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How to Start a Gym Franchise in 8 Steps

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Gym franchises are some of the most popular franchises in the country, so if you have a passion for health and fitness and are interested in joining a franchise rather than building a new business from the ground up, this could be the perfect solution.

There are plenty of gym franchises to choose from, but deciding which brand is right for you is just one of many steps you’ll need to take. Read on to learn how to start a franchise gym, pros and cons, how much it costs, and more.

How to open a gym franchise

Ready to start the franchise buying process? Follow these steps to purchase a gym franchise of your own.

1. Weigh the pros and cons of owning a franchise gym

As is the case with any business venture, there are advantages and disadvantages of franchising. Before you decide that opening a gym franchise is right for you, consider the pros and cons. It’s also a good idea to speak with current and former gym franchisees to get a better understanding of what this process will entail.

Here are some pros and cons of owning a franchise gym to consider as you make your decision:

Pros of owning a gym franchise

  • Brand recognition: Franchises are well-known brands with a history of success. This makes finding members a cinch—there’s already a built-in customer base. Plus, the franchisor will likely handle marketing for the entire franchise.

  • Training and ongoing support: If you’ve never owned a business before, there will be lots of things to learn. With a franchise, you’ll have the ongoing support of your franchisor to walk you through every step of the process.

  • Higher profits: Franchises typically see higher profits than non-franchise businesses, as there is a loyal customer base and formula for success. While the initial investment to open a gym franchise can be high, you’ll likely turn a profit more quickly.

Cons of owning a gym franchise

  • Lack of independence: When you join a franchise, you may own your location, but you are ultimately an employee of sorts of the franchisor. They have the final say when it comes to business strategy, marketing, location, decor, etc. If you’re looking to create a truly unique gym experience, a franchise may not be the best choice.

  • Initial investment: As we mentioned, the initial cost of starting a gym franchise can be very high. You’ll have to purchase a lot of equipment, after all. If you don’t have the liquid capital or aren’t able to qualify for financing, this will likely not be a viable option.

  • Ongoing cost: In addition to the initial franchise fee, you will also be responsible for ongoing payments to the franchisor. These may include royalty fees, marketing fees, renewal fees, and more. Make sure you’re aware of all of the costs involved in a particular gym franchise before you join.

2. Consider your options 

If, after weighing the pros and cons, you’re convinced that buying a gym franchise is right for you, you’ll next want to consider the franchise options you have. There are plenty of gym franchises to choose from—from classic gyms to specialty studios. Some options include:

  • Anytime Fitness

  • Orangetheory Fitness

  • Planet Fitness

  • Crunch Fitness

  • Pure Barre

  • The Bar Method

  • Jazzercise

  • Gold’s Gym

Your gym franchise options will also be specific to where you want to open your business so make sure you spend some time researching the best choices. When reviewing your options, pay close attention to any requirements they have to make sure you meet them, as well as how much capital each one requires.

3. Contact franchises

Once you’ve narrowed down your options to a handful of possibilities, it’s time to reach out for more information. This can typically be done online through the franchises’s website. In most cases, you’ll submit a preliminary application or request more information.

From there, the franchisor will provide more information. This could also include upcoming events in your area to learn more about the business and speak with other people in the franchise. Remember that during the application and interview process, you should be interviewing the franchisor just as much as they’ll be interviewing you to make sure it’s a mutual fit.

If you move along in the application process, the franchisor will share their franchise agreement, which includes the franchise disclosure document (FDD). Both you and your business attorney should review this document carefully, as it will lay out exactly what both you and the franchisor are responsible for over the course of your business relationship. If all looks good, you’re ready to sign and officially join the franchise family.

4. Write a business plan

Once you know the franchise gym you’re going to open, your next step is writing a business plan. This may feel unnecessary when joining a franchise, as so much of your business will be prescribed by the franchisor. However, it’s still a good idea to put something together so you can clearly see how you’ll launch and grow your business.

There are some key points you want to make sure your business plan hits, including a market analysis of competition in the area and the need that your gym franchise will fill that’s currently not being filled by competitors. You should also include other information like expected costs, how many people you expect to hire, what your role in the franchise will be, financial projections about how long until you expect to turn a profit and more.

The nice thing about opening a franchise gym instead of starting a business from scratch is that you can likely get quite a bit of information for your business plan directly from the franchisor or franchise agreement.

5. Secure financing

The cost of buying a gym franchise will vary depending on which one you decide to join, as will the financial assistance you can expect to receive from the franchisor. We’ll explore costs in more detail below, but for now, it’s worth discussing your franchise financing options.

