DescriptionAnytime Fitness
Case Study
Based in Woodbury, Minnesota (USA), Anytime Fitness gives current and potential
entrepreneurs an opportunity to purchase and manage a fitness center. The company
began offering fitness center franchises in October 2002 (Anytime Fitness, 2022b). As
of 2022, Anytime Fitness now has 4,700 locations with a combined 4 million members
in 39 countries including the United States, Canada, and Australia (Anytime Fitness,
2022a). Thirteen centers are in Kentucky with 2 in Louisville (Anytime Fitness, 2022b).
Anytime Fitness centers are open 24 hours a day, 7 days a week, 365 days a year.
Members can expect on-site staff during normal operating hours (e.g., 7 AM to 7 PM).
They also can access the facility at any time of day or night using a fitness centerissued key fob or card (Anytime Fitness, 2022a).
Anytime Fitness Gym: Step Inside (1:13)
Inside every fitness center, members can find equipment such as treadmills, elliptical
and rowing machines, stair climbers, and free weights and racks. Members also have
access to classes such as spinning, Zumba, cardio, and yoga. Other services include
personal training, private showers, and wellness programs (Anytime Fitness, 2022a).
Membership fees vary by location but are typically $41-45 a month (Anytime Fitness,
2022a). Members can access personal training for $40-85 per hour. Anytime Fitness
centers also have contracts with local businesses and health providers, who encourage
their employees or clients, respectively, to visit the centers as needed. The price per
visit is $25-35.
Fitness Industry
According to the International Health, Racquet, and Sportsclub Association (IHRSA),
fitness centers around the world generate approximately $87 billion each year (Anytime
Fitness, 2022a). One million people become members of fitness centers annually. From
2014 to 2019, revenues related to fitness centers grew by 7.8% (Anytime Fitness,
2022a). The COVID-19 pandemic curtailed, and for a time completely halted,
attendance at all fitness centers. However, the industry is experiencing a rebound and
is expected to grow through at least 2028 (Smith, 2023).
Anytime Fitness Franchise
Entrepreneur ranks Anytime Fitness on its lists of Fastest Growing Franchises and Top
Global Franchises (Anytime Fitness, 2022a). Anytime Fitness continues to seek new
investors who have interest in owning a franchise, and the company provides details
about this opportunity.
Anytime Fitness Franchise Fitness Center Opportunity (8 pages)
https://www.anytimefitness.com/wp-content/uploads/2022/06/The-Anytime-FitnessFranchise-Opportunity.pdf
Anytime Fitness also publishes a Franchise Disclosure Document. Every organization
that sells franchises must provide a similar document to current and prospective
franchise owners. The franchise disclosure document gives information about the
financial requirements to start a franchise and the revenues and expenses expected
once the franchise opens its doors to customers.
Anytime Fitness Franchise Disclosure Document (388 pages)
https://www.anytimefitness.com/wp-content/uploads/2022/06/Anytime-Fitness-2022FDD.pdf
Anytime Fitness Scenarios
The Anytime Fitness Franchise Disclosure Document is a long one. Arguably some of
the most important information can be found on pages 55-56 of the document (pages
63-64 of the PDF). These pages detail the income statement for Anytime Fitness
locations.
The Anytime Fitness income statement shows the revenues and expenses for an
average fitness center as well as the revenues and expenses for its top performing
fitness centers (best case scenario), its middle performing fitness centers (most likely
scenario), and its bottom performing fitness centers (worst case scenario).
Anytime Fitness center revenues come from monthly and annual memberships,
personal training, and pay per visit fees. More details about these revenue sources are
above.
Each fitness center incurs direct costs, or cost of goods sold. These include costs for
processing memberships and credit cards, key fobs and cards for members to have
24/7 access to the facility, supplies, and wages and payroll taxes for personal trainers.
Each fitness center also incurs indirect costs, or operating expenses. These include
salary for the manager (which could be the franchise owner), commissions and
bonuses, payroll taxes and other employee benefits such as access to a 401k, rent,
utilities, telephone, internet, and repairs and maintenance. Additionally, every fitness
center pays a monthly franchise fee, minimum amount for local advertising, general
advertising fee that helps support all Anytime Fitness locations, insurance, technology,
attendance at the Anytime Fitness conference held every two years, software, office
supplies, and other expenses.
Scenario Analysis
The question now becomes how to make a decision about this potential franchise.
Imagine you’re presented with an opportunity to invest in and manage an Anytime
Fitness center. Would you view this as a wise financial decision?
