How Snap Fitness became a powerful Canadian Franchise force
(Published in the July/August 2016 issue of Franchise Canada Magazine)
Back in the mid-2000s, Leigh and Tim Ostiguy were working in Alberta’s oil fields, and life was, as Leigh puts it, “really overwhelming.” The couple’s jobs were becoming ever-more stressful; Tim’s sometimes keeping him away from home for weeks at a time. With a blended family of eight active kids, it’s not surprising they wanted a change. “We knew that we wanted to be entrepreneurs and that we wanted to pursue something in the health industry, but we weren’t sure what it would be,” says Leigh.
After a rigorous search, they eventually found Snap Fitness, a fitness franchise that was approaching 2,000 gyms worldwide. “For us, the concept seemed exactly what we were looking for, because the process in becoming an owner was so simple, it made sense to us,” says Leigh. “Plus, they already had many successful franchises, they had a proven track record, so we realized this business is working.” Apparently they really liked what they found. Leigh and Tim opened their first Snap Fitness in Sylvan Lake, Alberta, in January 2009, followed by their second that spring in nearby Lacombe, and eventually two more in Red Deer.
Headquartered in Chanhassen, Minnesota, and under the Lift Brands umbrella, Snap’s track record was, and still is, built on offering no-frills gyms with great customer service in clean, 24/7 facilities close to home. Most are between 2,500 and 5,000 square feet, and an average club has over 550 members. There are now about 2,500 locations built or in development in over 20 countries, including 86 gyms in Canada’s four western provinces and Ontario.
It all got started in 2003 with Peter Taunton at the helm. A former pro racquetball player who was once ranked second in the U.S., Taunton owned and operated five America’s Fitness Centers in Minnesota. “The void that I thought I was filling with Snap Fitness was convenience,” he says. “I thought I could create a smaller footprint that had a nice array of strength equipment, cardio. And by having a smaller footprint, I could tuck it into the neighborhood strip centres, making it more accessible for people driving by it on their way to and from work.” His belief turned into reality, and in 2004 it was enough to get people in the doors and get franchising.
Today, though, you have to offer so much more than convenience, says Taunton. Clubs have to be clean; the staff has to be engaged and supportive with knowledge of nutrition; equipment has to be top-notch and always working; and there better be personal training and programs to help people meet their goals. “And that’s just ground zero,” he adds.
Where Snap Fitness has excelled is building on that base with new technology, more well-rounded, robust service, and updated, modern facilities. What that specifically looks like is a physical activity belt, for example, a device recently introduced that can track members’ heart rates and calories burned while they exercise. “Let’s face it,” says Taunton. “If I’m going to set you up on a workout program, I have to know the effort you’re putting forth that’s more than watching you huff and puff. So with this strap, I can track your effort and pair up a meal plan and workout plan that’s going to get you to the promised land.”
It also helps to be working out in a gym that you actually want to be in and that creates energy. And that’s been a big focus over the past year-and-a-half as Snap Fitness has undergone a brand remodel. Although each franchise is given a dedicated interior designer to customize their look, there are common features to the redesign, such as a wall option that features a huge Canadian flag made up of images of Snap Fitness members. In 2016, Snap plans to modernize over 300 clubs, and over the next four years between 300 and 400 clubs per year should get the treatment.
Another huge part of Snap Fitness’s success has been its process for new franchisees, which Leigh Ostiguy says is “simple, streamlined and not stressful at all.” To financially qualify, they’ll need $75,000 in liquid assets, a $250,000 net worth and $75,000 in household income (all figures U.S.), but business experience isn’t that important because the company can teach owners how to run a gym.
What is important for Snap Fitness is finding engaged franchisees (the absentee inclined need not apply) who are excited about working in this field and making someone’s day, says Steele Smiley, the company’s chief marketing and development officer. “When people meet us and say, ‘I want to be in a business where I can provide a positive experience,’ that’s a wonderful characteristic. Certainly we look for people who are looking for great financial returns, but really we look for positive people who want to be in the wellness business.”
Once a new franchisee is onboard, a 20-step plan is put in motion that walks them through the entire process, from the day they sign the agreement to the day they open the club. And right with them throughout is an individually-assigned concierge (aka “brand performance specialist”) whose job it is to support them and move them through the process. Most franchises don’t have a concierge system like this, says Smiley, but for Snap it’s proven to be worthwhile, and not just to for efficiency’s sake, but because it makes new people feel more welcome and comfortable.
It certainly did for Leigh and Tim Ostiguy. “They helped with everything, from securing the location to setting up funding,” says Leigh. “They also had all of their vendors in place, so the decisions were simplified, and it was low stress because it was like, ‘Here is what you need to do, and here’s how you make the decisions.’ They really do have turn-key systems in place.”
By the way, that concierge—for the Ostiguys, a man named Mark—doesn’t leave them high and dry once the club doors are open. “He’s our go-to-guy, and we can connect with him on a daily basis to get anything we need,” says Leigh. “He’ll point us in the right direction to help get us the right answer, whether it’s IT or marketing or whatever.”
And if franchisees tell their go-to they want to speak with someone on the management team, the manager will actually take the call. “We have nearly 450 corporate employees in 20 countries, and I’ve never seen a company of our size and scale where the senior leadership routinely gets on phone calls with individual franchisees,” says Smiley. “It’s just our culture; we’re very entrepreneurial, hands-on, we’re all accessible, we’re all in the boat together.”
As for the future, the Snap Fitness boat looks steady. As of May, they were adding a new country every month to the brand, and Peter Taunton anticipates them opening 150 to 250 locations per year for the near future.
Taunton knows, though, that to continue to grow, they’ll need to keep evolving with the industry, and he thinks that’s going to mean even more integration of technology into people’s workouts. “There’s very good and affordable technology out there that allows me to track your effort in the gym and put together a plan for you that can yield a really positive result,” he says. “Anyone today in the health and wellness space who’s going to be relevant, that’s what they have to have. If you’re not offering that today, I don’t think you’re going to be competitive long term.”
If the past is any indication, two Snap Fitness franchisees who should be competitive in the long term are Leigh and Tim Ostiguy. When they launched their first clubs in 2009, they had about 300 to 400 members per club. Seven years and two more clubs later—including the Sylvan Lake location that recently grew from 3,000 square feet to more than 5,000—they have over 2,100 memberships and 2,700 members at the four locations.
Those stressful, unsatisfying days in Alberta’s oil fields are long behind them. “Snap Fitness changed my family’s life, it really did,” says Leigh. “Not only has ownership allowed my husband and I to spend more time at home with our family, but it’s allowed me to live a healthier lifestyle as well and make a difference in people’s lives. And that’s probably the most important part: it’s just very positive and uplifting to be part of the health industry.”