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UNITING THE WORLD OF FITNESS
Health Club Management

Health Club Management

features

Everyone's talking about...: Global brands

What are the challenges faced by fitness brands looking to expand globally, and what’s the best model for international success? We ask our panel of experts

By Julie Cramer | Published in Health Club Management 2013 issue 10

While there are successful global brands in many industries, from fashion and beauty to hotel and restaurant chains, when you consider the health and fitness industry there are few, if any, brands that have been truly successful on a global scale.

After a phase of rapid expansion several years ago, Fitness First might be the closest a brand has come to enjoying the financial rewards of major global expansion. The business grew at a brisk pace across Europe, Asia, Australia and the Middle East – the latter under a licence – reaching a peak of over 500 clubs. But in recent years it’s sold its portfolio in Benelux, France, Spain and Italy and closed a significant number of clubs in the UK.

But it’s not only company-owned operations that have struggled: franchises have too. Curves, for example – once among the fastest-growing franchises in the world – has seen its estate shrink dramatically over recent years.

Was recession the only reason for these brands having to cut back, or did they just get too big, too soon? Is it simply not possible to scale a fitness brand globally? According to Tony de Leede, CEO of Fit n Fast in Australia, operating in overseas markets holds many challenges: “For example, the rejection rate on cheque-based accounts and credit cards in Asia is five to 10 times higher than in Western countries, so paid-in-full memberships are advisable.”

Are there any lessons to be learned from major global hotel chains, which seem to have achieved international expansion, even in very new markets, relatively easily? Or is this because their customers tend to be global travellers rather than local? Are the challenges for health clubs very different from hotels, as clubs must attract and retain an indigenous market?

Can clubs be global and local at the same time, and how do they adapt brand and service standards, management systems and recruitment to ensure their relevance in culturally diverse markets?

John Kersh,

VP of International development,

Anytime Fitness

John Kersh
John Kersh

“International expansion is resource heavy and the risks are high, and even successful global brands in well-established industries aren’t immune to failure. In the franchising and licensing sector, even the likes of Burger King, Starbucks, Subway and other global F&B brands have been forced to pull out of numerous countries.

What major global brands have in common is that they’re actually a collection of local brands woven together with unifying systems, principles and marketing. They’re both global and local at the same time. The fitness industry is no different, and the economics of the business model itself can be significantly different across borders.

This is where the franchise model excels. Franchisees apply their culture and personality to the business, and go to great lengths to localise the offering to appeal to regional differences.

Ultimately, global expansion is not for the faint of heart or the undercapitalised. For a fitness company to gain global success, it will need to find great local partners in foreign markets who share its DNA, be open to adapting its model to local tastes, and be financially prepared for the process to take longer and cost more than planned.”

Brent Leffel,

President,

NeV

Brent Leffel
Brent Leffel

“Our chair Mark Mastrov has built fitness brands in virtually every market in the world, and the main considerations are always the same. Location, location, location, and the need to localise the brand – regardless of whether you’re selling a hotel room, gym membership or apparel.

We think branded fitness concepts are scaleable by applying a number of key principles: make strong real estate selections, and use the brand to create ‘sensationalism’ in the local market, build awareness and attract the best staff.

Remember that, while the brand may be the thing that first brings the customer through the door, it’s the culture and energy of a club and its points of differentiation such as programming that keep them coming back.

Transport your brand’s culture and energy so it resonates with the local market. One strategy is to create an online community for members, instructors and trainers to develop a link between the global brand and the local neighbourhood.

The fitness business is all about people, and NeV is focused on aligning with the right partners, gaining local connectivity, and accessing the ‘influencers’. Without this, global expansion of a fitness brand will fail.”

Tony De Leede,

CEO,

Fit n Fast

Tony De Leede
Tony De Leede

“Global expansion in the fitness industry is fraught with difficulties, and there still hasn’t been a big name that’s sustained major growth in overseas markets.

Fitness First was probably the closest that a large, company-owned group came to achieving significant global expansion, but each of its international regions went through their own highs and lows. In the first eight years, Fitness First Australia experienced amazing growth, accounting for a high percentage of the group’s overall profits from a 25 per cent share of the total clubs. Since then, the new owners have sold off around 20 per cent of the clubs, with a consequent reduction in overall profits.

