How I keep my franchisees happy during rapid growth
The gym and fitness sector has boomed over the past few years, and Anytime Fitness is at the forefront of that growth. With revenue of $4.9 million and over 300 franchises now sold, co-owners Justin McDonnell and Jacinta McDonnell-Jimenez need to manage growth extremely carefully.
Part of that involves keeping the franchisees happy. Jacinta says managing all those relationships can be hard, and the company's had to introduce a few new changes to ensure satisfaction.
It's been nearly half a year since we last spoke – how are things at Anytime?
In the past five months we've opened quite a few clubs and sold more territories. We have over 300 now, and we're at 137 clubs opened. We've actually sold 315 as of today.
And how soon do you want to get those franchisees with their own clubs?
As soon as possible. They're looking for real estate right now, and we've got a big pipeline of projects we need to find real estate for. The likelihood of certain areas opening will depend on what's available.
Your revenue was just under $5 million last year – has it improved since then?
I need to check on the updated figures, but I'd say it's significantly higher than that now because of the territory sales we've picked up. We actually thought they would slow down, but they've sped up.
And that creates challenges all of their own.
We've been inducting new staff, we're constantly hiring staff to help support the franchisees. Inducting all these new people is hard, and within the office the challenge is just managing the growth and ensuring the departments are communicating at all times.
Have there been any major changes in the office so far?
Nothing major so far, but I just need to keep making sure everyone can see the big picture, can see how everything is put together. Departments can become very compartmentalised, so I need to make sure everyone is on the same page.
We also need to just adapt to changes that occur and what we've seen happen. We've got a big pipeline of franchisees trying to get into sites and that can create general issues as well.
What sort of issues?
When you're growing this quickly you need to work with your franchisees and ensure everything is on the right track.
There is a different dynamic working with a franchisee than with an employee. It's much more of a consultative approach and helping them understand the bigger picture. You need to manage that franchise over several years at a time, so it's completely different.
How does handling rapid growth differ when you're dealing with franchisees rather than normal employees? What have you done to manage that?
The relationship obviously changes and that brings its own challenges.
We've just started introducing state-based meetings to keep in contact with everyone. We didn't have to do that in the early days, but we do now to keep our face out there. You need to make sure everyone in the state knows what's going on, because often they can feel removed.
So we've definitely needed to change the way we communicate with all the franchisees.
The US guys are the same. They've made a dedicated effort to attend face to face franchise meetings, and they have 1,700 clubs. It's just the need to communicate constantly.
What else have you done?
Keeping an eye on franchisee satisfaction is a big deal. We conducted a survey last year, and we're going to do that again, just to keep ensuring they remain profitable, there are no signs of risk.
We're very happy with the way we've been moving forward and making sure we're communicating to them what's going on. That's our key focus and that becomes even more important as the franchisee count continues to rise.
Based on your comments just now it looks as if you'll be pursuing this rapid growth for a while. But, now, what's your biggest risk?
We're very member-centric, and as our brand flourishes, we need to make sure that all the members are having the same experience. We need to maintain consistency, and our greatest risk is that it fragments. The focus must be that every member has the same experience nationwide.
The growth can be rapid, and get out of control – do you feel you've done well so far?
I feel like we're managing it pretty well. Luckily for us, a lot of our new territories are being sold to franchisees already within the system. Having over 100 separate franchisees would create bigger issues, but we're copying with the growth well.
It all comes back to the hiring process, I think. When we recruit, we get staff who aren't scared of change. So we regularly try and look at the way we're doing things, change them up, and keep that culture going.
Every so often we sit down and review how things are going. It's not often a formal process, but we regularly try and review how we work.