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Franchise Welcomes the Neighborhood Club

MARIETTA, GA — Large, multipurpose fitness facilities aren't where the market is right now. Instead, the market is in the smaller, neighborhood clubs, says Chuck Spencer, CEO of American Bodyworks. That's why he and four partners opened American Bodyworks, a franchise that takes all the cardio and strength equipment of a big club and puts it in 6,000 square feet. It all fits thanks to the deletion of some of the other elements of a big club — most notably, group fitness classes and child care.

American Bodyworks had four franchises as of mid-April, with two more in presale. By the end of the year, Spencer plans to have 20 franchises open in the Southeast. Next year, the company plans to expand throughout the country.

The club's first franchise went from almost going out of business in 2004 (before becoming an American Bodyworks facility) to earning about $700,000 in 2005, says Ray Groover, CFO of American Bodyworks and one of the partners in the company. Revenue increased another $150,000 in 2006.

Groover attributes much of the success to the personal training offered at the franchises. Although the key card clubs operate with small staffs — generally a full-time manager and two part-time employees — many of them contract with an average of three personal trainers.

“That is the mainstay of many of the facilities — the personal relationship between the staff and the members,” he says.

The franchisor takes a percentage of the profits rather than a flat fee from franchisees, a way of doing business that ensures the franchisor is interested in the success of the franchisee, Groover says. The franchisor also manages the back end of the franchisee's business, something that keeps them from making mistakes that many new clubs make, Spencer says.

“What we want from the franchisee is the front end — someone who will sell memberships, get results for members and represent the club,” he says.

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