Tuesday, December 29, 2009

Fitness Centers, Gyms, Womens Only Gyms Franchise Business Opportunities

After all the New Year parties are over, it will be time to atone for excesses and make resolutions. And getting in shape is high on the list,
especially for those who went overboard celebrating the economy’s rebound act. But whether these resolutions are kept or recycled for the next year, fitness chains are rejoicing because 2010 is expected to bring joyous tidings of healthy business.

While there is no estimate of the number of fitness outlets in India owing to the local and fragmented nature of the industry, a Technopak Advisors report says that the gym and fitness centre market is worth around Rs 690 crore. The anti-obesity market, worth Rs 1,800 crore, is projected to grow at a 13% CAGR through 2010, the report adds.

There are a handful of big brand names in this sector, at present, and literally hundreds of smaller ones, with new gyms being added every day. And while fewer Indians (around 1%) actively participate in physical activities than their counterparts in the West, the trend is said to be slowly reversing, mainly in the upper middle-class segment where attitudes towards fitness and health are changing.

Talwalkars is by far the oldest and largest brand in India, but foreign chains like Gold’s Gym, set up in 2002, were also attracted by the lure of India’s population and the lack of a mass ‘fitness culture’. Gradually, other homegrown brands like Leena Mogre Fitness Centre, Barbarian Power Gym, FitnessOne and Sykz emerged from the unorganised clutter of fitness centres. They have survived the slowdown and are working out growth strategies.

FitnessOne, for instance, was set up in 2004 by P Vivekanand, a former pilot in the US. Says Vivekanand, “Lifestyle diseases are rising alarmingly and people are becoming increasingly aware of the need to exercise regularly.” FitnessOne, with an average annual membership fee of Rs 20,000, was clearly targeted at moneyed classes. And the response was great. By its first anniversary in 2005, FitnessOne had five centres in South India. That number kept growing as the brand grew. “Even last year, we clocked around 40% growth,” Vivekanand says.

The group also started Pink, a women-only fitness chain that opened to a rousing welcome in Chennai. FitnessOne is a Southern success story, and plans to stay that way on the retail side, adding over 40 centres to its existing 24 retail outlets next fiscal. It is also in talks with private equity players and plans to close a funding deal in 2010.

The fitness craze has been partially caused by six-packed and body beautiful Hindi movie actors, who in turn, rely on people like Satyajit and Devashish Chourasia. Their gym, Barbarian Power Gym, was started way back in 1991 in Betul, Madhya Pradesh. But the founders got their big break in Mumbai in 1996 after they met actor Aamir Khan on a movie set, and he encouraged them to start a professional gym in Mumbai. Satyajit and Devashish decided to sell off their Nagpur outlet, took a quick loan and shifted to Mumbai. They started with a 1,400 sq ft gym at Lokhandwala and have not looked back since. Today, Barbarian has a total of eight outlets spread across Mumbai, Delhi, Nagpur, Betul and Mathura.

Satyajit has personally trained Aamir Khan, Saif Ali Khan, Hritik Roshan, Ajay Devgn, Rani Mukherjee, Esha Deol and many others. Among corporates, he has trained Lakshmi Mittal, Anil Ambani and Sanjay Reddy (of GVK). “We want to take the company public in the next five years,” he says, adding, “There is huge opportunity. At the moment, only a fraction of the population has been tapped.” In the plan is taking his gyms to smaller cities. He has already started outlets in Ahmedabad and has signed up for more in Lucknow, Rajkot, Baroda, Surat and about 12,000 sq ft of space at a mall in Indore. “We have decided to take the pure franchise route ahead.”

Indeed, the franchise route is being favoured by many. Sykz, a five-gym chain, is also taking the route. Its founding partners Nitin Gupta and Aman Bhandari are planning to add at least 6-8 gyms a year from 2010 onwards. “It’s a 16-hour job. We cannot be involved with too many centres. We are looking for partners in various cities who are equally passionate about fitness as we are,” says Bhandari. Sykz is looking at expanding to other tier-I cities as well as tier-II towns such as Gurgaon, Noida, Chandigarh, Ludhiana, Ahmedabad, Indore, Jaipur and others.

Many fitness chains are banking on smaller cities to bring in business. Leena Mogre, director of Leena Mogre Fitness Centre, says, “The market is still untapped. New demand will keep getting generated in Tier II and III towns.” Mogre plans to open 50 outlets in smaller cities over the next seven years and is also in talks with investors. “Private funding is an option and we are meeting some investors who’ve shown interest in the sector,” she says.

The boom in fitness, especially in smaller cities has also benefited equipment suppliers like Rajesh Rai, managing director of Jerai Fitness. “Our equipment helps set up a gym in some part of the country every second day,” Rai claims. Rai, who started his own manufacturing unit in 2000, says that he gets regular orders to supply to gyms in Indore, Nagpur, Pune, Raipur, etc. And since many of his customers are smaller organisations, Rai offers them an equipment buyback scheme. “And if they’ve been filing their tax returns regularly, we also try and get them funding through nationalised banks,” Rai says.

As the lure of fitness becomes apparent, celebrities are jumping into it— just like many did with the restaurant business. Models-turned-actors Milind Soman and Rahul Dev launched a fitness centre, Breathe, in Delhi last year. Soman calls this an experiment. “Both of us got into the business because of our background in modeling and also because we anticipate a huge fitness wave in India,” he says. Soman also wants to bust fitness myths propagated by traditional gyms, which hawk supplements and concentrate on machine-based training. “India has never had a sports culture, forget about a fitness culture,” he says, adding, “We plan to promote sports fitness and have very little dependence on isolation machines to achieve fitness.”

For the duo, it’s about creating an environment, which is conducive to working out well. At Breathe, people from beyond a 4 km radius around the gym are not allowed to become members. “The idea is to ensure that all members come to the gym,” says Soman.

Hence you have a lot of options that you could explore before you take up a health and fitness franchise.
Source:25 Dec 2009, 0325 hrs IST, Nikhil Menon & Ravi Teja Sharma, ET Bureau