norma
New Member
Posts: 2
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Post by norma on Mar 23, 2017 3:07:15 GMT
Hello!
I am new here, and am pretty close to purchasing an existing Snap Fitness. I've been reading through this forum, and it seems like there are many unhappy owners. Are there any happy owners on here?
The club I'm looking at seems to be pretty solid and consistent as far as member numbers and profit goes. I would love some advise from current owners.
1. How long have you owned your club(s) and are your profitable?
2. Has your club had consistent membership numbers?
3. Would you recommend purchasing an existing profitable Snap Fitness to your closest friend?
4. Do you have any advice for someone who is ready to buy their first existing Snap Fitness?
5. What do you wish you knew before becoming a Snap owner?
Your response is very much appreciated! I am excited about this new business adventure, but after reading through this message board I am feeling like maybe this could be a bad investment.
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Post by cheryl on Mar 23, 2017 14:13:26 GMT
For me it's a quality of life issue. Buying into snap fitness is similar to buying into a communist way of life. 1. You are forced to buy substandard products, and pay a premium price for them. (Similar to Russian made autos) 2. Support is atrocious. Imagine if every time you had a problem you had to call the DMV for help. a. support is only available 9 to 5 Central standard time (or something like that) and Mon through Fri b. the time for them to get back to you is 72 hours c. When they do get back to you it's typically one of the following i. We filed a ticket on it ii. It must be something you're doing. No one else is having that problem (then come on here and find out it's a widespread problem) iii. That's the way we designed it 3. Almost every initiative taken is for the benefit of corporate, not the franchisee 4. You're forced to let people use your club for free for 30 days. The only check that snap hq does on the person is check their email address. They don't check physical address, name, DOB, etc. This lets people use your club for 30 days whenever they like. Catch them pulling this? Well then you're the one who has to handle it. Corporate won't deal with it. They make the mess, you clean it up. 5. Currently the club you're buying is profitable. How much do they make per year with enrollment, program, initiation (or whatever they call it) fees? Are you aware that those fees are subject to going to $0. Not because of anything the club has done, but by steps corporate has taken. We make between $7K and $10K a year on this. This is now subject to going to $0. I had someone come in the other day saying that he signed up online, because by doing that it allowed him to avoid those charges. Unsuccessful clubs almost always waive those charges. Successful ones are able to charge that. Snap will tell you that you have to upsell them. Really? On what? Training? Myzone? One size doesn't fit all. Again, this is a communist mindset. 6. Unfortunately Snap isn't an expert or leader in any field. Typically they're followers and are jumping on the bandwagon years after it's started moving (eg Myzone, A front desk, owner participation, fitness classes, etc) 7. How is retention? Great. The only area where we hurt is losing members because their credit card info changes. The account goes delinquent. The member doesn't call or when you call them they tell you to go ahead and cancel the account. What makes the whole situation infuriating is a. snap could update the billing automatically, but they choose not to. Other billing systems do this, why not snap's? b. snap said they'd roll this out at the end of Q1 of calendar year 2017. That's by the end of March. Wanna place a bet on whether this is true? c. snap charges you for every account that goes delinquent. It's their recovery fee, which is an auto dialer and spam email they send out to the delinquent member. It almost never gets the person to update. The responsibility is still on you. In summary, snap doesn't give a crap about your retention numbers. Their concern is making additional revenue off of the franchisee one way or another d. So, you don't collect any money on that delinquent or suspended account. It falls to reason that snap wouldn't collect anything either, right? Nope. They still treat them as an active member and you're charged for that person in your member maintenance fee.
I would NEVER have opened a SNAP if I knew what type of people in corporate I would have to deal with. I would have just opened cheryl's gym. If you decide to take over that snap I'd modify your agreement to: 1. Make any corporate initiatives opt-in (eg Fitpass, 30 day trial, recovery fee, etc) 2. Charge a reasonable price for shitware ($55 is even overpriced for their awful attempt at this) 3. Only agree to 5 years 4. Remove the non-compete clause.
If they don't do these things I'd run, not just walk, from them as quickly as possible. Talk with other snap franchisees in the surrounding areas, but make sure they're not corporate stores. Look for someone who's run their club for 3 or more years.
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Post by cheryl on Mar 23, 2017 14:26:32 GMT
Here's a question for you to ask snap:
What benefit do they bring to you as a franchisee?
The only benefit I see is the ability for your members to use other Snap fitness locations, and typically my members who come back tell me how bad the other snaps are. From time to time I do hear that the other snap was nice, but it's about 80/20.
If you've ever worked out at a club you already know just about everything you need to know. Snap is only going to try to sell you things which benefit them and you'll rarely see a discount because you're a snap franchisee. Typically you can negotiate a better deal by yourself on equipment and anything else you need to run a fitness center.
