Local gym chain set to take New York
An Australian fitness entrepreneur has his sights set firmly on the giant US market, writes Christopher Niesche.
A decade ago Dave Hundt imported the Contours female-only gym concept from the United States. Now he and his partners are about to introduce their own female fitness franchise to New York in an attempt to crack the giant US market.
Next month Hundt, 42, will open the first EnVie Fitness gym franchise in New York state, even though the company has been operating for just a little over a year, with seven franchises, in Australia.
"We figured we could wait around until we get 100 [franchises in Australia] and say 'we've proven this thing and can take it international' or we could say 'we've got seven up and running, we've done successful start-ups previously, let's take it to America,'" says Hundt, who has worked in banking and owned and operated his own gym. "Regardless of when we enter that market there's going to be learnings and experience that we'll gain, so why not do that earlier rather than later and allow us to build scale quicker?"
EnVie (pronounced on-vee and French for "in life") plugs a gap in the women's fitness sector. Some gyms such as Contours cater for older, less fit women, while 24-hour gyms that suit younger women are usually mixed sex and often have large periods of the day or night where there are no staff, which is a safety concern for customers.
The new franchise aims to compete with round-the-clock gyms by opening female-only gyms from 5am to 10pm. "The female of today is very busy: they're working mums, they have a number of responsibilities and they find it really hard to fit a regular fitness routine into their lifestyle," Hundt says.
He says he is drawing on his experience of having been one of those who built up the local Contours chain to roll out the EnVie franchise across the US, starting with next month's opening in Jamestown in upstate New York.
"We don't do it lightly. We haven't just said, 'let's have a crack at that market,"' he says, adding that he and his partners have fully researched the market and made several trips there. "The time is right. The fact that we've got some very strong competitors who have had huge business in that market and are in decline is an exciting opportunity for us."
The female gym chain Curves has declined from more than 10,000 gyms around the country to about 3000, Hundt says. The figure illustrates the scale of the market, and Hundt says for the same investment of time and money, EnVie could probably open 500 gyms in the US for every 50 it opens in Australia.
EnVie is expanding overseas via franchise development partners who will each be responsible for opening 20 gyms over three years. This avoids the need for the company to have its own US team until it has built a critical mass in that market. So far they have one development partner but aim to recruit more.
Instead of the usual franchise practice of taking a percentage of each gym's takings, EnVie takes a payment for each member a gym has - which Hundt says is the "key metric" in the fitness industry.
Meanwhile, the company will keep expanding in Australia and has a team to concentrate on the local market. "We are very much aware that we need to ensure that Australia is successful if we have any hope of going well overseas," Hundt says.
He says he has learnt the key to a successful franchise is making it easy to scale from the outset to help reduce growing pains. Training and screening of potential franchisees is also crucial. "Every dollar that we spend up front and making sure we have a highly skilled network of franchisees and staff saves us $10 in support down the track."