| CBI Interview|
“What’s the new normal?”(See “The New Normal,” April CBI, pg. 42). I believe we’ve gone through a period that only our grandparents understand. A lot of people have been hurt. We’ve all made changes in the way we live.
CBI: In your view, how has the downturn affected the fitness industry? Will things ever get back to ‘normal’, or are funda- mental changes occurring? If so, what are they?
JS: The industry is experiencing changes that will be with us for a long time. For example, short-term, the lack of financing has slowed franchise growth dramatically in all segments. As the economy improves, financing will loosen, but I’d be surprised if the easy lending days of the past ever return. The recession hurt the retail indus- try, creating a window for low-cost
operators to step through. A lot of retail space is currently available, and the cost to enter the market in this segment is low. Franchises are attractive investments for equity groups, for multi-unit franchise operators, and for displaced corpo- rate executives who can use funds from their large 401(k)s. Low-cost gyms will improve just
as the economy segment of the hotel industry has. They’ll continue to put pressure on full-amenity gym opera- tors to keep their products looking good and their service standards high.
CBI: What was the overall mood like when you attended IHRSA’s 30th Anniversary International Convention and Trade Show in San Francisco? How did you make use of your time there?
JS: This was my second IHRSA convention. It was great to see how
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PRO FORMA: GOLD’S GYM INTERNATIONAL, INC.
• Number of Gold’s Gym full-service franchises in the U.S. and elsewhere: 623
• Number of Gold’s Express franchises: 3-5 open by August 2011
• Total number of members in 2010: 3.5 million
• Member breakdown: 53% female, 47% male
• Cost to build/own a full-service Gold’s Gym (35,000-100,000 square feet): $963,000- $3.9 million; $25,000 franchise fee; royalty of 3% of annual gross revenues; National Ad Fund fee of 2% of annual gross revenues
• Cost to build/own a Gold’s Gym Express (10,000-25,000 square feet): $895,000 to $1.9 million; $25,000 franchise fee; royalty of 5% of annual gross revenues; National Ad Fund fee of 2% of annual gross revenues —|
www.
ihrsa.org |
JULY 2011 | Club Business Internat ional 33
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