ANYTIME FITNESS – STICK TO THE MODEL
S
uccess is not guaranteed for every franchise that targets India. With 1,600
locations across nine countries in three continents, the Anytime Fitness model has a strong track record – and yet, having launched in India at the end of last year, its four clubs were recently closed down by the master franchisee, leading to a termination of his franchisee rights. So what went wrong? While Contours Express
International has consciously adapted its model for the Indian market (see HCM July 11, p54), too much variation from the tried and tested model can, says Anytime Fitness, undermine the whole business. Dave Mortensen, president
expand into Brazil, Russia and China through franchise arrangements. “We’ve made a strategic decision
to focus our capital resources on Central European growth, and a market such as India – with immense potential for a premium brand such as Holmes Place – requires huge capital commitments. Having matched up with suitable partners, we wanted to keep the ownership structure as simple as possible to allow for uncomplicated fi nancing for a successful growth trajectory – hence pursuing the franchise route. India also has its own unique business culture and style, and having a local partner who understands these nuances made sense for us. “India is becoming a progressive and
welcoming business destination – so far we haven’t encountered anything we’ve not been able to turn to our advantage, and the fact that communication can all be done in English makes the adaptation process easier. However, like all emerging economies, there are numerous processes involved in setting up and operating businesses in India. The challenges are very diffi cult to put into words – anyone who has done business in India will be smiling in agreement with me. From getting visas to setting up bank accounts, there are surprises all the way. Specifi cally, most European business people will have huge challenges around the ability to meet timelines.”
august 2011 © cybertrek 2011
of Anytime Fitness, issued the following statement in June: “We are extremely disappointed to learn of the recent closings of Anytime Fitness clubs in India. Although the clubs were independently owned and operated by an Indian businessman under a master franchise license agreement, this is an unfortunate development for the Indian fi tness industry and for Anytime Fitness. “In India, unfortunately, the
licensee of the Anytime Fitness brand took great liberties with our traditionally low-investment model, creating a bloated corporate infrastructure and adopting practices which are contrary to global standards of health club management. In spite of our stern warnings, our master franchisee frequently deviated from our systems and charted his own course. “As a result of these breaches, we
delivered a notice of termination of our agreement to our master franchisee at the beginning of May 2011. Regrettably, we were unable to apply resources from overseas to protect the numerous individuals that have been affected by this problem, including club members, staff, landlords, vendors, respected fi nancial institutions and a prominent Bollywood celebrity.” The franchise still believes its
model can work well in India, and is now seeking a new franchisee to establish the brand in the market.
healthclub@leisuremedia.com kate cracknell
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