Will the 1-2-3 Fit Franchise be the Quiznos of Health Clubs? Is That a Good Thing?
October 3, 2007 by Sean Kelly
Filed under Business
(FranchisePick.Com) Is the 1-2-3 Fit fitness franchise the Quiznos of health club franchises? If so, is that a good or a bad thing?
When the 1-2-3 Fit franchise launched in 2005, Club Business International gave this glowing and unqualified accolade:
If ever fitness seemed fated for success, it may well be 123 Fit. This new enterprise, based in Denver, Colorado, is the product of a unique partnership between a fitness industry legend [Ray Wilson] and one of the most powerful forces in franchising [The Quiznos Franchise Co.].
Ray Wilson, who started in the fitness industry in the 1950s, has perhaps been responsible for more health club brands (American Health Silhouette, European Health Spas, Family Fitness Centers, and Ray Wilson’s California Fitness Centers) than any other individual in history, including two franchised health club concepts (women-only Figure Magic Express and coed Ray Wilson’s Healthy Exercise).
At the time, Quiznos boasted more than 3,300 franchised stores, ranking 3rd in Entrepreneur magazine’s list of Top 10 Franchises behind by Subway and Curves International, Inc. The 1-2-3 Fit fitness franchise concept was the result of an alliance between Wilson and the top dogs at Quiznos:
Last year, Wilson and his business partner, Joe Ochoa, approached Quiznos CEO Rick Schaden and Executive Vice President Brooksy Smith about the possibility of collaborating on a fitness franchise that would capitalize on the two partners’ respective strengths – Wilson’s in fitness and Quiznos in franchising. An agreement was reached, and the new brand, 123 Fit, was unveiled in March. The first of the facilities, which will offer a convenient 30-minute, is scheduled to open in Houston this month.
“There’s a growing need for accessible, neighborhood, user-friendly fitness centers,” observes Schaden. “Partnering with Ray, who is known as the father of fitness, on a health club concept is a winning idea.”
Today there are approximately 35 1-2-3 Fit franchise locations and at least three locations listed on the website as “Coming Soon.” How does 1-2-3 Fit franchise separate itself from the competitive field of franchise health club concepts to have emerged in recent years?
1-2-3 Fit boasts “Worlds Best Workout” via the “Revolutionary Simbio System™”
The 1-2-3 Fit franchise website boasts that it provides the “Scientifically Proven Worlds [sic] Best Workout,” enabling members to “Burn Over 450 calories in 30 Minutes.”
According to their website, 1-2-3 Fit fitness franchise’s secret weapon #1 is their “30/30 Circuit™”:
Each station in our 30/30 Circuit™ has 3 zones to choose from depending on your fitness level – simple for those just getting started or challenging for those wanting a more intense workout.
We provide you with 3 personal training sessions, where you receive your orientation to 1-2-3 Fit, fitness overview, and a workout customized just for you.
Secret weapon #2 is the “revolutionary Simbio System™”:
Our revolutionary Simbio System™ equipment developed exclusively for 1-2-3 Fit is the next evolution of fitness equipment. It’s the first equipment to provide both positive and negative resistance without the soreness typically associated with traditional weight stacks, while maintaining the benefits. Less Pain, More Gain™.
Secret weapon #3 is the trial membership and guarantees:
Everyone who visits a 1-2-3 Fit will receive a one week trial membership so they can experience the world’s best 30 minute personalized workout. Each one week trial membership includes three personal training sessions… During the first 30 days of your membership to 1-2-3 Fit, you agree to participate in three personal training sessions during your first week and complete your workout at least three times a week for the next three weeks. If you are not satisfied with 1-2-3 Fit after completing these twelve visits, you will receive a full refund of any fees that you have paid.
According to the 1-2-3 Fit franchise website, franchise startup costs range from $176,750 to $229,425, including a $20,000 franchise fee. Prospective franchisees must have net worth of $125,000 and liquid cash of $70,000 to be considered. Club size averages 1600 – 2000 square feet, and it takes “approximately 3 – 6 months from securing a site” to open a franchised 1-2-3 Fit club.
