With the pandemic forcing the closure of many retail spaces—including competing gyms–there could be hidden opportunities to snap up prime real estate if you’re considering becoming a World Gym franchisee or are an existing franchisee hoping to expand.
“Someone’s problem can be someone else’s opportunity,” says Jeffrey D. Mintz, principal at Cresa a commercial real estate firm that consults with World Gym franchises. “At the same time, I remind people that they have to do their research. It’s possible to make a great real estate deal that’s a bad business deal.”
Here are some strategies to make the most of your potential real estate possibilities.
- Know your target market—and whether it’s changed.
If you’re looking to upsize or relocate your space, make sure you have an updated view into your ideal clients and whether their habits have shifted. For example, if you’ve had your eye on a spot in the downtown core to serve workers as they leave their offices, note that their patterns likely have changed. Many companies have pivoted to a remote or hybrid model, meaning that they might not be near the office during key workout hours—if at all. By contrast, if you’re positioned near a neighborhood, you may be able to capitalize on clients who are working at home and have more flexible schedules that enable them to more easily drop by for a workout.
- Look at your competitors who might be changing their business model.
Many gyms could be downsizing as they move their offerings to a virtual environment or cope with dwindling membership. “There are many operators, including franchisees of the larger franchisors, that are shuttering their locations and that leaves lots of opportunities,” Mintz says. In fact, just because the space is no longer right for them doesn’t mean it might not be right for you. The key is to do lots of research to find out why they’re leaving and if the reasons would impact you as well.
- Look for lower rates in better areas.
“There can be a flight to quality,” Mintz points out. “If better buildings are hurting, the right landlord might be interested in dropping rent dramatically.”
- Consider malls and other retail areas.
Many malls and retail centers are suffering as brick-and-mortar stores consolidate or close their doors as more shopping moves online. “There are some shopping mall operators who are hurting, and having another business come in can be appealing as it makes the complex more vibrant,” Mintz says. “Getting more live traffic can be a silver lining to these dark clouds.”
- Ask about a“pandemic clause.”
The last thing a gym owner wants to risk is having their facility close in another government-mandated shutdown. According to the Wall Street Journal, “Because many insurance policies didn’t cover pandemic-related losses, landlords have offered various concessions to attract and retain tenants, including allowing them to defer part of their rent if another shutdown is ordered.” While this might not be a widespread offering, it’s worth asking about possibilities as you conduct your negotiations.
“There are plenty of opportunities,” Mintz says, “but you have to do your homework. While it can be a difficult time to add expenses, it can be worth it. The right location can make you more money and save you money at same time.”
World Gym’s Real Estate and Development Team will help with everything you need to select your location, negotiate your lease and build your World Gym. For more information, contact us at: https://www.worldgymfranchising.com/franchising-options