FRANCHISE INFORMATION REPORT

Transcription

1 FRANCHISE INFORMATION REPORT

2 Tapout is one of the most widely recognized lifestyle brands and is the official fitness and training partner of WWE. We are striving to take that brand recognition one step further by growing a chain of fitness centers. Tapout Fitness Centers are committed to being leaders in the fitness industry by: 1 MAINTAINING POSITIVE CLUBS WITH A TEAM CULTURE WHERE PEOPLE AT ALL FITNESS LEVELS IMPROVE 2 PROVIDING OUR FRANCHISE OWNERS WITH ALL THE TOOLS THEY NEED TO SUCCEED. Our Martial Arts focused programs and 24/7 fitness fills a niche in the industry, making Tapout Fitness a unique option that will get our customers excited about fitness. As an owner of a Tapout Fitness franchise, you will be able to take advantage of our world famous brand and partnership with WWE in order to maximize your success in the industry. 2 FRANCHISE INFORMATION REPORT

3 AN EVER-GROWING INDUSTRY The health club industry is enormous and continually growing, even through tough economic times. In 2013, the industry brought in over $78 billion dollars worldwide, at more than 165,000 clubs with over 138 million members. When you read numbers like the ones above, there are three main questions you ask yourself: 1 WHO USES HEALTH CLUBS? 2 WHY IS THE HEALTH CLUB INDUSTRY RECESSION PROOF? 3 HOW MUCH MONEY AND GROWTH DOES INDUSTRY SEE YEAR OVER YEAR? 3 FRANCHISE INFORMATION REPORT

4 Q: Who uses health clubs? A: Everyone

5 Fitness centers are a priority in almost every demographic. Both genders use gyms or fitness centers almost equally, which wasn t always the case. In 2013, 52% of gym-goers were female, a percentage that reflects the gender ratio in the population as a whole. Age is one demographic that shows a little bit of imbalance. The average age of a gym-goer is 40 years old, as of Indeed, the age group that makes up the highest percentage of members is 35-54, at 35%; the second biggest group was at 27%. Millennials and Generation X-ers are more likely to belong to a health club than members of the Baby Boomer or Eisenhower generations. One thing that IHRSA reports as being a successful marketing strategy for different age groups is to target your older customers with benefits of continued exercise as they age, while targeting your younger customers with loyalty programs and by advertising the social aspects of belonging to a gym = 35% UNDER 18 = 15% = 27% 55 AND OLDER = 24% SOURCE IHRSA The demographic with the largest disparity of membership is income, which comes at no surprise, as the number one reason people told IHRSA they did not belong to a gym was that the cost is too high. 41% of gym members make over $100,000 a year, but there are still users in every income bracket. 5 FRANCHISE INFORMATION REPORT

6 On average, the gym user visits the gym 103 times a year or about twice a week, these are what the industry refers to as core users. In 2013, 44% of members were core members; since 2009 the proportion of core users has increased by 20% overall. It is possible this increase can be attributed to tough economic times, as people only justify spending the money on health club memberships if they really utilize the facility; although, this reason is the least commonly given as to why people use health clubs. Because such a wide variety of people use health clubs, it is no surprise that people surveyed had varied reasons why they go to a gym. IHRSA reports the top reasons they received, in order: 1. I need to get in shape/stay in shape/stay healthy. 2. For overall health/wellbeing. 3. It s at a convenient location to me. 4. The variety of equipment, strength and cardiovascular equipment. 5. To get my workout in, rather than to socialize. 6. To make progress with my personal goals. 7. Access to group exercise classes. 8. To have fun. 9. My friends and family work out at the health club. 10. Access to fitness professionals. 11. The social aspects of the health club. 12. I feel obligated to go to the health club because of the money I spend on my membership. With so much diversity, from the customers' backgrounds to the reasons they come to the gym, the health club industry is sure to see success for years to come. 6 FRANCHISE INFORMATION REPORT

7 Q: Why is the health club industry recession proof? A: Fitness matters to people at all times

8 The recent economic downturn in the United States has been the worst since the Great Depression. The peak of the recession was in spring of 2009, but true recovery didn't begin until spring of It is curious, then, that the health club industry saw continued growth during those two toughest years of the recession. In fact, the health club industry in the United States added gyms, members, and revenue during those years REVENUE $19.5 billion $21.4 billion NUMBER OF CLUBS 29,750 29,890 MEMBERS 45.3 million 51.4 million 8 FRANCHISE INFORMATION REPORT

9 It seems that health concerns are a big motivator for people to belong to a health club. As people are getting older and obesity is becoming an epidemic in the United States, more and more people see the negative health consequences of an inactive lifestyle. Even though approximately 2 out of 5 Americans leads sedentary lives, the increase in gym participation gives gym owners a unique opportunity to make a difference. The IBIS World Gym, Health and Fitness report found that there are a number of attributes that successful gyms share, all of which keep them going even through hard economic times. These qualities are: 1. Easy access for clients. 2. Effective product promotion. 3. Economies of scale. 4. Provision of appropriate facilities. 5. Technical knowledge of the product. 6. Business expertise of operators. Our goal is to utilize all these qualities in order to create the best gym experience for the members and franchise owners. 9 FRANCHISE INFORMATION REPORT

