- Category: Widget
- Published: Wednesday, 25 February 2015 16:36
- Written by Isaac
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Gym Businesses Flex Muscle
Staten Island commercial bank notes reported strength of fitness franchises
STATEN ISLAND, N.Y. – Industry revenue is showing gains among gym and fitness franchises, according to research data revealing what is described as robust growth.
Victory State Bank, Staten Island's only community-based business bank, sees as positive the news early this month of growing memberships and a more health-conscious population.
In addition to greater demand, favorable interest rates and new technology have spurred industry expansion during the past five years, according to IBISWorld, which describes itself as a leading publisher of business intelligence.
Growth in the gym and fitness franchises industry comes from not just demand but also favorable interest rates and new technology which have spurred industry expansion during the past five years.
The report adds that many franchisors have also invested in franchise consultants and regional training in order to gain a large customer base.
Additionally, many franchisors implemented franchise business models for both single and multi-unit franchise investments.
According to IBISWorld Industry Analyst Darryle Ulama, “Many franchisors responded to the favorable investment environment by providing more franchise opportunities, which bolstered industry revenue. Many, for example, developed networks to assist franchisees in obtaining a loan for franchise investments.”
As a result, industry revenue has expanded over the past five years, and is expected to grow in 2015. As low-cost, low-amenity gyms gained popularity over the period, lower franchise investments were required, causing profit to rise.
“Additionally, contained start-up costs, such as low marketing costs due to franchisors' already established brand awareness, spurred many franchisees to enter the industry,” says Ulama.
“The growing popularity of budget and boutique gyms and fitness facilities increased demand for franchise establishments.”
During the five years to 2020, industry revenue is forecast to grow at a faster pace. The proliferation of public health campaigns that raise awareness about health and fitness will prompt new gym and fitness franchises to enter the market.
Further, more time-strapped consumers will require high-margin services, like fitness trainers and individually tailored nutritional plans, to achieve fitness results despite limited available time. Because more individuals prefer gyms that are catered toward local clientele, franchises will become more popular.
As for corporate gym memberships, the IBISWorld website says the average price that businesses pay has been rising at an estimated average annual rate of 2.4 percent over the three years to 2014.
While escalating demand and rising operating costs have prompted suppliers to raise membership rates, fierce market competition has prevented more rapid price growth, it observed.
During the period, demand for corporate gym memberships has picked up.
When procuring corporate gym memberships, the site advises, buyers should be cognizant of various fees in addition to service-based charges that can increase their total cost of ownership.
Most gym operators, particularly high-end gyms, require a minimum one-year commitment. Therefore, the site notes, employers are typically responsible for paying termination fees in case of contract breach or policy change.
About Victory State Bank
VSB Bancorp, Inc. (OTCQX: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office is in the community of Great Kills, and branches are in the communities of West Brighton, St. George, Dongan Hills and Rosebank. For additional information, Victory State Bank may be reached at 718-979-1100 or visited online atwww.VictoryStateBank.com.