From selling out to remaining competitive--here are some tips for finding your opportunities in a fragmented marketplace.

The health and fitness industry is fertile ground for growth through consolidation. Populated primarily by small, single clubs, the market presents the type of fragmentation that attracts larger companies looking to build a dominant brand name, to grow by placing acquired clubs under one banner.

If you've been paying attention, you realize that these larger companies have already arrived. Acquisitions by industry juggernauts such as Bally Total Fitness, 24 Hour Fitness and Town Sports International (TSI) are commonplace, while Wellbridge (formerly Club Sports International), a large consolidator in its own right, may be consolidated itself, according to industry insiders. Even the venerable Gold's Gym has new owners who want to expand the company's corporately owned locations through acquisitions.

The emergence of larger players doesn't signal an end for individual operations or smaller chains, however. Consolidation can be an exciting time with opportunities for everyone. As long as you're prepared. That's the goal of this feature: to help you stay on top of this changing industry.

Want some tips to sharpen your competitive edge? IHRSA executive director John McCarthy offers some business advice for independent operations (page 33). He also foresees a profitable future for both club chains and individual locations.

If you're a multi-club operator concentrating on one area, regionalization may be your ticket to a competitive advantage. Heed the advice of Australian Body Works' Tony de Leede (page 35). With 23 clubs and growing, de Leede has become a major player in the Atlanta market.

Perhaps you think a name change could boost your business. Look to page 34 for an interview with Mark Siebert, a franchising expert. Not only will you learn what to look for in a franchise, but you'll discover whether your club is in a position to become a franchisor itself.

Differentiation can give individual clubs an advantage when faced with competition from mass-market chains. That's why we sought the advice of three club operators for a separate section on specialty markets (page 36). Steven Bowcutt of The Kidz Club examines the children's market; Larry North shares his experience with executives in small, high-end clubs; and Sharon James of Club La Femme talks about women-only facilities.

Focusing on key demographics can help small clubs survive in tight markets. However, we realize survival may not be on your agenda. Maybe you want to cash out. If you're a club operator without an exit strategy, selling your facility may be your way to retirement. To make the most of acquisition opportunities, turn to our interview with Frank Napolitano on page 32. Having recently sold his Highpoint Athletic Club to TSI, Napolitano has personal experience working with a buyer.

Conversely, Rick Caro, chairman of the Spectrum Clubs, has personal experience as a buyer. Although relatively young, Spectrum Clubs is now one of the top 10 companies in the industry, thanks to consolidation. Flip to page 30 to get Caro's perspective on what buyers want from sellers, and how sellers can make the acquisition process go much more smoothly.

One of Caro's perspectives deserves attention right here. If you add up the clubs that have been consolidated in the last year, the sum only accounts for 1 to 2 percent of all clubs in the United States. So to say that consolidation is having a huge impact on the industry is an overstatement. In other words, you shouldn't feel that you must sell out before you are squeezed out. For the health and fitness marketplace, consolidation is very much in its infancy. "We are still a fragmented industry," Caro says.

All the more reason to get ready now, while consolidation is just gathering momentum.