Is it possible to turn a sports lifestyle into a successful local business? Of course, it is! NeoJoule is a chain of local f i tness studios that has been developing dynamically for four years. The brand is not afraid of crises and sanctions. The company has successfully survived the lockdown in 2020 and this year's crisis – the business is local, most of the equipment and the construction materials do not depend on the foreign suppliers. Read about how the chain of local fitness studios is developing, how the management company monitors compliance with standards and what awaits the company next in our article.
Today NeoJoule has 14 boutique fitness studios in Russia and the CIS. But it all started with one studio in Moscow, and then the company began to develop as a franchise. Th e company’s revenue in 2021 grew by more than 2.5 times, new studios constantly opens in the new cities, and the company develops more formats for broader audience.
WHAT DOES A STANDARD STUDIO LOOK LIKE?
Studios range in size from 70 to 200 square meters. They are usually located in large residential areas, near potential clients and are part of the infrastructure, along with hair salons, dry cleaners and supermarkets. Each studio has a broad range of diff erent group and personal classes, it is not a monostudio where there is only one type of classes. Franchisees build a schedule themselves and improve it for the cliеnts’ needs: in some cities there are more yoga and stretching classes, in others – dance classes and fl y yoga are more popular. In the spring of 2022 in Moscow we opened the first studio with pylons which became a very popular class among women. Many studios have classes for kids. Some studios have a special area for personal training.
THE BEGINNING OF THE JOURNEY: WHY A FRANCHISE
There has always been a demand for group classes, but mostly such business was opened by yoga gurus and over coaches, motivated by their own interest. NeoJoule decided to build a franchise chain, so that anyone could open a fi tness studio – even with minimal experience in sports and the client business, but with a great desire to grow and develop themselves and its business. There fore, the main goal of the management company is to develop the brand standards and establishment of business processes, the development of training materials and ITsystem. Group classes studios are the “last mile” business. Each city has its own characteristics, its own audience, and trends, so it is diffi cult to manage a fi tness studio in Novosibirsk from Moscow. To make it successful, you need to do a lot of local marketing research, test diff erent trends and learn more about the city, and it is very difficult to do it remotely. Local business is always about building the relationships with clients, developing a local community, and establishing an individual approach to each person. It is much better if the entrepreneur lives in the location where the studio is situated. That is why a franchise is an ideal way to develop such a business. Partners live in diff erent cities, know the details of their location and the interests of their clients much better than the Management Company. In contrast, the Management Company knows a lot about business processes, marketing strategies, analytics and the IT-system. For partners the Management company acts as a third- party mentor, who can advise on what needs to be done from the outside and share what works best for the other franchisеes in the chain. This kind of cooperation is a win-win situation for both parties.
ADVANTAGES FOR THE FRANCHISEES
T h e management company helps both at the construction and launching stage and aft er the opening. Partners receive not just the right to work under the brand’s name, as it happens in many franchises, but also get 24/7 support from the management company.
At the stage of the construction franchisee get:
– assistance in the selection of the premises and help in negotiation of the lease agreement;
– help with the designing of the interior of the premises in the corporate brand style;
– the assistance with the order of equipment for all the classes;
– the formation of a schedule for the local clients;
– help with the local marketing campaign and pre-sales;
– staff search and selection;
– corporate training for franchisees and sales training for their administrators.
After the opening, management company helps franchisees with:
– The development of a local marketing plan and launching of advertising campaigns;
– Work with the CRM-system, operational and fi nancial analytics;
– Setting up all the routine business processes;
– Managing and controlling the staff members.
QUALITY CONTROL: HOW TO CHECK THE STANDARDS OF THE BRAND WITHIN THE CHAIN
Since the management company has gone through the stages of opening and launching studios many times, it has established the business processes that leads to the result. It’s like a detailed instruction: the franchisee goes step by step and gets the result. That’s why it’s important to monitor the work of franchisees on a constant basis. The communication with partners is based on the principles of coaching. Every week, the management company organizes a call with each partner, where the results of the previous week are discussed and the new goals are set. All the information is recorded in a special system.
The next week the process continues. Working according to the principles of “coaching” is a unique feature of NeoJoule, which constantly develops both business and personal qualities of every entrepreneur in the chain.
