Franchising is not perfect. But then again, neither are any other business ownership models. There is no single business format that is best for everyone—it all comes down to the individual. There are both advantages and disadvantages of franchising that you should consider before deciding if it’s right for your small business.

Fitness Franchising Challenges

It’s all about perspective. You might find that some of the drawbacks to franchising are not drawbacks at all, but rather a new way of approaching business. For those with limited business experience or other obligations that may prevent them from putting in the time necessary for a start-up, the pros of franchising can significantly outweigh, or even negate, the cons.

1 – Digital Competition

In the age of COVID-19, digital fitness platforms have sprung up like weeds. It was the only option for so many individuals who could not attend their regular gyms and health clubs for many months due to forced closures or health concerns. 

The good news for the fitness industry is that the demand for an in-person workout experience is still very real. As restrictions ease up in some areas, we’ve seen many gym-goers return. Among those who opt to wait for a vaccine, they will undoubtedly be returning with enthusiasm soon. 

Even though the overall outlook remains positive, COVID has posed a significant concern for gyms and other fitness facilities. To keep up with various online fitness platforms, these businesses have had to step up their game to remain competitive. 

When choosing a fitness franchise to invest in, you’ll want to look for a business model that has adapted well to the limitations created by the pandemic. The brands that have made it through strong are the ones that were able to quickly and effectively launch a digital component to their offerings. Keeping clients engaged through these rough waters is key to keeping their business top of mind and providing a place for them to return once we can all get back to business as usual.

2 – Cost

The thought of franchise fees and royalties may make some cringe, but in all honesty, it’s not as bad as it sounds. The money you pay to the franchisor in initial fees is not money wasted—it’s an investment into your business. In exchange, you are getting valuable services and support from your franchisor for things that you would be left to figure out on your own otherwise.

There will be specific net worth requirements you’ll need to meet to be approved by a franchisor. Until you break even, you’ll need to have the means to support your lifestyle if you plan on leaving your current job. You will also be responsible for ongoing royalty payments in exchange for continued use of the trademarks and franchisor services.

The good news here is that partnering with a reputable franchisor may make it easier to secure financing. Access to group pricing through the franchisor’s vendor relationships may help you save money in the long run.

3 – Limited Creativity

Are you the type of person who likes to come up with new ideas and see them come to fruition? Do you want complete creative liberty over your business? If the answer is yes to either of these questions, you may want to seriously think about whether or not you could thrive in a franchise system.

Part of franchising is upholding the brand standards and creating a sense of cohesiveness among all franchise locations. This includes limitations on how and what you can sell, how you represent the brand, the technology you are allowed to use, territory restrictions, and more.

The plus side is that there is no trial-and-error process. Everything put in place by the franchisor has been tested and deemed successful. But since you will be locked into a contract, pay very careful attention to the limitations in the FDD and franchise agreement, and ask yourself if you will be happy operating within these guidelines.

CITYROW studio

4 – Hard Work and Long Hours

To produce a successful franchise business, you must be willing to work hard and put in long hours early on in the process. The franchisor will help you through anything you are unfamiliar with. You will never be alone along your journey, but it will still require a lot from you.

Alternatively, you can hire a manager to operate the business on your behalf and become an absentee business owner (if this is the case, be sure to hire a manager you can trust that will uphold the business standards as much as you would).

You’ll need excellent people skills, an openness to learn, and the ability to manage your team or your selected leaders. Thankfully, as part of a franchise, you won’t be going at it alone. 

5 – Market Saturation

If you invest in a well-established franchise, it may be challenging to secure the territory you are after. If that is the case, consider a newly emerging franchise that has shown growth potential in its early stages. Your territory options will widen, and you could be the first to market in your area!

Regardless of which franchise you choose, be sure to evaluate the franchisor’s territory protection policies and competition from other brands (it’s okay to have some competition—it shows that there is a demand for what you are offering).

While the franchisor will likely have national marketing covered, you will still need to conduct local marketing efforts in your community. Your franchisor may provide you with marketing materials and guidelines to help you in this endeavor. Fortunately, the brand recognition that comes with franchising, especially as the franchise grows, will help you attract a loyal customer base.

6 – Doesn’t Completely Eliminate Risk

It is a bit of a misconception that a franchise is a risk-free way of owning your own business. The truth is, risk is inherent to any type of business venture—but franchising gives you the proper support system to start strong and to better navigate challenges along the way. If you trust in the system and adhere to the franchisor’s policies and procedures, you can significantly increase your chances of success.