Secret Weapon #4: Systems developed by Quiznos’ Rick Schaden
What happens when you open your 1-2-3 Fit franchise club? According to the 1-2-3 Fit franchise FAQ:
We’ll be right there with you at the opening of your 1-2-3 Fit. A certified opening consultant will work with you to ensure that your opening runs smoothly and successfully and 1-2-3 Fit is never more than a phone call away. Using the systems that Rick Schaden has developed to support over 3200 Quiznos Sub™ restaurants, we are committed to providing our franchise owners with the highest level of support and service in the industry.
WHAT DO YOU THINK? ARE YOU FAMILIAR WITH THE 1-2-3 FIT FITNESS CLUB FRANCHISE? WITH RAY WILSON? WITH QUIZNOS RICK SCHADEN? IS 1-2-3 FIT A GREAT FRANCHISE OPPORTUNITY?
YOUR COMMENTS INVITED.
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Can consumers, whistleblowers and activists enact change using blogs like FranchisePick.com , FranBest.Com and others? What’s the best way for companies to respond to online criticism and attacks? A Harvard report with multiple recent case studies compiled and is available for free download.
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123 Fit SUCKS!!! No it WILL NOT be the Quiznos of Health Clubs. The only thing that is similiar is how they are screwing the honest person who buys into this nightmare. Last I heard there were over 5000 lawsuits against Quiznos. As long as Rick Schaden and Brooksy Smith and all the Quiznos “has beens” are in charge of this concept, it will be nothing but lies, false promises, fraud and the continuing misrepresentation of everything like Quiznos. And beware….this is not a proven system and there is no consultant that helps you from the time you buy until you open. Even Ray Wilson bailed out after he found out what F…ups the two at the top really are. I guess he has a conscious!! And oh yeah… they will continue to squeak money out of you with their bullshit until you have no money and close your doors. They led you to believe that you dont know what you are doing and your the reason your store is not doing good, but when all the franchises do speak to each other they find that their all in the same sinking boat.
Their so called secret weapon #2 is a scam. They tell you this so called “Revolutionary Simbio Equipment” is exclusive to 123 fit. The only thing exclusive is the made up name simbio system that was painted onto the equipment. Check out this website at Life Fitness http://us.commercial.lifefitness.com/content.cfm/circuit_series
What do you see? The so called “toaster to 123 fit” as Brooksy would say, is what you see! Anyone can buy this equipment. But they led you to believe that it is exclusive to 123 fit owners. They tell you that you can break even at 400 members. BIGGEST JOKE ever. Monthly bills are minimum $15,000 to $20,000. Do the homework. Check what these clubs that are still open have for members. I mean really check. If they have 600 members and they are being charged $49. Lets see $49 x 600 = $29,400. Wow if that we true we would all still be open even with 300 members. Sounds to good to be true, because it is. Their proven system does not work. I believe about 20 or more stores have closed. For one that opens, one closes. I am a 123 fit owner and I am sure to be closing if I dont get the members I need. And I can tell you to buy the equipment yourself through Life Fitness, find a reasonable space to rent, advertise yourself (cause you wont get any help from them anyway) and you will save yourself alot of money and probably not file bankruptcy like the clubs. So my advice to you is, STAY AWAY FROM 123 Fit!!!!!
…nothing but lies, false promises, fraud and the continuing misrepresentation of everything….
So they ARE the Quiznos of health clubs…
We are one of first group of people to buy this franchise, and it ruined our lives – both financially and emotionally. The information sounds good and Brooksy is a brilliant salesman, but the concept is NOT working. More stores have closed than are still open – I understand that over 7 stores have closed in California, including one that had over 600 members and was still not profitable. The ones that are open are struggling and have been ruined financially. I don’t think there are even 35 stores open. When they say that Quiznos is one of the most successful franchises of all times, the success was mostly for the founder Rick Schaden, not the franchisees. There are hundreds of lawsuits against Quiznos, and 123fit is already facing several. Please proceed with great caution, and talk to a lot of the current and former franchisees before considering investing your money in this business. The concept makes sense, but it just isn’t working. The first store that were opened in Houston were run by Brooksy’s best friend, and he eventually abandonded them and had a nervous breakdown. They no longer speak…..We could go on.
[crossposted at pigasys.com]
I think people need to check and re-check their facts before putting any credence into what others have to say. I have spoke with franchise owners who are cash positive and am myself. Does the system work? Yes, for those who follow the system. Negativity breeds negativity. There are people who do and those who talk about doing. Which one are you?
Happy franchise owners.
