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a district manager role.”
Russo agrees that if the owner is
the key reason for a club’s success, it
is not time to expand. “Successful en-
trepreneurs work on their businesses
not in their businesses,” he explains.
“They’ve perfected business operat-
ing systems that run their clubs and
produce results.” How do you test the
quality of your systems? According to
Russo, your systems are effective when
you can walk away for three months
and have your business continue to
grow and make money without your
presence.
Owning more than one profit-
able club can also have an impact on
their future resale value, says Geoff
Del Grande of Fitcom Services, in
Orangeville, Ontario, and who has
ownership in several clubs across the
country. “Potential purchasers aren’t
very interested in buying single clubs
because they assume that much of a
single club’s value is likely in the own-
er,” says Del Grande, who is launch-
“Seek out others who have done what
ing a club franchise business in 2010
you want to do…interview them, pay
called “Always Open Fitness™. “But
once there are two successful clubs
them or take them out for dinner.”
in a chain, purchasers know they are
buying a success system that can carry
on without the original owner.”
a member before he even owned his “Interview them, pay them or take
first club. them out for dinner,” says Kuntze. Get friendly with
“I think it’s the best way to learn,” “Pick their brains, and then duplicate your banker
he says, referencing the group meet- their steps.” Many club owners erroneously
ings and non-competitive structure think they can fund a second club
(direct competitors of existing mem- Consider your with profits from their first club, says
bers are not eligible to join). “I’m able management style Russo. A wiser choice is to acquire a
to talk with owners who have been in McPhee needs to ask just one ques- separate business loan for the new
the business for over 20 years, share tion to determine whether a client club to ensure they don’t put the first
financial reports with them and learn should open a second club: “What’s club at risk. He strongly believes that
all the things I need to know for my your management style?” When cli- individual clubs must be able to sup-
clubs to thrive.” ents tell him they like control and to port themselves independently.
According to the Alliance’s founder, be hands-on in their clubs, a red flag “What if there’s a recession that im-
Jeff Russo, in addition to the wisdom shoots up. In these situations, McPhee pacts the profits at your first club?”
and camaraderie of the group, Alliance often recommends that they stay with he asks. “You need to have money in
members benefit from shared purchas- their current club and focus on mak- place to operate for a least your first 18
ing power on products and equipment, ing it bigger and better. months,” says Russo, referencing the
marketing initiatives, programs and “If you’re going to run two clubs, point when a well-run club typically
services. “Alliance members enjoy the you need to be the type of person starts to turn a profit.
same benefits as franchisees in large who’s willing to give up the reins, loves And how much money will you
fitness club chains while remaining in- to see your staff do well and who pays need? Many clubs operate without
dependent,” says Russo. well. If you stretch yourself thin over even a basic business plan – and this
Don’t have access to this type of two locations and need to approve ev- is the key reason that so many of them
business support network? Then ery decision, you and your staff will fail, says Russo. “Each of your clubs
seek out others who have done what go crazy. You have to be comfortable needs a solid three-year business
you want to do in a similar market. moving from a management role into and marketing plan with three-year
24 Fitness Business Canada November/December 2009
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