The Business Record has an article on a couple of Iowa fitness franchises that are apparently growing at an impressive clip. In the past I wrote a post questioning whether fitness franchises are a solid investment. Based upon my experience in representing a number of franchisees in the fitness industry, I would say the competition is fierce and a prospective franchisee needs to carefully consider whether their franchise location can be profitable. 

Specifically, you should look very carefully at the trends of the franchise concerning the number of outlets.  Carefully study the number of transfers and not just the number of closures.  A high number of transfers may be an indication that franchisees in the system are struggling, but unprofitable franchises have not been shut down.  Of course if there is a significant number of closures in the system that is definitely a bad sign. The reality is that profitability in any market with a fitness franchise gym is often a tough task to achieve.

The franchises mentioned in the article are different than traditional gyms and are relatively new to franchising.  In these concepts you are really purchasing a program rather than a gym.  In evaluating these fitness franchises, or ones similar to them, it would be important to determine whether the exercise program offered is unique and whether the franchisor’s intellectual property is protected. After all, the exercise program is the critical part of the system – not the gym itself.  

As always in evaluating franchises, do your homework. It is important to have in-depth discussions with management to get a feel of their experience in franchising (not just running a single gym or exercise program) and talk with as many franchisees as possible to learn about their experience with the franchisor.

In the case of new franchises people are often attracted by the prospect of getting in on the ground floor of an opportunity but not everyone thinks it’s a great idea to buy a new franchise. Also, there are common mistakes to avoid when selecting a franchise. Before you invest your savings commit to doing the best due diligence you possibly can.