[posted at Pigasys.com]
Go to this website: http://134.186.208.228/caleasi/PDFDocs/004826305.PDF
Go to the bottom of page 2 where it shows that they are 10 million in debt and dont hold much hope for the franchise. You still happy?
There are only 6 stores that have over 400 members and I know the bottom 2 arent making any money. And I seriously doubt if you are one of them. 123 fit franchise is on their way out. You need at least 400 paying primary members at $49 a month to be making any kind of money. Just because they have 414 members does not mean they are making money. It seems to be 2/3 paying members and 1/3 add ons. Clubs monthly costs are running from $10,000 to $15,000 depending what your rent is plus nnns, then equipment lease payment, gas & electric, phone, DSL, insurance, music, music system lease, royalties, advertising, Go figure software lease, e merchants fees, Merchant warehouse fees. Lets see have I left anything out? We both know if you are making anything, its very little. DO YOUR HOMEWORK PEOPLE. And hire a lawyer and let them research it for you. A good franchise lawyer. Most of the franchise lawyers already know what a loser this 123 fit franchise is. It will save you alot of money.
Amazing disclaimers, especially the $10M loss. Would anyone buy after reading that document?
123 fit owner: Why does it mention Max Muscle stores in the UFOC? Is that part of the concept…or did their attorney mess up the search and replace?
The 30-minute workout is dying, boring and it’s run it course. It’s a fad. JOIN A REAL GYM or open a real gym with real gym equipment. Do your homework!!!! I would advise you if your looking to open a fitness center research the demographic and know your competitors. These franchises don’t care about other gyms in your area. Other gyms that are established WILL put YOU out of bussiness. I also recommend that unless you have experience in the gym business don’t even try to compete with someone who does, you will lose. Think Twice!!!!! Open a Quiznos your chances are better, more people prefer to eat than exercise. I own 2 independent gyms and you have to know what you are doing and be ready for change, fitness is always changing. DONT FALL FOR THE SALES PITCH FOR THESE FLY BY NIGHT FRANCHISES THERE ARE HUNDREDS OF THEM.
These look like old comments from failed bitter owners. I am a 123 Fit owner and am in a positive cash flow situation. Corporate has been extrememly responsive to questions and calls. They continue to improve and I would estimate that a majority of owners have a positive cash flow. Things have improved and keep getting better at 123 Fit. Our members love the online meal planning and nutrition program. 123 Fit has worked for me. Sorry others have not executed the program as well.
These look like old comments from failed bitter owners. I am a 123 Fit owner and am in a positive cash flow situation. Corporate has been extrememly responsive to questions and calls. They continue to improve and I would estimate that a majority of owners have a positive cash flow. Things have improved and keep getting better at 123 Fit. Our members love the online meal planning and nutrition program. 123 Fit has worked for me. Sorry others have not executed the program as well. As for circuit training running it course, in case you have not noticed all the big gyms are now featuring it and the celebrity trainers are talking about. Circuit training is HOT. You are not in touch with reality if you think otherwise.
Pete(anon) writes As for circuit training running it course,in case you have not noticed all the big gyms are now featuring it… Circuit training is HOT.
Are you saying that the fact that larger competitors are offering the same product is a GOOD thing for 123 Fit franchisees? Your point is that they are validating the concept – however, isn’t the real point that there is ever-increasing competition for the same customer – and the big clubs have more to offer in addition to circuit training.
Remember when you had to go to a frozen yogurt shop to get frozen yogurt? I doubt the many defunct FY franchisees celebrated when their product was being dispensed at ice cream shops, grocery stores and everywhere else.
Sean. You completely missed the arguement. I was responding to a comment that indicated that circuit training was no longer popular. Nothing could be further from the truth. So I post to respond to the claim that 123 Fit is doomed to failure because there is no demand for circuit training. You respond with a post suggesting 123 Fit is doomed due to too much demand? I will give you a quick education in the fitness business. My members and others will continue to come to places like 123 Fit. They will not go to the big gyms for a whole array of reasons including the 20 something barbies running around in tight shirts, meat heads grunting in the corner grunting and screaming as they pump iron, the weird guys hanging around trying to meet them. These are stigmas/truths of the big gyms that leave a large group of consmers out. There is a market for consumers that do not want the big gym experience even if they are offering circuit training. So while I am aware of what they are doing, I don’t believe they are my biggest competition. Comparing the fitness business to the yogurt business is naïve. This type of post – you can’t make it because circiut training is not popular and you can’t make it because circuit training is too popular is exactly why most successful franchise owners do not waste time on this site and others like it. We know first hand what is happening. If we post here we are damned if we do and damned if we don’t. If you want input and to hear the good as well as the bad and ugly, you must be willing to accept that you don’t already have all the answers and let positive comments stand or at least question them from a position of honesty – not just knee jerk reactions. Otherwise this site is doomed to remain what is seems to be today – a place for failed franchisees to gather and exchange bitter and often inaccurtate and uninformed comments.
