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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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4 Tips for Starting an Industrial Business

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The industrial sector is a broad category that covers businesses involved in the manufacturing, production, and distribution of goods. Small industrial companies are growing across the country and there are many opportunities for entrepreneurs to get involved in this sector.

As with any type of business, there are certain things you need to do to set yourself up for success. Here are four tips for starting an industrial business:

photo credit: Pixabay

1. Do Your Research

Market research means figuring out who your target customers are and what they want or need. There are a number of different ways to do this, but some of the most common include surveys, interviews, focus groups, and observation.

Surveys can give you a good overview of customer opinions while interviews or focus groups can help you to delve deeper into specific issues. Observing potential customers in their natural environment can also be helpful in understanding their behavior and needs.

2. Choose the Right Niche

When it comes to starting an industrial business, one of the most important decisions you’ll make is choosing the right niche. There are a number of factors to consider when making this choice, and it’s important to do your research before settling on a particular industry.

First, you’ll need to identify the needs of your potential customer base, such as the products or services they need. Once you have a good understanding of the market, you can then start to narrow down your options. Consider the competition in each niche and decide which one offers the best opportunity for success. When making your final decision, it’s essential to choose a niche that you’re passionate about.

3. Create a Business Plan

In today’s competitive marketplace, it’s more important than ever to choose the right niche for your industrial business. When you specialize in a specific industry or type of product, you can better meet the needs of your target market and stand out from the competition. How do you know what niche is right for your business? Here are a few things to consider:

First, think about your strengths. What does your company do better than anyone else? What unique skills or experience do you bring to the table? Use these strengths to narrow down your focus and choose a niche that you’re passionate about.

Next, consider your target market. Who are you trying to reach with your products or services? What needs do they have that you can address? When you choose a target market and understand their needs, you’ll be better able to choose a niche that meets their demands.

Finally, don’t be afraid to experiment. Trying new things is essential for any business, so don’t be afraid to test out different niches to see what works best for you. By keeping these tips in mind, you can be sure to choose the right niche for your industrial business.

Engineers work with industrial printer

4. Optimize Your Processes

Through industrial control engineering, you will be able to identify opportunities for improvement and design solutions that achieve the desired results. In many cases, these solutions involve the use of automation and other advanced technologies.

By optimizing industrial business processes, industrial control engineers can help to improve efficiency and increase productivity. In addition, they can also help to improve safety conditions by reducing the potential for accidents. As industries continue to grow and become more complex, the demand for qualified industrial control engineers is likely to increase.

Endnote

With an increased demand for industrial operations and manufacturing, there has never been a better time to start an industrial business. By following these four tips, you can be sure to set your business up for success.

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How to Find the Right Business Coach — and Avoid the Wrong One

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At its best, business coaching can connect you with a mentor and supporter who helps you generate ideas, make plans and execute on them.

But at its worst, a business coaching offer can cost you time, energy and money — without much to show for it.

Here’s what to expect from a business coach, how to find a coach that suits you and how to spot red flags.

What a business coach can do

Business coaches draw on their professional experience to help you set and achieve your own business goals.

“I’m here to help you, and I’m here to raise your level of knowledge in whatever way I can,” says Gary Robinson, who chairs the Memphis, Tennessee, chapter of SCORE. SCORE offers free business mentoring for entrepreneurs nationwide.

Some ways a business coach or mentor might do this include:

  • Offering feedback on your ideas and suggesting new ones.

  • Giving you templates and other tools that help you make plans.

  • Connecting you with resources in your region or your industry.

  • Giving you deadlines and holding you accountable to them.

Some business coaches may also offer coursework or group training sessions on particular topics, like sales.

Working with a coach should help you identify opportunities you hadn’t seen before or develop new strategies for pursuing those opportunities, says Sophia Sunwoo, who coaches women and nonbinary entrepreneurs through Ascent Strategy, her New York City-based firm.

“[Coaches] don’t necessarily have to have all the answers,” Sunwoo says. “But they are the people that know how to maneuver and create a bunch of different thinking paths for their clients.”

What a business coach can’t do

A business coach isn’t the same as a consultant, whom you would hire to perform a specific task. A coach or mentor could look over your business plan, for example, but they wouldn’t write it for you.

“If you were to hire me as a consultant, you would expect me to roll up my sleeves and pitch in and work with you to get things done, and you would pay me for that,” Robinson says. Coaches, on the other hand, “try to show you how to do things so that you can do them [yourself].”

Business coaches are also not therapists, Sunwoo says. Entrepreneurship can be emotionally and mentally taxing, but it’s important that coaches refer clients to mental health professionals when necessary.

Business coaching red flags

If a business coaching opportunity “promises guaranteed income, large returns, or a ‘proven system,’ it’s likely a scam,” the Federal Trade Commission warned in a December 2020 notice.

In 2018, the FTC took legal action against My Online Business Education and Digital Altitude, which purported to help entrepreneurs start online businesses. The FTC alleged these companies charged participants more and more money to work through their programs, with few customers earning the promised returns.

In both cases, these operations paid settlements, and the FTC issued refunds to tens of thousands of their customers in 2021 and 2022.

To avoid offers like these, the FTC recommends that you:

  • Be wary of anyone who tries to upsell you right away or pressures you to make a quick decision.

  • Search for reviews of the person or organization online.

