The growing interest of entrepreneurs in the fitness services market contributed to the active development of franchising

The growing interest of entrepreneurs in the fitness services market contributed to the active development of franchising in this segment. The number of offers over the year increased by more than a third, and partnership agreements were concluded by 14% more. Demand for the product is primarily provided by regional investors who rely on opening small studios, although the margins of the sports business in Russia remain low.

The volume of supply of sports franchises over the year increased by 37%, to 138, TopFranchise calculated. Analysts clarify that over the past year, 37 new projects have entered the market, including nine fitness centers and themed studios. Franshiza.ru expert Anna Rozhdestvenskaya says that 140–150 offers are now available in this segment. TopFranchise co-founder Viktor Bolshakov points to an increase in interest in the sports franchise: “If in 2023 we saw an increase in applications by 11% year-on-year, then this year it is already 30%.”

The head of the National Fitness Community (NFS), Elena Silina, suggests that in 2024 the number of concluded franchising agreements will increase by 14% year-on-year versus 9% in 2023. According to her, now 45% of clubs operate in Moscow and the Moscow region, 14% in St. Petersburg, 21% in other cities with a population of over a million, 19% in cities with a population of 500 thousand or more.

In cities with a population of less than 1 million people, fitness is poorly developed, adds Ms. Silina. She says that some networks are now developing a special franchising product for cities with a population of 30-100 thousand people, mostly small studios up to 250 sq. m. m within walking distance.

However, large networks are also forming proposals for the regions. The owner of Fitness by Emin Agalarov, Emin Agalarov, told Kommersant about plans to develop the Zhara Fit and Crocus Fitness networks within the franchise. “There are many regions that are ready to open projects using an already established structure and the approach that we propose. For us, this is an excellent solution in terms of large-scale development of the network in the market,” he explained. Brands are developing not only in Russia, but also in the countries of the post-Soviet space: for example, Crocus Fitness is planned to open as a franchise in Bishkek this year. The development of the franchise was also announced by Pride Fitness, explaining that they expect to open 50 clubs under such a program within five years.

In the segment of large-format properties, payments from franchisees can now form 5–10% of a chain’s income; in the case of studios, successful players’ revenue from franchising exceeds the turnover of their own clubs, notes Svetlana Kalina, leading FitnessData analyst. President of the Association of Fitness Industry Operators Olga Kiseleva explains that payments to franchisees consist of two parts. The initial lump-sum payment when opening a club averages 1.5–2 million rubles; regularly paid royalties can be 7–10% of gross revenue or be fixed, she says. Ms. Kalina adds that the average investment when opening a fitness club franchise is 25 million rubles, and a studio is 4.3 million rubles.

According to Ms. Kiseleva’s observations, this line of business becomes successful for networks only if there are factors that retain franchisees in the long term. The expert includes ensuring an influx of new clients and providing our own software. Svetlana Kalina explains that chains may face failure to comply with requirements on the part of franchisees, which primarily carries reputational risks.

Now the market for fitness services is growing. The NFS previously said that the segment’s turnover in January 2024 increased by 10.5%, to 1.47 billion rubles. Franchised clubs are often successful; last year they accounted for only 15% of total closures, Ms. Silina said. But the profitability of the fitness business remains low, amounting to 7%, according to the NFS, although before the pandemic it was 15–20%.

Alexandra Mertsalova, Daria Andrianova