The recent explosion of private and franchised small group training studios has proven that, for health clubs, bigger doesn't always mean better. In addition to pulling members out of big box health clubs, small group training studios attract talented trainers who are looking for ways to develop better client relationships and maximize earning potential.
Though some club operators may view small training studios as a threat, industry experts say the business model is an opportunity for large health clubs to follow the trainers' lead to a new type of programming that drives retention and adds revenue.
Josh A. Leve, co-founder and president of the Association of Fitness Studios (AFS), has worked in the health club industry for a decade and has managed both big box clubs and small studios. Through AFS, he consults with small studios and helps them gain access to resources that traditionally are available only to larger clubs.
Leve says that three things motivate personal trainers to leave big box clubs and join smaller training studios: flexibility, tighter client/trainer relationships and money.
"Just go walk around any major metropolitan city and you can come upon 30 to 40 of these facilities," Leve says. "You're not confined to this corporate structure that these big box clubs have become known for. Trainers are creative people. A lot of trainers are realizing instead of working at one health club, they can work at three to four different studios."
One way larger health clubs are battling this trend is by eliminating part-time training positions and requiring trainers to become full-time employees. Many also try to keep employees invested in their club by requiring trainers to sign non-compete agreements, Leve says.
Although small studios may seem enticing to personal trainers, Leve says the growth in small studios is not a major threat to large health clubs.
"If an owner is worried they are going to lose their own clients or their own trainers to the competition, there is a larger issue there, and they are not creating enough value or enough experience to make their members want to stay," he says.
Eddie Tock, an industry consultant and a partner in REX Roundtables, says the small group studio trend is opening opportunities for everyone in the fitness industry.
"What we've seen is there's definitely more clubs opening, many of which are small studios or small personal training, but a lot of clubs are expanding their training programs to include small group training," Tock says. "They are adding team training and small group training of two to four people. Every club out there is recognizing that this is a trend that is good for business. The trainers can make more money, the members can pay less money and the club will make more money."
The threat of losing his best trainers to smaller studios does not worry Bill Windschief, owner of World Gym, Lewisville, TX, and executive team member with World Gym International, Los Angeles. To Windschief, trainer turnover simply comes with the territory of operating a large club.
"Anecdotally, I would say that trainers are always kind of bee-bopping around," Windschief says. "They are always thinking about opening their studio or looking for places they can make more money. If you have a great trainer with a lot of education and a big following, sometimes those trainers will go to smaller studios. Typically, in my experience, those are not the folks that we are hiring. The traditional health clubs are getting good, qualified trainers that are not yet established—maybe just starting out—because we have to maintain a certain profit margin."
Small group training franchise Orangetheory Fitness, Fort Lauderdale, FL, is expanding across the country and entering markets that were once dominated by big box clubs. Reginald Williams, head trainer at Orangetheory Fitness in Fairfax, VA, and regional general manager for Virginia and the District of Columbia, says more experienced trainers are leaving big box clubs for the small group training environment because the opportunities are often better for highly qualified trainers, particularly in the area of compensation.
Commission-based compensation packages for trainers at big box clubs have changed little recently, Williams says, and they hit a revenue ceiling. Often, trainers come to places such as Orangetheory looking for a new structure where they can maximize relationships and earning potential. Orangetheory does not make trainers sign a non-compete and allows them to train at any studio or health club they choose.
"Our coaches aren't responsible for the sales of each individual member," Williams says. "It's really a team-based thing. We have sales associates that are responsible for prospecting and bringing in members."
Tami Mensh, Orangetheory Fitness marketing manager, says Orangetheory and studios like it are not in direct competition with large health clubs, and they can co-exist peacefully. Small studios offer a different type of experience for a different type of trainer and member, she says.
"We do one thing and we do it well as a small studio," she says. "Big box clubs are more apt to take trainers who are just starting out because [the big clubs] are looking to make more money per session and aren't necessarily very concerned about trainer retention. Smaller clubs depend more on the relationships built within their club and tend to pay trainers more to keep them happy."