Fitness is one sector of the franchising industry that has been hit particularly hard by the COVID-19 pandemic. According to the Franchise Times, “[o]verall sales for the segment dropped to $5.8 billion last year. That’s a 23.8 percent decline as all but one of the gym brands suffered sales losses . . . .” However, while that one gym brand, Burn Boot Camp, saw a 12.2 percent increase in sales in 2020 compared to 2019, that came with a 16 percent increase in franchised outlets. As a result, as franchise lawyer Jeffrey M. Goldstein explains, anyone who is considering a fitness franchise must look at the numbers very carefully before moving forward.
What Do the Numbers Really Say?
It is no secret that some franchisors massage their numbers in order to make their franchise offerings look more attractive to prospective franchisees. As a prospective franchisee, it is imperative to do your research and make informed decisions based on accurate and reliable information. While you should be able to rely on a franchisor’s disclosures, you should also review them with a reasonable amount of skepticism. Oftentimes, it is what franchisors don’t say that ends up being misleading to prospective franchisees.
What are Franchisors (and Their Franchisees) Doing to Adapt?
The fitness sector in particular has been forced to adapt to the day-to-day impacts of the COVID-19 pandemic. From opening outdoor spaces to offering on-demand videos and live-streamed fitness classes, fitness franchisors (and their franchisees) have been forced to exhibit unprecedented flexibility over the past nearly two years.
But, while these strategies may have allowed franchisors and their franchisees to build the gap, are they short-term solutions or permanent shifts in the way these businesses operate? If you are thinking about buying a fitness franchise, this is something you need to know. Should you decide to move forward, you will be making a substantial investment in the franchise system, and you will need to know what exactly you are paying for.
It is also worth keeping in mind that if members start wanting to come back in person, franchisors are going to oblige. This means their franchisees are going to need to oblige as well—and they are going to need to do so at their own expense. If your franchisor decides it is time to refresh your gym and adopt new safety protocols so that you can welcome members back at full capacity, will you be prepared to cover the costs, and will it make financial sense for you to do so?
Are Health and Fitness Franchises Poised for Post-Pandemic Success?
Finally, while some have posited that the health and fitness industries are poised for post-pandemic success, it is clear that the pandemic has taken its toll on the fitness franchise sector. Before buying a fitness franchise, it is important to make sure you feel confident in your ability to succeed. This requires thorough due diligence, an honest assessment of your capabilities, and a clear understanding of the terms and conditions of the specific franchise you are considering.
Schedule a Free Initial Consultation with Franchise Lawyer Jeffrey M. Goldstein
Franchise lawyer Jeffrey M. Goldstein brings more than 30 years of experience to help prospective franchisees make informed buying decisions. If you are thinking about buying a fitness franchise and would like to know more, you can call 202-293-3947 or inquire online to schedule a free initial consultation.
