Strength in numbers a perfect fit

Technology the key to getting people into the gym, writes Alexandra Cain.

The latest greatest equipment, friendly staff and flexibility are the secrets to a successful gym franchise, according to Justin McDonell, who owns the master franchise for the Anytime Fitness chain of 24-hour gyms in Australia.

McDonell should know. In five years he's built the franchise into a national network of 260 gyms and is on track to reach 350 gyms by Christmas, and ultimately 400.

Not a bad result for a business that opened its first franchise in the New South Wales country town of Gunnedah in 2007, population 7888.

He says he chose Gunnedah as a test location for the network because the site fitted the global business model - it was next to a supermarket.

The rent was also low, allowing him a relatively risk-free first foray into the market. Just two months later, he opened a second gym, in Wodonga.

According to McDonell, who founded the business with his sister Jacinta McDonell-Jimenez, although it's easy to assume gyms are more city than country, rolling out the strategy in country towns initially allowed the pair to keep costs low and test the market.

When the siblings were considering taking the master franchise for Australia they looked at two franchises that were already successful in the US and also considered going it alone.

But being able to access the Anytime Fitness infrastructure, marketing and IT support, as well as the name, convinced them to go ahead with the agreement.

McDonell says the major sticking point when signing the master agreement was making sure it clearly stipulated what they were getting for their money.

The Australian franchisees pay a monthly network fee of $900, of which a third goes back to the US parent. For that, franchisees receive support and access to a dashboard of metrics so they can tell how their business is performing. They are required under the terms of their five-year contracts to do a complete refit every five years to keep the gyms looking (and no doubt smelling) fresh.

He says so far none of the franchises have failed, although one agreement was terminated. McDonell bought back this business, which he says is now performing well.

One of the reasons the franchise has been so popular is because it can be run by one or two people. Although every outlet is open 24/7, it doesn't have to be staffed around the clock. Cameras are mounted in every gym so franchisees can monitor cameras online when they're not on the premises. (Members are given a key and access code to let themselves in.)

Most of the gyms are also in residential areas with plenty of parking, so gym members can get in and out easily. Memberships can be used at more than 2000 gyms around the world.

As to how it has sustained such stellar growth, McDonell says many franchisees own multiple franchises - one has 10 - which has helped drive expansion.

In terms of the lessons learnt , he says if he had his time again he would have self-funded the enterprise - initially two partners were involved, of which one has since been bought out.

Right now McDonell is rolling out a new product through 60 gyms called "fitness on request", which involves rooms where members can dial up exercise classes. He's also trialling cost-effective personal trainers for small groups and new cardio equipment.

Here are his five tips for running a successful gym:

■Make sure you have the latest technology and gadgets.

■Offer services others don't.

■Be flexible - if members want to train at 8 o'clock on a Sunday night facilitate it.

■Offer a friendly, professional service.

■Keep the gym clean.