I was responding to a comment that indicated that circuit training was no longer popular…You respond with a post suggesting 123 Fit is doomed due to too much demand?
You thought I was saying that there is too much demand? I can see why you’re confused. No, that wouldn’t make sense.
I believe my point was closer to “Too much supply”
I will give you a quick education in the fitness business.
I appreciate it.
My members and others will continue to come to places like 123 Fit. They will not go to the big gyms for a whole array of reasons including the 20 something barbies running around in tight shirts, meat heads grunting in the corner grunting and screaming as they pump iron, the weird guys hanging around trying to meet them.
This is all very scientific. But I’m trying to keep up.
These are stigmas/truths of the big gyms that leave a large group of consmers out. There is a market for consumers that do not want the big gym experience…
Time to update the argument, Pete. You’re reading from a ten-year old brochure. Have you been following the shake-out in the industry?
Comparing the fitness business to the yogurt business is naïve.
A fad is not a fad?
If you want input and to hear the good as well as the bad and ugly, you must be willing to accept that you don’t already have all the answers and let positive comments stand or at least question them from a position of honesty – not just knee jerk reactions.
I let all comments stand. It’s a discussion, Anon. We’re a bit past the cliche sales pitch of the allure of circuit training. Hundreds of circuit training clubs are failing each year. There is saturation. There is difficulty with retention rates. There is difficulty with keeping members interested past a year. Deal with some of the real issues and you’ll command some respect. Deal with the reality of the situation – not the same cliches and myths used to sell these guys in the first place.
Hate to break it to you, Anon, but the fitness industry publications come here for their information. We have literally thousands of comments from not just 123 Fit franchisees, but also Contours Express, Butterfly Life, Curves, Lady of America, Cuts & more.
The whining and failures are the direct result of the anecdotes and myths that you claim are an “education” Those with no fitness or franchise experience might buy your spin, but people here have more experience and their BS-detectors are finely tuned.
Try bringing your game up a notch, Pete. Maybe you can share reasons for all these failures other than “not following the system.”
Otherwise this site is doomed to remain what is seems to be today – a place for failed franchisees to gather and exchange bitter and often inaccurtate and uninformed comments.
Thanks to the 30 Minute Fitness franchises, failed and bitter franchisees is a huge and growing market.
Sean. My apologizies. You are very correct. You and all of your sources are so much smarter than me. Who am I to comment on my success? I am only making several thousand dollars per month with my 123 Fit. I will bow out of the discussion. I feel less than wothy to be among “experts” with all the industry publications – none of which are read by anyone in the business – and all the statistics and the others who have successfully run a business into the ground. Not to mention – you – Sean – heck you are even a webmaster. Wow. Got to go. Time to make a big deposit in the bank. So have fun talking amongst yourselves. Seems you have all you need. Good luck to you all in finding…uh…whatever it is you are seeking.
Thanks for your insights, Pete (Anon). Good luck with your franchise sales.
Thanks for the education, and for explaining about the 20 something barbies, the meatheads and the creepy guys hanging around. (Only franchise sales guys and sportscasters can wield cliches with such aplomb.)
Made me nostalgic for the fitness franchise brochures of the 1980s… The good old days of 95% franchise success rates.