Obviously there are major challenges around working in different languages and cultures. This is where you would think the franchise system might be more successful than a fitness business with company roots, as franchisees tend to be local people who are close to the community and work extremely hard at their business. And yet franchise fitness models also seem to have failed at a fairly strong rate around the world.

I feel that, because we’re still a very young industry, there’s no real history or consistency we can point to where we can say: ‘This is how it’s done.’”

Scott Lloyd,

CEO,

David Lloyd Leisure

Scott Lloyd
Scott Lloyd

“As DLL specifically operates much larger, family-type facilities, our property, development and capital needs for expanding globally are going to be very different from, say, the budget clubs.

Firstly, our lead times will be much longer, but once sites are established they become quality assets delivering strong returns in high profile locations. As they are large, they also benefit from their own economies of scale and so are less dependent on the local infrastructure in this respect.

We want our future scaleability in global markets to more closely follow the funding and development models of the four- and five-star hotel chains. This model, which is still a new concept for the fitness sector, brings together management contracts and property investment partners in local territories.

While brand and operational standards can be replicated quite easily, tapping into local investment knowledge is key. There’s the added benefit that investors will tend to approach us with the best opportunities, rather than us having to put manpower on the ground to find the right places.

Where the model differs from the hotel chains is that, while those businesses serve a travelling public, global fitness brands must create strong member connections in all local markets.”

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
https://www.leisureopportunities.co.uk/images/HCM2013_10global.gif
What are the challenges faced by fitness brands looking to expand globally? Is there an ideal model for international success? We ask our panel of experts
John Kersh, Anytime Fitness, Brent Leffel, NeV, Tony de Leede, Fit n Fast, scott lloyd David Lloyd Leisure,David Lloyd
HCM magazine
Dr Davina Deniszczyc talks us through the findings of the first Nuffield Healthier Nation Index, which has benchmarked activity levels and attitudes to exercise among the UK population
HCM magazine
HCM people

David Beckham

Global partner, F45
This partnership with F45 is an exciting business venture for me
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Generations rarely have the opportunity to reset public opinion and effect behaviour change for good, but post-pandemic two unequal movements with a lot in common will be the focus of governments, says David Minton
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Interview
We believe there’s space for another 30–40 David Lloyd clubs in the UK and we’ll build around two new clubs a year
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Sponsored
Les Mills is launching a new digital network called Les Mills Connect to help clubs build back better and emerge from the pandemic with a stronger business
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Hybrid
The Gym Group has taken its digital hybrid strategy full circle, piloting in-gym workout pods and studios with its home workout delivery partner, Fiit. HCM talks to the team driving the project
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Statistics
How have consumers responded to the end of lockdowns? Cesar Carvalho shares some bounceback numbers with HCM
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Sponsored
Active IQ is launching courses to upskill fitness professionals to work in social prescribing, extending the reach of the industry
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Supplier launch
Life Fitness introduces Integrity SL, the next-generation LED console with intuitive functionality and digital connectivity
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Billed as the ‘2021 Experience Tour’, Egym has taken its connected gym floor experience on the road around the UK
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Catalogue Gallery
Click on a catalogue to view it online
Directory
Management software
Premier Software Solutions: Management software
Architects/designers
Zynk Design Consultants: Architects/designers
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Exercise equipment
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Fitness equipment
Octane Fitness: Fitness equipment
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Wearable technology solutions
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Lockers/interior design
Fitlockers: Lockers/interior design
Property & Tenders
Welwyn Garden City
Welwyn Hatfield Borough Council
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Newport, Shropshire
Lilleshall Sports Academy
Property & Tenders
Diary dates
21-24 Sep 2021
Messe Stuttgart, Germany
Diary dates
13-14 Oct 2021
Online,
Diary dates
01-03 Feb 2022
Coventry Building Society Arena, Coventry, United Kingdom
Diary dates
07-10 Apr 2022
Exhibition Centre , Cologne, Germany
Diary dates
15-16 Jun 2022
ExCeL London, London, United Kingdom
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates

features

Everyone's talking about...: Global brands

What are the challenges faced by fitness brands looking to expand globally, and what’s the best model for international success? We ask our panel of experts

By Julie Cramer | Published in Health Club Management 2013 issue 10

While there are successful global brands in many industries, from fashion and beauty to hotel and restaurant chains, when you consider the health and fitness industry there are few, if any, brands that have been truly successful on a global scale.

