July 2013

Hampton Hotels #1 Franchise in the World

Hampton

Entrepreneur.com recently ranked Hampton Hotels as is the #1 franchise in the world operating more than 1,844 United States units as well as nearly 100 additional units worldwide.  Since the first Hampton Hotel opened its doors in Tennessee in 1984, the hotel chain has seen significant growth.  Maybe it’s the free breakfast and local phone calls that makes Hampton Hotels so successful, but most likely it’s the proven brand and operational resources that actually have helped Hampton hotels to reach the top of the Franchise 500 List.

The History of Hampton Hotels

Hampton Hotels date back about 30 years to 1984 when the first hotel, called the Hampton Inn, opened in Tennessee.  As the first mid-price national hotel chain to actually offer free continental breakfast and free local phone calls, Hampton Inn quickly built a name of respect and superior affordability for itself.  By 1999, the hotel chain was acquired by Hilton Worldwide, a major player in the hotel industry.  It was this takeover that would bring Hampton Hotels to its fullest potential over the coming years.

Since the hotel chain gained the interest of Entrepreneur in 2010, when it was ranked 4th overall in the Franchise 500, Hampton Hotels has been voted best mid-priced hotel and has been recognized for their significant efforts to improve franchise owner satisfaction.  The business works hand-in-hand with its franchisees to provide advantageous opportunities in the areas of driving business to the hotel, offering tools to serve and retain guests and providing information that improves management of the business for effective results.

The Details

Thinking about opening a Hampton Hotel?  The franchisor is seeking additional franchise units worldwide, but it will take a total investment of at least $3.6 million to get started and there is a franchise fee of $65,000 as well as ongoing royalty fees of 6%.  The franchise term for a Hampton Hotel agreement is 22 years and it is fully renewable.  Financing is handled by third party vendors rather than in-house.

The chain does provide ongoing support in the form of newsletters, meetings, and toll-free phone line support.  The franchise also supports franchisees by offering general manager training and various other training options at the headquarters.  Marketing support including co-op advertising, national media and regional advertising.  Ongoing support along with a proven brand have helped Hampton Hotels to grow into a prospering chain that spans internationally.

Resources:

http://www.franchiseexpo.com/franchises/hampton-hotels
http://www.entrepreneur.com/franchises/hamptonhotels/284276-0.html
http://www.franchisebuy.com/franchise/Hampton-Hotels

Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.

How Planet Fitness Became the Leader in Fitness Franchising

Planet Fitness

Based in Newington, New Hampshire, fitness franchise Planet Fitness has gone from a small, local based chain to national leader in fitness franchises. With an astounding 4.5 million members across 47 states the popularity of Planet Fitness has grown tremendously. And it doesn’t look like this growth will be slowing any time soon; it is currently the fastest-growing full size health club franchise in the country. In 2012 Planet Fitness became the national gym sponsor of the widely popular NBC program “The Biggest Loser” and the franchise celebrated the opening of their 700th location in November of 2013 in Stockton, California.

So how did Planet Fitness get so big? Well, the story starts in 1992, when brothers Michael and Marc Grondahl took over a struggling Gold’s gym franchise in Dover, NH. Unfortunately, due to poor location and lack of parking, they were eventually forced to close that original location. But that didn’t stop Michael or Marc. They went back to the drawing board and started again in 1993 with a new location named Coastal Fitness. To help with managing operations, they brought on a third partner, present CEO Chris Rondeau.  They would eventually buy the name “Planet Fitness” from a Florida gym in 1994.

Given the highly competitive nature of the gym business, the partners made a bold move to target an entirely new demographic… people who wanted a place to casually exercise without all the serious body-building types and judgemental attitudes.

To accommodate this new audience, they streamlined operations and eliminated the serious weight equipment and focused more on cardio machines such as treadmills and stationary bikes. Over time, this hassle-free environment became known as the “Judgment Free Zone,” designed to make those new to working-out totally comfortable.