If 123 Fit is such a success why is there only 28 clubs left? The CEO closed his clubs. Sure they have changed alot of things. They battle tested their system on the backs of many people who have suffered because of their misrepresentations. A good zor battle test their system with their own money. Yes the circuit is smaller and the newer clubs, (maybe 4 or 5) are saying their doing better. Who cares that many people have been hurt because of their misrepresentations and infraudualent enducements to get them to sign a crappy franchise agreement. I know you sell vitamins. Do you sell crappy viatimins and put your 123 trademark on the bottles? Not to mention you charge a monthly fee for towels. Oh yes personel training. I hear that is going well. Last month several clubs made $900 on personel training. I am all for the zees making it. Believe me, I am. The fact you are refining everything on good innocent people is a disgrace. If you are making thousands of dollars now good for you. Many people post their thoughts about what is happening to them on sites like this. Our stories are true. I know of several clubs now that are not too happy. Pete you are of the 2 to 4 clubs that are happy. How do we not know you are telling us the truth? Let’s see the number 1 club with 698 members claims they made $29,000 in the month of August. The number 2 club with 220 members claim to had made $18,000. That is approximately $84.79 a member. I see Silverdale in Washington lost a good number of members. Pete whoever you are former zees do get information. There are clubs that are unhappy. Bottom line is I do not believe the numbers on the information sent to current zees. It doesn’t make sense. 123 Fit should change their trademark to More Pain Less Gain. People stay away from this franchise. Buy the circuit on Life Fitness.com. It is half as much and you will not loose hundreds of thousands of dollars. Do it yourself. Life Fitness will show you how to set up your circuit. Take it from people who have been on the front lines of this franchise. Heck get a hold of me and I’ll tell you how to save yourself hundreds of thousands of dollars. Sean has my e-mail.
Wow. Just when I thought Sean had brought some fairness to the conversation – and by the way Sean I am still considering your offer. You have made a fair offer to me to get a successful 123 Fit story out there. And I thank you for that. I am still concerned that any specifics would be attacked by Barb and other faild owners using outdated and incorrect info. Given that potential customers read these boards, I still feel better posting annon until I take Sean up on his very fair offer to Guest Column or do and Interview or something.
I challenge “Barb” to post her financials. She mentions the towel charge like it is something bad. The YMCAs in my area charge $1 per towel. I charge only $5 per month for unlimited towels I may be underpriced, but I cannot see how the towel program contributed to “Barbs” failure.
She mentions other things like “crapp vitiams. Well I made good money selling these vitiams. Maybe she pre-judged the product and that is why she is bitter? Also, I do much, much, much more in Personal Training than she mentions. Maybe PT has not worked for her – but it has for many. She also mentions that 3 – 4 clubs are doing good. Previous posts say there is no way no how you can make money with 123 Fit and to run the other direction from them. So now we are finding that even the enemy is addmitting to clubs be profitable. WoW. The 123 Fit system has worked for me. To hell with Barb.
Pete anon!
Of course, in all franchise startups, there are some successes and success is making enough in gross sales to cover your overhead, to include startup debt, and to pay royalties to your franchisor. Franchisors would be happy if all of their startup units were successful but they survive quite nicely if only 50% to 60% of them survive to breakeven status, as long as they can overseed units to begin with.
Apparently, you are one of how many 123 franchisees who are happy with their purchase of this franchise? You survived but you want to ignore and discredit the great number of 123 franchises who have failed and lost their life savings because the franchisor could overseed startup units with immunity under the law, and was not required under law to make timely disclosures of unprofitability and failure of units to new buyers of the franchise.
You don’t acknowledge the many failures and indicate that you think customers read this board. I think you are wrong about this and I really wonder where you are coming from, and who you are, really!
Barb has already been to Hell and back and I think your lack of compassion and bad manners and unwillingness to share the story of your success with Sean is telling! You are mean enough to be a franchisor!
I was nice enough to tell you Pete I am happy for your success.
Since you have been mean I’ll tell you the hell with you. For all I know you could be Brooksey Smith who is not a good man. You weren’t the first generation of zees. You could care less if people are hurt by lies.
The only way you can get along with corporate is if you are one of them. The same type of people.
FYI we never sold vitamins or had personal training. We had 30 stations. We were told our build out would not be more than $50,000. There was many factors why we went out of business. We trusted 123 Fit. Afterall their advertising and telling us Ray Wilson was there. Only to be told Ray left a long time ago. Yes you fit in well with 123 Fit and Quiznos. 123 Fit knew how much money we had. They wanted our club. Out of all the magerial contracts they offered us $75,000 after 2 years. We take the risk and they take our paid off equipment. That is not a solid deal and you know it. If it didn’t work for them they could throw the crappy franchise back in our lap. I have done a thorough investigation on this franchise. I could write a book about this. (What a great idea.) I wouldn’t be afraid of 123 Fit because it would be one true horror story after another. If 123 Fit makes it in the long run it will because they have tested their system on us. I hope one day the one-sided FDD’s will be thrown out.
