Anaheim Hills, Ca — For 12 years Mike Salerno ran his own clubs, Precision Fitness in California, but recently, he decided to take that personal training studio model and launch a franchise version of it. Salerno sold two of his three clubs to franchisees last year so that he could concentrate on franchising the business. He plans to have 10 franchises open by the end of this year, focusing initially on California.
“We are high quality for a low price,” Salerno says about the franchised clubs.
Precision Fitness franchises combine weight training, cardiovascular exercise and nutrition into individualized programs for $18 per session. Sessions typically run 90 minutes. Often, a group of four to five individuals will work with one personal trainer in a 1,400-square-foot facility that is equipped with one piece of each type of equipment needed.
“The way we time it, no one has to wait for any of the equipment,” Salerno says.
By offering personal training in a group setting at a lower price, Salerno says he's made personal training more affordable for the general public. Salerno and franchisees don't collect monthly membership fees. Instead, customers pay an $18 fee for each session. Most clients come in three times per week, Salerno says, adding that the low price helps with retention, too.
“With the pricing plan, we've been able to keep clients longer,” he says.
Startup costs for franchisees are $80,000 to $85,000 (including the initial $25,000 franchise fee), he says. Monthly franchise fees run $500 flat minimum or 5 percent of gross sales, whichever is more. Because most of the clubs have low overhead with just two personal trainers, cable TV, water and electricity costs, most club operators can expect to operate for $5,000 per month, Salerno says. Typical revenue each month is $15,000 to $20,000 per month, he adds.
“All the gyms we've done have been in the black from day one from pre-signs,” he says.
The company requires potential franchisees to have three months of working capital and a background in fitness with a nationally recognized personal training certification. If they don't have one of these certifications, Salerno will require them to complete his own nutrition and physiology training.
Despite the need for a fitness background, potential franchisees don't need a business background, Salerno says, because the company offers franchisees all the business training plus all the accounting, billing and scheduling software that they need.
The company helps franchisees select their site, locating most of the clubs in B-tiered strip malls to keep rents affordable.
Franchisees also receive marketing and advertising support from the company, although Salerno says that the company does little advertising because most business comes from word of mouth.
“All our gyms do 10 new clients a month,” he says.
So far, Salerno hasn't added any new staff to support the franchisees, but he says that after the first 10 franchises are open, he will add more support.