This is a special podcast interview by Brittany Bode and Samantha Schweitzer of FranPath Consulting. They interview Rick Mayo, Alloy Founder/CEO, on why the Alloy Personal Training Franchise is a unique franchise concept.
The Alloy Personal Training franchise concept is a proven fitness and business model for over 30 years. It also “powered” thousands of clubs worldwide before becoming a franchise. Rick explains the Alloy differentiators and how Alloy became a franchise brand.
Top Reasons Alloy Is A Unique Franchise Concept
1. Targets Undeserved Customer Demographic
One reason that makes Alloy a unique franchise opportunity is that the Alloy customer target market is a population that has been underserved in the market. Our customer avatar is like what a one-on-one personal training business might target, around 45 to 65 years old. Traditionally 45 to 65 holds more discretionary income. Most fitness specialty boutiques, large health clubs, and group fitness class based programs target 30-year-olds and a larger number of members.
2. Safer Workout Environment With Fewer People Training
After the pandemic, there was a resurgence of people wanting to return to in-person fitness workouts in a safe environment, rather than workout remotely. People want socialization again, especially when many people are not returning to work in an office environment and continue to work remotely. So the brick and mortar fitness concept is evolving with brands like Alloy, where small groups of people training in a smaller facility allowing clients to workout with fewer people in a safe and clean environment.
3. Better Coach To Client Ratio
So over the last 30 years, Alloy scaled their fitness business model by making personal training more affordable with small group training. We have a ratio of 1 coach to 6 clients. One-on-one personal training can be obscenely expensive.
4. Better Value With Small Group Personal Training
Our average membership is about $30 per small group training session or around $300 a month. But if you look at our price of $30 a session compared to the one-on-one personal training price of $80- $100 per session, we are a good value to our target customer, training six people with one coach. They still get personalized coaching and accountability. So we are a good value for personal training.
It is also a little more expensive than the big box clubs that have a larger number of members in a facility and larger group fitness classes. Typically, the large fitness clubs have thousands of members that they need to maintain the large facility and staffing. The large number of members and larger fitness classes enable to keep the cost of the membership lower, but don’t offer the personalized training, attention and accountability that an Alloy would provide. Many large clubs could care less whether you even show up to use your membership.
5. Higher Retention Rates Lead to Higher Customer Lifetime Value
Alloy clients stick around longer, which resulting in Alloy having one of the highest retention rates in the industry. The average member stays around longer than in any other fitness model. Our customer average stay is around 36 months. If you take the average membership of $300 a month, that’s $10,800 lifetime value for that customer.. We are over 10 times the lifetime value of a class-based boutique brand or a big box health club. There is a lot of turnover in fitness clubs and they constantly churn members while needing to bring new members into the facility. Who do you rather have as a customer, someone who’s gonna stay three years and pay $10,800 over their membership, or someone who’s going to stay five months and pay so much less? The customer acquisition costs are the same for bringing in new members, but you must spend more money to get more customers in to support the loss of members constantly with more turnover.
6. Franchise Business Coaching and Support
Alloy also supports franchisees with a better ratio of business coaches to each owner/operator. The typical ratio in the franchise business is 80:1 (80 franchisees to one franchise business coach). We didn’t think that would be enough., so we committed Alloy to keep a 30:1 ratio (30 franchisees to one franchise business coach). We have regular calls with both the operator and the investors. We are a partnership and only successful if our franchisees are successful.
One way we coach is by reviewing metrics. We measure KPIs regularly with franchisees because many of our franchises are semi-absentee owners. We have a dashboard where we can see the different leads in the pipeline and the email and phone communications where we can identify and coach them quickly. Typically, it is a once a week call during presale, that’s usually the first 12 weeks. Then once the franchise is up and running, we have a monthly call. We can easily track and pull up metrics to make sure they are on track with the appropriate numbers of leads, sales, retention rates, etc. It is important to have very clear metrics for the operator in your business and to have franchise business coaches. When you are an entrepreneur, specifically someone that’s working all day in a different job, it is a big deal to have someone helping you.
7. Higher Revenue Per Square Foot
The Alloy business model we developed with small group personal training increased the business margins to be one of the highest revenue per square foot facilities in the country. Originally, Alloy started as a one-on-one personal training business. After we switched our business model to small group personal training, other fitness facilities wanted our consulting guidance to learn our retention and revenue secret. Then other businesses wanted to buy into our sales programs, operations, systems, and fitness programs and that is why we started licensing our business model. We pivoted to franchising in 2020. In 2022, we now have over 50 franchises awarded because of our success with our unique franchise business model.
8. Scalable Business Model
Our franchise concept with our target client allowed us to make the model scalable. We have many franchisees owning multiple locations because it is scalable, allowing for economies of scale. Our franchise concept, training, and support allow an owner to be confident and profitable with a manager running day-to-day operations at each facility while they run multiple locations.
We help clubs be operationally efficient and successful, and we help them get their communities to a healthier place. Alloy is a life-changing business. .
Listen in to understand the unique Alloy concept and why you should consider at it as an investment opportunity.
- A 30-year fitness shortcut (04:08)
- Is fitness saturated already (12:35)
- The ideal Alloy franchise (18:11)
- How Alloy supports franchisees (20:44)
- Measuring KPIs for franchises (24:08)
- The one piece of advice that will help you (24:46)
- The reason Alloy franchised their business model (26:05)
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