06 May 2020
Pure Gym reveals trial of global franchise model
BY Liz Terry
Budget operator, Pure Gym, has revealed it’s trialling a franchise offering to grow the brand globally.
Speaking at the Fit Summit in Singapore today (5 May 2020), Pure’s chief strategy officer, Francine Davis, said the company is looking for master franchise partners in countries such as China, India, and Japan. She said Pure was testing the model and the first couple of deals had already been agreed.
Davis explained the move is part of Pure’s expansion strategy, saying: “We could see many areas across the world that are underserved by good quality, low-cost fitness with no contract models. We think Pure Gym has a successful model we can transport into other areas of the world and this has led us to create this franchise offering.”
She said Pure had considered expanding with direct development, but ruled this out as too high risk and has looking at the option of going down the franchising route instead, as these opportunities are areas the company has no experience: “We may know the environments,” she explained, “But we don’t know the infrastructure and don’t have people on the ground.
“We want to work with master franchises rather than individuals,” said Davis, “As we’re not set up to deal with individual franchisees. We’re looking for strong partners that are well capitalised and have good real estate experience.”
Davis said Pure believes its model is well-differentiated, saying: “Anyone can build a gym – wherever you go around the world, the physical proposition is similar – maybe different wall covering or different kinds of equipment – however, it’s the things you overlay that really move you up a level in terms of success.
"This includes things such as the technology-led operating model and the ability to manage and optimise revenue and yield, which gives a good return on capital and high margins and ratios.”
She said that pre-COVID, Pure had a roadmap to get 500 clubs open in the UK and to expand globally through acquisition and franchising.
Pure was on-track with this earlier in the year, having acquired Fitness World in January to kick off its international ambitions, before the pandemic struck.
She addressed the issue of the company not currently having an income stream, due to closures, saying: “ One might say, having a no-contract gym business is not the best thing right now, but we believe the market will come back and come back even stronger for our low-cost offering, due to the increased focus on fitness and health."
Davis said Pure has a team of 50 in-house developers working on its website and app and that the app already has features built in to indicate the number of people using the gym at any one time. This means once the clubs re-open, consumers will be more confident to use them, as they can see the number of people working out via their app before deciding to attend.
She predicted people will also use the gyms more at off-peak times coming out of lockdown, ‘flattening the curve’ of peak time usage, and optimising Pure Gym's long opening hours.
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