10 Q: How much money and growth does this industry see year over year? A: Enormous growth.

11 THE TAPOUT FITNESS CUSTOMER EXPERIENCE BRAND RECOGNITION + PERSONAL ATTENTION As a brand, Tapout cannot be beat. Your customers already know its background and heritage. Our goal at Tapout Fitness is to utilize this brand recognition in order to bring customers in, then keep them in our gyms by giving them the personal attention they crave. Tapout Fitness is the only gym on the market to offer its members this combination of big and small gym ideals. But why do we do it? BIG GYM BACKGROUND = GREATER REVENUE SMALL GYM FEELING = GREATER CUSTOMER RETENTION 11 FRANCHISE INFORMATION REPORT

12 According to IHRSA, gyms that are part of a chain report greater revenue increases year over year at 5.6% growth, compared to 3.7% growth for independent clubs. On the other hand, smaller facilities that don t belong to a chain reported a better retention rate at 74% versus 69.8% for gym chains. At Tapout Fitness we are dedicated to making our customers feel like they are not just a transaction in the eyes of the gym owners. Rather, using diverse classes, one-on-one training, and tailored fitness plans, we create a fitness oriented relationship with our customers. When we take advantage of the best aspects of big and small gyms we create a winning situation for our franchisees and our customers. People leave health clubs for a wide variety of reasons, according to IHRSA. At Tapout Fitness, we never want any of these reasons to be why our members leave: I felt out of place. It was too intimidating. There was no one there to guide me. I didn t reach my fitness goals. I didn t know what to do there. 12 FRANCHISE INFORMATION REPORT

13 Many people, especially women, cancel their gym memberships because they feel intimidated by the machinery or the hulking gym rats they see around the gym. At Tapout Fitness, we strive to create an all-inclusive gym where everyone has the goal of becoming physically better. Another advantage our gyms have over the rest of the industry is that we are the only gym to offer a mixed martial arts background in addition to the more traditional gym setting with weight machines and cardio. Our customers also love the variety of classes taught at Tapout Fitness Centers. In addition to these (and more!) specialized classes, Tapout Fitness also offers traditional gym classes such as yoga, spinning, Pilates, boxing, and boot camp in some locations. TAPOUT MARTIAL ARTS is split into 3 distinct age ranges: ages 4-7, ages 8-13 and 14 and up. The program starts with an emphasis on physical fitness, motor skill development and life skills. Tapout Martial Arts then progresses to challenge one s individual skill level to promote you through our belt rankings. This program is a comprehensive mix of striking, wrestling and grappling in a non-contact platform that will give you the skills to be a Tapout Martial Artist. TAPOUT 20: A class that teaches members a new way to workout Tapout 20 is a twenty minute circuit workout guided by a certified trainer but motivated by the individual members. Anyone at any fitness level can participate in this class, as it is adaptive to individual needs and skill levels. TAPOUT FIT: A thirty minute, total-body conditioning class, geared toward building muscle and shedding fat. These seven rotational workouts are designed for maximum results, keeping customers coming back for more. 13 FRANCHISE INFORMATION REPORT

14 THE TAPOUT FITNESS DIFFERENCE: FRANCHISEE SUPPORT It s no small decision to make the large financial investment to become a franchise owner, which is why we strive to provide our franchisees with the tools they need to succeed. Tapout Fitness provides a turnkey business with no experience required. In addition, Tapout Fitness comes with multiple avenues to success: 1. BRAND RECOGNITION 2. PERFORMANCE ENHANCEMENT SUPPORT When you are a Tapout Fitness franchise owner, we are in your corner. 14 FRANCHISE INFORMATION REPORT

15 1. BRAND RECOGNITION Tapout s greatest strength is being recognizable. We are among the biggest brands in athletics and have been the biggest brand in mixed martial arts (MMA) since the inception of the UFC. Simultaneously, we are striving toward becoming the most widely recognized brand in the fitness franchise industry. Because of our well-defined brand, franchise owners already have part of their work done for them. According to the IHRSA report, new health clubs have difficulty getting started because of the time it takes to build up a brand, gain members, and turn a profit. Our franchisees never have that problem simply because so many people already know our brand via a number of internationally known agencies. Tapout Fitness already has in place partnerships with WWE. In addition, our brand clothing is sold at many of the nation's retailers: TAPOUT.COM With this much exposure for the brand, our franchisees' marketing and merchandising is already started for them before they even open up their doors. Plus, every time WWE holds an event, your brand name and logo will be on every screen. That sure can't hurt your business! 15 FRANCHISE INFORMATION REPORT

