Trends in Food and Fitness Franchising | International Franchise Association

Trends in Food and Fitness Franchising

 

Exploring franchise development insights in the fast-growing fitness versus restaurant industries.

 

By Matthew Stanton

 

The fitness franchise industry has been gaining momentum and industry players from all franchise sectors are taking note. As a former executive from the quick-service and fast-casual restaurant space, I’ve seen firsthand the restaurant franchise industry’s migration to the fitness and wellness space. I made the transition from restaurant franchising to the fitness and wellness sector this past year, and have seen the migration momentum continue to build as many restaurant franchise owners are also making the switch from multi-unit restaurant operators to multi-unit fitness studios.

 

“I’ve seen firsthand the restaurant franchise industry’s migration to the fitness and wellness space.”

 

So, why are we seeing restaurant franchise owners move to the fitness space? And what is it about fitness and wellness that makes franchising in that segment an attractive investment opportunity? When comparing the fast-growing fitness sector to the very saturated restaurant space, consider the following four insights:

 

1. Fitness is a simpler model to operate

 

One of the biggest differences in fitness and restaurant franchising is that the business model in the fitness space is less complicated. In fitness, there is room for owner-operated or manager-run models, and in both scenarios, you are dealing with less staff, no food handling issues and very limited inventory compared to restaurants. Fitness franchise owners can scale to multi-units and, instead of operating one restaurant with 50 staff members, may have five units with 30 total employees. However, that’s not to say fitness is easy by any means, as you still have to be consistent every day, provide an exceptional customer experience and serve your customers just like in the restaurant business.

 

2. Lower Investment Costs, Fewer Barriers to Entry

 

The simpler business model and generally lower buildout costs means a lower cost of entry to get started as a franchise owner in the fitness space. Restaurant franchises comparatively are more expensive, which has helped contribute to the restaurant sector being dominated by highly capitalized ownership groups. There is naturally more flexibility in fitness because small business owners can afford entry and the business model can be attractive for both mid-size and large multi-unit groups.

 

More stability, less disruption

 

If you look at the restaurant industry, there are some serious disruptions that have emerged that can rapidly erode profits without major changes to the business model. These include third-party delivery services and rising minimum wage laws on top of ever-rising food costs. Minimum wage laws are not as impactful to fitness as there are far fewer employees, and even fewer who are near the minimum wage. Some fitness regiments come and go, but the fitness business model is generally stable and consumer spending in the industry continues to grow as people spend a larger share of their wallet to reach their fitness goals.

Additionally, while technology has certainly disrupted many other industries, it’s actually served to compliment the fitness industry, making the one-to-one relationship with a fitness professional more meaningful, and insight-driven. Private fitness is proving to be lucrative, too. In 2017, Fitness Together’s highest annual revenue studio reached $925,679 with the average annual revenue of the top third of studios being $564,378.

 

Improving people’s lives

 

From my experience in both the restaurant and fitness/wellness space, I’ve heard from entrepreneurs that they are finding fulfillment from being in the health and wellness industry compared to others. As a whole, our population is moving to a place where fitness and health are key parts of our lifestyle, so when you open a health and wellness business, you are ultimately helping people find solutions to real-life problems. As an owner, knowing you have a business that is not only profitable, but also allows you to see the positive transformations in the lives of your customers, is an incredible feeling that is hard to pass up.

 

Demand for personal trainers has grown steadily over the past five years, and IBISWorld estimates that growth will continue between 2018 and 2022. Much of this growth is because consumers are no longer looking at the money they spend on fitness as a luxury, but rather a necessity. I have seen firsthand how this demand is affecting the fast-growing fitness space versus the restaurant space.

 

“You don’t have to be a great cook to be a restaurant owner – and that applies to fitness too.”

 

From a franchise development perspective, there is an education piece to all of this. You don’t have to be a great cook to be a restaurant owner – and that applies to fitness too. The fitness industry needs good business professionals and you do not have to be a personal trainer, or even ‘fit’, to run a successful fitness brand. Fitness franchise owner profiles generally are people that have a passion for wellness at large, whether that is fitness, nutrition or the desire to provide a service to the community that really benefits lives.

 

 

Matthew Stanton is the Chief Development Officer for WellBiz Brands Inc., the manager of the health and wellness brands Fitness Together (franchise.org/fitness-together-franchise), FIT36 (franchise.org/fit36-franchise) and Elements Massage (franchise.org/elements-massage-franchise).