I’m a 26-year-old woman working full time in a job I hate. Quite frankly, I am sick of working for the man! Now, I have never had my own business before, and I am a little apprehensive, but I love fitness, and I also love F45 (a new high-intensity interval training fitness franchise). It is rapidly growing on a global scale, with 750 studios around the world already. The cost to open a franchise is $150,000, plus $1,700 a month in fees (plus rent, wages, taxes, etc). I do not have the capital, so I would also need to apply for a business loan. Do you think this is a good idea?
A mate of mine does F45 — short for ‘Functional 45-minute’ training — and fair dinkum he never shuts up about it.
But let’s get one thing straight: if you buy a franchise you’ll still be working for the man — but in this case it’ll be the ex-finance dude who dreamed up the F45 franchise model. I imagine he’s currently lifting gold-plated barbells from all the money he’s making … and good on him too! All I’m saying is that in this equation he’s the entrepreneur — and you’re the worker.
So, would I buy an F45 franchise?
No, I wouldn’t.
And it’s not because I could risk having a cardiac arrest if I actually did F45 — it’s because I’ve put the franchise through its paces, just like I would with any investment.
So let’s you and I do a money workout:
First, let’s look at the sector. Australia’s gym market is one of the most competitive and saturated in the world, according to IBISWorld. (Why are we so fat, then? Is it the chicken or the egg? Or maybe it’s the chicken and egg sandwiches.) Simply put, there are a lot of businesses fighting it out for our fitness dollars.
Second, one of the key selling propositions of the F45 franchise is that there’s not a lot to it — two trainers, four walls, and a bit of equipment. Easy to start … and easy for potential competitors to start too. And what about when ‘F6’ comes out? (Seriously, I could totally blitz 6 minutes of training.)
Third, while F45 is going bananas right now — the business is just five years old. What will it look like 10 years from now? Fitness is a faddish industry (hello Zumba, Tae Bo, and pole dancing fitness). Heck, F45 is itself a gentler version of CrossFit, which is now reportedly starting to run out of puff.
So, here are a couple of questions you need to ask yourself:
How quickly could you earn back your upfront costs (a $150,000 loan plus $1,700 a month)?
Even better, could you avoid borrowing (which always ramps up the risk and makes life more complicated) and instead — as we Barefooters call it — ‘swing on the trapeze’. That is, keep your day job, start a morning and weekend fitness bootcamp, and make a go of it for the next 12 months to test it out. If it’s a winner, quit your job and go for it!