Franchise Players is Entrepreneur’s Q&A interview column that puts the spotlight on franchisees. If you're a franchisee with advice and tips to share, email firstname.lastname@example.org.
Planet Fitness signed its first franchise agreement in September 2003. At the time, the gym chain famous for its low prices, free pizza and customer base that is more "Average Joe" than bodybuilder, was primarily focused in the Northeast. Eric Dore and Shane McGuiness, Planet Fitness's first franchisees, were ready to bring the fitness franchise to a whole different market: sunny Florida. Over a decade later, Planet Fitness has more than 800 locations, of which Dore and McGuiness own 22. Here's what almost 11 years in franchising have taught the duo.
Name(s): Eric Dore and Shane McGuiness
Franchises owned: 22 Planet Fitness clubs in the Southeast, specifically Central Florida, the Florida Panhandle and Georgia.
How long have you owned a franchise?
[Shane]: We opened our first franchised location in September 2003. We were actually the first Planet Fitness franchisee, which is exciting to think about given that there are more than 800 locations and 150 franchise groups in the chain today! Our first gym opened in Altamonte Springs, Fla, and we are sprinting into our 11th year of franchising.
[Eric]: Shane and I wanted to be part of an industry we loved while being able to build our own business. The model made sense to us and we were able to form a relationship with Planet Fitness founders Mike Grondahl and Chris Rondeau (now Planet Fitness’ CEO) as they had a genuine desire to help educate us on the industry and share their vision.
A franchisee with Planet Fitness just seemed to make sense as it combined an industry we were passionate about with three experts that were revolutionizing the industry. We discussed the possibility with the Planet Fitness founders who agreed to give us an opportunity to open a franchise in the Orlando, Fla. market. We established the business name Sunshine Fitness and opened our first Planet Fitness club.
What were you doing before you became a franchise owner?
[Eric]: We’re both from New Hampshire (where Planet Fitness was founded) and where our friendship started way back in the 1st grade. I then went to University of New Hampshire and began my career in sales while Shane received his MBA in entrepreneurship from Babson College. I spent most of my time after college working for Star Trac and Life Fitness, two leading fitness equipment manufacturers. Planet Fitness became one of my first customers. Prior to collaborating on our business plan for Planet Fitness, Shane was partnered with two entrepreneurial founders of a start-up medical device company out of Rhode Island in the early stages of commercializing a new technology for sports medicine.
Why did you choose this particular franchise?
[Eric]: Working for a large fitness equipment company in the northeast, with over 400 clubs in the territory, I quickly learned that Planet Fitness clubs were the busiest. We also loved the business model and the differentiated brand positioning – great value with memberships for only $10, high quality experience, and a non-intimidating environment geared towards making everyday people feel comfortable, unlike any other gyms.
Before committing to the opportunity we had a third-party company perform a feasibility study in the Orlando market to see if the model could work outside of N.H., and when the results were in we saw overwhelming indication that it could. Shortly after, we were opening our first club in sunny Florida.
How much would you estimate you spent before you were officially open for business?
[Shane]: We bootstrapped in the early stages particularly as it related to formation of the company, initial legal expenses, and preliminary market studies. These costs were limited to about $20,000. Once our investor group had committed funding, the site selection, build-out and presale of memberships began and our costs escalated quickly. Construction and equipment purchases totaled $900,000 and we had about $100,000 leftover for working capital. We almost left ourselves short in startup capital but the model kicked in and membership sales thrived just in time. Since then, the model has evolved and our clubs have become bigger and better with the advances in the brand, and of course, the associated rise in start-up costs with building better facilities.
Where did you get most of your advice/do most of your research?
[Shane]: We were fortunate to have a close relationship with the founders. We were able to jump in the car with Mike Grondahl and drive around the territory picking his brain on what to look for in new locations and strategies for growth. In a saturated industry, we were able to learn and apply the founders’ customer driven approach and key success factors that made the business unique.
We quickly understood that it wasn’t just about the affordable pricing that drives this franchise model. These guys had created a complete model with sustainable competitive advantage. We were also able to leverage a very supportive and experienced Board for guidance and perspective during all facets of our development. They continue to be strong mentors and valuable partners throughout this entrepreneurial journey.
What were the most unexpected challenges of opening your franchise?
[Eric]: Not over thinking the model and following the model as it had been established by the franchisor. I think as a franchise there is a natural desire to put your own stamp on a business as there is a great sense of pride in opening your own business. Over time you learn where there is additional value that you and your partners can bring to your operation that coincide with the model rather than to “tweak it.”
What advice do you have for individuals who want to own their own franchise?
[Eric]: Work in an industry that you love. In the early stages, especially, it is a big effort and it can consume almost everything you do, even if you aren’t at work, so you want to make sure you will be spending your time on something you enjoy. Make sure that the culture of the franchisee fits in line with your beliefs and ideas. Sometimes a good way of finding out the culture is to spend time talking to other franchisees.
What’s next for you and your business?
[Shane]: Currently, we own and operate 22 clubs, employ 235 people, and serve more than 130,000 members. Although not the largest franchisee, we’re really proud of what we’ve accomplished so far. We are excited to continue to grow with Planet Fitness and have plans to open more clubs throughout Florida, Georgia, and Alabama over the next few years with a goal of 40 clubs by 2018. Along the way we will certainly continue to support Central Florida and Georgia through our community efforts that include the Special Olympics, Susan G Komen Race for the Cure, and Coalition for the Homeless among others. We’ve been extremely fortunate, so giving back is really important to us.