The fitness industry has become an increasingly diverse one. Innovative fitness business models and training concepts are being regularly brought to market and involve a list of on-going fitness trends, including personal training studios, cycling studios, budget gyms, and more. Some of these concepts are company-owned, some are single locations, while others rely on a franchising model to expand their fitness brand. In the case of fitness franchise concepts, independent business people enter into a franchise agreement and pay an on-going royalty to use the systems of a proven business model.
If you’re considering starting your own fitness business, then you want to educate yourself on the fitness market in general and understand all of your options. To create a solid business plan, you will need to understand the size of the consumer fitness marketplace, current fitness trends, and forecasted market growth. You might also want to decide if you would prefer using the experience and systems a fitness franchise concept offers.
Global Fitness Market
The global fitness marketplace continues to grow. According to IHRSA, the global health club industry generated $87.2 billion (and has grown every year since 2008) and now includes over 201,000 health club facilities and over 174 million members worldwide. This is an increase of 20 million members since 2017, which reflects strong growth. A couple of factors that contributed to this growth are:
The expansion of some fitness brands, for example, Genesis Health Clubs, already a 45-club business, ventured out on a multimillion-dollar project which included a world-class aquatic center, baseball diamonds, soccer fields, a pre-school, and new luxury health club. In 2018 Golds Gym, expanded opening up nine additional international locations as well as one more domestic along with signed a number of franchise agreements for multiple U.S. locations. Other fitness brands around the globe have similarly expanded aggressively in the past five years.
Acquisitions, Anytime Fitness’ parent company Self Esteem Brands purchased Basecamp Fitness, a new high-energy fitness concept developed by the founder of Zappos. Xponential Fitness acquired Pure Barre, who became the largest provider of boutique fitness in the world. Advances and the evolution of the technology and it’s integration with fitness is also factoring into the growth we see in the industry. 24 Hour Fitness disclosed that it is leaning on Microsoft Dynamics 365 and Adobe Experience Cloud to offer a custom, personalized experience to meet each members’ needs.
The U.S. Fitness Market Trends
The United State is the largest health and wellness market in the world, with 38,477 clubs, and an annual growth rate of 3.6%. According to the market research firm IBISWorld the U.S. market total revenue currently bringing in 36 billion and annual growth from 2014- 2019 is at a 3.5% increase. It is predicted that fitness franchises will grow even more rapidly as more entrepreneurs look for opportunities to invest in turnkey operations.
Fitness franchise growth by the cost of membership:
Fitness franchises offering monthly memberships in the $24 – $74 range are doing very well in mid-market. However, the most significant growth is happening at the higher and lower end of the price spectrum. The International Health, Racquet & Sportsclub Association reported memberships to midmarket heal clubs grew by 2 percent, within the same time frame, premium health clubs (charging $75 to $99 per month) had a 21 percent growth, while budget health club memberships (charging less than $25 per month) went all the way up to 69 percent.
The Reason Fitness Franchising is so popular.
Over the five years into 2018, the Gym and Fitness Franchises industry has benefited from public health initiatives that shed light on the importance of fitness in fighting diabetes, obesity, and other health ailments. Partially a result of this health-conscious climate, the number of health club memberships has grown steadily during the period. This trend has benefited gym franchises, as greater demand from a larger gym-going demographic encouraged franchise expansion. Thus, many franchisors, in an effort to develop a larger client base and respond to the growing popularity of boutique gyms, have offered more franchise opportunities over the past five years. From the IBISWorld 2018 Gym & Fitness Franchises Report (U.S.)
A few points Franchise Direct shared on the subject of why fitness franchising is so popular:
A few additional factors are causing the fitness franchise industry to grow, one being the loosening of real estate restrictions at retail shopping centers for fitness studios. “As shopping center owners look to replace vacant big-box tenants, health clubs have become a viable option and have gained favor from landlords as the emphasis on a healthy and active lifestyle has been adopted by a significant number of adults aged 20 to 64,” says Eric Vu, senior associate at California-based Hanley Investment Group Real Estate Advisors.
Second, an additional factor that contributes to the growth and recent trends is the science and data that is now available. There are a number of case studies that have been done and are currently underway regarding what works. Our society may always fall prey to the “quick fix” schemes, and the reason for that is two-fold, instant gratification, and convenience. The purpose of these case studies is to assist with the convenience factor. For example Amy Roberts, a certified personal trainer says “A few specific trends have emerged in recent years regarding working out for general fitness, and more specifically how to elicit the optimal metabolic response—that ‘after burn’ effect of continued calorie consumption for up to 48 hours after a session—e.g. the biggest bang for your effort and time.” Many specialty franchise models are emerging from this particular factor.
Technology In Fitness
Virtual fitness and digital technology is a key trend that has only just begun. More and more consumers are utilizing digital resources to help achieve a more well-balanced fit and healthy lifestyle. Technology is helping more people get active through fitness experiences that are fun, habit-forming, and convenient. Some of the leading trends are wearables, smartphone applications, and virtual streaming. Fitness franchises are keeping up by offering in club virtual fitness classes and upgrading their fitness equipment to include wearable integration capabilities and smart screens.
IHRSA’s 2017 Health Club Consumer Report reported, “over the past decade, personal training and, more recently, small group training has evolved into the primary sources of non-dues revenue for many health clubs.” Fitness-only clubs have earned an average of 8.7% in total revenue from small group training, and participation numbers are increasing. IHRSA’s Profiles of Success reported that 18 million health club consumers signed up for small group training in 2016, which accounts for 26.6% of the total consumer base.
Gym (Health Club) Market Size, Growth & Trends
Additionally, here are the latest gym industry statistics that demonstrate its market size, growth, and trends according to reports conducted by the Wellness Creative Co.
- In the USA, there were more than 6 billion gym visits to 39,570 facilities in 2018 (this excludes hotel gyms) [IHRSA 2019].
- At 39,570, the number of U.S. health club facilities increased by 2.8% over the previous year, up from 38,477 locations [IHRSA 2019].
- In 2018, U.S. health club industry revenue increased to $32.3 billion, up from $30 billion in 2017, a 7.8% growth [IHRSA 2019].
- The U.S. health club industry serves 71.5 million consumers [IHRSA 2019].
- In the U.K. there are over 7,000 gyms, and the market value is just under £5 billion [Leisure Database 2018].
- Boutique studios and budget clubs (high volume low cost) are continuing to perform well, although some are predicting a resurgence of mid-market clubs [Wellness Creative Co. 2019].
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