Pushing His Franchise Model To The Limits

Randy Zarecki opened his first Fitness Together franchise in 2002. But he saw an opportunity to add programs to make his three personal training studios more appealing places to work out.

(Sunday, August 05, 2007) - When longtime fitness buff and sometime personal trainer Randy Zarecki decided to go into business, a personal fitness franchise just made sense.
Zarecki chose Fitness Together, a Colorado-based franchise operation that describes itself as the largest personal training organization in the world. It differs from other health clubs in that its trainers work individually with clients during customized sessions in fully equipped private studios.

In 2002, Zarecki opened his first location, in northeast Minneapolis. He added another three years later, in St. Paul's Highland Park neighborhood, and in March launched his third studio, in Uptown.

But to help clients attain their exercise goals and to manage his growth, Zarecki, 41, decided to put the franchise model on a workout plan of its own.

"The thing that we've had to do is develop [business] systems and processes and exercise program management tools and systems for running a multistudio operation," he said.

Fortunately, he had the technical background.

Zarecki was selling software when his career path took a hit, getting downsized when the dot-com bubble burst. He used savings to open his first studio, with start-up costs running $90,000 to $150,000.

He took out a home equity line of credit to open the second and a business loan for the third. Zarecki has a 10-year franchise agreement. He owns three of the nine Fitness Together franchises in the Twin Cities area.

While his studios look and feel like other Fitness Together locations -- the franchisor specifies the equipment, carpet and paint that go in each site -- clients will find some things only at the ones that Zarecki runs.

More than one gets tricky

"What the franchise gives you is the ability to run a decent, single, stand-alone studio," Zarecki said.

"But when you start operating multiple studios, you have to have everything documented well, and the culture needs to be defined so that things happen the way you'd like them to when you're not there."

Zarecki said that he has developed a number of internal systems that he and trainers use to keep track of client attendance, from scheduling software to discussions among trainers about each client's progress.

For example, those who are slipping get encouragement to get to the studio. And those who have perfect attendance (three times a week) get a free session every month. Clients tend to be busy professionals age 45 to 65, with a number of executives and entrepreneurs among them.

Zarecki also has added a proprietary program, called prescribed cardiovascular training. While the franchisor simply recommends such training, Zarecki and his trainers set up a plan of varying intensity and duration for each client.

He typically calls for 30 to 40 minutes of cardiovascular training before or after a session. "It tends to be widely misunderstood and misapplied," said Zarecki, an avid bike rider who pedals 200 miles a week in addition to working out.

"Cardiovascular exercise needs to be in your program, but it needs to be managed."

Zarecki also offers an expanded nutritional analysis and dietary guidance program. He uses franchise-recommended software to analyze a client's diet and suggest changes. For higher-level dietary management, Zarecki directs clients to an online system where they record what they eat and a staff member keeps tabs on the intake.

A communication culture

"It's also part of our culture for us to communicate with our clients on a daily basis about what kind of choices they're making," Zarecki said.

A 45-minute workout session costs $63 to $83, Zarecki said, with an average rate of $70 a visit.

The fee includes program management, prescribed cardiovascular training programming and nutritional guidance.

Eva Snitkin, a client and health care consultant, said that working one-on-one with a trainer helped her commit to a fitness program and reach and maintain weight loss and diet improvement goals.

"Having someone there with you, you feel supported, you feel taken care of," said Snitkin, a client for the past two years. "It's a great experience. It's not cheap, but I feel lucky that I'm able to go."

Zarecki's pumped-up model also takes employees into account. He hires only full-time trainers, not the part-timers common at other gyms. He also has developed his own customer service manual and employee development program to document procedures and responsibilities. Zarecki said he had shared some of his additions to the Fitness Together model as a member of the franchisee council.

With two studios last year, his revenue was more than $700,000; Zarecki said he expects to pass $1 million this year. With three studios, he also has room for employees to grow. He opened his second location because he had staffers ready to manage. With his third, the manager also is a 15 percent equity owner.

"There really isn't a great career path out there for a trainer," Zarecki said. For trainers at most health clubs "you're probably doing as well ... as you'll ever do after you've been there for two years."

Now he wants to hire a manager to work with his three studio managers, so that he can plot future growth.

"If that works out, then I know that another three [studios] should work," he said, estimating that the market has room for as many as 20 Fitness Together studios.

The expert says: Mark Spriggs, head of the entrepreneurship department at the University of St. Thomas Opus College of Business, said that an owner like Zarecki can be a franchisor's dream -- as long as the company is comfortable with additions to its plan.

The more traditional franchise model, from the franchisor's perspective, is "what we want you to do is what we tell you to do," said Spriggs, who teaches a class about franchises.

What Zarecki has going for him is that he appears to be doing everything the franchisor expects and more, based on a deep knowledge of the fitness industry, Spriggs said.

"Most of the stuff he's doing seems to be a more sophisticated version of what Fitness Together says they want their people to do," Spriggs said.

"If I were running Fitness Together, I'd like to see and consider licensing some of the programs he's got."

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