16 2. PERFORMANCE ENHANCEMENT SUPPORT Tapout Fitness wants our franchisees to succeed, so we do not just send them out into business ownership and hope for the best. Our support team brings over 40 years of experience to our franchisees, offering support in every part of owning a business. We offer: Former executives of successful companies Successful Entrepreneurs Professional Martial Art coaches and athletes Certified Trainers These professionals participate in myriad training programs to help your business hit the ground running as soon as it opens. 16 FRANCHISE INFORMATION REPORT

17 One unique thing about Tapout Fitness is we do not offer training as a one and done deal. Running a business, just like fitness, takes ongoing training and practice in order to get the desired result. That's why Tapout Fitness believes in a performance enhancement culture, in which training is ongoing and consistent. There are five phases to Tapout Fitness training: PHASE 1 Pre-Opening Training, Real Estate and Marketing Assistance PHASE 3 On-site Grand Opening Support PHASE 4 Business Launch Training and Marketing Support PHASE 5 Ongoing Marketing, Management and Operations Support PHASE 2 Tapout Fitness Initial Training 17 FRANCHISE INFORMATION REPORT

18 PHASE 1 Pre-Opening Training, Real Estate and Marketing Assistance Right from the start, Tapout Fitness sets up its franchisees for success. As soon as you sign up to be an owner you will be enrolled in an online curriculum designed to help you maximize the time before your gym opens its doors. Using this online curriculum, you will learn strategies for recruiting employees and trainers, advertising your gym, and bringing in members. You will also be assigned a Business Development Manager (BDM) to help you through the online curriculum. There will also be a group of real estate professionals added to your team to help you pick the optimal location for your franchise. Finally, through our Train-the-Trainer program, we will recruit, train, and certify your personal trainers. As your business grows and you add more trainers and classes, Tapout Fitness will continue to offer this resource. 18 FRANCHISE INFORMATION REPORT

19 PHASE 2 Tapout Fitness Initial Training As soon as the location is selected, franchisees go to the Tapout Fitness Initial Training, a three-day training at one of our training centers. You will learn the four major disciplines necessary to successfully own and operate a Tapout Fitness Center from our qualified teachers. The four disciplines are: PHASE 3 On-site Grand Opening Support Your grand opening is sure to be grand indeed, but there is a difference between learning about running a business in a classroom and actually running the business. That's why for the first five days that you are in business, Tapout Fitness will have one of the trainers on site to assist you with managing, billing, marketing, and customer service. DISCIPLINE 1 Marketing and Customer Acquisition DISCIPLINE 2 Customer Service and Support DISCIPLINE 3 Performance Enhancement DISCIPLINE 4 Business Management 19 FRANCHISE INFORMATION REPORT

20 PHASE 4 Business Launch Training and Marketing Support YOUR AREA OR YOUR ADDRESS GOES HERE Upon completion of Tapout Fitness Initial Training, you will continue to receive support and training from online sources and your Business Development Manager. Tapout Fitness provides virtual training resources on business development and client services in order to maintain the high quality of service our customers expect from our fitness centers. PHASE 5 Ongoing Marketing, Management and Operations Support The support and education from Tapout Fitness are perpetual in order to keep your business in top shape. Our franchisees benefit from ongoing interaction with business development managers, virtual education, and of-the-moment technology. You will never be alone as a Tapout Fitness franchise owner. Tapout Fitness strives to set itself apart in the industry by offering a unique gym experience and a positive, successful franchise experience. With all the corporate support you will receive for the lifetime of your business, you are sure to build a successful business. 20 FRANCHISE INFORMATION REPORT

21 AVAILABLE TERRITORIES We have franchisees and partners with a projected growth of 350 franchises. In addition, we are working with additional franchise owners to grow our brand even further. 21 FRANCHISE INFORMATION REPORT

22 FRANCHISEE INVESTMENT The proverbial million-dollar question: How much does it cost to get started as a franchise owner in Tapout Fitness? The answer is dependent on how big you want your gym to be. Because Tapout Fitness centers are adaptable to almost any space from small apartment complex gyms to anchor stores in strip malls the business model is flexible, thereby making the investments flexible too. EXPRESS STUDIO 3,000 RENTABLE SQUARE FEET $30,000 FRANCHISE FEE INVESTMENT: $93,960 $193,244 STANDARD MODEL 6,000 15,000 RENTABLE SQUARE FEET $30,000 FRANCHISE FEE INVESTMENT: $119,706 $654,053 The total investment range of $93,960 to $654,053 makes Tapout Fitness a competitively priced franchise option, especially in the fitness industry. In addition to the already low costs, Tapout Fitness offers discounts to those who open more than one franchise at a time and to members of the military. 22 FRANCHISE INFORMATION REPORT

23 GET STARTED RIGHT AWAY Are you ready to get started on owning a business, being your own boss, and adding fun and fitness to people s lives? TIME TO BELIEVE To get started on your dream, Franchise@TapoutFitness.com or call (800) Sources: IHRSA 2014 Profiles of Success Report 23 FRANCHISE INFORMATION REPORT