The Winner in the Fitness Industry: The Value Segment

In 2017, Entrepreneur magazine reported that the fitness market as a whole will grow at 1.5 percent between now and 2022, with franchise brands growing at twice that rate. Amid the rise of boutique gyms that come with a higher price tag, the value fitness segment has grown exponentially. In fact, according to fitness industry group International Health, Racquet & Sportsclub Association, value memberships are up 69 percent, nearly three times more than the premium segment and 35 times greater than the mid-level concepts, cementing the segment's status as the industry leader.

“There is a trend in fitness right now where people are piecing together their own fitness programs by attending boutique classes while also maintaining an affordable monthly membership to a traditional health club,” said Mark de Gorter, chief operating officer of Workout Anytime, an Atlanta-based fitness franchise with more than 150 locations nationwide. “Workout Anytime fits right into that value-driven sweet spot, which has led to a lot of attention to our category, and higher revenue and more franchise sales for Workout Anytime.”

With 38 percent annual growth over the past 4 years, the brand is growing at an incredible clip. In 2017, 35 new clubs opened and nearly 30 new clubs are set to open in the early part of 2018 alone. Founded in 1999, it took Workout Anytime nine years to get to 50 units, just two more to get to 100 and it will take just two more to double that number to 200.

In addition to the current landscape of fitness trends, real estate is also a driving factor in the rise in the value fitness segment. Randy Trotter, senior vice president of franchise development for Workout Anytime, highlights the “Amazon Effect” as being a factor in the brand’s ability to secure real estate.

“As shopping center owners look for junior anchors to fill in gaps where retail shops were elbowed out by Amazon and other online retailers, Workout Anytime is the perfect solution,” Trotter said. “Our clubs bring traffic to a shopping center, and because we’re a service-based business, we’re not subject to the Amazon Effect and can be a stable, long-term partner.”

While mid-market gyms are thriving in many locations, the biggest growth is happening at the high and low ends. A report from the International Health, Racquet & Sportsclub Association found that in 2015, memberships to midmarket clubs grew by 2 percent, while during that same period, premium clubs (with $75 to $99 dues per month) experienced 21 percent growth, and value memberships (less than $25 per month) shot up by an astonishing 69 percent.

“With the trends in fitness, and our ability to capture affordable real estate in shopping centers with high visibility, we are well-positioned to continue attracting new franchise partners to join our system, and to continue to encourage our existing franchisees to grow their businesses,” said de Gorter. “2017 was an incredible year for Workout Anytime, and we’re confident that with all of these pieces in our favor, that 2018 will be even better.”