Post by cheryl on Oct 20, 2018 22:03:02 GMT
I had a discussion recently with a local Subway owner. We discussed several topics regarding franchisors and initiatives. I was talking about the redecorating, also known as modernizing, but better described as redecorating. He mentioned that Subway mandated him to update the look of his club with new lights, flooring, wallpaper, etc. He said that the cost to do all of that was about $40K. I told him that this was similar to what we were facing. he didn't really see this as out of the ordinary. However, later he mentioned that Subway paid for half of his remodel. He assumed snap was paying half of the cost. Absolutely not!! They pay $0. In fact they collect money from the contractors and suppliers on what you spend and you receive no bulk pricing. At that point he understood my frustration and said he had several franchises over the years and never heard of such a thing.
He also mentioned that Subway takes 5% of his gross sales as his franchise fee. At first I thought that sounded high, but realized later that 5% would be less than what I'm paying now. Additionally part of that 5% goes toward national marketing. That's TV ads, radio ads, etc. Again he was dumbfounded that snap provided no national marketing. Then he sat back with arms folded and asked, "so what's the benefit of being a franchisee?". Truthfully? There really isn't any reason to buy a snap fitness franchise. You're bullied to to buying substandard software at an extravagant price, doing all of your own marketing and running your club. Oh, and that's one of the other things he mentioned. Subway actually helps him to find sandwich artists. They called him while we were sitting down and gave him all the details of a prospective employee.
One thing he mentioned is that if he decided not to renew his contract and ran as "Jake's subs" his business would fall off dramatically. That's not the same with snap. I could call it "Cheryl's unique fitness club" and it would have little to no impact.
It all boils down to this: He feels Subway has his best interests at heart and is doing what they can to help him out. I feel that snap has corporate's interests at heart and is doing everything they can to benefit corporate. We should be seeing benefits from being a snap franchisee. "Hey we're rolling out MyZone. Normally their monthly fee is $150. However, since you're a snap franchisee your monthly cost is $95. Oh and that top level package from MindBody... Instead of $200 per month we have that at $100/month for you. That's one of the benefits of being part of the snap fitness brand. We want to see you succeed, these are tools we believe will get you there and we're using our size to get you those discounts!!!" Sadly, any benefits in pricing for size are sucked up by corporate. Franchisees get nothing any better than what they could have negotiated on their own as a single club and in some case they've negotiated better pricing. I was stunned recently when a friend who owns a gym showed me the pricing he received from FOD. It was better than what I get. Wait, isn't that our parent company. How does someone with 2 clubs get better pricing on a product (both acquisition and monthly) than me? It's simply snap figuring that they can force you to buy something at $X and you're mandated to do it. Oh, btw the friend went with Les Mills.
Snap needs a change in the corporate ranks. A change which would actually put franchisees first and not just use it as a catch phrase. One thing that came through in talking to several corporate employees at the convention is that they truly want to help franchisees, but the corporate ranks have one goal and that is to benefit corporate. If it means f'ing over the franchisee well then so be it. It's corporate first and maybe the franchisee can come in somewhere in the top 10.
Personally I think both peter and john have to go. In talking with them i get a sense of contempt for the franchisee and an absolute disregard for anything which would benefit, or at least not be detrimental, to the franchisee. They both come off as bullies with big egos and no empathy for anyone but corporate and themselves. It's really sad. I've been with 3 different fortune 100 companies and never got that kind of feeling about the corporate brass. I'm hoping an upswell can oust peter and john, but I fear that those who truly have the franchisees' best interests at heart will become discouraged by them and leave.
