Franchising – hidden costs and some drawbacks

If you have money, want to start your fitness business, do not have your own great idea but you feel confident about you plan – then starting a franchise I would say is a good idea. A strong product or service should defend itself and if a franchise concept is good enough you should be confident about quick growth of your business. This seems to be perfect solution and pretty safe investment overall. The costs of a franchise can vary depending on the fact if you are buying a part of the concept or the whole thing and also the expectations from the franchising side. And here we touch the darker side of the whole idea – very often it turns out that the real franchising costs are much higher than initially set. Below you can find just a few reasons for which your franchising bill can go through the roof.

The floor is...not yours

First thing that you may come across is that big franchising fitness chains expect similar floor plans in each location. Their customers are used to specific predictable floor plans and this triggers expectations from a franchisee. You have to be prepared to receive the exact floor model that includes everything from the colour of the paint to the number of lockers in the locker room. If the cardio area normally consists of 10 machines where at least 5 are treadmills be ready for this type of expense as you will not get away with only 2 treadmills. While this type of road-mapping may be useful for those who do not want to design the layout of their gym or do not want to waste their time on this part of business it may also turn out to be more expensive. A long list of specifications about brands and models of equipment means that your equipment costs are likely to rise to the level you did not predict in your budget.

Safe’n’sound

High costs security systems apply only to those who are interested in health clubs to be open 24 hours a day and are highly automated with little or no staff during evening hours. Members of such gyms are required to have a special access card which unlocks the doors. The doors must have the special magnetic lock that is connected to the computerized card reader. Plus you have to add costs of security cameras which would view all the areas of the site.

Fees

Everyone is aware about licensing fees and royalties that a franchising chain will charge. The problem is that most people don’t know that the fees are based on flexible rates. This simply translates to the fact that the more successful the gym becomes the more money the franchisor makes.In some way you may feel being punished for doing well and for running a successful fitness club. Going down the list of feesmany big gym franchises charge a percentage of sales as their share in marketing expenses. So again, the more successful you are the higher your marketing costs are going to be. And probably this is a point you cannot argue about.