Opening a franchise requires a significant financial investment often including franchise fees and steep advertising costs. For some, who feel they may lack the financial assets to invest in a franchise, this can be quite daunting.
But it doesn’t mean it’s the end of the road.
If you’ve found the right franchise fit, done your due diligence, and know that the franchise model can help you fulfill your business goals, there are four options you can explore to help finance your franchise. You can learn how Jon-Anthony Lui, a multi-unit franchise owner of Tutor Doctor, got the cash needed for his franchise on the Franchise Canada Chats Podcast:
Probably the easiest and most cost-effective way to fund your franchise is through personal savings. The advantages here are that you’ll know exactly how much money you have to put towards your franchise, you won’t have to pay back any interest on a loan, and you’ll retain complete control. Just be sure you have enough money saved to minimize the risks of personal bankruptcy or debt.
One of the top reasons to go this route is that you’re likely to get a loan as part of a well-reputed franchise than as an entrepreneur starting a business from scratch. But, before you approach a bank for a loan, make sure your credit is in good standing, all the required paperwork (i.e. tax returns, personal financial statements), and a solid business plan in place. It doesn’t hurt to shop around and talk to different institutions about your financing needs.
As a prospective franchisees, you are eligible for a number of government programs so long as you thoroughly understand and meet their qualifications. Keep in mind that the government loan application process can be long, which means it’s worth carefully considering your qualifications for a seamless approval process.
Borrowing from Friends and family:
Finally, you can always turn to family members and friends for funding. The benefit of this option is that you can agree on your own payment plan with family and friends. This is often a more flexible option, as sometimes you can adjust the plan if your financial situation changes. But ensure everything is in writing to avoid disagreements in the future.
Remember to weigh the pros and cons of each financing method. Find out which options Jon-Anthony Lui considered and used to fund his Tutor Doctor franchises on theFranchise Canada Chats Podcast.
Fitness franchises have become extremely popular. In fact, franchise systems operating in the health and fitness sector have grown exponentially over the last five years. Over a five-year period, “Health and Fitness” franchise listings in Canada’s No. 1 franchise directory – Lookforafranchise.ca – have seen a 35 per cent increase.
And it’s showing no signs of slowing down.
“Canadians today are taking charge of their health,” explains Steve Collette, co-founder and CEO of 3rd Degree Training and Actual Nutrition when asked why he believes health and fitness franchises are rapidly growing.
Here are a few reasons why Health and Fitness franchises are booming:
Canadians are becoming more health conscious
According to Stats Canada, more than 16.2 million Canadians aged 12 and over reported participating in at least 150 minutes of moderate to vigorous intensity aerobic physical activity per week. A health and fitness franchise not only actively meets this demand, but also provides its franchisee with the reward of helping Canadians live a healthy lifestyle and reach their fitness goals.
There’s something for everyone
Gone are the days when gyms targeted only a small segment of the population. Nowadays, gyms are attracting more members thanks to an abundance of choice. Members can choose a low-budget gym and still get a good sweat in or they could opt for a smaller, more specialized boutique studio to meet their specific fitness goals. Plus, there are 24-hour fitness centres popping up nationwide to make going to the gym is a lot more convenient for today’s consumers.
Happy, healthy employees
More and more businesses are recognizing the benefits of a healthy workforce when it comes to the bottom line. Many employers are covering the costs of gym services and studios. This has become a great source of supplemental revenue for the fitness industry at large and it’s one of the reasons why this sector continues to thrive.
The benefits of a dues-based business
Whether it’s on a bi-weekly or monthly basis, membership fees and/or annual contracts give entrepreneurs a source of recurring revenue. Combined with non-dues revenue sources typically available at gyms, such as smoothie bars and activewear merchandise, a health club could prove to be a very profitable venture.
All these factors are the key reasons why the demand for fitness franchises is so strong. Losing no stamina anytime soon, it’s definitely an exciting time be in the health and fitness franchise business!
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