Fragile Franchises: Why It's a Great Time to Be an Independent Gym Owner

As the COVID crisis deepens, more and more franchisee gyms are asking Two-Brain for help.
I can’t name them specifically because privacy is a core value of our mentorship practice. But if you’ve heard of a fitness franchise, we’ve probably spoken to one of their franchisees in the last week.
They’re hurting.

Fragile Franchises?

All the benefits of a franchise—a preset model, done-for-you pricing, group purchasing power, brand marketing—those can look pretty attractive to a solo-preneur trying to figure everything out on the fly. In fact, established entrepreneurs often buy franchises because they don’t want to spend years and thousands of dollars trying to figure it all out while burning money.
But in times of crisis, a franchise becomes extremely fragile.
As a franchisee, you don’t have the ability to pivot your core offering. You can’t simply take your business online overnight; you have to wait for the franchisor to act.
You might not have the ability to cut expenses. As a franchisee, you might be contractually tied to a lease or franchise fees or a certain number of staff.
You could easily lose all your clients—and all your revenue—with no way to get any back and no end in sight.
Almost overnight, the value of gym memberships went to zero. No one can sell “access” anymore.
Within a week, the value of exercise programming fell to zero. No one can sell workouts anymore.
Soon, the value of coach-led classes will fall to zero. Clients know how to enter “free workout class” into a search engine.
The only thing that’s retaining its value is coaching.
Two-Brain gyms made a quick pivot to customized online coaching. Spending four to six minutes per client per day to tailor group programming has resulted in a greater than 90 percent retention rate. Some have actually grown in client numbers and revenue already. And many have been able to cut their largest expenses.
They could do it because they’ve built antifragile businesses. Their failures—and their successes—are theirs alone.
Many have licensed the “CrossFit” affiliation to benefit from the branding (and because they align with CrossFit’s values). Others haven’t. But even within that affiliate model, the terms of licensure are so loose that CrossFit affiliates can make fast moves. They’re antifragile.

Ready for Change

When the world is constant and predictable, it’s attractive to own a franchise. No guesswork, proven models. And someone else to blame if it fails.
But when the world changes—as it always does—it’s far more beneficial to be the master of your own fortune.
And if you’ve already built your plans and playbook, why do you need a franchise at all?
When the world emerges from the COVID-19 lockdown, independent gym owners will find themselves swimming in a larger ocean with fewer sharks. They’ll have new tools: online training, nutrition coaching and a hybrid model we call Flex. They’ll be thinking differently about their equipment and space expenses. The best affiliates will be stronger than ever before, and they’ll have far less competition.
Gym ownership has always been a game of attrition. COVID just knocked five years off the natural progression of the fitness industry. Licensees and solo-preneurs who pivot fast will benefit. Franchisees won’t.


One more thing!

Did you know gym owners can earn $100,000 a year with no more than 150 clients? We wrote a guide showing you exactly how.