Seeking franchise partners in small towns: Gold’s Gym VP

Operating successfully through sub franchise model in India, Gold’s Gym has spread its presence via city, population and paying capacity. In an exclusive conversation with WI Bureau, Nikhil Kakkar, Vice President - Franchising Operations, Gold's Gym India, disclosed the brand’s expansion plans through franchising.

“We work on revenue sharing model with franchisees, with a payback period of 3-4 years on investments. We do have company owned gyms, but we majorly operate on franchise format. The ratio is 80:20 (franchise: corporate),” informed Kakkar.

Emerging trends
The trends have changed a lot in the past 5 years. We see a lot of young entrepreneurs joining business in wellness franchise, as they want to do something different from their conventional family business. Also, a lot of changes are emerging in tier 2 and 3 cities, where wellness is catching up big time.

Selection criteria
We feel apart from money, Passion is something which drives the health & wellness business. Since franchising is a long term business, we look at Compatibility, Involvement in business & Management bandwidth in the prospective franchisee. We also check the professional and financial background and ensure the same are as per the internal benchmarks.

Top franchisees
The quality is always a mix, the top franchisees are the ones, who follows the S.O.P’s and guidelines set by the franchisor. The reason for top franchisees is not only the revenue or profits they make, but the level of customer service they offer to their clients, standards, hygiene & maintenance levels are other reasons for success.

Franchisee & franchisor relationship
It is directly linked with franchisors health, as a happy customer gets you more customers, and more happy franchisee would get you more franchisees. We have several examples wherein a happy and successful franchisee started with single franchise unit has now opened multiple franchise units.The franchisee & franchisor relationship is very sensitive & requires a lot of understanding, bonding & hand holding, wherein both need to cooperate & accommodate each other.

Support on offer
We assist franchisees in setting up the business i.e. Site selection, Layout planning, Vendor Management, Staff recruitment, Staff training (Sales / operations / Marketing / trainers), manuals training / design. The training for the staff is in our scope for entire franchise term.

Touching untouched areas
Yes, we are expanding big time in tier II & III towns. We have opened franchise in cities like Ajmer, Haldwani, Rohtak, Siliguri, Bilaspur, Jodhpur, Jalgaon in past 6 months and are soon opening in cities like Patiala, Phagwara, Aligarh, Bareilly, Aurangabad & Hisar. We are looking for franchise partners in similar towns across country for future expansion.

Challenges faced
The biggest challenge is quality of service & compliance of terms in this relationship.

Roadmap ahead
We are looking at expanding across country, but small towns are going to play a vital role in the next few years. We are working on a mission to have 150 operational gyms by March 2018 and we are quite optimistic to achieve the same.

No. of operational franchise units

We have 91 operational gyms in the country, out of which 16 are corporate owned and 75 are franchise-owned gyms in 48 cities. We have 20+ gyms under construction in 15 cities, which are expected to become operational over the next 6-8 months.