Well, the November issue has been out for more than a week, and so far, I've only received two communications from people within the industry about the cover story, "Time's Up," in which Stuart writes about the growing number of franchised companies that are closing or facing lawsuits from their franchisees.
One gentleman told me that he was just waiting for the press to wake up to the fact that these franchised facilities are closing. He predicts that within the next two years similar closings will occur in the franchised key-card club market. In his opinion, express and key-card clubs only work if they are in smaller markets with little competition. Once big players and/or low-priced players move in, the franchised facilities lose members and must close. With as little customer service and personal attention as members get at some express and key-card clubs, they often decide the $30 per month isn't worth it, especially when they can get the same amount of service for $12 per month or more customer service for that $30 per month.
The other communication was with a man who owns a women-only express club. He is having such trouble with the facility that he is trying to sell it. He said that he's not alone. He knows of many other franchisees experiencing similar financial issues. He says that his franchisor over-promised to the franchisees, didn't help with site locations and didn't support the franchisees once they began operating.
It's a sad story. And not just for the franchisees who are losing their life savings but also for our industry. If this explosion of franchised facilities turns into a huge bust, just think of the millions of former members we've turned off who may never again think joining a club is worth the effort. That's too bad considering the obesity epidemic we're facing and the fact that so many good clubs exist.
So what can we do about this as an industry? Send me your thoughts! --Pam