May you never experience what all the couples who trusted this coporation and ended up in financial hell. I took a 9 month course in business. It was costly. Did you know that many families have been emotionally hurt and financially bankrupt because of 123 Fit’s unethical business practices. Do you think 123 Fit is the only unethical zor around. Look at all the Quiznos horror stories. I could name alot more if you want.
Go and enjoy your thousands. (If this is so.) You show me your financials. It goes both ways. Which can be easily fabricated like the numbers on the weekly reports are. I gave you solid proof that there are unhappy zees with 123 Fit. You are pissed I am sure. If you are indeed successful I would disassociate myself from people who are not what I call honest, trustworthy or decent people. The way you talk I would say you fit. Cheers!
Pete:
You sharply criticized this site, saying that the comments here are overwhelmingly negative and that success stories are not featured. You said we should “hear the good as well as the bad,” and “let positive comments stand.”
When I asked you to correct this imbalance by providing that which you said was lacking, you had to “think about it,” and were “concerned that any specifics would be attacked by Barb and other faild owners using outdated and incorrect info.”
Do you see the challenge of getting a balanced discussion going?
The detractors are pretty specific with their complaints – and specifics are really what build a credible argument.
Why would someone with a valid success story be hesitant to be specific about their success? How could they refute your verifiable facts with “outdated and incorrect info”?
Your hesitation makes no sense and undermines the credibility of good points you may have to make.
I see a lot of these types of exchanges on this and other sites. Usually at this point in the dialogue, if the commenter in your position is a corporate shill or saleperson they will resort to nastiness, insulting attacks and nothing more specific than “You didn’t follow the system,” or “I’m successful and you’re not.”
However, if the commenter is truly a successful franchisee they will get specific: sharing the number of members, retention rates, breakdown of profit centers, advertising costs, conversion rates, etc. Why wouldn’t they?
If you’re for real, you’ll be more specific than comparing towel charges. In that way, a real conversation can commence, rather than 123 Fit is evil vs. 123 Fit is Great.
For instance, maybe personal training is the difference between your success and their failure. Maybe you advertise aggressively and they didn’t. Maybe your rent, labor, overhead, etc. is much lower.
Another difference that emerges between the shill and the true franchisee is that even a successful franchisee has some empathy to others who were in their position, whereas the shill is mean and depersonalizes the failed zee. That’s a useful skill for those who sell flawed franchises.
I hope you can overcome the fear of sharing the details of your success, and actually add some insight and interest to this tired topic.
Ok. Here are some specifics. Later in the post I will apologize to Barb and any others I may have offended. Also, these numbers are mine – rounded off. I am not comfortable sharing my identity at this point. But what I will share is tested and true. So let’s get to the business.
Overhead should run $11K – $12K per month. Here is a breakdown. Rent $4K. Labor (to cover 77 hours – total coverage) $4K. Marketing $1000 – $1500. Royalities $600. Credit card fees and memeber service fees $600. Utilities/insurance $500. this does not include any debt service. Someone had posted they spent $300,000 in 9 months – so they probably paid cash for equipment. If not, add $600 – $1000 for equipment. Either way, this is a good baseline of monthly spending. My experience is that this is accurate month after month after month.
For the revenue. I will use 250 members with an average of $33 dollars per member. The avg per member will vary by club. Rough formula for why I am experiencing that. 125 members at full price of $44 and 125 members at $22. The ones at $22 are add ons or members we signed up on special deals whe we first started. So here is the math – $8250 in monthly dues. 12 new members per month. 10 pay enrollment fee of $100 plus first months dues. That is $1440. $2000 – $3000 in personal training. 2-3 of the new members prepay $1100 – $1700. So you get to $13K – $15K per month this has been my experience. I know the math is rough. This is where we are but adding the 10 – 12 new members per month. Even if we loose 6 members per month and add 12 we have a net gain of 6 members per month. In 12 months we go from 250 members to 322 members and you can redo the math from there. More monthly dues and more members to sell Personal Training to. So there is the revenue.
Here is where we have found success.
