Each week, we seek expert advice to help a small or medium-sized business overcome a key issue.
Jackson Loychuk's gym concept can be found in several Canadian cities and even in two U.S. states, but not in Ontario.
Mr. Loychuk started 30 Minute Hit Ltd., a women's-only gym specializing in boxing and kickboxing, with his wife, Deanna, in 2004 in Vancouver when they observed that women were keen to take up these physical activities but did not want to do so in front of men.
"We found that women secretly desired to take this kind of course, but they were intimidated in the co-ed gyms, and that scared them off," he said. "But when they walk in here, they can see that 30 Minute Hit is meant just for them. That's been the biggest appeal."
Soon after their first club opened, customers inquired about franchise possibilities. Some of those clients have since moved from Vancouver to other parts of Canada and to the United States and opened 30 Minute Hit locations. Today the company has nearly 40 franchise locations, mostly in British Columbia and Alberta, with one as far away as Texas.
Yet, breaking into Ontario, Canada's most populated province, has proven difficult. "The challenge for us is finding the right fit in a new market the first time out," Mr. Loychuk says. So far, the company's owners have felt more at ease with franchising out to people who have experience with the brand and are passionate about it.
The economic boost of entering Ontario would be significant. According to the International Health, Racquet and Sportsclub Association, the industry's revenues in Canada top $2.2-billion annually. Sixteen per cent of Canadians belong to a health or fitness club, according to the association.
The opportunity in Toronto, with its population of 2.6 million, is so great that several U.S. companies have recently opened locations, including Anytime Fitness, Equinox and Hard Candy Fitness, which is owned by Madonna.
"The potential is massive, bigger than B.C.," Mr. Loychuk says. "As far as market share goes, we have a strong niche and we don't have too many direct competitors.
"But my choice is not based on location, it's based on the owner. It's how we've managed our expansion," he says.
The Challenge: How can 30 Minute Hit muscle into the lucrative southern Ontario market?
THE EXPERTS WEIGH IN
Barry O'Neill, managing partner, Zed Financial Partners, Toronto
It is important to get a better sense of who is who in Toronto, to help find the best partner and also to identify the stiffest competition. You can get a lot of valuable information from the general public. Go to various sites and associations and ask questions like, "What gym is the best for women's-only classes for kickboxing and boxing?" The answers you receive will serve as a component of your market analysis. With that information you would be better able to determine whom to approach and where to locate the business.
Although the "right" partner is the main criteria, the location still remains vitally important to success. Map out the top-rated women's-only gyms in the city and also find all the gyms that offer boxing and/or kickboxing. Then rule them out as possible areas for a 30 Minute Hit franchise.
I haven't opened a restaurant in Toronto because I would need to physically be there, but we did find a way to have the Vij's brand in Ontario and in other markets – we started our packaged food line. The key was finding the right people who have the capability and knowledge for food processing and packaging and distribution.
But whether it's me or any other person in business, you have to believe in the product and in yourself. The important thing is if you have a strong enough niche then you can move into a market and grow your presence there slowly over time. 30 Minute Hit should look to partner with a brand that can introduce it to the market with demonstrations or some form of sampling of their niche brand. That may not be a franchise owner, per se, but someone who is more of a collaborator or vendor.
Sandra Fulton, managing director, Connect Hearing Canada, Victoria
Connect Hearing has had to find a range of ways to build its presence across Canada. We've grown through acquisitions as well as new store openings. The opportunities are different but the process and goal is always the same: Find the right fit for our business and for the community we wish to serve. Our business has a strong culture, vision and values, and we only seek to partner and work with people who share these attributes.
I can understand the fitness company being reluctant to enter a new market to work with people who are unknown and may not have a shared passion for their brand. A way to test an unfamiliar market could be to trial-run their brand in a partner facility. Do a few women's-only sessions at a co-ed gym that won't view them as competition. They'll be able to gauge the interest of the women in the community they would like to expand into and perhaps spark a network that can help them find that ideal owner.
THREE THINGS THE COMPANY COULD DO NOW
Map out competitors
Use social media and the Internet to identify the best locations for a franchise in the Toronto market
Test the market
Offer trial runs of their offering in a place that won't view them as a competitor.
Look for a partner
Locate a vendor who will help them introduce their gym concept.
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Interviews have been edited and condensed.