Running a Gym Business: Franchise or Independent Ownership

Running a Gym Business: Franchise or Independent Ownership
Courtesy FRNation.com

Courtesy FRNation.com

The decision to go into the gym business is a significant one, and if that’s the decision you’ve made for yourself at any point, congratulations!  

 

But there’s another choice that you’ve made along the way, or are making right now: the choice between franchising and independent ownership. It’s a choice that’s equally as important as the one to go into the gym business in the first place.  This decision will shape your fitness business’s trajectory, influencing everything from your brand’s identity to your financial commitments. 

 

For context, I should share that Fitness Revolution used to be a franchisor. In fact, we were the fastest growing personal training franchise in the US.  We were also recognized by several organizations for franchisee satisfaction and were ranked the top fitness franchise by Franchise Business Review.  All for multiple years.     

 

Ultimately, we decided to unwind our fitness franchise and restructure the service as fitness business coaching because that’s what our target market actually wanted, and it was a better fit for our strengths. The main factor in that decision was that our target market made it very clear that they wanted to keep their autonomy and identity – which inherently conflicts with the purpose of a franchise.  And that all relates directly to the purpose of this article. More in a moment.

 

I’ve also been a franchisee, opening an Anytime Fitness franchise about 15 years ago.  

 

So I’ve been on every side of this decision – the franchisor, the franchisee, the independent owner withOUT expert support, and independent owner WITH expert support. 

   

If you’re wrestling with the decision to go with a fitness franchise or go the independent gym owner route, I wrote this article to offer my unique blend of perspectives, and hopefully help you make as informed of a decision as possible.    

 

Understanding Franchise Gym Businesses


A franchise gym business is a model where you buy into an established brand, adopting their business strategies, branding, and operational guidelines. 

 

Familiar fitness franchise names used to just be the big box clubs like Gold’s Gym or Planet Fitness.  More recently training gym franchises have become popular, for example Orangetheory and F45.  

 

Franchises should provide franchisees with a proven business model, marketing support, and ongoing training, which can appeal to first-time gym owners. However, they also come with franchise fees and specific obligations to the franchisor that can be major hurdles, both to get into business and to stay in business.

 

Understanding Independent Gym Ownership


First off, to clarify, I’m using ‘independent ownership’ in a general sense, meaning ‘not-franchised’.  Technically a franchisee can be independently owned, and commonly are.  The ‘non-franchised’ independent owner has 100% authority over their business and brand, while a franchised business – independently owned or not – still must adhere to franchisor guidelines and obligations.

   

Simply put, independent gym ownership allows you to retain your identity and your autonomy, giving you the freedom to create a unique fitness business that aligns with your vision. 

 

Independent gym owners have the opportunity to build their brands from scratch and offer unique experiences that stand out in the crowded fitness market. As an independent gym owner, you have the liberty to innovate, whether that means offering niche workout classes, incorporating holistic wellness services, or creating your own unique gym culture.

 

However, this path requires the willingness to navigate the business landscape without expert guidance – or – to seek out expert support unaffiliated with a franchise.  It’s a challenge that requires all of your  leadership muscles.

 
Comparing Franchising and Independent Ownership


When looking at the two options side by side, there are several factors that come into play, and I want to go over the primary ones.  

 

Franchising involves paying initial and ongoing franchise fees, possibly a marketing fee and/or other fees.  You don’t have those fees as an independent gym owner.  But you also don’t have some of the benefits that come along with them, which I’ll go into below. 

 

As a franchisee, you also have certain obligations to the franchisor. Franchising often comes with certain restrictions designed to maintain brand consistency.  Hours of operation, what services will be provided, staffing requirements, location restrictions, etc. 

 

Independent ownership, as I keep saying, offers complete autonomy and the freedom to get creative with your business decisions.  You have full control over your business, you just have to bear the increased responsibility that comes with that control.  That’s your tradeoff.    

 

There are a few other areas that are especially important to consider:

  • Brand Recognition
  • Business Models and Strategies
  • Training and support
  • Marketing and Advertising

 

Interestingly enough, 10+ years ago, the decision typically came down to one factor: if you had the money, you went the franchise route.  If you didn’t have the money, you went independent.  

