A Unique Fitness Model

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-By Anne Lindert-Wentzell

Today, convenience is the success factor of just about every type of product and service that is showing steady growth. – Charles G. Mortimer, corporate executive, General Foods.

Mortimer’s words from the mid 1900’s remain indisputably true today in all aspects of daily living. Technology has conditioned us into becoming an instant gratification society. Time is always of the essence, and somehow it seems, we have less of it.

Many of us want to incorporate a fitness program into our daily lives simply because it’s essential to performing well in daily tasks – healthy body, healthy mind. In Australia, the fitness market is booming as evidenced by the 2.5 million people who belong to 2800 clubs – a $2 billion industry in 2010. According to a Club Industry magazine survey, a club’s location is the most important consideration when deciding which club to join, and this is followed closely by pricing and available equipment. EFM Health Clubs successfully addresses all three of these elements and has been doing so for over 20 years.

There are a number of fitness franchises in Australia vying for a franchisee’s attention, with various capital investment requirements. EFM’s business model stands out from the crowd, simply because all of its clubs operate within schools, hospitals and corporations. These clubs are not only accessible to staff, but to the general public as well. It’s unique in both its concept and niche market strategy – and it seems to be working.

In terms of the all important club convenience, Greg Nunan, EFM Health Clubs National Business Development Manager affirms that, “With exercise and fitness it has to be really convenient. People lead busy lives.” Enthusiasm may dwindle if a health club member anticipates a commute to a gym after work – they won’t go as often, if at all. EFM negates this concern, says Greg, simply because, “By positioning ourselves in a hospital for example, and running programs for the staff, it removes the need for them to travel off site. They just have a short walk down the corridor to our facility. It’s a fitness program that couldn’t be more convenient.”

In schools, both staff and students benefit from EFM’s presence and quality fitness equipment. “We come in and provide all the equipment needs for their facilities… during school hours they have full access to the equipment, so essentially we’ve provided the gym equipment for free,” says Greg. “Outside of school, we run our programs as a health club… a typical member will attend before or after work.”

Positioning its services inside corporations with a staff of a thousand or more means that EFM, “Can run a program exclusively for that organisation… from the employer’s perspective, their intention is to have a fitter and healthier workforce,” says Greg.

As for clientele, Greg acknowledges that EFM Health Clubs tend to attract a niche group of clients – typically females 45 and over, many of whom haven’t been to a gym in awhile. Greg explains one possible reason for this statistic that, “A typical commercial gym caters to the 18 to 35 year old… these are people that know what they’re doing, they’ve been to a gym before, they’re quite active and have an understanding of how to exercise.” EFM attracts mothers, for example, who now have some time to focus on themselves but need assistance in starting a routine – being in contact with gym staff and fitness trainers is unfamiliar territory. “The majority of people require some assistance. We offer the equipment and a qualified personal trainer to help each member through the program… so by nature, we tend to get an older demographic,” says Greg, “for a fraction of the cost of a commercial gym.”

No one who visits a gym or health club, with good intentions, wants to be dismayed upon arrival to discover that they will have to wait to access a piece of gym equipment. That can dampen all enthusiasm, and so too can being overwhelmed by a sea of strangers who are focused on themselves and their mission. EFM offers a reprieve in the form of smaller social groups. “Our gyms are run similar to a studio type gym,” says Greg. “We have 100-250 members in total, unlike a commercial gym which can have thousands of members. You don’t have to wait for the equipment, you know all the staff and the members know each other…. We run walking groups, so a lot of our members will do their fitness session then go for a coffee. It does become really social. Just by nature, being a smaller interface allows us a social and cultural interaction between members as well as members and staff.”

Unlike commercial gyms, EFM’s business model is unique in that the company doesn’t require a large amount of space to run its programs. Due to the boutique studio nature of its facilities, a room as little as 100 square metres, on-site at the hospital, school or corporate organisation, can be sufficient. “We only have a couple hundred members, so we only need a small amount of unused space such as a basement, old storage area or old squash courts for example. It’s just a matter of finding working available space,” says Greg. Running its facilities out of this unused or under-utilised space enables EFM to add further value to an organisation’s staff benefits, whilst assisting them in maximising their use of space.