Price. We strictly adhere to the corporate sales tour. It is incredibly effective in showing the value of what we offer. Price is not the issue when the tour is done. So we get full enrollment and $39 plus $5 towel for all new members. The towel program is not optional. We just include it and quote $44. When the towel program was rolled out I can recall several clubs on the call resisted charging for towel service. Most if not all of the big gyms do – the YMCA near us charges $1 per towel. So unlimited for $5 is a good deal.
Advertising. We focus on “weight loss” rather than exercise in our advertising. We do this at the suggestion of corporate. Last spring they launched the weight loss marketing. Once again many clubs resisted it. We embraced it. The respones we get from weight loss ads VS exercise ads is in the multiples.
Employees. Our employees are such a big part of whether we sell things or not. We hire people that are passionate about helping people. They are paid on production. They know they are valued and they belive in our exercise/weight loss programs. Not only does this help us get new members but it helps us sell personal training. People get results, have a positive experience in our club so they spend money with us.
Capital. Fortunately we had the the capital to get through the normal start up and operating period. It took us longer than 9 months to reach where we are. So when I read that someone only gave it 9 months it is important to understand that it somethimes takes a bit to build a business and to get to a tipping point. So I don’t mean berate those that did not have the capital to get to the tipping point – I just assumed people knew it can take some time.
So with all that said I now want to offer a sincere apology to Barb and any Sean and any others I offended. Just as you are passionate about your experiences, I am too. And memebers and potential members do read these blogs. When a potential member came in recently and told me that 123 Fit was being trashed on some sites and that caused them to decide not to join I became engaged in this and other sites. I just want to get the word out that many 123 Fits are experiencing what I am. That the future for 123 Fit may very well be better than the experience Barb had with them.
I can understand the bitterness and hurt from folks that were first in with 123 Fit or many other concepts. Certainly there is a learning curve for any business. Even with experienced and long standing businesses mistakes are made – New Coke? But I am sorry people get hurt in the process.
But several of us are making it. I am just here to protect my business – not hurt or berate others. So you have my sincere apology.
Barb for you a special note. You are obviously passionate about the experience you had with 123 Fit. I know you want to do good with it. Don’t write a book -you should consider starting a website. Not just about 123 Fit or even franchising. Use your passion to educate people about business. You have been through the school of hard knocks – as most business owners have. Put that education to good use. I will bet Sean would allow you some publicity on his site and you would be doing a good service. Whatever you do, please know that success or failure with 123 Fit does not make you OR 123 Fit bad people. You mentioned I may be Brooksy Smith. Well I am not. I have no love lost for him just an arms length relationship. Trust but verify. But I have come to learn that he is not evil. He did not start 123 Fit so that he could oversee failure. I believe he is doing his best. And based on recent changes and the profitability of many clubs – they may have actually figured it out.
So that is my 2 cents worth and more. Good day to you all.
Pete I appreciate your details of your business. I am happy you are making it.
It doesn’t change the fact that many people have been hurt and may never recover. I really hope what you say is true for your own sake and the 28 clubs left.
What is wonderful about the internet people can get information that they never could before. It is like being part of a net-working group. You don’t dare hurt anyone because people will tell the rest of the group.
Regardless I still feel the same way about 123 Fit. I experienced what I did and I am not going to lie about it.
I sincerely wish you success because I do not want anyone to experience what so many in the franchising world has experienced. Franchising is a brilliant concept when it is a win win win situation. Sean says the zor wins, the zee wins and the customer wins.
Remember I am more concerned about the zees here. Best of Luck, Barb
Pete I keep reading your comments. The fitness business is unpredictable. We had a great summer. August was our biggest month. Which is suppose to be the slowest time of the year. Sept. came and we lost alot of members. Your numbers aren’t realistic based on the fact the average fitness center loses about 70% of their members a year. A good example of this is the former club in Palm Springs. He signed 1150 members. He went out with 650.
All clubs lose members. Therefore you are saying you are doing your numbers based on losing 6 members a month. You forgot that people go on hold. Turnover in the fitness business could be affected by people losing their jobs, people moving or people being plain undisciplined when it comes to exercise. Don’t forget the economy.
One of the biggest lessons I have learned is business is based on facts not hope. You can be the most positive person in the world. You can create a sense of community. You can do all you can but one thing I am sure of is the fitness business is unpredictable. In fact I believe fzors should disclose this factor to their zees. The risk factor is much higher. Pete you may be doing well now. (If it is so.) I understand you have to stay as positive as possible. You have to prepare yourself for the worst case scenario.