How to Choose a Profitable Franchise (3:01)
Franchise Chatter (2022) suggests potential and current franchise investors consider
three key performance indicators (KPI) when analyzing franchise opportunities. Keep
the first two key performance indicators in mind as you think about this Anytime Fitness
decision. You can also find out more about Anytime Fitness at the Franchise Chatter
website: FranchiseChatter.com
Anytime Fitness Worth It? (4:34)
Vetted Biz (2023) provides additional information about the fitness industry as well as
Anytime Fitness, including its competitors and financials. You can also find out more
about the Vetted Biz perspective on Anytime Fitness at its website:
Most documents and videos discussing whether to invest in a franchise focus on the
initial investment, or what potential investors must pay in start-up costs. For Anytime
Fitness, this can range from $382,000 to $784,000. These costs include a franchise fee,
travel and training, building lease and build-out costs, rent, architect and design fees,
opening costs, grand opening advertising, insurance, furniture, and contingency funds
(VettedBiz, 2023).
For this case study, you do not need to factor the franchise initial investment
into your decision. Your task is to focus only on whether Anytime Fitness
represents a good decision after this initial investment.
Case Study Questions
The Anytime Fitness franchise disclosure document includes an income statement with
four columns outlining the average, top third, middle third, and bottom third financial
performances. Use the income statement spreadsheet, videos, other information and
documents above, and any additional sources to respond to the following questions.
https://docs.google.com/spreadsheets/d/1hgq00bDT_mQeefpUhHxR6b3aHuwh_F8Xmq
QKIEHNk6g/edit?usp=sharing
1. Anytime Fitness reports in its franchise disclosure document that one of its highest
performing fitness centers makes $1.5 million annually. This is approximately $1 million
more than the revenue for an average Anytime Fitness center. Use the income
statement spreadsheet to complete the following:
Describe two options to help increase revenues for an Anytime Fitness center.
Describe two options to help reduce direct costs for an Anytime Fitness center.
Describe two options to help decrease indirect costs for an Anytime Fitness center.
2. The Franchise Chatter video includes three key performance indicators (KPI)
potential investors should consider. List the first two key performance indicators. Use
these first two indicators to assess the income statement scenarios (average, top third,
middle third, bottom third). Do each of the four scenarios meet these two key
performance indicators? Why or why not?
3. Review the six options you described in question 1. Would your proposed options
improve the financial performance enough to meet the key performance indicators?
What is your confidence level (high, medium, low) about each option?
4. Based on your analysis, would you invest in an Anytime Fitness center? Why or why
not? Include responses from questions 1-3 and any sources you used as part of your
answer.
(Remember that you only need to focus on the income statement and not the initial
investment. Also, if you believe factors in addition to/instead of the key performance
indicators should be considered, please include those considerations here.)
Please refer to the case study rubric in the syllabus. Please make sure to include every
component listed in the rubric in your written submission (e.g., introduction, analysis,
implications).
RUBRIC
Content Points Excellent Good Satisfactory Poor
Brief
Introduction
5%
Presents a clear introduction of the case study issue. Provides detailed context and comprehensive background
information.
Analysis 50%
Provides detailed explanation of data analysis. Fully incorporates financial skills in analysis (e.g., calculating
financial ratios, conducting scenario analysis).
Implications 30%
Includes strong discussion of results with clear interpretation of findings. Offers excellent and numerous practical
implications for sport managers.
Grammar,
Writing, and 10% Formatting
Uses clean, consistent formatting in document. Includes no or very minor grammar or spelling errors. Incorporates
appropriate APA formatting throughout document.
References 5%
Includes 5 or more references to support case study analysis and implications. Appropriately uses APA formatting.
References
Anytime Fitness. (2022a). Anytime Fitness. https://www.anytimefitness.com/
Anytime Fitness. (2022b). Anytime Fitness franchise disclosure document.
https://www.anytimefitness.com/wp-content/uploads/2022/06/Anytime-Fitness2022-FDD.pdf
Franchise Chatter. (2022, July 8). FDD talk: Anytime Fitness franchise costs, fees,
average revenues and/or profits (2022 review).
https://www.franchisechatter.com/2022/07/07/fdd-talk-anytime-fitness-franchisecosts-fees-average-revenues-and-or-profits-2022-review/
Smith, S. (2023, January 6). Fitness industry perseveres through 2022 to get back on
top. https://www.ihrsa.org/improve-your-club/industry-news/fitness-industryperseveres-through-2022-to-get-back-on-top/
Vetted Biz. (2023). Anytime Fitness Franchise cost high, revenue low.
Purchase answer to see full
attachment
