10 Tips for Buying a Health and Wellness Franchise

The health and wellness space is booming, estimated to be worth over $6 trillion globally and steadily growing. As such, it’s an attractive landscape for many entrepreneurs looking to grow through a franchise investment. Navigating the path to franchise ownership requires careful consideration, and prospective investors should use a methodical approach to help select a franchise opportunity that is attainable, sustainable and will align with their goals.

Here are 10 tips to guide you through the process.

The health and wellness space is incredibly diverse, meaning there are opportunities for a wide range of entrepreneurs. It’s important to identify your starting point, existing skill sets and long-term goals before beginning the research and investment process to ensure you’re focusing your energy on brands that actually make sense for you.

Some concepts will require a multi-million-dollar investment and robust operational experience, while others are far more affordable and may be a better fit for beginners. No matter where you fall on the entrepreneurial spectrum, choosing a model that truly aligns with you as a business owner and will support your long-term goals is key to success.

Many in the industry recommend franchisees establish their own advisory team to guide their entrepreneurial journey — a personal Board of Directors of sorts. Gathering your team early on can ensure you’re supported and have insights from all angles throughout the research process. Consider connecting with a franchise attorney, a financial professional and even a mentor or coach who has experience in the franchise world.

Having a passion for the good or service your franchise offers can be a great motivating factor. If the business model fits with your experience and you’re confident in the future of the business, begin to consider how passionate you are about the widget. Operating in a space that you’re truly passionate about can be energizing, offering the boost many entrepreneurs need to keep going during challenging times, but an investment decision should not be made based on passion alone.

“The people that we talk to as potential franchisees are typically people who are passionate about his industry and wanting to help others. But based on that, there are a lot of different models,” said Rick King, vice president at Fitness Premier 24/7 Clubs. “There are a lot of different ways to get a client from point A to point B.

So finding a model and brand that aligns most with you and what you’re passionate about is key. We really make sure that there is a lot of alignment between us and our franchisees on what our visions and theories are so we aren’t risking disagreements down the road.”

Consider your passions and understand how much they should (or shouldn’t) impact the final decision. A business whose only merit is the entrepreneur’s passion for it likely won’t succeed. Alternately, a great, lucrative business model should not be written off just because it’s not the investor’s favorite widget; many franchisees come to love the widget as they work the system and experience the impact they have through the business.

The FDD is a critical source of information. It provides comprehensive details about the franchisor, including the leadership team, litigation background, fee structure and sometimes financial performance. It’s highly recommended to review this document carefully, often with the support of a franchise attorney, to ensure you have a clear understanding of the opportunity before signing an agreement.

A thriving industry does not guarantee that every concept within it will succeed. Research your local market to understand where demand lies and get an idea of the preferences of your specific community.

Analyze the existing competition to get an idea for the existing demand and decide if that demand is sustainable — and if there is enough to be shared. It’s key to choose a franchise opportunity that brings a unique differentiator to the market and one that offers a good or service people are actually looking for.

A strong franchisor provides robust initial training and ongoing support. Investigate the quality and comprehensiveness of the training programs and be sure to ask about support post-opening. Things like marketing assistance, operational guidance and technology support are important, and a well-developed support structure in these areas indicates the franchisor is also invested in and committed to your success.

“From what I’ve seen, people get into this industry because of their passion. It’s not necessarily because of their experience,” King said. “It’s typically first-time business owners who want this to be the future of their careers. With that, we are teaching them how to be business owners, and there’s a lot more to the business than what meets the eye. It’s not just the facility, your members and your staff — you also own a business.”

King explains that it’s crucial for franchisees to have support with things like payroll, accounting and human resources. Especially in the early days, it can be easy for franchisees to get caught up in one facet of the business and let another slip.

“Early on in my career, I found that I was spending a lot of time in an office behind a computer doing all this back-office stuff,” King said. “It was taking away from the performance of the business and my being front and center to drive the business and drive my team to be successful.”

While the development team at the franchisor level should work to answer any questions you have and provide a clear overview of the opportunity, there are some facets of the business that they cannot legally discuss. And many times, prospective investors are interested in hearing an unfiltered review from someone who has actually gone through the process.

Get in touch with existing owners, or even former franchisees of the brand, and ask about their experience with the franchisor, profitability and the realities of day-to-day operations. This feedback can serve as another helpful “puzzle piece” as you work to get a full picture of what ownership will look like.

One of the most obvious benefits of investing in a franchise is brand awareness. A well-established brand can provide a significant advantage by offering immediate recognition and trust from customers. Research the brand thoroughly and ensure it has a reputation you want to be associated with. Looking at things like online reviews, testimonials and news coverage can help you gauge public sentiment.

“The future of the health and wellness industry is very strong,” King said. “I don’t see it going away at any given point. I think it’s going to continue to grow and become more and more popular. The younger demographic — 18 to 25 — is joining at a faster pace than I’ve seen that age group join in a very long time, and they’re also becoming more in tune with health and wellness. That’s a good sign for the future because, typically, when somebody starts a journey like this at a younger age, they’re more likely to stick with it throughout the course of their life.”

While the larger fitness industry is in a good place, models that cater to holistic wellness, reaching beyond just exercise to consider things like recovery and nutrition, will likely have even better longevity. When analyzing the opportunity in front of you, think of the ways you’ll be able to diversify revenue streams. Consider whether this business model will set you up to become a key provider in consumers’ lives, or if it’s a more replaceable service or resource.

Some franchisees are happy with one location, but others are interested in building empires. If you suspect you’ll ever have the desire to be a multi-unit operator, you should consider whether this specific business will support that goal.

Does the brand offer multi-unit ownership opportunities? Does the support structure cater to multi-unit owners, offering things like operational, marketing and technology support that will empower streamlined operations across all locations? As a part of this evaluation, you should also look at the franchisor’s policies on territory growth and the process for expansion.

Investing in a health, wellness or fitness franchise is a significant decision, and it’s important to take the due diligence process seriously. By asking the right questions, considering the right factors and keeping the right people by your side, you position yourself to make a confident investment that can grow into a rewarding business that will serve both you and your community long-term.

Every great franchisee had help. Franchisees turn to Growth Club to leverage its 100+ years of franchise experience to help navigate the difficulty of finding the right franchise opportunity. Visit www.1851growthclub.com and see what we can do for you.