“Oh, that’s just a fad” = thinking that can lead to missed opportunity

by | Mar 12, 2019 | Blog

Some say the key to finding great businesses is following opportunities that others don’t see.

I believe part of the art of finding great businesses requires keeping an open mind, keeping an ear to the ground for information that others don’t have and then digging in and researching these business opportunities diligently.

As it relates to keeping an open mind, fitness franchises can close a person mind’s faster than most. The common stereotype that I hear when talking about fitness businesses “Oh, that’s just a fad.”

I get it. Body by Jake, Bowflex, the Shake Weight, and the ThighMaster all soared and crashed…


…I wonder how much money the owners of these concepts made during their boom period? I wonder if they would sign up again for the same ride?

Which begs the question: Is having a lot of short-term success such a bad thing?

Orange Theory’s success (so far)

The Orange Theory franchise system has soared to over 600 fitness studios since starting to franchise in 2012.

The Orange Theory owners who I talk to are happy, successful and focused on opening multiple locations. And now, we are starting to see some owners cashing out of their ground floor success and, in some cases, small private equity firms are purchasing the Orange Theory franchise being sold. There is nothing that makes me smile more than hearing about a franchise owner getting paid a handsome some and cashing in on their exit strategy.

Orange Theory recognized there was an opportunity in the market to create a premium level experience that was fun, engaging and produced results all within a 60-minute class that customer could schedule at their convenience.

Orange Theory tapped into a growing segment of fitness called boutique fitness. And they aren’t the only franchise or company thriving in this space.

Americans continue to get off the couch (even in down economies)

U.S. health club memberships have risen at a compound annual growth rate of 4.2 percent over the past 20 years and even climbed during recession years. Boutique fitness is one of the fastest growing forms of fitness memberships.

The experts report young Americans, in particular, are doling out less of their cash on cable and at department stores, and more on fitness and technology. Consumers, in general, are moving away from the independent workouts at big box gyms and moving towards fitness studios that deliver a communal experience with peers while having fun, burning a ton of calories and enjoying a premium experience.

Another boutique fitness franchise rocket ship

Most people don’t believe me when I tell them that one of the fastest growing franchises of 2017 figured out a way to offer pilates to the masses through a boutique style experience.


No, the franchisees are not pilates instructors!

Many of these wildly happy and successful franchisees came out of the corporate world. And many had to push past their limiting beliefs and stereotypes about fitness businesses to take the time to look under the hood and research this particular franchise. And for some, they found a business that changed their life…

The feedback I hear about the people who decided this business was a fit is very strong.

A peek under-the-hood

What many of these franchisees uncovered during their due diligence process was a business model that tapped into an underserved market that was extremely fragmented.

Digging deeper, they uncovered a business that attracts an extremely loyal customer base which creates a recurring revenue stream and high customer retention rate.

Digging even deeper, they found a customer acquisition and marketing model that was driven by a unique presale membership strategy that converts prospective customers into paying customers at a very high rate and helps ramp the revenue up quickly.

Once they learned about the unit economics, it all made sense. One instructor teaching multiple customers at the same time is a very profitable business model.

The owners are business people, not Pilates instructors

And finally, through their diligence, they were able to actually speak with and connect owners of the franchise to hear firsthand what their experience has been. These successful owners tend to be savvy business people with a passion for health and wellness along with an ambition to open multiple locations.

They are not in the studio teaching Pilates. They are building, leading and managing their team of instructors who run the day-to-day operations of each studio. They are watching the business’s numbers, KPIs and executing their marketing plans. Some of them even have full-time jobs still.

In sum, this franchise is a great fit for people who are looking for a business that:

1.      Makes an impact in their customers’ lives by promoting healthy living

2.      Operates off a repeat revenue model driven by a loyal customer base

3.      Is run by a manager thus enabling the owner to have a semi-absentee role

4.      Has multi-unit potential

5.      All within a moderate investment.

There are still opportunities for this particular franchise in limited markets around the country. I know where. If you want to find out if there is availability left in your market, get in touch with me.

“The secret to getting ahead is getting started.” – Mark Twain

I share this example to illustrate the point that judging businesses by some of the first thoughts it conjures up in one’s mind can lead to missed opportunities. There aren’t many businesses that can conjure up quicker stereotypes than fitness businesses.

Keeping an open mind and taking advantage of the transparent information available when researching franchises by looking “under the hood” of the actual business model to learn it and then validate with existing franchise owners gives people the information they need to figure out if a business that they would have otherwise dismissed by judging it on the surface is, in fact, a business that is a fit and could change their life.

If you ever want to talk about franchising or business ownership, I’m happy to. Just request a call here and I’ll be in touch.

The First Step is a Conversation.

If you have that burning desire to build your own successful business so you can live a life you can only have working for yourself, let’s talk.

The First Step is a Conversation

The first step is a pretty simple one: We have a conversation.

After we speak, we’ll be able to figure out if there is a good fit to work together.