Chances are, you’ll need some sort of financing to get your business off the ground. While you may be required to self-fund a portion of your franchise, you will likely look to outside sources as well. You’ll have a variety of business loan options available, based on what you need to use the money for (i.e. buying property, working capital, etc.) Your franchisor may also offer guidance or their own financing solutions that you can utilize during this stage.

6. Choose a location 

An easily accessible and convenient location for your gym is crucial. For most gym-goers, close to home or work is best. As to figuring out what constitutes “convenient” for your target membership, it all starts with studying the data available to you.

“The first thing to do is look at the demographics of the area,” says Montoya Jennings, operations manager for L.A. Fitness in Atlanta, Georgia. “Choosing a location depends on a lot of things: the average age of the area, the crime, and if it’s near a shopping center, which encourages more foot traffic and spending. There’s quite a bit of data to consider.”

You can utilize resources like Stats America to research everything about residents in a given region, from gender breakdown to estimated median income, which tells you whether the kind of gym you want to open will have a stable community of potential members to draw from.

Another part of the location decision is whether to use an existing structure to house your gym or to build something new entirely. In the case of L.A. Fitness, they’ll often look for a satisfactory property in a desired location, then enlist a contractor to build according to the company’s description and specifications.

Of course, every franchise is different. Make sure you consider any location requirements when choosing a gym franchise. Some franchisors will have very specific requirements or may choose the location themselves. Others will give you more autonomy.

7. Get permits

As with any business, you’ll need to obtain the proper permits and licenses to operate. These can include building permits if you’re renovating a space, as well as a number of other permits once you’re ready to open, such as health and safety permits.

In some cases, you’ll need your licenses and permits in order before you can start receiving equipment and setting up your gym. “You need to get the license to occupy, the business license for that facility, the fire inspectors to come out and do their inspection, contractors to ensure the fire sprinklers and plumbing are up to code. Then L.A. Fitness sends out its own team to install all the equipment for the facility—that team decides what goes and what doesn’t,” says Jennings.

There are fees for obtaining building permits, and other permits might be necessary as well, depending on the kind of amenities your gym plans to offer. For example, a snack bar could require employees to pass a food handling test specific to that locality.

8. Start hiring

Once the location is set and you have the proper licenses and permits to legally operate, you’re ready to hire your first employee. You’ll need a number of employees to help clean, run the front desk, manage sign-ups and memberships, and train members or teach classes, and more.

Remember, gyms typically have long hours—some are open 24 hours a day—so they’re open when their customers want to work out. This means you’ll need a host of employees to cover all the shifts and make sure your facilities are clean and well-organized.

How much does it cost to start a gym franchise?

As we’ve mentioned, the cost of buying a gym franchise can be significant. Besides the initial fee you’ll pay to join the franchise, a gym requires a great deal of equipment, as well as a large commercial space.

The total upfront investment for a gym franchise can fall anywhere between $30,000 and $300,000, including the one-time franchise name fee (ranging from $15,000 to $30,000).

Of course, some brands are less expensive than others. Ditto for some locations. For example, the initial investment for Snap Fitness ranges from $77,000 to $250,000, including all needed working capital, while Curves charges $24,000 plus an additional few thousand for equipment delivery.

Some companies have larger financial requirements: Planet Fitness, for example, asks that franchisees have liquid assets totaling at least $1.5 million, with an overall net worth over $3 million.

Royalties are another cost: Some companies charge a flat rate per month (usually around $400 to $500—again, depending on the brand) while others take a percentage of gross revenue. Royalties pay for continued use of the brand name—a huge draw for potential customers—and help with marketing, advertising, training of new employees, and other support that independent gyms have to fund on their own.

The bottom line

Starting a franchise gym isn’t for the weak-willed or those without the upfront capital. If you have the means to go into business with a brand-name gym, however, you have the opportunity to enter an industry that expects to see continued growth for years to come with the backing and support of an established name. With an independent gym, you have to start from the bottom. The head start that a franchise gives entrepreneurs is substantial—from then on, it will be up to you to fulfill that promise of success.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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10 Software Tools to Keep Your New Business Documentation Organized

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When it comes to documenting SOPs, training materials and other important internal business processes, what’s one tool or software (not your own) that you would recommend new business owners use, and why?

These answers are provided by Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most successful young entrepreneurs. YEC members represent nearly every industry, generate billions of dollars in revenue each year, and have created tens of thousands of jobs. Learn more at yec.co.

1. Google Docs

Stay simple and use Google Docs. With direct edits and commenting features, it’s easier than ever to constantly improve upon your living documents. That way, your SOPs can continue to evolve along with your business.

Firas Kittaneh, Amerisleep Mattress

2. Loom

You can use Loom, or a similar screen-recording software, to record short videos for your team and create sections within the platform to optimize your SOPs and onboard new hires. Video information is easier to retain for most and is also easier to look up again and parse out. Certain processes are timeless and can also be used if someone needs to take over a process in an emergency.

