Terry DavidAs the fitness industry continues to evolve at a rapid pace, CEOs of fitness franchises face a unique set of challenges in 2024. From technological disruptions to changing consumer preferences, leaders must navigate a complex landscape to ensure their brands not only survive but thrive.
Market Saturation and Differentiation
One of the primary challenges is standing out in an increasingly crowded market. Anthony Geisler, former CEO of Xponential Fitness, observes: “The market is always going to have room for sound concepts. However, there’s a lot of opportunity for concepts that have broad appeal to the large – and quickly growing – market of people who are focused on staying fit and eating right.”
Craig Benson, interim CEO of Planet Fitness, emphasizes the importance of simplicity and focus as key strategies for differentiation in the fitness franchise market: “You can’t be great at everything, and you have to focus on the things that you can be good at and really exploit the heck out of them. That’s the model Planet Fitness has had for a really long time, and we don’t plan on changing that. Complexity adds challenges.” This highlights the value of honing in on core strengths and resisting the urge to diversify too broadly in order to maintain a clear and effective business model.
Real Estate and Location Strategy
Securing prime locations for franchise outlets remains a critical challenge. Fitness franchise entrepreneur Anthony Geisler emphasizes, “Location is so incredibly important when it comes to launching and maintaining a successful fitness business. This has always been a challenge, and it will remain one for the foreseeable future.”
Jim Rowley, CEO of Crunch Fitness, emphasizes the importance of leveraging vacant retail spaces to grow franchise locations: “With many major retail closures, landlords and developers are eager to fill these vacant spots, and fitness centers like ours drive significant foot traffic to surrounding businesses. This presents a huge opportunity for us to secure prime locations at favorable terms, which benefits both our franchisees and the local communities.” This strategy allows Crunch Fitness to capitalize on retail real estate shifts and boost its franchise growth.
Talent Acquisition and Retention
In an industry heavily reliant on human capital, finding and keeping top talent is crucial. Geisler notes, “We need access to a quality labor pool. This is true about any business, whether it’s running Google or running a gym. However, I think too many in our space take this lightly and do not invest in the highest quality talent possible. That is a big mistake.”
Balancing Digital and Physical Offerings
The rise of digital fitness solutions presents both opportunities and challenges. CEOs must find ways to integrate online offerings without cannibalizing their physical locations. Geisler provides insight: “There’s a simple reason for this: It is very hard to build community digitally. People are social animals. They get better results and more satisfying workouts when they’re in the same room together and can create community.”
Ian Schafer, founder and CEO of Deep Focus, emphasizes the importance of integrating digital transformation into business models to meet evolving consumer demands: “Innovation needs to be part of your culture. Consumers are transforming faster than we are, and if we don’t catch up, we’re in trouble.” This highlights the critical need for fitness businesses to blend digital and in-person offerings to stay relevant and competitive.
Technological Integration
Keeping pace with technological advancements is crucial. Geisler predicts, “We’ll see better technology enter the marketplace and make a significant impact in areas like point-of-sale and CRMs. You’ll see the integration of AI into customer management and other functions.”
Adapting to Health Trends
The emergence of weight-loss medications like GLP-1s presents new challenges and opportunities. CEOs must consider how these trends might impact their business models and adapt accordingly.
Managing relationships with franchisees and ensuring consistency across locations while allowing for local market adaptations is an ongoing challenge for fitness franchise CEOs.
Financial Management and Growth
Balancing expansion with profitability, especially in a high-interest rate environment, requires careful financial management and strategic planning.
As the fitness industry continues to evolve, CEOs must remain agile, forward-thinking, and deeply in tune with consumer needs. Those who can successfully navigate these challenges while fostering innovation and community within their brands will be best positioned for success in the dynamic fitness landscape of 2024 and beyond.