After quite a bit of price experimentation from $99/year to $35/month, they ended up offering gym memberships at dramatically reduced prices of $10/month in order to compete against bigger, better-known brands. This low cost membership and unique environment proved to be a truly revolutionary business model in the fitness world.

In addition to the low-cost $10 per month membership, Planet Fitness offers a variety of other benefits including membership appreciation gestures such as free pizza on the first Monday of every month, and free bagels on the second Tuesday of every month, being open 24 hours, no contracts, no commitments, no salesmen, free training, 30-minute workout rooms.

After a decade of successful operations, the company then embarked on a national franchising plan in 2003. The fitness industry as a whole has seen rapid growth in the last ten years or so, with global gym membership reaching close to 50 million, and Planet Fitness is right on the cusp of that trend. Today, they are actively seeking new franchises throughout the United States and Canada, ranking in at #25 on the list of fastest growing franchises. If you are looking to invest in a fitness franchise Planet Fitness is one of the best options out there. The franchise fee is $10,000 with an ongoing royalty fee of 5% over the course of the ten-year franchise term, which is renewable.

All in all, it looks like Planet Fitness’ success will only continue to grow. “As we celebrate our 10th year of franchising and the opening of our 700th club, we’re excited to continue to open new locations and provide even more people with access to affordable, high-quality health clubs,” Chris Rondeau, the franchise’s chief executive officer, recently explained. “Our unique, non-intimidating environment truly creates an atmosphere where everyone can feel comfortable.”

The Keys to Planet Fitness Success?

Specialized Knowledge/Proven System

For starters, the original Planet Fitness owners were operators themselves and operated several gyms first-hand. This personal experience provided Planet Fitness ownership and team members with the “specialized knowledge” to build-out a scalable, franchise-able system. Such operations experience provided Planet Fitness corporate members with the insights and experience to understand the dynamics of leases, construction, gym operations, staffing, member issues, memberships and product offerings, marketing and sales, legal and other business areas critical to franchise system success.

The Right Team

With a seasoned, experienced team Planet Fitness was able to crossover into franchising much easier than other franchises with less hands-on experience. As well, Planet Fitness really did have a “system” that could be rolled out successfully — and they knew it because their team had already opened and operated multiple gyms previously for over 10 years.

Smart Marketing

A keen sense for marketing exposed a large, untapped market of casual fitness individuals that were often intimidated and therefore uninterested in gyms. By introducing a low-cost membership and the “Judgement Free Zone”, Planet Fitness was able to directly target and attract a huge following of new, atypical gym members.

Planet Fitness fully committed to this “non-gym” audience and successfully launched national advertising campaigns that specifically scoffed at typical “gym rats.” Such edgy campaigns were wildly successful and clearly touted that Planet Fitness was truly the home of “no judgement.”

Combining these marketing efforts with the national recognition that came with Planet Fitness’ involvement with “The Biggest Loser” created a recipe for franchise awareness and market success.

Business Model

By pricing recurring monthly memberships all under $20, Planet Fitness made their gyms accessible to most everyone. As well, most members don’t work out frequently, but are willing to maintain their membership anyway because it’s so affordable. Planet Fitness also went against the grain and focused only on the bare essentials clients wanted in equipment and services.  This allowed for streamlined operations and equipment purchases.

National Trends

Of course, it always helps to have some national trends driving interest in a product or offering. And the trend of an aging population and increasing rates of obesity are now encouraging people to get fit far more than ever before.

Support

No franchise system will be successful without dedicated support. Planet Fitness offers a range of franchisee support such as:

  • Training: Available at headquarters: 2 weeks. At franchisee’s location: as needed.
  • Ongoing Support: Newsletter, Meetings, Toll-free phone line, Grand opening, Internet, Security/safety procedures, Field operations/evaluations, Purchasing cooperatives, Lease Negotiation
  • Marketing Support: Co-op advertising, Ad slicks, Regional advertising.

