A European gym franchisor focuses on small gyms (approximately 300 square meters) with standard fitness equipment without classes or lockers. The gyms are typically located in local strip malls and open 24 hours a day and accessible with a member’s access card. With the business growing rapidly, new competitor have penetrated the market with the same offering. To make our client’s franchising opportunity more attractive, our client wanted us to advise on how to increase franchise profitability.
- We reviewed the profit structure (revenue axis and cost structure)
- A market study (size, growth, customer segmentation) was done
- A Competitor analysis (fragmentation, segments, differentiation features) was led
- Break Even and Feasibility analysis were done
- New potential revenue opportunities were suggested
Breakeven estimated to 233 members
Revenue growth estimated at 11%
Cost reduction estimated at 2%
The business model allowed for a low breakeven membership point for franchises
Revenue growth opportunities (pricing, quantity, new product, marketing equipment) were adopted
Cost-saving opportunities (rent, labor) were considered
Focus on the rural market segment was increased
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