The new kid on the block packs a punch with its grand plans.
By Zhen M
US-based 24-hour gym chain Anytime Fitness officially opened the doors of its first club in Malaysia end of last month in Bandar Puteri Puchong, ironically right next to a 24-hour McDonald’s. At its grand opening, Anytime Fitness Malaysia (AF Malaysia) director Dr Ali Roodgar declared the plan to open 40 AF outlets, at least, over the next 12 months.
Such a lofty target – more than the combined total of the current two leading gyms – is certainly mindboggling, considering that Malaysians are not exactly avid gym goers and there are arguably a fair number of gyms already. Is there demand?
AF believes there is a huge untapped market that its 24-hour community gym model will fit in just nicely. And it is confident investors will be keen for a slice of the action.
“Anytime Fitness is not just a gym, it’s a successful franchise business,” proclaims Maurice Levine, AF’s master franchisee for Hong Kong, Singapore, China, Malaysia and the Philippines.
AF is the world’s fastest-growing health franchise, with 2,501 clubs and more than two million members globally. It topped the ranks on Entrepreneur magazine’s prestigious 2014 Franchise 500 list, surpassing all other franchises in the world, including well-known ones like Subway, McDonald’s and Pizza Hut. Entrepreneur states that the most important factors for inclusion on its Franchise 500 list are financial strength and stability, growth rate and size of the system, highlights Levine.
According to AF vice president of international development John Kersh, AF has on average opened 200 clubs in the US per year in the past seven years. Its expansion outside of US has also been at the same rate but is expected to exceed that of the US starting next year.
“We have a total of 2,501 clubs; about 600 are outside of US. In five years, we expect an equal number of US and international clubs,” Kersh says, adding that AF itself owns only 30 clubs, with the rest owned by franchisees. It has a total of about 1,700 franchisees, many owning more than one club. The franchisee with the most clubs owns 30.
Getting non-gym goers to go!
AF’s fastest growing market is Australia, which it ventured into in 2008. Today, it has over 350 clubs there. The company expects strong growth, if not as spectacular as in Australia, across Asia, where the fitness industry is underdeveloped and hence presents a big opportunity, he says.
Some 16% of the total population of the US have gym membership, and about 10% for overall Europe. In Asia ex-Japan, the figure is a tiny 1-2%, maybe, remarks Kersh.
AF currently has a presence in Japan (40 clubs), Singapore (three clubs) and Malaysia. Plans are afoot to open clubs in the Philippines, Hong Kong and Shanghai this year.
When asked about the competition from the existing gyms in Malaysia, Ali says: “We’re not competing. We’re not looking for competition. We’re different. They are targeting gym goers. Our clients are people who are not going to gym (yet).”
Everyone says they are different but in AF’s case, this is mostly true. For starters, it is the only 24-hour gym chain in Malaysia. Whether we need that, is quite another matter. As its model is that of a community gym, it is located near residential areas rather than in malls, is typically only up to 6,000 sqft in size and sans the usual trappings of a larger gym e.g. no sauna, steam room, swimming pool or DVD corner, and offers very limited group exercise classes. The flagship outlet in Puchong is 10,000 sqft as it will double as a training centre for AF Malaysia.
Ali seems confident of achieving the 40-club target. He himself will be opening three clubs within the next two to three months and renovations have already commenced. An Australian investor, who currently owns 10 AF clubs in Australia, plans to open 12 outlets and another AF franchisee, who has two clubs in Singapore, is also keen to open a few here.
“I’m also talking to other interested investors,” he says, adding that he is awaiting the approval of the relevant authorities for the AF franchise model in Malaysia before opening up the franchise route to investors.
Investing in an AF club would cost US$63,000 in franchise fee and fit out costs of up to RM300,000, depending on the size of the gym. The gym equipment is leased on monthly basis, Ali shares.
For more information, please visit its local website.
Ali explaining the various safety measures adopted by the gym. As a 24-hour gym, security is of paramount importance as the three-storey premises will be unstaffed, saved for a security guard, in the wee hours of the night/morning. AF Malaysia’s security partner Secom has a response unit in Bandar Puteri Puchong itself and will respond to any security emergency within 5 minutes of the alarm being triggered. Columbia Asia Hospital is a stone’s throw away.