Have you finally decided to join the franchise gym business arena? For the last three years or so, many gym insurance Tasmania specialists have observed the growing demand for gym franchise in the region. This comes with the surge of awareness in the health and fitness arena inspiring people to become more and more physically fit. As an effect, franchise gyms start sprouting from one Australian region to the other giving old-school fitness centres a run for their money. When thinking of getting a gym franchise, it is important to learn how to decode its basic elements to ensure your profit potential.
Licensing Fee. Some business-minded individuals always go for gym franchises with low licensing fee and for the wrong reasons. Initial licensing fee will definitely vary. It can go as high as $30,000 or as low as $2,500. Like buying a pair of shoes, it is imperative to find a brand that has known track record in terms of longevity and “right fit”. It is then, critical to look beyond a licensing rate but more on a franchise’s overall reputation. Be reminded though that such fees are not the overall indicator of a franchise success. Money simply can’t buy success.
Royalty Fee. Royalty fee is another important aspect in picking the right gym franchise. At first glance, a fixed percentage royalty fee sounds more lucrative as a franchise will only charge around 8 percent for operating privileges. But as your membership volume grows, so does the amount you have to pay monthly (or as indicated in the contract). Flat royalty fees offer the same rate over time. It doesn’t increase or decrease and does not rely on membership volume. Most reliable franchisors offer flat rate royalty fees though.
Equipment Requirements. It’s a known fact that opening a gym always entails initial cost for purchasing equipment. However, some franchises present a standard checklist of equipment which may even cost more than the licensing fee itself. Some require a gym that’s filled with state of the art machinery in compliance to certain standards. If you are still testing franchise waters, the best route is to go for gym franchise that requires less to save part of your bottom line. If it’s a full scale facility you want, asking a franchisor for corporate purchasing privileges in the form of discount from a particular line is a must.
Marketing & Promotions. Most, if not all, franchisor will charge a fixed monthly fee for marketing and promotions. This will include web hosting, online and offline advertising, social media management, and lead generation. In some cases, a franchisor will present various packages for a franchisee to consider. This is quite critical when you start off a franchise. So make sure to choose a package that will work to your advantage.
These elements will be the most critical in terms of operational expense when opening a gym franchise in Tasmania or anywhere else. There is no standard rule in picking the best franchise though. If you may, it is also wise to consider what gym insurance Tasmania coverage a franchisor offers to its franchisee. Reliable ones always have their franchisees’ backs to ensure continued success to the business. For all other gym insurance needs, click HERE or call our hotline now.