developed. Examples of restrictions include where you can open and operate a business, what or how service is delivered, what classes and services can be offered, what equipment can be purchased, and so on. If you are creative person a franchise could be quite limiting.
Creativity: If you’re creative and like to do things your way, you may not be thrilled with the constant monitoring and guidance that typically comes along with a franchise and your inability to create services and programs that could benefit your members.
Brand Reputation: The brand’s reputation is dependent on the performance of the whole franchise network. Poorly performing franchisees may have impact on the franchisee’s own success as bad news travels fast in the digital age.
Exiting: If you decide you want to sell or close the business or you want to rebrand and go it alone, you might be met with termination clauses that can carry some hefty financial costs.
Franchise Term: At the end of the franchise term, the franchisor could decide not to renew the franchise further, leaving you stuck trying to build a new fitness brand and all the costs that go along with that.
Franchisor Risks: If the franchisor goes out of business or faces a public relations crisis, it could have an impact on your business.

There are risks and rewards associated with starting and developing any business venture whether or not it is a franchise. A franchise allows you to go into business for yourself but not by yourself. To make a decision that is right for you, make sure to do the following:

Conduct an in-depth due diligence analysis on the franchise model you are considering;
Talk with franchisees not on the Franchisor’s list of recommended franchisees to speak to;
Seek advice from industry experts;
Make an in-depth list of what you want from a business venture and ask yourself how the advantages and disadvantages impact that list.

Seeking fitness industry expertise? Reach out to Atwood Consulting Group ([email protected]). Our team of consultants can help guide you through the decision and help you get up and running whether you decide to do a fitness franchise or build your own brand from scratch.