While once the domain of bodybuilders, athletes and wannabe Hulks, gyms are now full of a diverse range of people.
As more health concerns about obesity have been discovered and the waistlines of the Western world have grown, the campaigns for healthy living and fitness have started to abound.
There are television shows, magazines, newspaper articles, countless blogs and even references to fitness cropping up in major movies.
A growing number of people are also jumping onto trends like the Paleo Diet, Intermittent Fasting, Cross Fit and Tough Mudder.
In the coming five years, IBISWorld also expects spending on health and weight loss to continue increasing as more Australians seek help to combat their growing waistlines.
Their data predicts that revenue for the industry will be more than $7 billion by 2018-19, with personal training and gym memberships top of the list of areas IBISWorld has tipped to grow the fastest in the coming years.
In 2013-14, IBISWorld expects Australians will spend almost $860 million on gym memberships, and this is forecast to increase by 3.1% per annum to reach $1 billion in 2018-19.
IBISWorld General Manager (Australia), Karen Dobie said that gyms were a part of the industry that responded very quickly to consumer demands and feedback.
“The number of venues with state-of-the-art equipment, group fitness classes and a wide range of facilities – including pools, saunas and even saltrooms – continues to grow in response to increasing consumer demand,” she said.
“Gyms have been excellent at responding to increasing and diverse working hours, opening in more locations with longer operating hours.”
While private and independent gyms are growing across the country, it is often the established brands that people first turn to.
These include Anytime Fitness, Goodlife, Fitness First, Fernwood Womens Health Clubs and Genesis Fitness, with familiarity varying between states.
Fairness and Fitness Memberships
Not only are the names of these gyms familiar to many Australians, they are also all franchise.
That means when you go to their websites, workout in their gyms or read the glossy magazines that many of these places now produce, you see ads suggesting you could run your own branch of their gym.
Some, like Fitness First and Fernwood Womens Health Clubs, are even actively promoting opportunities for people to open new locations, profiling franchise managers and owners and making the work sound like a dream come true for frequent fitness fans.
But these franchises have their fair share of issues, and for managers things are going to get more complicated before they get easier.
The ACCC recently announced it would be conducting an Australia-wide audit of franchise in the fitness industry, among others, due to a “disproportionate number of complaints” from consumers.
The audits enable the ACCC to quickly determine whether franchisors are complying with particular aspects of the Franchising Code.
Addressing the Legal Symposium at the National Franchise Convention on 20th October 2013, ACCC Deputy Chairman Dr Michael Schaper said the audit power is an important part of the ACCC’s work for fairer consumer dealings across all industries.
“The ACCC has actively enforced the Franchising Code since its introduction in 1998,” he said.
“During this time we have taken successful court action against more than 20 franchisors and have also obtained court enforceable undertakings from more than 10 franchisors.”
As well as the huge number of complaints about fitness franchise that have been made to the ACCC, personal anecdotes and criticism abounds online.
There are also all kinds of reviews about different fitness chains on blogs, in forums and on social media, with many condemning them for a wide range of reasons.
One commenter on the Fitness First Facebook page claims that “no matter what price you are [offered when you] join the club, the fee will keep increasing…Mine just recently increase $2.5/week or equal to $10 a month + $0.5 per direct debit transaction. Good job FF.”
Meanwhile, a comment on the Goodlife Health Clubs, Australia Facebook page indicates deception about memberships when trying out a gym.
“I was lied to by one of your consultants about a contract and was forced into a contract with her putting false details down and am now charged with about $1600 because I only visited your fountain gate gym one time for a trial.. Truly disappointed and will definitely not recommend this club to anyone,” the Facebook user wrote.
Similar critiques have been posted on social media for all of the major gym chains and, while there is often an equal amount of praise, it shows that the ACCC investigation is definitely justified.
Punching Above Their Weight: Franchisees Feeling The Pressure?
While there is bound to be a range of reasons these gyms are so criticised, one of the key things to consider is the fact that they are franchise, which means there are both franchisors (who run the networks) and franchisees (who buy the individual businesses) involved in the running of these gyms.
Earlier in 2013 the chairman of the Australian Competition and Consumer Commission, Rod Sims, said that he was very concerned by ”rogue elements” and the potential power imbalance between franchisors and franchisees when speaking at the Franchise Council of Australia’s national conference.
Sims explained that franchisors ”are often large and well-resourced companies that hold substantial power in the franchising relationship. They co-ordinate the operators, they own the brand and, in many cases, they control the supply of the key products for the franchising business.”
”On the other side, franchisees are often couples or individuals, many of whom enter the franchising relationship without a great deal of business experience but nevertheless invest large sums of money – and sometimes their nest egg … without doing sufficient due-diligence checks.”
This relationship could explain some of the issues that the industry faces. If the people running a particular club are new to the franchise structure (or have not researched what they can and can’t legally do), then their priorities and actions could be frustrating for members and potential customers.
Besides that, Sims suggests there is a lot of pressure on franchisees to mean the financial goals of the franchisor, which could similarly be feeling the weight from stakeholders and investors.
This complicated business relationship does often work – which is why people can shop at the same stores, stay in the same hotels or go to the same cafes – but sometimes it does not.
Perhaps the best advice for consumers, however, comes in the form of a comment made by Franchise Council of Australia’s Executive Director, Steve Wright:
“’Don’t just accept claims at face value; there may be more information you need to get the full picture,” he said at the national conference.
While Wright was addressing potential franchisees at the time, the same statement holds true for consumers considering signing up to one of these gyms.
The post Building a Body Of Workout Spaces: The Rise Of Gym Franchises appeared first on Quid.