Commitment

Given the success of Planet Fitness, it’s clear to see the brilliance of this unique business model after 20 years. But the truth is, it wasn’t always so clear what the future of such a novel concept would be.  It took tenacious confidence and commitment of the original ownership team to stick with this unique and unproven gym model.  And in that commitment lies the real key to the success of Planet Fitness.  Marc Grondahl once said, “Just be true to yourself. If you have an idea, even if it is an unpopular idea, be tough and don’t give up. Don’t be afraid to do things differently.”

References:

http://www.planetfitness.com/health-club-franchise

http://en.wikipedia.org/wiki/Planet_Fitness

http://www.nhbr.com/June-3-2011/Q-A-with-Michael-Grondahl-Co-founder-of-Planet-Fitness/

https://www.openforum.com/articles/mark-grondahl-of-planet-fitness-how-a-lean-business-model-became-a-franchise-heavyweight/

Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.

3 American Franchises Redesigning Dessert

If you have been eating the same bowl of vanilla ice cream every night for dessert since the 1980s, it is time to spice things up. And luckily, when it comes to desserts, creativity is in. Florian Radke, owner of a vegan bakery in San Francisco, insists that innovation is the latest trend when it comes to the dessert market. “Finding your niche and growing it, that’s the whole beauty of the new dessert market,” he explained. “I think you can see the trend in all those local bakeries that have lines out the door. Customers are realizing that if they’re going to treat themselves, they ought to do it right. There are lots of businesses taking chances, and that’s great.” Check out the three American franchises that are revolutionizing the dessert landscape.

Top Pot Doughnuts. How good is Top Pot Doughnuts? So good that in 2011, Seattle Seahawks player Golden Tate allegedly broke into the store at 3 a.m. to get one of its amazing masterpieces. Praised on Food Network’s Cooking Channel and on the Travel Channel for its “hand-forged” doughnuts, Top Pot might just have the best doughnuts in the country. Even Starbucks seems to thinks so. Just a few years after opening, Top Pot Doughnuts was supplying roughly 13,000 of the coffee giant’s locations with a range of baked goods, including old fashioneds, apple fritters, and chocolate-cake doughnuts. But now, Tot Pot is ready to stroke out on its own. By the end of this year, the brand will have 19 locations open in Washington and Texas, and the brand plans to start franchising soon.

Cinnaholic. It’s true: Desserts really can be healthy, especially when they contain no animal or dairy products, as is the case with all of Cinnaholic’s tasty treats. Originally a local business in Berkley, California, led by husband and wife team Radke and Shannon, this vegan bakery has big expansion plans in the works. Cinnaholic garnered local fame with its now beloved customizable vegan cinnamon roll. The business was born out of a seemingly simple quest to craft the perfect vegan cinnamon bun. An accountant and baker, Shannon chronicled all of her vegan cinnamon bun attempts on her blog Confessions of a Cinnaholic, and when she finally perfected the recipe, the couple opened a store. Soon, they had lines winding around the block. 

The couple is now working with the Atlanta Franchise Group in hopes of expanding to 100 locations. Amazingly, many of the customers don’t have any idea that the bakery’s products are vegan. “I don’t believe you can just put a product on the market because it’s vegan,” Radke noted. “It has to be outstanding. It’s important to us that the product is amazing. We don’t advertise the fact, but the vegan community knows we’re here.”

“It took a while to find the trick, but we’ve made the recipe so simple,” he added. “That’s the beauty — we can easily teach it to our franchisees.”

Camille’s. At Camille’s, ice cream bars don’t come out of the box. Ice cream is made fresh every single day, blast frozen in a customizable freezer imported specially from Europe. Run by husband and wife team the Gregorios, customers at Camille’s can pick out their base bar of ice cream, frozen yogurt, or fruit sorbet. Then an “artist” will dip it in chocolate and dress it with anything you can imagine, from sprinkles and nuts to coconut and crushed cookies.

 

Sources: 

http://www.entrepreneur.com/article/237449

Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.