Before you can pick the right location for your franchise you need to truly define the member demographic you are seeking Photo by Thinkstock

Before you can pick the right location for your franchise, you need to truly define the member demographic you are seeking. (Photo by Thinkstock.)

Defining the Right Demographics for Your Fitness Franchise

Determining your customer demographics is key before picking a location for your franchised facility. It requires gathering a lot of data, but a good franchisor will be able to help. 

(Editor's Note: This column is part of a series of columns by Matthew Cicci tracking his progress as he opens a fitness franchise. Check out previous columns in this series by going here.)

I am about one month into my journey to open a fitness studio. Before the daunting task of choosing a location can happen, I need to ask that critical question that every business owner must ask: who will purchase my product or service? I already had chosen the franchise concept, been accepted by my franchisor based upon my professional and financial qualifications, and wrote a really big check to the company. But that was the easy part. The hard part was to come: actually building a studio that the right people would frequently visit, enjoy and recommend.

One of the first things you need to consider is customer demographics. You can define and refine the ideal image of your target consumer in many ways. One of the better definitions that I have seen reads like this: "statistical characteristics of a population, such as age, gender, location, marital status, ethnicity and income used by a business to identify a market for their goods and services."

Let me outline a few of the more significant categories that I chose to focus on for my group fitness studio:

  • Population. Will there be enough people in your general area (and that differs by concept) to support your financial projections? Is that number growing or shrinking when compared to previous years?
  • Income. Before choosing a geographic area, you must determine the minimum income level you need from your desired demographics to attract that demographic to your facility. That minimum number should coincide with the business that you are developing. Planet Fitness and Equinox are not likely neighbors for this reason, with a few exceptions.
  • Consumer expenditure. This is really the big one. On what are the people in your area spending their disposable income? Furthermore, what percentage of that spend is on like-minded health and fitness products or services?
  • Age. Although you don't want to limit your pool of potential clients, you also must be aware of whether Millenials or Baby bBoomers live around the corner. A Crossfit studio across from a retirement community will not be as successful as, say, a water aerobics class for obvious age-related reasons.
  • Gender. Like it or not, the data suggests that group fitness attracts more female clients. One 2014 study even suggests that females outnumber males 5:1 in this category. IHRSA's 2014 data suggest similar numbers stating that males make up only 38 percent of club attendance figures.

Other categories to consider include marital status, race and ethnicity, commute time, education level, occupation and labor force. Within each of these individual categories, it is possible to drill down so deep that you learn more about your area than the Census Bureau.

Franchise Help

You don't have to figure out all of this on your own if you are a franchisee.  Good franchisors have teams of professionals and years of research that have helped the team build the 'typical' client into the business plan. The support center for my concept was instrumental in provided the necessary tools, resources and professionals to help me determine my ideal end-user. It's like having an older brother who is four years ahead of you. He may not be on campus with you during your freshman year, but he can still tell you what classes, bars and potential exes to avoid. That is what the franchise model brings to the table — an invaluable history of trial and error that I (as their newest franchisee) am able to capitalize on.

Analysis Paralysis

Having so much available data can become overwhelming. For example, just from a basic real estate report, I could break down the consumer expenditure category into annual vs. monthly, retail vs. non-retail, 0.5 mile radius to 2.5 mile radius, year over year, and more. And that's just one category. Extrapolating upon each and every demographic characteristic can consume you to the point of inaction and even become counterproductive. You need a balance. I decided to identify the three most important features for my scenario and analyze the heck out of them while simultaneously setting minimum criteria for the remaining categories.

The Final List

Done, right? Well, no. It will be months and possibly years before I know for certain if the research done in these crucial few months will actually pay off. I would like nothing more than a line of cars weaving their way through the dark to my location like at the end of the movie "Field of Dreams." However, before I can say whether I am in heaven or Iowa, I first need to know if I will be on Clybourn Street or Webster Avenue. Find out in two weeks when I discuss the importance of location, location, location.

BIO

Matthew Cicci is a freelance fitness writer and small business owner in the Chicago area. With more than 15 years of experience in the health and fitness industry, Cicci has operated businesses in the not-for-profit, commercial, franchise and residential fitness environments, including a regional fitness consulting position and managing an 80-acre residential complex in New York. Cicci has held several industry-wide certifications, has a bachelor's of science degree in management and studied under the master's program for exercise science at Syracuse University. He can be reached at macicci@aol.com.

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