How to Invest During A Recession

Is it safe to invest during a recession? Rick Mayo and Franchise Consultant, Kimberley Daly, share their recession investing advice in this episode. They will also share why investing in a fitness franchise is a great opportunity during a recession.

The economy is always at risk of a recession, but there’s little doubt that a recession will hit us at some point in the future.

Many investors interested in becoming fitness entrepreneurs want to know how recession proof fitness is. The answer is it depends which demographic market you are servicing.

At Alloy Personal Training, we have been in business for more than 30 years and what we’ve seen is actually that our business model does well during recessions. Having gone through the economic downturn of 9/11/2001, the 2008/9 recession, and now the recent pandemic, we can say our model is recession-proof.

The simple reason is that our target client is the 45+ age group, which holds about 70% of our country’s disposable income. This group is not as affected by the recession as other segments of the population. In our 31+ years of business, we have never seen a downturn, but more of a boon for us.

Our target clients have a great willingness and financial stability to commit to their fitness, regardless of the economy. Fitness is an integral part of their lives. Now they are even more interested in their wellness and fitness than before COVID because of the way the way the disease affected those that had pre-existing medical conditions like diabetes, heart conditions, and obesity.

This is not the case for other fitness concepts and fads, which might fold during difficult times. Recent fad concepts, like HIIT are so intense that the average consumer can’t keep that momentum or avoid injuries.

Daly shared her personal fitness participation in personal training as a busy professional and Mom. She invests in personal training because fitness isn’t a fad in my life. Fitness is a regular part of her life to feel good, look good, be healthy and strong. She said, ” I live an incredibly busy life and I need fitness at the core to have the energy for all of it. I hold myself accountable by hiring a personal trainer because I want results in my life!”

Price and value are not always the same thing in fitness. Psychology reveals the more money you spend, the more l value you will receive especially for individuals that don’t have a lot of time and want results. If you are paying over $100 per month for fitness vs. paying $10 a month for a fitness membership, your participation is much higher in brands that are more expensive. People appreciate the more there’s just a perceived value that comes along with spending more money, certainly in a personal training service. There are more reasons to show up to be better for your work, be better for your family, have energy for your friends, activities and work. The Alloy franchise model has higher engagement rates and retention rates.

The $10 a month membership model, on the other end of the spectrum, is typically where you have a lot of people paying, but there is very low participation and low retention rates. .

In this episode, Rick and Kimberley Daly offer some wisdom to those considering investing in fitness franchise businesses in 2023.

During your franchise investigation, the franchisor is guiding the conversation initially to lead you and teach you and educate you to get an initial understanding and belief about the franchise model. Then you need to validate the franchise opportunity in the real world with the franchisees already in the franchise system.

If you plan to become a business owner, you can’t control the economy, so in your investigation you need to review how that franchise is affected by the economy and a recession.

Alloy Personal Training Benefits vs Other Fitness Franchise Ideas

In the boutique fitness industry, there are a lot brands that do large group classes with 20+ people getting sweaty in a room. At the other end of the spectrum, you find one-on-one training personal training. One-on-one personal training is more expensive, and the business model is harder to scale for success. Alloy is right in between the two models, where we have small group personal training where we service the same customer avatar as one on one training, but we do it in a more affordable way. We also have a pre-sale process, to help obtain the 130 members needed to be successful.

So, the biggest difference with Alloy is personal training six clients with one coach which makes it more affordable for the consumer, and a more successful and scalable business model for the franchisee.

If you’re interested in investing in a fitness franchise, even if we’re going into a recession, contact us!