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If You Brand It, They Will Come

Chris Palumbo started elements in 2004, and ever since then, he‘s been making some major efforts at branding this franchise of women-only clubs as an upscale “lifestyle force,” as he calls it. He brought Bruce Fabel on board last week as CEO. Fabel has a background at Warner Brothers and Nike and experience in U.S. and international expansion, an area Fabel will focus on for elements. He also has three months of experience as COO at Life Time Fitness in 2001, one year as COO at Diversified Health and time at Butterfly Life.

Palumbo and Fabel are trying to build a brand not just by opening clubs, but also by surrounding their chosen market with the brand through an online magazine, an online diet portal called BalanceD (with plans to build retail diet centers), a blog, apparel in their clubs (and possibly soon, elements everyday apparel in upscale retail stores), and a recent consumer media blitz to magazines such as Shape and Vogue.

It all sounds impressive, but during the almost four years since elements started, Palumbo has only opened two clubs in Atlanta, one in Boston, one in Chicago and one in Charlotte, NC (and sold 50 franchises so far). That‘s a very small number of open clubs compared to the fast growth of other women-only health club franchises. Of course, my point of reference may be askew these days since the fast growth rate of other franchises now seems like the norm--and, of course, we all know that faster growth isn't always sustainable.

Do I believe elements will be different? Palumbo and Fabel say they are trying to be different by building an upscale brand and support system first before expanding. But the industry has been bitten by so many bad franchise companies lately that I‘m afraid to predict success for anyone at this time. I wish Palumbo had more clubs to show for his efforts at this time. I guess I'd prefer to say that only time will tell whether building a brand first will pay off in the long run. -Pam

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