The fitness industry has changed substantially in the past five years. It’s had to in order to meet the fitness needs of a more educated and health conscious clientele. EFM Health Clubs meets this demand – it’s not only about fitness. The company has extended its programs to include, for example: Lift For Life, a weight training program designed for those at risk for Type 2 diabetes; the LEANing Challenge, a 30 day program designed by an EFM nutrition expert highlighting an eating and exercise plan that has participants feeling better, with increased energy; EFM Cross Training, a training technique under the guidance of a fitness coach for weight loss and improved overall general fitness and; Bio Age testing, a measurement of real biological age that assesses one’s fitness performance for their age, giving an idea of overall health before initiating an exercise regime.

For those interested in a cardio program, EFM can customise an appropriate program for each member. Greg suggests that, “As part of our screening process we recommend that our members seek advice from their own general practitioner … We have a comprehensive health screening document that we go through… we run it through a standard fitness session. This gives our fitness expert a communication of where the member is [physically] to develop a fitness plan for them.”

EFM operates a very affordable business model, benefiting both members and franchisees. The company has combined both a gym and an accompanying tailored personal training program into a unique and flexible Fitness Coaching membership. Unlike some of the competition, EFM acknowledges that a person’s situation can change, and does not require a twelve month membership contract upon signing. Clients have unlimited access to the facilities and can train when and for as long as they like. EFM is member friendly, offering various monthly membership options at an affordable rate. “We can keep our costs low because we have lower overhead,” says Greg.

Franchisees are provided with initial and ongoing training with continual Franchisor support. EFM’s unique service offers a unique rent-free operation, combined with an on-site captive audience to market to. Franchisees are able to keep membership pricing to a minimum – as they don’t have to pass on the cost of rent – whilst still providing personalised attention and training. EFM members therefore have an ultra-convenient and affordable membership option at their on-site EFM fitness studio, a perfect recipe for success at every step in the chain.

EFM Health Clubs has grown from 12 fitness franchises in two states to more than 65 franchises in five states in less than 12 years, with an active membership of 8000. The bulk of this growth over the past three years has come from existing franchise outlets, despite EFM being listed in the top growing franchises for new site growth as well, with eight new franchises planned for 2012. EFM Health Clubs has been recognised, for the third consecutive year, in the BRW 2012 Fast Franchises for its revenue and outlet growth. Greg attributes this growth to the company’s strong internal programs and systems which assist Franchisees in growing their businesses. EFM has streamlined its group marketing systems, for example, which has resulted in back to back to back membership enquiry records from 2009 through to Feb 2012, and has coupled that with a comprehensive sales training system developed with a sales expert. So at every step of the way, EFM is seeing growth – record numbers of membership enquires, record conversion percentages of enquiries to paying members due to Franchisees’ improved sales skills, and a high-value, high-service fitness coaching service for members, keeping them engaged and interested in maintaining their memberships.

There are challenges that can come with rapid growth, if not managed properly, but EFM maintains sustainable growth even through this trying economic climate; it continues to grow and prosper. Much of the company’s success can be attributed to market demand and the professionalism and commitment of Franchisees and their staff who deliver tailored programs suited to client needs. Greg maintains that, “We have a strong interest in growing, at the right rate. Our focus has been on our clubs – that they’re profitable and growing well… with the track record that we have, we see no reason why it won’t happen.”

The company has good reason to be “extremely optimistic” about its future. Its business model of on-site studios at hospitals, corporate organisations and schools is very sound, providing a true win-win-win scenario for the host organisation, Franchisees, members and Franchisor. “We have a fantastic group of highly skilled and motivated Franchisees that are committed to delivering our fitness coaching service to members. From a big picture perspective, we’re well on target to achieving our goal of 100 highly profitable sites by the conclusion of 2015 financial year,” says Greg. “We feel that we’re very well positioned to manage and capitalise on our growth opportunities as we’ve invested heavily in our franchise systems over the last three years.” It’s an investment that certainly appears to be paying off.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

June 22, 2018, 5:15 PM AEST