After a phase of rapid expansion several years ago, Fitness First might be the closest a brand has come to enjoying the financial rewards of major global expansion. The business grew at a brisk pace across Europe, Asia, Australia and the Middle East – the latter under a licence – reaching a peak of over 500 clubs. But in recent years it’s sold its portfolio in Benelux, France, Spain and Italy and closed a significant number of clubs in the UK.

But it’s not only company-owned operations that have struggled: franchises have too. Curves, for example – once among the fastest-growing franchises in the world – has seen its estate shrink dramatically over recent years.

Was recession the only reason for these brands having to cut back, or did they just get too big, too soon? Is it simply not possible to scale a fitness brand globally? According to Tony de Leede, CEO of Fit n Fast in Australia, operating in overseas markets holds many challenges: “For example, the rejection rate on cheque-based accounts and credit cards in Asia is five to 10 times higher than in Western countries, so paid-in-full memberships are advisable.”

Are there any lessons to be learned from major global hotel chains, which seem to have achieved international expansion, even in very new markets, relatively easily? Or is this because their customers tend to be global travellers rather than local? Are the challenges for health clubs very different from hotels, as clubs must attract and retain an indigenous market?

Can clubs be global and local at the same time, and how do they adapt brand and service standards, management systems and recruitment to ensure their relevance in culturally diverse markets?

John Kersh,

VP of International development,

Anytime Fitness

John Kersh
John Kersh

“International expansion is resource heavy and the risks are high, and even successful global brands in well-established industries aren’t immune to failure. In the franchising and licensing sector, even the likes of Burger King, Starbucks, Subway and other global F&B brands have been forced to pull out of numerous countries.

What major global brands have in common is that they’re actually a collection of local brands woven together with unifying systems, principles and marketing. They’re both global and local at the same time. The fitness industry is no different, and the economics of the business model itself can be significantly different across borders.

This is where the franchise model excels. Franchisees apply their culture and personality to the business, and go to great lengths to localise the offering to appeal to regional differences.

Ultimately, global expansion is not for the faint of heart or the undercapitalised. For a fitness company to gain global success, it will need to find great local partners in foreign markets who share its DNA, be open to adapting its model to local tastes, and be financially prepared for the process to take longer and cost more than planned.”

Brent Leffel,

President,

NeV

Brent Leffel
Brent Leffel

“Our chair Mark Mastrov has built fitness brands in virtually every market in the world, and the main considerations are always the same. Location, location, location, and the need to localise the brand – regardless of whether you’re selling a hotel room, gym membership or apparel.

We think branded fitness concepts are scaleable by applying a number of key principles: make strong real estate selections, and use the brand to create ‘sensationalism’ in the local market, build awareness and attract the best staff.

Remember that, while the brand may be the thing that first brings the customer through the door, it’s the culture and energy of a club and its points of differentiation such as programming that keep them coming back.

Transport your brand’s culture and energy so it resonates with the local market. One strategy is to create an online community for members, instructors and trainers to develop a link between the global brand and the local neighbourhood.

The fitness business is all about people, and NeV is focused on aligning with the right partners, gaining local connectivity, and accessing the ‘influencers’. Without this, global expansion of a fitness brand will fail.”

Tony De Leede,

CEO,

Fit n Fast

Tony De Leede
Tony De Leede

“Global expansion in the fitness industry is fraught with difficulties, and there still hasn’t been a big name that’s sustained major growth in overseas markets.

Fitness First was probably the closest that a large, company-owned group came to achieving significant global expansion, but each of its international regions went through their own highs and lows. In the first eight years, Fitness First Australia experienced amazing growth, accounting for a high percentage of the group’s overall profits from a 25 per cent share of the total clubs. Since then, the new owners have sold off around 20 per cent of the clubs, with a consequent reduction in overall profits.

Obviously there are major challenges around working in different languages and cultures. This is where you would think the franchise system might be more successful than a fitness business with company roots, as franchisees tend to be local people who are close to the community and work extremely hard at their business. And yet franchise fitness models also seem to have failed at a fairly strong rate around the world.

I feel that, because we’re still a very young industry, there’s no real history or consistency we can point to where we can say: ‘This is how it’s done.’”