Matthew Capala, Alphametic

3. GitBook

Although Google Docs is an elegant and convenient resource, I think GitBook might be the next best thing. It’s far more functional than a simple Google Doc, since it allows you to structure your SOP more like a wiki page or a full website instead of a handful of files in a folder.

Bryce Welker, Testing.org

IT documentation

4. JobRouter

JobRouter is one tool that I love using for documentation purposes. It helps you manage your documents from creation, editing, approval, release and distribution. It also integrates beautifully with Microsoft Word for ease of use.

Thomas Griffin, OptinMonster

5. Process Street

When documenting SOPs, Process Street is a great option. It’s a user-friendly process management software that allows you to create, track and schedule workflows. It also lets you create checklists, collaborate with your team, capture data and more so you have full control over your processes.

Stephanie Wells, Formidable Forms

6. Trainual

Trainual is a software that helps business teams run internal processes faster, better and smoother. A pain businesses face is maintaining performance as teams are assembled, grow, mature and are refreshed. The onboarding process is one process that plays a significant role in growing and refreshing teams but, if botched, organizational performance suffers. Trainual focuses on that onboarding.

Samuel Thimothy, OneIMS

7. Trello

While I wouldn’t necessarily recommend it for distributing official materials, an excellent system for organizing, commenting on and discussing internal documents among multiple teams is Trello. Trello allows you to share, sort and comment on documents in an easy-to-manage system. With their team functions, you can also ensure only those who need the materials will have unrestricted access.

Salvador Ordorica, The Spanish Group LLC

IT project management

8. systemHUB

One tool that I love using for any documentation purpose is systemHUB. It lets you integrate your existing project management software and continue working on it. You can replicate the existing documents or start from scratch as per your requirement. You can also share it with your team and do a lot more.

Josh Kohlbach, Wholesale Suite

9. ETQ

The most important thing about document control software is retrieving what you need when you need it. I like ETQ because it streamlines the entire process from document creation through retrieval and training. ETQ lets you set up permissions for employees to access the information they need and automation to notify employees of upcoming/pending training.

Matthew Podolsky, Florida Law Advisers, P.A.

10. Your Own Internal Wiki

Create your own internal wiki. There are many plug-and-play WordPress templates that are easy to use and pre-built to act as an internal wiki. Allocate a login to each employee, categorize content and use hashtags to make your SOPs and other processes easily searchable.

Chase Williams, Market My Market

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How Startup Studios are Bringing New Ideas to the Startup Space

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By Startup Studio Insider

Even as businesses have struggled through COVID-19, investors have been eagerly bringing capital to startups with the hope that new and fresh businesses will catch on and become the latest and greatest success. This influx of capital is primarily due to the exponential growth of new investment models that have exploded into the mainstream in the last five years. It is these new funding models that are helping connect entrepreneurs with investors who fit their wants and needs.

This new phenomenon of the ‘perfectly matching’ entrepreneur is a beautiful symbiosis capable of helping startups avoid risk, increase efficiency, and continue business development in a forward trend.

In this explosion of entrepreneur-startup matching, startup studios have developed almost a cult following. As many entrepreneurs have strong ideas, but lack the experience, finances, or team to bring them to fruition, studios provide a sort of safety net, capable of helping entrepreneurs deal with business and operational aspects, leaving them the time necessary to focus on ideas. With this initial investment, the special teams behind startup studios are mobilizing to mitigate risk for new businesses and help entrepreneurs focus on what matters most.

Startup studios are a critical competent of the startup and entrepreneurial space due to their capabilities to usher new ideas and practices into the industry. As this model continues to change the startup space as we know it, take a look at the list below to learn more about how a startup studio can single-handedly turn any entrepreneurial project into a juggernaut.

A Concrete and Singular Vision

Startup studios are built to do one thing and one thing well: build companies from the ground up. As this is the core initiative of these studios, they are better equipped than any other organization to take an entrepreneur from initial idea stages all the way to launch and beyond.

Because of this singular focus, startup studios are in the business of churning out these business over and over again. What this means is that they have not only repeated the process many times, but also standardized it down to a science. They’ve experienced every step of the process, and can often forewarn against roadblocks or concerns inexperienced entrepreneurs would plow headlong into.

Complete Operational Guidance

With the repetition behind the core of startup studios, they have a layer of shared resources which allow for a more rapid development and faster growth process than many other incubators or accelerators. From strategy playbooks to cross-collaborative teams, processes, and backing, these resources have allowed companies to take their development to the next levels.

