MASTER, REGIONAL AND INTERNATIONAL FRANCHISING Global Franchise www.globalfranchisemagazine.com ASIA FITNESS SPECIAL FOCUS: FITNESS: FITNESS WHAT WORKS AND WHO’S WORKING OUT FRANCHISES IN ASIA RIGHT NOW IN SOUTH EAST ASIA South East Asia Report Anyone involved in global franchising will tell you that a franchise that has proven successful in Maryland won’t necessarily succeed in Malaysia. Food franchisors found out early that tastes can vary widely and while a concept itself may be welcomed at an overseas destination, some changes are often necessary to the menu if the brand is to have a long-tern future in the area. You may reason that fitness centers will be exempt from this rule. What can be so different about body toning? It’s true that the adjustments in this field may not be as radical as those you may make in other sectors, but as ever be aware of beware cultural difference. Where people may prefer to exercise on their own back home, there are parts of Asia where the group is the important unit. An increasing number of Western franchises are successfully tailoring their concepts to ASIA local demand and the future of franchising fitness in the East looks strong indeed. ADVERTISEMENT SALES DIRECTOR Mark Forsyth +44 1323 471291 [email protected] Ross GROUP ADVERTISEMENT MANAGER Richard Davies +44 1323 471291 [email protected] SENIOR ACCOUNTS MANAGER Neil Phillips +44 1323 471291 [email protected] SENIOR ACCOUNTS MANAGER Tom Hepton +44 1206 505487 [email protected] ACCOUNT MANAGER Craig Bartlett +44 1323 471291 [email protected] EDITOR Ross Gilfillan [email protected] ART DIRECTOR Lloyd Oxley CREDIT CONTROL Sue Carr +44 1206 505903 PUBLISHER Matthew Tudor globalfranchisemagazine.com South East Asia The Facts & Figures When considering expansion to South East Asia it’s more than helpful to speak to someone with experience of franchising in this part of the world – and you can up your game considerably by opening a dialogue with a franchise consultant who advises brands planning such a move. Edwards Global Services (EGS), publishers of the GlobalVue country ranking tool, are well placed to assist. We asked CEO Bill Edwards why brands should think seriously about expanding here. globalfranchisemagazine.com Global Franchise ASIA hat makes South East Asia a good bet for expanding fitness franchises? India, Indonesia, and ChinaW represent 2.8 billion (40 percent) of the world’s population, with 600 million (21 percent) middle or upper class consumers today. Nearly 90 per cent of the next one billion people to attain middle-class status the popularity of Filipino professional boxer and will be in Asia. politician Manny Pacquiao, there is room for a The newly middle class in Asia are focused on kickboxing franchise. education for their children, healthy, safe food Singapore: This country, which has a large and better health for them and their families. middle class, has long had fitness businesses like This last desire leads to the growing fitness Fitness First, which is not a franchise. Singapore craze across SE Asia. The rapidly-growing is the most developed fitness market and is middle class in SE Asian countries is becoming considered saturated. increasingly health conscious. They are seeking Thailand: The burgeoning middle class here is a structured fitness program from a well-known very open to modern fitness concepts and large brand that they can trust. multi-format gyms are present in major shopping malls. Franchises like World Gym and Tapout Which countries are particularly Fitness were recently in Bangkok at part of a U.S. receptive to this sector? Commercial Service Franchise Trade Mission China: With approximately 300 million middle seeking country licensees. class consumers who seek brands, this country Vietnam: This country has a growing but still should be a major target for fitness franchises. fairly small middle class. The population is There are numerous local small fitness businesses very young on average and open to fitness that try to imitate western brands. franchise concepts. Hong Kong: The density of population and buildings makes for high rents in Hong Kong. Which sorts of fitness franchises Gyms are often on high floors of buildings where are popular in which countries? rents are lower. The standard large-format gyms are present. Indonesia: The world’s fourth most populous Kickboxing, boxing, yoga, pilates, spinning and nation is experiencing a rapid expansion of its similar boutique fitness brands are also starting middle class, which includes over 30 million to draw consumers. Asian consumers like to households and about 70 million consumers. try new and innovative concepts but also tend Japan: With an aging population, Japan has to move on to newer ones when they enter a a need for fitness concepts that require lower country. Beware of being considered a fad. activity levels. But there is a desire for kickboxing, which is reflected by the presence of 9 Round. In