Scott Lloyd,

CEO,

David Lloyd Leisure

Scott Lloyd
Scott Lloyd

“As DLL specifically operates much larger, family-type facilities, our property, development and capital needs for expanding globally are going to be very different from, say, the budget clubs.

Firstly, our lead times will be much longer, but once sites are established they become quality assets delivering strong returns in high profile locations. As they are large, they also benefit from their own economies of scale and so are less dependent on the local infrastructure in this respect.

We want our future scaleability in global markets to more closely follow the funding and development models of the four- and five-star hotel chains. This model, which is still a new concept for the fitness sector, brings together management contracts and property investment partners in local territories.

While brand and operational standards can be replicated quite easily, tapping into local investment knowledge is key. There’s the added benefit that investors will tend to approach us with the best opportunities, rather than us having to put manpower on the ground to find the right places.

Where the model differs from the hotel chains is that, while those businesses serve a travelling public, global fitness brands must create strong member connections in all local markets.”

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
https://www.leisureopportunities.co.uk/images/HCM2013_10global.gif
What are the challenges faced by fitness brands looking to expand globally? Is there an ideal model for international success? We ask our panel of experts
John Kersh, Anytime Fitness, Brent Leffel, NeV, Tony de Leede, Fit n Fast, scott lloyd David Lloyd Leisure,David Lloyd
Latest News
People should concentrate on exercise and staying fit – rather than dieting and weight loss ...
Latest News
Sibec Europe, scheduled to take place in Cologne, Germany, from 2 to 5 November 2021, ...
Latest News
Swim England has warned that 2,000 swimming pools could be lost forever unless the government ...
Latest News
Sports Minister, Nigel Huddleston, has joined gym-goers this morning to kick-off the annual National Fitness ...
Latest News
A new high-end workspace, designed for the use of personal trainers, coaches and other health ...
Latest News
VAT reform, adjustments in business rates and a fitness-led high street regeneration push could see ...
Latest News
Peloton has completed the merging of its commercial operations with Precor, the equipment brand it ...
Latest News
Half of UK adults aren't happy with their physical fitness levels, according to a study ...
Latest News
Temporary measures brought in to support businesses in the UK from insolvency during the pandemic ...
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Nadine Dorries has replaced Oliver Dowden as the Secretary of State for Digital, Media, Culture ...
Latest News
In a major move against the gym market, Apple has revealed a number of upgrades ...
Featured supplier news
Featured supplier news: Technogym awarded “Supplier of the year” at ukactive awards 2021
The best in class of the physical activity sector have been revealed at the ukactive Awards 2021.
Featured supplier news
Featured supplier news: Will your business last without digital transformation?
During the pandemic, a digital transformation took off faster than anyone could have predicted with meetings in person cancelled and millions working from home.
Featured operator news
Featured operator news: Everyone Active bolsters Everyone on Demand and enters second year with five new partnerships
Everyone Active has signed a number of new deals which will see the operator strengthen its digital product offering, Everyone on Demand.
Featured operator news
Featured operator news: Everyone Active generates £342m in social value
Award-winning leisure operator Everyone Active generated £342million in social value at its sites across the country in 2019/20.
Company profiles
Company profile: Premier Software Solutions Ltd
Premier Software was founded in 1994 and has proven experience developing business management solutions specifically ...
Company profiles
Company profile: Myzone
Myzone is an innovative heart rate monitor and community engagement tool to track physical activity ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
Management software
Premier Software Solutions: Management software
Architects/designers
Zynk Design Consultants: Architects/designers
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Exercise equipment
Power Plate: Exercise equipment
Fitness equipment
Octane Fitness: Fitness equipment
Skincare
Comfort Zone - Davines S.p.A: Skincare
Wearable technology solutions
MyZone: Wearable technology solutions
Lockers/interior design
Fitlockers: Lockers/interior design
Property & Tenders
Welwyn Garden City
Welwyn Hatfield Borough Council
Property & Tenders
Newport, Shropshire
Lilleshall Sports Academy
Property & Tenders
Diary dates
21-24 Sep 2021
Messe Stuttgart, Germany
Diary dates
13-14 Oct 2021
Online,
Diary dates
01-03 Feb 2022
Coventry Building Society Arena, Coventry, United Kingdom
Diary dates
07-10 Apr 2022
Exhibition Centre , Cologne, Germany
Diary dates
15-16 Jun 2022
ExCeL London, London, United Kingdom
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates
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