 

That’s not the case anymore.  

 

In the last 10 years the landscape has changed a lot. In particular the independent route has become a more compelling alternative than it used to be. 

 

Depending on one’s goals, preferences and scenario, going independent is often a preferred route.  Whereas it used to be more like the ‘option you’re left with if you didn’t have enough capital to go with a franchise’.    

 

It’s still a tough decision for many to make, but it’s at least become a decision that’s about more than who has money and who doesn’t.  

 

There are two trends that have shifted the balance: 

  1. The influx of new, unproven fitness franchises into the market.  Between 2010 and 2020 a lot of good operators decided to take the leap and try to franchise their concepts.  Some grew, but most stalled.  Most likely because franchising is a different business from owning and operating a gym.  Just like real estate is a different business.  There are a LOT of franchises out there stuck at 4-10 franchise units because they can’t scale as franchisors and/or prove the concept as an investment.  The overall effect is that the sense of security that came with a franchise has been diluted a bit.
  2. The maturation of fitness business coaches, consultants, and mentors.  This little industry is proving to be a viable alternative to franchise expertise and support for independent fitness business owners.  There’s still some of the ‘wild west’ residue, but it’s gotten better and is still improving. More recently we’ve begun to see some of these experts delivering a professional experience for their clients.  

 

Brand Recognition:

Fitness franchises might offer the advantage of instant brand recognition, although that’s not always the case. The idea is that when you open a new branch of XYZ Fitness, potential customers should already have an idea what to expect. IF – the franchise has established that brand recognition. 

 

This is where CrossFit thrived. CrossFit wasn’t a franchise and didn’t offer any of the other benefits of a franchise.  It was brand recognition only.  But that brand recognition was strong. It’s still got some weight, but not near what it had at its peak. 

 

If you would rather build your own brand than operate under someone else’s, independent gym ownership offers you that opportunity. You can create a unique identity that resonates with your target audience, and cultivate your own local brand around that. 

 

Fitness Business Models and Strategies:

Franchise gyms should provide access to tried-and-tested business models and strategies. This can be a big advantage, especially for those new to the business world. Learning strategy and business models on the fly is tough, and isn’t going to be the smoothest or the fastest path, even if you’re a fitness business savant.  

 

On the flip side, independent gym ownership allows for innovation and customization. You have the freedom to experiment with different strategies until you find what works best for your specific market.  If you have some experience in business, in operating a training gym, or both – that knowledge will serve you well here.

 

Models and strategies is one of the areas where the playing field has leveled out the most in the past 10 years, particularly because of the growth of the fitness business expert resources.   Franchises no longer have the market cornered on the ‘tried and tested’ insights.  A professional expert or firm will have access to as large or larger of a network than most franchises, drawing on that network to source ‘what’s working’. 

 

Training and Support:

Franchise gyms provide training and support to franchisees, which can include everything from operational training to marketing support. Independent owners, on the other hand, will need to rely on their current business knowledge. Another common option is to seek out business coaches, consultants, or mentors to provide guidance. ‘Expert’ solutions like these can also mean more personalized support tailored to your specific needs and goals.

 

This is a tough one on both sides, and you’ve got to do your due diligence either way.  We have had many  franchisees of many different fitness franchises come to us for support because they were not getting the support they needed from their franchisor.  But that doesn’t mean that every franchise is bad about training and support.  There are some who do it well.  You just have to do your due diligence to find them. 

 

Which is really no different than finding other expert support.  It’s really tough to filter through all of the business coaches, consultants, mentors, gurus, and hobbyists to find true experts who have the knowledge and resources necessary, and that you can trust to deliver a professional experience.  But they do exist.

  

Going it alone (no franchise and no outside expert guidance) would be my last option. In fact, I would probably recommend someone not go into business if that was their plan.  We believe that a business owner has to have support of one type or another – either franchise or other expert.  

 

It’s just going to require solid due diligence to make sure you find a good one for you.  But it’s worth the extra effort when you do. 

