Snap Fitness’ expanding strategy

Peter Tauton, owner of Snap Fitness, believed he had a business concept that would excel in the franchising market. He launched three independent gyms near Minneapolis and believed that the company’s low cost overheads, maintenance, and personnel would make his company a successful franchise and appeal to potential business owners. In 2004, Tauton registered his company as a franchise and began to search for potential business owners.

There were only a few interested people at first. Tauton then came up with a strategy to target first time franchise buyers who have less capital to invest. He also was aware that first time business buyers were looking to keep their day jobs. Tauton offered technology so they could manage their club remotely. What if the technology fails? Why couldn’t they just hire someone to run their business for them? However, a competitor, Anytime Fitness, also offered the same technology. He distinguished himself from the company by offering a flat fee.

The flat fee proved to be successful as Tauton now had over 1,000 franchise locations. I believe the success of his franchise was his research on the target market. He narrowed down his market and chose a correct strategy to target potential buyers. What if Tauton didn’t market his franchise as a flat fee? What if he decided to target other franchise owners? What his franchise be as successful?

Bridget Walsh

http://www.businessweek.com/managing/content/mar2008/ca20080310_283377.htm

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