The Fitness Together personal training franchise seems like an attractive opportunity.
After all, it ranked #100 in Entrepreneur’s Franchise 500, its fifth consecutive year to appear on the list.
“We are honored to be named among the industry’s best,” said Jeff Jervik, president and CEO of Fitness Together Holdings, Inc. “Despite the troubled economy, Fitness Together has continued to grow and establish itself as a leader in the fitness industry. And our annual ranking to the Franchise 500 is a true affirmation of our stability.”
The Fitness Together franchise website cites risk reduction as a key benefit it offers.
“Why all the excitement about franchising?” states the Fitness Together website.
“It’s simple. It’s because people want to reduce their risk.
“Entrepreneurs who choose to franchise are ahead of the curve with exclusive systems, branded services and a proven business model.”
Why is it that Fitness Together has such a high SBA loan failure rate?
However, once you dig a little deeper, the emphasis on risk reduction by Fitness Together seems a bit ironic.
According to the 2012 Fitness Together Franchise Disclosure Document (FDD) , 198 Fitness Together franchises ceased operation (31%) between 2008-2011.
According to data released by the Small Business Administration (SBA) indicates that Fitness Together franchise owners who qualified for SBA-backed franchise loans have a loan failure rate of 36%.
That qualifies Fitness Together for inclusion in UnhappyFranchisee.com’s list of WORST FRANCHISES IN AMERICA (by SBA loan defaults)
Are you familiar with the Fitness Together franchise opportunity? If so, please share your experience, opinions or insights with a comment below.
If you are a Fitness Together franchise representative or employee, please leave a comment or email us at UnhappyFranchisee[at]gmail.com.
The inability to repay an SBA-backed loan (or any franchise loan, for that matter) indicates a serious situation for the franchisee.
It’s especially serious with a franchise investment as high as Fitness Together: between $169,650 to $299,750, according to their website.
It’s likely that Fitness Together franchise owners who received SBA loans may have collateralized their franchise loan with their homes or other personal assets, and many were unable to repay those franchise loans… despite the serious incentive to do so.
Fitness Together
| SBA loans granted since 2001: | 107 |
| SBA loan failure rate: | 36% |
| Sources: Coleman report (SBA) |
The relatively high franchise closure rate of Fitness Together seems to be a franchise red flag.
| Fitness Together Franchises 2008-2011 | |
| Franchises open 2008: | 365 |
| Franchises added 2008-2011: | 272 |
| Franchises ceased operation 2008-2011 | 198 |
| Franchises ceased operation (%) | 31% |
| Sources: Fitness Together 2012 Franchise Disclosure Documents (FDDs) |
According to the 2012 FDD, Fitness Together started had 365 U.S. franchises open in 2008 and had 272 by the end of 2011… a net loss of 93 locations.
However, when you figure that Fitness Together opened 272 new franchises during that period, it’s apparent that the number of franchises that ceased operation is actually 198, or 31% of the 637 total Fitness Together franchises open sometime during that period.
Fitness Together Franchises 2008 – 2011
(Source: Fitness Together 2012 FDD)
| Year | Outlets at start of the year/period | Outlets added | Terminated / Ceased Operation* | Outlets at end of the year | |
| 2008 | 365 | 75 | 40 | ||
| 2009 | 400 | 18 | 72 | 247 | |
| 2010 | 346 | 8 | 44 | 218 | |
| 2011 | 310 | 6 | 42 | 207 | |
| 2008 -2011 | 365 | 107 | 198 | 272 |
* This column combines franchises that were either terminated by the franchisor or “ceased operation for other reasons.” During this period, 92 franchises were listed as terminated and 106 ceased operation for other reasons in the Fitness Together Franchise Disclosure Document (FDD).
Are you familiar with the Fitness Together franchise opportunity?
What do you think accounts for the high SBA loan failure rate of Fitness Together franchise owners?
What steps should Fitness Together be taking to stop further franchise failures?
Has Fitness Together taken serious action to address the problems that led to these loan failures?
Please share a comment (anonymous is fine) or Contact UnhappyFranchisee.com.
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View Comments
We have a flawed system that truly needed help when all our owners had to close. We did not understand the market and could not help our owners. Our first priority was to collect on owners monthly royalties and sue them if they did not make good. The founder is enjoying his money and so are we at corp, forget the owners that closed. It must be about 60 percent of the franchises have closed. In no time will we be closed as a Corporation.