It is no secret that women-only circuit training clubs have saturated the country. The Curves for Women franchise boasts over 8,000 locations. Although the jury is still out on the long term viability of these franchise clubs (there are currently over 700 existing Curves clubs listed for sale on the Curves website), there is no doubt that they have been a thorn in the side of larger coed facilities by taking away thousands of potential members. With their message of “no intimidation” and the time efficiency of a 30-minute workout, these clubs appeal to the needs of today’s deconditioned, busy Baby Boomers.
Some large clubs have attempted to counter these circuit training clubs by offering their own “express” type of circuits within their facilities using conventional weight stack machines borrowed from their main workout area. However, the problem of getting the intimidated person in the front door still remains. Some progressive club owners have opened their own satellite circuit training clubs to attract this market and act as “feeder” clubs into the main club.
Mike Apple is one such club professional. Working up through the ranks of 24 Hour Fitness, he says he has seen every type of fitness box there is. Apple most recently has worked with Fitness Industry icon Eric Levine and 24 Hour Fitness to open California Wow mega clubs throughout Asia. Apple and Levine are now launching the first of many California Fast Fit franchise clubs in Asia. “We have seen a consolidation of large clubs in the Fitness Industry and have seen personal training studios becoming strong for good reasons. We also watched Curves for Women take the industry by storm. We woke up and realized that you did not need 20,000 square feet to service a community. Our first facility will be about 2,000 square feet and will feature a hydraulic circuit, cardiovascular equipment and a weight stack circuit. We plan to take fitness to the people and to appeal to the de-conditioned, intimidated people with nice facilities far better equipped than the typical women’s franchise club. We won’t have the inherent problem of members dropping out after reaching a plateau due to nonadjustable equipment.”
Mark Mastrov, founder and CEO of 24 Hour Fitness, recently joined forces with industry veterans Mark Golob and Thomas Gergley to open their Butterfly Life women’s franchise clubs featuring resistance equipment and group exercise classes offered in about 2,000 square feet. In a side-by-side website comparison of Butterfly Life to Curves for Women, they claim their program has much more to offer in fully adjustable equipment.
If these industry professionals see the need for these smaller “express” clubs, shouldn’t you ask yourself if a circuit-training satellite club right for you? Perhaps some simple number crunching is in order to answer this. Low overhead is a major key to the success of these circuit training clubs. Rents and personnel costs for 1,200- to 2,000-square-foot facilities are obviously much less than those of 12,000- to 20,000-square-foot clubs. By dividing your current rent and personnel overhead costs by the number of existing members, you will find your current average cost of servicing your membership base. By dividing your monthly gross sales by the number of members, you will determine your average revenue per member. The average membership of the Curves for Women clubs listed for sale is in the range of 350 to 400 members. By contacting a local real estate agent to determine the typical rent for a 1,200- to 2,000-square-foot facility, then adding the estimated staffing cost (typically three or four part-time people), then dividing this total by about 350, you should be able to determine the approximate cost to service each member. For example, if you assume the rent for this size facility to be about $2,500 per month and if you have four part-time people working 20 hours per week each at a rate of $10.00 per hour, your overhead would be approximately $5,700 per month. Dividing this amount by 350 gives you a cost of $16.29 to service members. Another way of looking at it would be to divide $5,700 by the monthly dues you would expect to charge: at $39 per month, you would need 146 members to cover the overhead.
As you can see, if a small women’s club has 350 members paying $39 per month, their monthly gross is $13,650 and with $5,700 in expenses, the approximate net profit would be $7,950. Granted, this is nowhere near the net dollars generated by larger clubs, but percentage-wise, these small clubs can be more profitable. The key factor to remember is that members of these small clubs can be transitioned into the “mother” club when they are ready – offering members a place to go when they reach a plateau.
Rande LaDue is the President of Pro*Fit Enterprises. He can be contacted at 888.604.2244, or by email at pace@cox.net, or visit www.pacegroupexercise.com.
