Chuck Runyon found a way to grow his gyms fast, without having a giant pool of money at his disposal. Here's how he created a franchising success.
Anytime Fitness co-founders Chuck Runyon (left) and Dave Mortensen.
Chuck Runyon knows you hate working out. So in 2002, the fitness-nut-turned-entrepreneur launched a 24/7 co-ed gym with the goal of it becoming the most convenient get-fit option in the world. To scale the business, he decided to use a franchise model. Runyon, who has a self-help book hitting shelves in January called Working Out Sucks, now has franchised 1,700 clubs in 10 countries. Inc.'s Caitlin Berens talks with Runyon about how, with very little knowledge of the business model, he made franchising a scalable—and surprisingly affordable—way to grow his gym business.
Anytime Fitness has grown really quickly over the past few years. What drew you to franchising in the first place? We saw this as a fast way to grow because with franchising you're using other people's capital and the capital of landlords. Franchising was a comprehensive, fast way to grow the brand of Anytime Fitness without having to take out a big pool of money.
I imagine there were challenges to going the franchise route, though? Well, franchising is a highly regulated industry, so there were several legal hurdles to clear. We had to fill out a franchise disclosure document and several other franchise agreements, as well as navigate and amend the legislation of about eight states. This all takes time. We also have a very eclectic franchisee base—they're not just personal trainers—most of them have never run their own business before, or worked in the fitness industry. So there's been friction at times. At its core, franchising is a relationship—you can't implant work ethic or motivation, but you can provide the tools for success.
How do you manage those relationships? We had some franchisees who didn' work out. Initially, being new to franchising, we sold some larger territories than we should have and we sold some of those to the wrong people. Even if they looked well-heeled and had business acumen and a huge financial statement, some still didn't work for us. The money was great up-front, but long-term it really made that area of the country stagnate with growth. They were just the wrong people.
What would you tell a young entrepreneur who came to you asking for franshise-building advice? They need to have a very scalable idea to begin with. We didn't know too much about franchising when we got into it, but our industry knowledge made us confident our concept would work. You should also concentrate on technology and people in today's age. Then focus on being franchisee-friendly—don't do the money grab—franchising doesn't work unless the franchisee makes money.
With such a large franchise how do you make your brand stand out? We have a wellness website, Anytime Health, for our members, which allows them to track calories and access virtual certified trainers 24/7. We're trying to less club-centric and engage our members outside of our fitness center to show that fitness and nutrition is a lifestyle. I think we out-care our competition.
CAITLIN BERENS writes about business innovation and entrepreneurs. Before Inc., she worked at Billboard, SELF, and Better Homes and Gardens. She attended Drake University, and lives in Brooklyn, New York. @CaitlinBerens