Your numbers don’t make sense. You don’t think you can lose 25 members in one month? I have seen it happen. In fact I saw in one weekly report a club losing 34 members. It is like corporate telling people they have to open with 250 members. Very few do that. You and I know that. That is the exception.
So much negativity! Where to begin?
My sincere sympathies for anyone who has lost, closed or left their business in a negative way, whether 1-2-3 Fit or otherwise.
Remember that your experience is not inclusive of EVERYONE else! Please don’t discount others who are successful, whether or not they are the majority of owners or not.
The fitness business is and always will be a tough one. People will continue to search for the perfect body and nutrition, diet and exercise will not go away.
1-2-3 Fit, Curves and Butterfly Life did not invent or create the circuit concept. In fact, circuit workouts have been around before gyms came into being. Most schools with athletic programs (football, baseball, volleyball, track, swimming etc…) have used circuit training for years. The U.S. military has done it since WWI. It is not new and it is not going away. A fad it is not. It is proven to be effective time and time again.
Why do some fail and some succeed? There are as many answers to this as there are franchise owners. One cannot use blanket statements to the entire system for an individual failure/closure.
Some of the orginal clubs who closed were charging significantly less per month than current clubs do. This is one explanation why a club, such as Palm Springs, can close with over 600 members and not make it.
Another reason is that original clubs were designed with a larger footprint and higher rents. This can effect profitability as well.
A third effect on profitablilty is having multiple profit centers available. Originally, 1-2-3 Fit had only a workout available. Now they have added personal training and nutrition programs as well as vitamins. These can easily add revenue to the bottom line each month. In fact, personal training is constantly one of the biggest revenue producers in gyms today. Overtime, it will surely benefit 1-2-3 Fit owners.
If you are/were a 1-2-3 Fit owner from the start, it was definitely harder on us than those who follow. I know this first hand. I can also tell you that our club has implemented price increases, personal training and the nutritional program and revenues continue to grow each month.
It is always a tragedy when somebody fails and I do not wish ill will on anybody. It is also important to not drag down others after you have failed. Some of us are making it and while I understand the need to vent, it is not a fair shake to scare others off of what could be a profitable business venture if properly executed.
One must consider all facets when deciding to spend your hard earned $$$ on a business. I wish everyone well on your endeavors.
The above writer is all BS. Is this BK? I am not talking about Burger King.
Unfortunately, the legal but “constructive fraud” of the “package” of a disclosure document and the adhesory franchise agreement, AND the fact that a certain percentage of franchisees do survive to breakeven, and maybe even profits, always works for the franchisor who is concerned only with the growth of gross sales of the SYSTEM that are grown even by those who eventually fail.
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The original franchisor of 1,2,3 was the original owner of Quiznos who knows how to “work the law on the books” to their advantage and premeditates using franchisees as merely expendable resources to maximize their profits out in the corporate world where the law has been arranged to permit them to maximize their profits while avoiding risk and taxes.
The current laws excuse the Franchisors from any obligation to disclose MATERIAL unit performance statistics in any manner, let alone in a timely manner, to new buyers of franchises.
How did Quiznos use the $250 mil(?) they borrowed in a securitization deal in 2006 when they transferred ownership of the Quiznos Franchise Agreements and Royalty Flow to a Special Vehicle Entity so that they could borrow more cheaply under our laws to expand their operations, etc…
If Quiznos hadn’t been permitted to disguise the actual failure rate and churning they indulged in through their UFOC’s, would they have been able to accomplish a securitization?
Obviously, Quiznos learned from Burger King who successfully securitized their franchise portfolio of franchise agreements.
This is all part of the big Bubble that has exploded in the faces of the franchisors, the special vehicle entities, the banks and lenders, the rating agencies, and the insurance companies and that started with the rip-off of those little people who were tricked into buying the hard assets and making the promises at the bottom of the pyramid — in the scenario of both the real estate bubble and the franchise bubble.
As Warren Buffet said, he determined not to buy into anything he couldn’t fully understand, but apparently he did understand the “RISK” and avoided it for himself and his investors.
One wonders why the head of the SEC and the Secretary of the Treasury and the Secretary of Commerce, and the Department of Justice didn’t understand the risk to the health and welfare of the American people.
Its the American people who will now wade in the BS of the coverup of this betrayal of the people by our institutions and our Congress.