TRIB3’s Chief Development Officer, Karl Dietrich, talks about why fitness franchising is the smart choice for the future and how TRIB3’s model is built to be effective and safe as we emerge from lockdown.
Why is franchising important in the fitness industry?
Franchise business models have been a key driver of growth in the US fitness market and UK trends are expected to follow suit, currently sat at around 5% penetration with major operators regularly entering this market. Just as boutique fitness emerged in the market to address a need for flexibility and offer high quality pay-as-you-use concepts, the franchise fitness market is also transforming how the member or customer is looked after. A franchisee has financial ownership of their facility, so the focus is on the whole customer journey and sustained quality with a desire to exceed the customers’ expectations, it’s a very exciting sector to be leading in. Eight years ago, there were only a couple of franchised fitness businesses in the UK, now there are several variations, from low-cost to premium service and from ‘big box’ to boutique across the spectrum of leisure and wellness. This is increasing the interest in the sector from entrepreneurs with a keen interest in health and wellness who may have historically chosen food and beverage franchises as the only investment opportunity to consider.
How have you seen the fitness sector change over the last few years?
Since the recession in 2008/2009, through which the fitness industry proved itself to be very resilient, the major concepts to emerge in the market were the low-cost formats and the boutiques both of which came about to address the need for flexibility e.g. no contract, accessibly priced ‘budget gyms’ or high-quality pay-as-you-use studios which focus dually on the workout and the experience the customer has. Both of these concepts have opened the market to more users allowing for continuous growth over the last few years – we always advocate that more choice is a good thing as the fitness sector is so important globally in driving physical activity. Boutique franchising has been alive and well for several years internationally and has proven, with the right focus on experience and accessibility, to be very fruitful.
Most recently, accelerated by the impact of COVID-19, we’ve seen digital and connected fitness become a compelling trend. In boutique fitness, we are retailing experience as well as a results-driven workout so social and community – togetherness – is a big part of the offering but we do see a role for virtual and live fitness ongoing. We want to support our customers in both the studio and their homes and offer the next-level workout experiences we are known for in whatever forum is best for them. Recent surveys have shown that around half of people state that even as lockdown and confinement measures lift across the world, they would be adding at-home and digital fitness into their standard fitness routines ongoing so this should be seen as a huge opportunity not a challenge.
How have you been dealing with the impact of COVID-19?
Of course, the main priority was and is the wellbeing of our team and our customers, what we call our TRIB3Rs, but we’ve also had a consistent focus on engaging and building our community and ensuring we can support people to stay active. This includes launching TRIB3 at Home, a series of live at-home, coach-led workouts which we made free for everyone to ensure we could keep our customers and the wider community fighting fit. We have been overwhelmed by the response and engagement of both our existing customers and people who’ve never engaged with TRIB3 before and we’re excited to continue this momentum – we are developing a brand-new live workout platform which will complement the existing studio offering. We’ve also been focused on augmenting the experience we offer in-store to protect our customers and protect the workout experience they know and love, implementing distancing measures and bolstering hygiene measures.
So, what does this mean for the commerciality of your stores? Does the model still work with distancing measures in place?
The TRIB3 experience is purpose-designed as a one studio, one workout offering creating one simple, compelling model. This allowed us the flexibility to adapt quickly and effectively to COVID-19 & and associated distancing measures. We’ve adjusted the layout of the studios but also adapted the timetable based on feedback from our current customers around their changed consumption habits. This ensures that while distancing will mean reduced capacity in each single session we can still offer a diverse, compelling schedule. Likewise, our model is built on a prudent occupancy rate so even with reduced session capacity, occupancy only has to increase marginally per session to keep the store profitable. Our zoned approached to studio layouts also means we can adapt quickly as distancing guidelines are relaxed to safely phase a greater class capacity back in. Around 90% of our current TRIB3Rs told us they felt safe and empowered to return so we are confident of a positive return to business.
Why do you think fitness franchises will be important after the COVID-19 pandemic?
One of the most important messages for the fitness industry and for the public at large, throughout the pandemic, has been that being physically active is crucial to long-term health and keeping people fighting fit with the UK’s Chief Medical Adviser stating: ”There is no situation, no age and no condition where exercise is not a good thing.” Fitness franchising allows for efficient and fast growth of the sector and allows people who are wishing to take control of their personal situation and start their own business to do this with less risk and more support. Franchising overall is increasingly considered a safer environment for new business owners as it has been consistently growing and maturing so the major lessons have been learned. Boutique operators, like TRIB3, are able to implement physical distancing efficiently into the model as class-based fitness is already built around capacity management and zoning, so these types of fitness franchises will offer a safe but enjoyable way to come back to group exercise. Historically, after any challenging financial global conditions, both leisure and franchising increase in popularity due to more people looking to increase their health and wellbeing and also to secure their own future income streams via franchising; a proven model.
What type of people are suited to fitness franchising?
It helps to have a passion for health and fitness as you’ll really connect with your customer-base and better understand their motivations, but you don’t need a background in the fitness industry to own a franchise like TRIB3. The support team that will work with you can offer decades of industry experience to support you as well as 150+ hours of specialised training within the franchise package. We offer many types of franchise relationships, where you’re an involved, hands on franchisee or wanting more of a management contract; we also offer a Joint Venture mediation service that can bring new franchisees together to create partnerships and work together as investors in a new location. Generally, we say we look for high-energy, entrepreneurial people who are looking to make a change, be their own boss and also looking to make a difference. The fitness industry is so exciting because it’s driving positive wellbeing behaviours with people across the globe, particularly in boutique, class-based fitness where around two-thirds of consumers agree they feel more motivated and push themselves further when working out in a group.
After a decade working with health and leisure franchises, including Anytime Fitness and easyGym, Karl came on board in 2019 to help deliver TRIB3’s ambition to create a global movement in fitness. His work at TRIB3 involves driving new business, helping existing franchise partners to successfully run their stores and delivering outstanding customer experience across the entire franchise journey – a hallmark of the TRIB3 brand. He is responsible for creating and refining processes and resources and driving significant growth in the UK and worldwide. All to realise his ambition for TRIB3 to become the go-to for boutique fitness franchising.