Additionally, startup studios are invested in the process of developing a product beyond its launch. As such, many studios have developed programs to share resources and guidance beyond the launches from the startup studio and into the spaces beyond them.

Startup team doing planning

Oversight on Strategy

As startup studios are deeply entrenched in the day-to-day operations of their projects from the very start, especially when compared to incubators and venture capital firms, they are more capable of providing strategic oversight than other investment styles.

By utilizing a repeated process, as well as the experience of the entire team, these studios are capable of developing plans from the start, and imparting wisdom and experience onto younger entrepreneurs. This strategic guidance has been cited by many who’ve gone through the startup studio ecosystem as one of the most essential tools they’ve taken away from their experiences.

While the startup studio model is not for everyone, it is a true partnership that provides more than just financial backing. A studio is a great model for entrepreneurs who thrive off of teamwork and collaboration, and who may be looking to deepen their experience and learnings. While they can require flexibility and trust in their studio’s guidance, they are often a critical tool in pushing startups to the next level.

As the old adage goes, if you want to go fast, go alone; if you want to go far, go together. If you want to truly take your idea to the next level, consider developing it under the help and guidance of a startup studio. For more on startup studios, be sure to check out Startup Studio Insider, the newest journal providing daily insights into the startup studio space.

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5 Mistakes Business Owners Make When They Open a New Dental Clinic

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Starting a dental clinic is a daunting task, especially for young, budding entrepreneurs. The medical equipment can be pricey, putting the owner at great financial risk. Because of that, planning is a crucial step of the process that can save you a lot of money and stress down the line. Luckily, even if you don’t have experience running a business, you can learn most of these things.

photo credit: Tima Miroshnichenko / Pexels

With that in mind, here are the five mistakes business owners make when they open a new dental clinic:

1. Hiring Too Quickly

Due to high expenditures, business owners tend to rush the initial processes when opening a clinic. Hiring the right staff is crucial for your success, but unfortunately, some entrepreneurs make a decision for all the wrong reasons.

As a way of cutting expenses, lots of owners will hire young professionals straight out of school. Sometimes, they will put them on probation even if they have experience. When the time comes to hire them as full-time employees, they might not have enough loyalty to stay with your organization.

Having enough experience is crucial for dentists, but you also need to consider if this person is the right fit. Business owners neglect long-term plans and team suitability for short-term financial goals. Hiring a reputable professional is usually a better idea as it will bring stability to your team.

2. Not Creating a Beautiful Website

Word-of-mouth marketing was always crucial for companies, and it is especially important for small businesses such as dentistry. Unfortunately, getting those first clients is always a choir.

Many owners neglect the power of promotion, thinking that it’s enough to have a good service. However, unless you’re able to attract those initial patients, you will never be able to scale the business.

Having a great website is important as it sets up the basis for search engine optimization. Down the line, it will help you reach more people through Google. But it also works as a digital business card. Like your clinic, the website needs to be clean and to instill confidence in potential patients.

3. Ignoring Search Engine Optimization

Performing search engine optimization or SEO is a time-consuming job. However, small local companies can achieve great results in just a few months.

According to several professionals that conduct dental SEO by Dental Marketing Guy, local search engine optimization is an ideal way of promoting dental services to your local community. When a person looks for medical experts in their home city, your clinic should appear at the top of Google search pages. By investing some money in this promotional activity, you can get thousands of new clients in a short time.

Among others, search engine optimization is great for branding. Unlike other digital marketing activities, such as pay-per-click, the SEO results will remain even when you stop paying for the service.

Dental assistant working on a laptop

4. Not Having a Stellar Customer Service Plan in Place

We can argue that customer service is more important for dental clinics than most other businesses. This is because lots of patients are anxious before treatments and exams. Like with any other medical procedure, a person wants to be certain they’re in good hands.

Most patients are willing to pay extra for premium dental services. However, if you have poor customer service, it can dissuade them from giving you a chance. Even if they visit your clinic once, they might not return.

Retaining a patient is especially important in dentistry. Like with some other services, a patient is willing to travel long distances to perform an exam at the same clinic. Once a person chooses a dentist, they will likely return to the same person for most of their lives. And the lifetime value of one patient can be high.

5. Not preparing for the unexpected

Similar to other businesses, dental practices are subject to inherent business risks. For example, an equipment malfunction can set you back for months. In some situations, it might take weeks before you can get back to business. Losing a staff member can also be a major problem.

Although you cannot avert some potential issues, you need to have a contingency plan. First off, a business owner needs to have a healthy cash flow to cover any unexpected expenditures. Having debt is normal for dental offices, but you need to reduce liabilities as soon as possible.

One way to protect yourself is by getting insurance. Certain policies can cover dental practice overhead and provide you with income when you go on a hiatus.

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