 

Marketing and Advertising:

Franchises often have marketing and advertising strategies and resources in place, which can benefit franchisees. You’re paying more, and in some cases are paying a marketing fee on top of the royalty. But you should also be gaining the advantage that comes with an entire system of franchisees marketing. 

 

Independent gym owners obviously don’t have those resources in place, but they do have the freedom to create and implement their own marketing strategies. This can allow for more creativity and the ability to directly target your local market, which can be powerful.  Especially if the business owner is a skilled marketer already.  

 

While the independent owner doesn’t have a franchisor to lean on, marketing and advertising tends to be one of the strengths of the ‘expert’ community of coaches, consultants, and mentors.

 

Key Factors to Consider When Making Your Decision


When it comes to making a decision between these two options, you’ve got a lot to consider, and there’s probably not just one single aspect that will be the determining factor.  Consider your personal business goals, financial resources, willingness to take risks, and your experience in business and in the fitness industry. Do you want security and support, or do you prefer creativity and control? 

 

I’ve made this decision for myself several times, and we’ve worked with a lot of gym owners trying to make this decision for themselves, and here’s what it almost always comes down to:

  • Sometimes it’s still just about the capital.  There’s a reasonably low barrier to entry to open a training gym, so someone who just can’t afford a franchise can still open an independent gym.  But if capital doesn’t eliminate the franchise option, then their decision between a franchise or going independent always come down to these two things: 
  • How much of your identity and autonomy do you want to give up?  With all of the fitness business owners I know who have chosen to go independent – this is the biggest reason.  They want to retain control over their brand and their service.  Fitness professionals don’t want programming requirements being handed down from ‘corporate’ or individualized programs being turned into ‘value meals’. (Nor should they, btw.)  
  • How much guidance/oversight do you want?  There are a lot of options out there.  My highest recommendation is that you just don’t opt to go withOUT any type of guidance.  Alone is the worst option.  (And this may sound bad, but I need to include it because it happens a lot: The second worst option for ‘expert guidance’ is the person you know who is willing to do it for free. I’ve never seen this work out. Even when they have the best of intentions, there have been a lot of businesses (and owners) left in pain.)

 

The Role of Fitness Business Coaches, Consultants, and Mentors


I don’t want to turn this into a lobbying piece for coaches/consultants/mentors, so I’ll keep this part lean.  

 

Whether you choose a franchise or independent ownership, business coaches, consultants, and mentors can provide invaluable support. They can offer guidance, help you navigate challenges, and provide insights that can propel your business forward.  

 

Don’t take the ‘independent’ aspect too broadly – that doesn’t mean you have to do it the hard way (alone).  

 

You’re Making An Important Fitness Business Decision


Like I said in the beginning, making the choice between franchising and independent gym ownership is a big one.  It’s a personal one – influenced by your goals, resources, and vision for yourself and your business.

 

Whether you choose the security of a franchise or the freedom of independent ownership, remember that success in the fitness industry requires passion, commitment, and a keen understanding of your market. So, weigh your options carefully, seek advice, and make the decision that aligns best with your vision for you and your gym business.

 

Regardless of which direction you choose, it’s going to be hard. But it’s going to be exciting as well. And I hope you find it fulfilling.

Fitness Revolution empowers fitness business owners to build and grow profitable businesses they are passionate about. Through expert coaching, backed by their proprietary Fitness Business Alignment System™, FR provides the long-term solution to ending burnout. To learn more about how FR can help you take your fitness business to the next level, visit https://frnation.com/.

Stay Connected!

Subscribe to FitBizWeekly’s FREE newsletter for news, commentary, idea sharing and developments across the Canadian health and fitness industry.


By clicking on the Subscribe button you agree to be on our newsletter list. You can opt out anytime. We respect your privacy. Your information will not be shared and your email address will be stored safely. 

Stay Tuned

Subscribe to our weekly newsletter 

By clicking on the Subscribe button you agree to be on our newsletter list. You can opt out anytime.  

We respect your privacy. Your information will not be shared and your email address will be stored safely.