NOTHING snap has is proprietary or confidential. The only thing you get as a franchisee is the frustration of having to deal with communist minded hq.
HAIL TO WONDERFUL AND ALL POWERFUL LEADER!! Oh, and read through your document, you'll find a part where is says you can't make negative comments about snap or lift brands. Ask yourself why that's in there.
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Post by Tired Franchisee on Mar 23, 2017 15:00:44 GMT
Sadly... i have to fully agree with Cheryl. Been in for well beyond 3 years and overall opinion is this system breaks FTC laws and only care about you til you sign their Contract. I would NEVER recommend friends or family or Foe to sign A Snap Agreement.
I would also add : Negotiate an Exit the Snap system clause with for example a 6-12 months notice for any reason that is not subject to obligations of a non compete. Make sure the languages is clear that you may remain in the fitness industry After removing their logo and name etc as that is ALL they have that is propriety. make sure it is noted you wil not be subject to any fine or fees etc should you exit early.
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Post by youkiddingme on Mar 23, 2017 16:16:42 GMT
+1 on everything Cheryl says. Snap is over 40% owned by VC's, and you know what VC's care about? Putting $ in their pockets at the expense of everyone else. 10 year FA, that says we (corporate) can change what we feel needs to be changed at anytime. Exit clause, read that one carefully, they have right of first refusal to sell your gym at a price THEY determine to whom they want. They will legally threaten you if you don't smile along with them. We (franchisees) are ATM's to them. Snap locations in the US, are in declining #'s, Snaps growth was exponential in 07,08 and 09 we are coming up on the 10 year anniversaries of those franchises, how many will opt out and just walk (run)away. VC's don't like declining revenue, how many new fees and mandatory programs will they implement. They will threaten and intimidate current owners into giving their gyms away as they find new suckers... er I mean owners. Pay attention to what Cheryl says, spot on.
Now what if some low price competitor comes near you in 1 or 2 years, you signed a 10 year agreement. They will take at minimum 30% of your membership, the enrollment fees you were charging will most likely have to be adjusted down, your monthly dues rate also. Employees will become frustrated with the software and lack of support and quit, turnover will be high, can you maintain a high level of customer service in that environment? Your fees to corporate will continue to escalate up, as will your rent and other expenses as your revenue drops. Be very careful.
Our business peaked many years ago, low priced competition moved into town, rent is high, fees go up. 30 day free use of your gym with low conversion rate (corp makes $9 on this at least, so they like it). We stopped the bleeding but profitability is way down from years past; obamacare is our friend. I could not in good conscience recommend anyone to buy a Snap fitness. Over promise under deliver, that's the Snap way.
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Post by greenergrass on Mar 23, 2017 17:46:33 GMT
I would not recommend this franchise to anyone. It is a money pit.
Membership numbers and expenses can be manipulated when someone is trying to sell. So it's important to really dig into the details.
*There may be active but inactive members due to bank declines. ex Steve Smith account has been delinquent due to CC not updated. But account kept active. *Silver Sneakers - There may be a number of these that count toward the total number of members. But there is no payment when they don't use the gym. *If the current owner has more than one location, they can direct expenses to the one they are not selling. And they can have all the memberships entered into the location that is for sale. Eventually the members will be transferred out but the club for sale has two to three months of dues before the transfer.
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Post by fishstyxx on Mar 23, 2017 21:19:06 GMT
I would agree with asking Snap what they bring to the table. You're bringing the money along with your time and resources. You'll be working outside of Snap's support hours, so why shouldn't they? What expertise do they believe they have? Whatever answers they provide you bring them back to this post and ask what the experience has been with their expertise in the fields they mention.
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Post by Dale on Mar 23, 2017 21:45:05 GMT
NORMA!!! For the love of God do not do it. Look at the dozens and dozens of threads here and the hundreds of comments. Are any positive about our experiences? No they are not.
Look...competition is crazy in this industry. Couple that with the non-existent support from Snap corporate and your decision is a no brainer.
Add the fact that corporate took our member management/billing system cost from $45/mth a couple years ago to $185/mth now! ($1,680 annually). Multiple new monthly fees during the same timeframe totaling $200-$300mth for services we don't need.
I could go on all day but let's leave it with this. Corporate could have helped us immensely by reducing the number of declined credit/debit cards each month over two years ago (translates to $ directly in our pockets), but instead they put time and money into developing a program which charges us money for each and every declined credit/debit card! Imagine getting a report each month of 30, 40, 50 declined credit/debit cards and in addition to not getting this revenue YOUR corporate leadership takes money from you for each decline!!!!! UGH!
