As the fitness industry continues to evolve at a breakneck pace, CEOs of fitness franchises find themselves navigating an increasingly complex landscape in 2024. From technological disruptions to shifting consumer preferences, the challenges are as diverse as they are daunting.

Real Estate Strategy and Market Saturation

One of the most pressing issues facing fitness franchise CEOs is the ongoing challenge of securing prime locations for their outlets. Anthony Geisler, former CEO of Xponential Fitness, underscores this point: “Location is so incredibly important when it comes to launching and maintaining a successful fitness business. This has always been a challenge, and it will remain one for the foreseeable future.”

In many urban areas, the fitness market is approaching saturation, making it increasingly difficult to find locations that offer the right mix of visibility, accessibility, and demographic fit. CEOs must now think creatively about their real estate strategy, considering non-traditional locations or exploring partnerships with other businesses to secure prime spots.

Jim Rowley, CEO of Crunch Fitness, emphasizes the opportunity presented by retail closures: “With the state of the economy and major retail closures, landlords and developers are looking to rebuild these emptied retail spaces. This is an opportunity for Crunch, as fitness centers not only fill these vacant spots but drive impressive foot traffic to surrounding businesses, making them a sought-after tenant.” This approach allows Crunch Fitness to capitalize on available prime locations in the competitive real estate market.

Moreover, the challenge extends beyond just finding the right location. CEOs must also grapple with rising real estate costs, which can significantly impact a franchise’s profitability. Balancing the need for prime locations with financial sustainability is a delicate act that requires careful analysis and strategic decision-making.

The Digital Dilemma: Integrating Technology While Preserving Community

The rise of digital fitness solutions, accelerated by the COVID-19 pandemic, presents both opportunities and challenges for fitness franchise CEOs. On one hand, digital offerings can extend a brand’s reach and provide additional revenue streams. On the other, they risk cannibalizing the core business of physical locations.

Anthony Geisler offers insight into this challenge: “There’s a simple reason for this: It is very hard to build community digitally. People are social animals. They get better results and more satisfying workouts when they’re in the same room together and can create community.”

The key for CEOs lies in finding the right balance – leveraging technology to enhance the customer experience and extend the brand’s reach, while still emphasizing the unique value of in-person workouts and community building. This might involve developing hybrid models that seamlessly blend digital and physical offerings, or using technology to augment rather than replace the in-studio experience.

Alison Corcoran, CMO and President of DentaQuest Partnership, emphasizes that “technology is not a driver, but it is critical in making it happen” when balancing digital and in-person efforts. This means that while the digital tools are essential, the focus should always remain on enhancing community connections and customer engagement through personalized, human experiences​.

Beyond just offering digital workouts, CEOs must also consider how to integrate technology into every aspect of their business. Geisler predicts, “We’ll see better technology enter the marketplace and make a significant impact in areas like point-of-sale and CRMs. You’ll see the integration of AI into customer management and other functions.”

From AI-powered customer service to data analytics for personalized workout recommendations, the potential applications of technology in the fitness industry are vast. CEOs who can successfully harness these technologies while maintaining a human touch will be well-positioned for success.

Navigating Health Trends and Regulatory Challenges

The fitness industry doesn’t operate in a vacuum, and CEOs must be prepared to adapt to broader health trends and regulatory changes. The emergence of weight-loss medications like GLP-1s, for instance, could significantly impact how people approach fitness and weight management.

CEOs need to consider how these trends might affect their business models and be prepared to pivot accordingly. This might involve developing new program offerings that complement these medications, or focusing more on overall wellness and strength training rather than just weight loss.

Additionally, regulatory challenges – from data privacy concerns to labor laws – continue to evolve. CEOs must stay abreast of these changes and ensure their franchises are compliant while still delivering value to customers and franchisees.

Bryan O’Rourke, CEO of Core Health & Fitness, emphasizes the importance of remaining agile in response to the evolving regulatory landscape and shifting health trends: “Navigating volatility and ensuring long-term growth requires constant innovation. Fitness businesses need to stay ahead of the curve by incorporating wellness offerings, adapting to consumer preferences for personalization, and understanding the regulatory pressures that come with running a modern fitness operation.” He highlights how trends like personalized wellness services and advancements in technology will shape the future of fitness​.