A Mountain of Paperwork

Here's the latest. I'm buried in paperwork and slowly working my way out. This list shows just some of the forms I've received to date:

1) Franchise agreement - (50 pages!)

2) Franchisee questionnaire and financial report

3) Copies of suggested membership contracts

4) Lease application + equipment quotes

So far, I've given full priority to numbers 1 and 4 on the list above--the franchise agreement and the lease application. I'm glad to report that I have completed reading the franchise agreement.

I've also created a spreadsheet with my concerns and questions cross-referenced to the appropriate pages and sections in the agreement. My attorney will get this today. There are a few sticking points to discuss with him, most of which are related to non-compete clauses. However, these points are unique to my situation rather than concerns that would be likely to affect most franchisees.

One legality requires a lapse of 10 days before a signed agreement can be sent back to the franchiser (World Gym). My guess is that this provides the franchisee ample opportunity to review the document thoroughly without feeling pressured by the franchiser - similar to a 'buyers right to cancel' a fitness membership.

The main reason why I've also kept the equipment lease front and center is that there are 4-6 week lead times for receiving most of the equipment. This means that even if I were to order everything today, I'd be unlikely to have it until January! I would love to have everything in place by January so that when the prime season for new memberships kicks in, we'd be well prepared.

I suspect that things will remain quiet for the next week or so. My attorney should respond in 5 days. And meanwhile we are busy gathering prices from contractors, and determining what steps to take once the agreement is signed.

Other than organizing these "big picture" tasks, I don't plan to do much regarding financial commitment until the franchise agreement is in place. That's because we aren't a World Gym until all the "i's" are dotted and "t's" crossed.

Quotes start arriving immediately

I've been told in the past that I move fast - but World Gym moves faster! Today, I received equipment quotes from 3 WG approved vendors, lease applications from 2 companies, and World Gym branded promotional products from somewhere else. But what's even more astounding than that - I already received the first draft of the postcard we plan to mail out in late November from Chris! It looks great - I would post it, but I'm sure WG would not approve of that, since it considered proprietary information.

It basically announces that we are renovating and becoming a World Gym and promotes a special offer that prospective members can take advantage of by stopping by during staffed hours, or by visiting http://www.worldgym.com/. I've always felt that being able to offer people a way to join a club online has been a great idea, but I never knew how to go about it. World Gym has already designed the back end, allowing members to enter their credit card information and join instantly. Then a branded mailer is mailed to the member along with some promotional supplies and their key tag, which will get them into the club 24/7. I would guess that this could all take place in as little as 24-48 hours. If you own a 24/7 club, you know first hand how difficult it is to determine which hours to staff your club - but the one thing you know is that when people want to purchase a membership. - you want them to be able to do it immediately. The web site seems to be a perfect solution.

Promotions, EFT's, and wall colors

In the past few days, I've been in contact with Ben, Chris, and Karin at Planet Fitness / World Gym. Karin coordinates a lot of the franchise activities and she overnighted me my UFOC (a requirement for companies to be able to sell franchises), along with my franchise agreement, and a couple of questionnaires designed to gather personal and financial information about me and my company. I have already begun reading the agreement, making notes about things questions that I need answered either by World Gym or my attorney. My goal is to get the entire things read and understood by this coming Monday and then to get it into my attorney's hands for his review. I hope to be ready to send it back to World by one week from Monday.

Today, Chris and I got into some very in depth discussions about our current membership statistics (number of members, current prices, etc.). I have never been great at paying regular attention to the numbers, especially as long as our bills are being paid and we have money in our checking account - but I've taken an Entrepreneur's Boot camp at Syracuse University for the past month, and I am committed to really understanding my financials. Chris asked me for several things:

• number of paid in full members (180)



• number of EFT members (12)



• number of expired members (190)



• EFT pricing ($39)



• Annual paid in full price ($419)



• 3 month membership price ($149)



• Age of club (1 year)

He suggested some pricing and promotion strategies, and we came up with a plan to have our first direct mail piece hit the Monday after Thanksgiving. He's going to have World Gym's mail house get started creating the mail piece so we can have it approved and ready to go. We're also planning to send a letter to our existing members at the same time. Chris really helped educate me on the value of the EFT memberships. I've always thought that having a solid EFT base is a good business strategy, I've just never followed through on implementing a strategy to build the base. It sounds like all that is going to change once we convert fully to the World Gym format.

On another note, Chris faxed me back my site plan, marked up with his suggestions about changes to wall colors, what WG graphics need to be installed on what walls, and a list of the specific colors - which are available at Sherwin Williams. I was really excited to start to get a vision of how things were going to look, so while I was at lunch, I stopped by the local SW and picked up a few color chips of each of the spec'd colors. The colors are really nice - they're bold, but soothing colors. I really think WG's new brand identity is going to be around for a long time, and it is such a marketable brand as compared to the older image of an ape and a bent barbell. I was also glad to hear that my mother liked the logo - after all there is so much more to this industry than body builders.

How I first heard about World Gym's plans

For several years, I've owned an independent 24/7 fitness center, and in fact, I've helped over 100 other independent club owners convert their clubs to 24/7 access. As much as I have enjoyed being responsible for all of the related decision making over the years, I've often thought that it would be nice to be part of a larger organization. The fact is, I have a couple of friends who own franchised businesses - and they attribute much of their success to the fact that they have this corporate support system.





I've seen several 24/7 fitness franchises pop up in the past few years, and while I've considered affiliating with them, I've also wondered "How are these companies, and what can they do for me?". I was especially wary of affiliating with a business group that comes on strong and then flames out. If I affiliate with a company, it needs to be one that I think is still going to be around for years to come.





Then in early October, I read in an online fitness magazine that World Gym was jumping in to the 24/7 club market [I've put the link to the article at the bottom of this post]. I thought to myself "Now there's a company I've heard of". I began trying to find out more by visiting their website, and making some phone calls. Eventually, I received a phone call from none other than Mike Grondahl. If you haven't heard of Mike, he's the founder of the wildly successful Planet Fitness chain based in New Hampshire that bought the World Gym brand about a year ago. After talking to Mike for a bit, I was put in contact with Ben Midgley and Chris Rondeau, the Presidents of Planet Fitness and World Gym respectively.





http://www.fitnessbusinessnews.com/index.php?p=article&id=fb200710GV4bOU