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Post by neglected on Mar 23, 2017 22:16:20 GMT
Norma,
Take heed and do NOT get yourself into the regretful mistake of becoming a Snap Fitness franchisee.
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Post by yankedchain on Mar 24, 2017 0:23:57 GMT
Heya Norma,
I wouldn't buy again myself.
Here are a few tips should you decide to go ahead with your purchase. I have learned these over time through lots of head banging.
1. Allow Snap employees to play you by letting them know that you think it is a privilege to own a Snap Fitness. 2. Allow even the lowest level employee you deal with at Snap Corp to think it you are "green". Never let them think you know anything. 3. Assume everyone you talk to at Snap is trying to "help you". That is code to buy something else from LiftBrands. 4. Remember that most of the BPS employees have been with Snap for less than a year and none of them have owned anything in the fitness industry. They have been personal trainers, front desk, and general managers. Don't think strategy brainstorming when you talk to these guys.
Best luck with your decision.
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Post by determined1 on Mar 24, 2017 12:56:17 GMT
Run the numbers to make your decision. Using Snap's "average" numbers here's what I show for an "average" club
Revenue = 15,000 Declines =(1,500) PT = 1,500 - Dale forgot that part Gross = 15,000
So, let's say you lease a 4,000sf building. I'd estimate an average rent at about $2/sf, so your rent is $8,000 Snap fees = (1,800) Processing fees = (500) Electric = (1,000) Employees = (1,600) This is if you're only staffed 40 hours per week and pay your front desk staff $10/hour Consumables = (100) Paper towels, paper, cleaning supplies,etc Repairs = (200) This is assuming equipment is all paid for and out of warranty Service providers = (300) TV, Internet, phone, etc
That leaves you a net profit of $1500 per month or $18K per year
If you have classes you'll have to pay instructors. Using Fitness on Demand? That's another $150
As cheryl mentioned the new fit pass can wipe out all of your enrollment fees. Don't trust Snap's enrollment fee numbers. I noticed that what they show for us isn't even close to what we make on enrollment. The $15K listed includes enrollment, if that goes away this number is closer to $14K and your profit drops to $500/month.
To those analyzing the expenses I do realize that I've low balled many of them. It's to provide a best case scenario.
Don't expect ANY help from snap corporate, the only thing you can expect from them are roadblocks, excuses and increased costs.
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Post by Amy on Mar 24, 2017 13:46:11 GMT
determined1...well said. I concur with your analysis entirely.
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Post by Disillusioned on Mar 24, 2017 14:37:25 GMT
I didn't see where Norma said the club she's looking at has been brought up to the new corporate standards? If the club needs to be "modernized" then there is about 15K to 20K she has to spend right off the bat. That stupid desk is over $1K just by itself. Which for anyone that bought it, it should have come with a free head exam!
Just my 2 cents (which is all I have left)
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Post by patdaddy4 on Mar 24, 2017 18:36:27 GMT
Norma, A lot of what you read here about expenses & fees increases is true. Business expenses have gone up over the years higher than they should have probably because net new Franchises growth has leveled off and Corp Snap needs to hit it's numbers etc. Also, note that this forum is made up mostly of disillusioned folks who are fed up. I'm sure there a plenty of other owners out there that are doing just fine, that don't belong to this forum. Try to reach some of them. By the way, the rent numbers in a previous post are a bit high at least for the mid-west. I pay a range of rents from $1600/mo-$5400/mo for around 4000 sf. It is your biggest expense typically and can make or break your deal.
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Post by snaplongtimer on Mar 24, 2017 19:21:24 GMT
Still considering the purchase? Have the owner print out membership trends for the club. He can do that for the past 3 years and you can get an idea about stability over time.
Also, greenergrass mentioned what I was thinking about expenses. Especially, if the club owner owns more than one. Don't settle for standard p&l's. Get a detailed look at expenses for at least last year and see if it makes sense. Hiding expenses are a common practice when one wants to beef up the bottom line for selling purposes. Consider the things Determined listed above especially equipment repairs. Treads and bike repairs are usually the most costly. Make sure something is listed.
Disillusioned is correct about modernization fees...20k+ within 6 months owning it if it hasn't been done already. Plus License 30k...ugh. 50K on top of purchase price...yuk.
Oh...ask for an example of a corp invoice (charges by corp to his club) for a month. Then ask where are the details of the mystery charges listed. That'll be a good conversation.
Many years ago, I got sucked in by very successful clubs owners speaking on the weekly conference calls. Truth be known, very successful clubs are far and few between. I always tell people, that ask about owning one, do your homework and open your own club. I won't do it again.
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