  • Research your coach’s background to see if they’ve accomplished as much as they say.

Sunwoo says to also be skeptical of one-size-fits-all solutions. A coach should customize their advice to your personality and skill set, not ask you to conform to theirs.

“The moment that a business coach pushes you to do something that is really not compatible with your personality or your beliefs or values,” Sunwoo says, “that’s a huge problem.”

How to find the right coach — maybe for free

Here’s how to find a coach that will be as helpful as possible.

Determine whether you need advice or to hire someone. A coach isn’t the right fit for every business owner. If you need hands-on help organizing your business finances, for instance, you may need a bookkeeping service or accountant. And take legal questions to an attorney.

Seek out the right expertise. A good coach should be aware of what they don’t know. If they’re not a good fit for your needs — whether that’s expertise in a particular industry or a specialized skill set, like marketing — they might be able to refer you to someone who’s a better fit.

Consider free options. There may be some in your city or region:

  • SCORE offers free in-person and virtual mentoring in all 50 states, plus Guam, Puerto Rico and other U.S. territories.

  • See if your city has a Small Business Development Center, Veterans Business Outreach Center or a Women’s Business Center. All are funded by the U.S. Small Business Administration and offer free training and advising for entrepreneurs.

  • Do an online search for city- or state-specific programs. Philadelphia, for example, offers a business coaching program designed for entrepreneurs who want to qualify for particular business loan programs. Business incubators often offer courses or coaching.

Make sure your coach is invested in you. They should take the time to learn about you, your business and its unique needs, then leverage their own experiences and creativity to help you.

“I’m on your team now,” Robinson says of his clients. “Let’s do this together and make this a success.”

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Are There SBA Loans for the Self-Employed?

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Many of the same SBA loans are available to both self-employed people and more formally structured businesses, such as limited liability companies and corporations. However, self-employed individuals, like sole proprietors and independent contractors, might face a higher barrier to entry for having limited credit history, inconsistent revenue or no collateral. If they can’t qualify for an SBA loan, other business financing options are available.

Who qualifies as self-employed?

Sole proprietors, independent contractors and partnerships all fall under the self-employed category. In these cases, there is no legal distinction between the business owner and the business itself. Sole proprietors, for example, are solely responsible for their business’s gains and losses, while LLCs and corporations are legally distinct from their owners. This distinction helps protect the owners’ personal assets if their business runs into legal or financial issues.

Are self-employed SBA loans hard to get?

While a sole proprietorship is much easier to set up than an LLC or corporation, lenders may be more hesitant to finance them for a few reasons:

  • Self-employed business owners are legally responsible, as individuals, for any debt and liabilities that their businesses take on. If someone sues their business, for instance, their personal assets — not just their business — could be at stake. This makes it riskier for lenders to finance them.

  • Sole proprietorships and independent contracting businesses may have lower revenue or less collateral to offer since they’re often a business of one. This could make it more difficult for them to prove that they can pay back the loan, plus interest. And it may require more paperwork.

  • Some banks set lending minimums that surpass what a self-employed business owner is looking for, either because the business owner doesn’t need that much funding or doesn’t qualify for it.

  • Since there is no legal distinction between the self-employed business owner and their business, they may lack business credit history. To establish business credit, you’ll want to register the business, obtain an employer identification number and open a separate business bank account and credit card to keep your business and personal finances separate.

SBA loans for the self-employed

SBA microloan: Best for small loans and more lenient requirements

Applying for an SBA microloan is a great option for self-employed business owners, especially if they’ve been turned down by traditional banks and don’t need more than $50,000 in funding. In fact, the average SBA microloan is around $13,000, according to the SBA. SBA microloans are administered by nonprofit, community-based organizations that can also help train applicants in business practices and management. And because the loans are small, the application process may be easier — applicants may have limited credit history and typically don’t need as high of a credit score as they do for an SBA 7(a) loan.

SBA 7(a) small loan: May not require collateral

Funds from the SBA’s most popular 7(a) lending program can be used for a variety of business-related purposes, such as working capital or purchasing equipment. While the maximum SBA 7(a) loan amount is $5 million, SBA 7(a) small loan amounts don’t exceed $350,000. And if the 7(a) small loan is for $25,000 or less, the SBA doesn’t require lenders to take collateral.

SBA Express loan: Best for quicker application process

SBA Express loans are a type of 7(a) loan for businesses that need quick financing and no more than $500,000. The SBA responds to these loan applications within 36 hours as opposed to the standard five to 10 days, which may speed up the process for borrowers working with non-SBA-delegated lenders. Additionally, borrowers might not have to fill out as much paperwork — the SBA only requires Form 1919. Beyond that, lenders use their own forms and procedures.

SBA loan alternatives

Online lenders

Self-employed business owners turned down for SBA or traditional bank loans may be able to qualify for financing with an online lender. These lenders offer options such as term loans and lines of credit, and they often process applications faster and have more lenient requirements. However, applicants should expect to pay significantly more in interest than they would with an SBA loan.

Business credit cards

Not only can business credit cards help build your business credit history and pay for everyday business purchases, but they can also help finance larger purchases (within your approved credit limit). And if you qualify for a credit card with a 0% introductory APR offer, you’ll have multiple months to pay off the balance interest-free. Just make sure you’re able to pay off your purchase before the intro offer ends and a variable APR sets in.

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