what ways do fitness franchises Malaysia: With the recent change of have to adapt themselves to government, Malaysian consumers have become local preferences? more optimistic, which could turn into higher International fitness brands must adapt to consumer spending at fitness businesses. A the operating hours, the consumer age and word of caution: Malaysian franchise laws and buying power and trends of the local Asian regulations prioritize local businesses and make consumer. Asians often like to do things it hard for international franchise brands to enter together in a group so fitness concepts and flourish. with group exercises like Orangetheory The Philippines: The growing middle class is have considerable potential in Asia. quite young in the Philippines and there is a large Probably the number one adaptation number of U.S. fitness brands present in this is a focus on social media marketing, country. Given the boxing craze here based on especially Facebook. globalfranchisemagazine.com How does doing business customers who can afford a fitness in various Far Eastern center membership are likely to countries differ from be high. practises in the Expect your center to be in U.S. or U.K? a mall. Middle and upper class Expect the laws and regulations consumers in SE Asia focus related to doing business to be on large malls which are safe, different than those you are used air-conditioned, have parking to in your home country. Play and feature a wider variety of particular attention to labor laws businesses than western country and regulations which can be so malls. Families especially go different that your unit economics to malls on weekends for their model may require substantial children to play, to shop and to adaptation. Most of all, research meet friends for activities and the cultural aspects related to meals. Asian consumers use fitness businesses in a country. Facebook to communicate with Find answers to these questions: their friends and family more than is it typical for men and women to consumers in western countries exercise together? What clothing do. And in SE Asia the Facebook cultural issues are there, if any. users are often the middle and Are there religious aspects of upper class consumer. conducting a fitness business, such our headquarters’s senior team, as in the Muslim countries? What How would an expanding our trademarked Going Global are the typical business hours Western franchise go about tools, the additional experience for fitness centers? Where are locating a master franchisee and knowledge of our franchise they typically located? Are group in his target country? savvy GlobalTeam™ on the ground exercises culturally acceptable and First determine what are the in 40 countries and our success desired? Can your unit economic requirements of your brand’s taking more than 30 U.S. franchise model work in Asia after adaptations international licensee. What type brands global. EGS also provides needed for high rent costs and of companies or entrepreneurs are franchisors international operations lower average consumer incomes the best fit for your specific fitness support such as new licensee than at home? brand? How much investment will startup, licensee audits be needed for a local investor to and monitoring in country. As What advice would you acquire your country license and well as fixing, terminating when give to a fitness franchise build out your fitness centers? necessary and even replacing planning Far Eastern international licensees. expansion? How can Edwards Global First do on-the ground walking Services assist franchises market research to see who your looking at expansion in this competition is and whether there region? are fitness concepts like yours in the Our company has a track record country. Then determine the size of of successfully taking franchise the consumer base in the country brands into carefully-selected that can afford your fitness brand countries that have the highest membership. Calculate the various potential ROI for the specific costs of building out your brand’s brand. To find, qualify and sign units and the operating costs. Labor international licensees for our costs are likely to be fairly low in franchisor clients we use the over SE Asia but rents in places where 140 years of international operations your brand is located will attract and development experience of Connect with Edwards Global Services. + 19492243896 | Web www.edwardsglobal.com | http://tinyurl.com/yaajvbag globalfranchisemagazine.com Global Franchise Fitness Franchises ASIA 10 Top Brands Asia gets Fit Healthier economies, rising standards of living together with a growing middle class have, in the cases of several South East Asian countries, brought with them an increased awareness and acceptance of goods and services offered by Western franchises. Especially in the urbanised areas, a taste for fitness centers is apparent. Malaysia's Kuala Lumpu alone hosts C.H.I.