In addition, a support team from the management company monitors the calls with the clients and administrators’ communication within the studio, reviews the recordings of the cameras in the studios, and checks the inputs of the data into the CRM system. It is also common practice to use mystery shoppers, who come to the classes, mark everything they notice on a checklist and pass this information on to the management company.
All this helps to evaluate the work of the studios remotely, to notice all the errors in the business and understand if something is not working. As a rule, on the basis of the information received the management company makes a list of recommendations which can help to correct defi ciencies.
The management company pays great attention to the operational and financial performance of each studio. It has been using a third- party CRM system from the very beginning, but a lot of fl aws in this system were revealed. Th at’s why at the beginning of the year the management company raised additional funding from an investor for the development of its own IT platform, which would unite all the partners and help to “improve” the necessary performance indicators more quickly, if any of the studios stands out among all the studios in the chain. In the future, the NeoJoule IT system will allow users to compare the performance of diff erent studios online and receive automatic “smart” recommendations to improve the work of each partner.
DIFFERENT BUSINESS MODELS: WHAT AWAITS THE MANAGEMENT COMPANY
For more than 4 years the company has been working in a sole format – a boutique fi tness studio of group classes, focused mainly on the female audience, but the requests of potential franchisees, assessment of local demand and the study of the global market have led to the emergence of three additional formats. Now any aspiring entrepreneur can choose from 4 formats to suit their budget and interests. Each format requires diff erent investments, but in all cases the support from the management company remains the same: mentorship constant feedback, methodological materials, corporate and sales training and assistance at every stage.
NeoJoule (total investment: 2.5-4 million rubles).
This is a multi-format fitness studio for group and personal training. The schedule can be changed depending on the local audience. 90% of the clients of this format are women. Minimal equipment is used for classes – mats, body bars, aerial yoga hammocks, etc. Now NeoJoule studios are operating successfully both in Moscow and in the small town of Kostanay in Kazakhstan. Therefore, such a business can be profi table almost anywhere.
Crossfit Corner (total investment: 1-2.5 million rubles).
It is a Crossfi t studio with the ability to hold group classes in a specially equipped premise. Investments in this format are lower, as it requires minimal construction work: the walls are concrete, loft -style, and rubber fl ooring for stability on training. T h e core of Crossfi t Corner is its short but very intense classes with built-in equipment. Such classes becomes more and more popular among busy men and women who want to get maximum results in minimum time.
Pilates Space (total investment: 4-7 million rubles).
Pilates studio with group classes on special reformers – the main advantage of this studio format. Such group sessions are especially popular across all ages in Europe and US. The total investment of such a promising model is higher because of the reformers, but the management company is working on schemes of third- party financing of the necessary equipment.
Bodybase (total investment volume: 6+ million rubles).
The model of the classical medium size fitness club of 400-1000 sq.m., which includes a gym and a room for group classes. Opening a gym requires more resources, since the area of the premise is larger and it is necessary to buy equipment, but the payback and profi t will be much higher.
WHAT IS THE DIFFERENCE BETWEEN THE MOEDLS?
Each model is suitable for its target audience. They differ in size of investment, design, type of core classes and potential audience. But one thing is common: the support from the management company. Full support from the selection and design of the premise to the scaling of the business into 2-3 and more studios, weekly monitoring and setting tasks, calls with representatives of NeoJoule, development of the marketing plans and working with staff members. Th anks to the management company, fitness studios are developing in different cities of Russia and the CIS, and partners are doing what they love and making money.
PROSPECTS OF BRAND DEVELOPMENT
NeoJoule is developing every year. In the future, NeoJoule will reamin a brand and a community of entrepreneurs, running the studios of diff erent formats with diff erent ideas and for diff erent people. In the future, NeoJoule is also a single IT platform that unites all formats and allows the entrepreneur to work effi ciently, and the management company to quickly monitor the results of each studio. Going down this path is not easy, but the company’s goal – to unite entrepreneurs who love sport and healthy lifestyle and become a leader in the fi eld of franchising in the sports industry – remains unchanged. Despite all the challenges, the company follows its mission – to make sports a part of people’s lives at all age.