HEALTH AND FITNESS WILL GROW EXPONENTIALLY IN 2022
It’s always easy to be an armchair quarterback, throwing out assumptions and big ideas on what will happen in the future. But this time I think I’m on to something.
The health and fitness markets have been hit hard during COVID, for obvious reasons….it’s been difficult to get customers to do anything indoors, especially get sweaty together. According to Club Industry News, the Pandemic took out 22% of all of the gyms in the U.S. and over 1.5 million people lost jobs in the fitness industry. Major bummer stats and in dollars, that equated to almost $30 billion in lost revenue due to COVID. So part of this story is the comeback element, there kind of is nowhere to go but up from here, but there is also a bigger picture growth curve that has been on an upwards trajectory for the last fifty years, COVID was just a short term setback for the fitness space.
Year over year growth for fitness has generally been about 3% per year and if you follow the old saying of buy low and sell high, now is the time to get into the fitness segment to realize what could be a big jump in industry growth to recoup the downtrend in 2020 and 2021. People want to work out and understand the value of exercise. You combine this sentiment with a big part of the population that has been stuck at home for a long time, gained weight, gotten unhealthy and really want to get back into shape, I can already hear the gym membership register ringing! Look for a big 2022 and most likely an even bigger 2023 in the fitness space as people run back into fitness and health.
What are the fitness models to watch for?
There are a variety of different versions of fitness franchise models, all of which are viable business models and really just depend your personal preference and what flavor of fitness you are drawn to as an investor.
Here is how I would break down the categories:
The Big Box Model – think Planet Fitness or two brands that I like are New York Fitness Clubs and EPIC Health and Fitness, these are larger facilities with a range of equipment and experiences and offer great value to a wide range of consumer preferences for fitness.
The next category would be the Class Fitness Model which is focused on consistent and focused interaction with members in a classroom setting where coaches are helping keep people accountable and drive results. The 800 pound gorilla in this space is Orange Theory with over 1,000 locations, but I like several new franchise brands in the category, Rock Box Fitness, EZE Fit and HYLO Fitness all come to mind as brands that are in high growth mode.
Another two brands I’m really high on are Industrious, a Seattle Based model which created a new HALO system to keep members apart from one another and offer a great fitness experience. These models don’t require as much space and offer a high margin, repeatable revenue stream which is always a great formula for a strong investment.
The third category would include the new kid on the block in mobile fitness where the services comes to the customer. It’s innovative, it’s low investment and it’s a fun way to help people get into shape in the comfort of their own home. Gymguyz is the leader in this segment with over 200 locations, but there is a new brand in All Terrain Fitness I like a great deal as well in this category of mobile fitness models.
The fourth segment of fitness franchising I would define as the check-in and workout model where it is essentially a fitness center and members purchase the rights to visit the location, they are generally smaller than the big box model and many times offer keycard entry. The Anytime fitness franchise has hit this model out of the park and defined the entire market segment with this approach to fitness.
Last but not least, you have the fifth segment of fitness franchises in senior fitness brands where the target audience is 55 and up and the experience is geared to a more “seasoned” member. 55 Fitness is a brand I like a great deal and has built an entire model around catering to this population and creating a great workout experience for seniors.
Some of the key elements that I would look for in a fitness franchise model to determine what might be the best bet would include marketing, operating systems and unique selling points.
Marketing is critical in this business segment both to attract new clients and also to keep them, any fitness franchise worth their salt will have a franchise marketing system that is tight, proven and consistently proven in company and franchise owned locations.
The operating system should have technology interwoven throughout the day to day operations. A good solid POS, CRM, Membership tracking system and scheduling model need to all be in place to help manage the day to day functions and minimize fires in the business.
The last might seem a bit fluffy, but if you look at what has driven some of the world’s most successful brands in the fitness franchise market, there is always some unique selling point that the brand has been built around. Maybe it’s the heart rate monitor at Orange Theory, the no banging weights thing at Planet Fitness or a culture of Body Building heritage at Gold’s Gym…something is used to promote that brand and separate the service offering from others in the segment.
Whatever your flavor of fitness might be, the market is ripe for a rebound and if you ask me, I would bet this market segment does some major ramping up in revenue, memberships and number of franchise locations in 2022. People want to look good and feel good and are willing to pay for it, find the right fitness franchise brand and capture this upswing in the fitness market.