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Health Club Management

Health Club Management

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UNITING THE WORLD OF FITNESS
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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
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Latest News
Fitness First has launched a new free digital fitness hub, offering users a wide range ...
Latest News
The Gym Group has brought in Rio Ferdinand and Wais Shaifta as non-executive directors, signalling ...
Latest News
As the global vaccine rollout brings reopening closer and heralds the end of lockdowns, jostling ...
Latest News
Less than half (44.9 per cent) of children and young people in England met the ...
Latest News
An England-wide survey of over 5,000 adults found that 80 per cent of people aged ...
Latest News
The government needs to provide the fitness and physical activity sector with a plan which ...
Latest News
Book4Time, a leading cloud-based business management solution for the global hospitality, spa and wellness industry, ...
Latest News
Some Brits drop their exercise habits, eat unhealthily and drink more alcohol during lockdowns, according ...
Featured supplier news
Featured supplier: Storytelling - the future of fitness content
Heading into 2021, storytelling will be a key trend among fitness content creators and connected fitness providers, as the industry recognises its potential to unlock ultra- engaging experiences that boost retention.
Featured supplier news
Featured supplier: AskNicely helps empower businesses to improve customer experience and boost NPS
Maintaining a consistent member experience across a growing health and fitness brand can prove challenging.
Company profiles
Company profile: BLK BOX
The BLK BOX product range is built for athletes by athletes, includes modular storage systems, ...
Company profiles
Company profile: Safe Space Lockers
Safe Space have over 25 years of experience in the UK leisure and fitness industry, ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
Exercise equipment
Technogym: Exercise equipment
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Red Light Therapy
 Red Light Rising: Red Light Therapy
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Wearable technology solutions
MyZone: Wearable technology solutions
Lockers/interior design
Fitlockers: Lockers/interior design
Fitness Software
FunXtion International BV: Fitness Software
Management software
fibodo Limited: Management software
Member feedback software
AskNicely: Member feedback software
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Property & Tenders
11 - 25 Union St, London SE1 1SD
Bankside Open Spaces Trust
Property & Tenders
Waltham Abbey, Essex
Lee Valley Regional Park Authority
Property & Tenders
Diary dates
02-04 Feb 2021
Ericsson Exhibition Hall, Ricoh Arena, Coventry, United Kingdom
Diary dates
23-26 Feb 2021
IFEMA, Madrid, Spain
Diary dates
03-04 Mar 2021
NEC, Birmingham, United Kingdom
Diary dates
03-06 Jun 2021
Expo Centre & Riviera di Rimini, Italy
Diary dates
16-17 Jun 2021
ExCeL London, London, United Kingdom
Diary dates
21-24 Sep 2021
Messe Stuttgart, Germany
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
Fitness First has launched a new free digital fitness hub, offering users a wide range ...
Latest News
The Gym Group has brought in Rio Ferdinand and Wais Shaifta as non-executive directors, signalling ...
Latest News
As the global vaccine rollout brings reopening closer and heralds the end of lockdowns, jostling ...
Latest News
Less than half (44.9 per cent) of children and young people in England met the ...
Latest News
An England-wide survey of over 5,000 adults found that 80 per cent of people aged ...
Latest News
The government needs to provide the fitness and physical activity sector with a plan which ...
Latest News
Book4Time, a leading cloud-based business management solution for the global hospitality, spa and wellness industry, ...
Latest News
Some Brits drop their exercise habits, eat unhealthily and drink more alcohol during lockdowns, according ...
Latest News
New year, new celeb workout as Mark ‘Bez’ Berry announces the launch of his own ...
Latest News
Frasers Group will open three new regional flagship Flannels-branded retail stores during 2021 – each ...
Latest News
The closing of gyms, leisure centres and swimming pools under COVID-19 restrictions is costing the ...
Featured supplier news
Featured supplier: Storytelling - the future of fitness content
Heading into 2021, storytelling will be a key trend among fitness content creators and connected fitness providers, as the industry recognises its potential to unlock ultra- engaging experiences that boost retention.
Featured supplier news
Featured supplier: AskNicely helps empower businesses to improve customer experience and boost NPS
Maintaining a consistent member experience across a growing health and fitness brand can prove challenging.
Company profiles
Company profile: BLK BOX
The BLK BOX product range is built for athletes by athletes, includes modular storage systems, ...
Company profiles
Company profile: Safe Space Lockers
Safe Space have over 25 years of experience in the UK leisure and fitness industry, ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
Exercise equipment
Technogym: Exercise equipment
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Red Light Therapy
 Red Light Rising: Red Light Therapy
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Wearable technology solutions
MyZone: Wearable technology solutions
Lockers/interior design
Fitlockers: Lockers/interior design
Fitness Software
FunXtion International BV: Fitness Software
Management software
fibodo Limited: Management software
Member feedback software
AskNicely: Member feedback software
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Property & Tenders
11 - 25 Union St, London SE1 1SD
Bankside Open Spaces Trust
Property & Tenders
Waltham Abbey, Essex
Lee Valley Regional Park Authority
Property & Tenders
Diary dates
02-04 Feb 2021
Ericsson Exhibition Hall, Ricoh Arena, Coventry, United Kingdom
Diary dates
23-26 Feb 2021
IFEMA, Madrid, Spain
Diary dates
03-04 Mar 2021
NEC, Birmingham, United Kingdom
Diary dates
03-06 Jun 2021
Expo Centre & Riviera di Rimini, Italy
Diary dates
16-17 Jun 2021
ExCeL London, London, United Kingdom
Diary dates
21-24 Sep 2021
Messe Stuttgart, Germany
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates
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