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Franchising involves business owners giving others the right to open and operate a unit of their franchised business. In this sense, starting a gym franchise can be a great way to expand your brand. Within the UK fitness industry, some popular gym chains operate as franchises, including Anytime Fitness and Pure Gym. However, any business owner must follow several steps to franchise their business. This article will explain the steps that an owner of a gym business will take to grow their business through franchising.
This handbook covers all the essential topics you need to know about franchising your business.
1. Check Whether Your Gym is Franchisable
Franchising can be a great way to expand your gym into new locations. The franchising model means that you would onboard franchisees who would operate their gym businesses under your brand’s umbrella. They will use your business’s:
- trade marks; and
- operating systems.
In saying that, franchising will only be an appropriate approach for some businesses. A proven business model is a vital element of any successful franchise. Your systems and gym set-up should be easily replicable across all franchise locations. Replicability will mean that franchisees can easily follow the systems in place and deliver quality service that meets your brand standards.
Additionally, you should also consider your business’ track record. To franchise your business, you should be able to show that your existing business model has proven success. The success of your business will be attractive to prospective franchisees as it can indicate success for their potential business within your franchise network.
2. Contracts and Legal Advice
There are several contracts and documents that you should prepare to franchise your business. The following table briefly outlines each of these documents.
|The franchise agreement is a legally binding document franchisors share with their franchisees. This essential contract outlines several aspects, including:
+ the duties and responsibilities of both parties;
+ the franchisee’s right to use the franchisor’s intellectual property; and
+ contract renewal and termination conditions.
|A disclosure document shares essential information about the business with prospective franchisees. For example, this document can include the franchised business’ financial history and any legal disputes involving the business or its key personnel. In the UK, a franchisor does not have to provide a disclosure document to prospective franchisees, although it is best practice to do so.
|Within a franchise operations manual, the franchisor explains everything a franchisee needs to know to run a unit of the business. It details: how the business runs the;
+ procedures of the business; and
+ role of the franchisee and franchisor.
It is crucial to ensure a legally sound foundation for your new endeavour. Investing in legal advice at this crucial stage of your business’ development can ensure the franchise agreement and other relevant documents are well-drafted and ready for use.Continue reading this article below the form
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3. Advertise the Opportunity
Once you have established that your business is franchisable and have prepared the franchisee agreement, you can begin advertising the opportunity to find franchisees.
Think carefully about the type of person that would be the ideal candidate to run a gym under your brand. Consider aspects such as their personality, their experience, and qualifications. Then, set out to find somebody who fits your criteria. You may choose to advertise within your existing gym or through online platforms such as franchise opportunity directories or social media.
4. Onboard the Franchisee
Once you have found somebody who fits your criteria, you can onboard them into your franchise network. At this point, you will give them the disclosure document, if you have prepared one, along with the franchise agreement. Once the franchisee signs the agreement, you will charge them an initial fee, train them, and begin to help them set up their gym.
5. Considerations Before Franchising a Gym
Franchising can be an excellent way to scale a gym brand and allow others to take on the day-to-day management of the growing business. There are several further points you should consider before franchising your brand. For example, the franchising model means that you can lose some control over your brand and its public perception. To mitigate the risk of reputational damage, you should set out detailed quality standards in the franchise agreement and operations manual.
You should also consider whether:
- you will be able to keep up with the management and support of your franchise network;
- you have the funds to begin the franchising journey; and
- your business currently possesses the right qualities for franchising.
Franchising has proven a successful strategy for gym businesses across the UK. To franchise your gym business, you should first check that you have a viable and replicable business model. You should then prepare the relevant legal documents, seeking legal advice if needed. Then, you will advertise the franchise opportunity and onboard the new franchisee.
If you require legal assistance to franchise your gym business, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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