Opening a Bally's Total Fitness Franchise in Sydney, Australia
Best distribution strategy - strip mall or stand alone building
To judge whether the club should be a strip mall or a stand alone building, we have taken the example of a few existing gymnasiums. The first of these is called LivingWell and situated in North Sydney. Their address is 100, Walker Street, North Sydney, NSW 2060. This is considered to be one of the best gymnasiums in the city. The view is pleasing to the eyes and the gymnasium is well fitted out with a big range of treadmills and cross trainers. The club also has a Total Body Express Room. This helps in making a fast and effective workout. The gymnasium is fully air-conditioned. The gymnasium has different equipment including Cardio and resistance equipment, Free weights, Ladies sauna, Massage, Group fitness studio, Spinning studio, Solariums, Physiotherapy, Pro-shop, Personal training, Luxury changing rooms, and Complimentary toiletries.
The club has specialized areas of treadmills, bikes, cross trainers and recumbent bikes. This gives us an idea of what is expected from the proposed Bally's Total Fitness Franchise. The club also provides a car park under the club. For this a fee is charged of $4.50 for the period from 7 AM to 9 AM and from 4:30 PM up to 7.00PM. This is the high charges, the lower charges are charged at other times, which have not been mentioned. It is clear from this what the peak hours for the club are. The car park closes at 7.00PM. The club works for a fairly ling time from 5.30AM to 9.30PM on four days of the week, from Monday to Thursday. On Friday they close early at 8.00PM. On Saturday, they begin later at 8.00AM, and close even earlier at 7:00 PM. Sunday is a short day from 10:00 AM to 6 PM. If the strategy is to operate in this area, it seems clear that we have to compete with them, and we must have a stand alone building. (Living Well-Find a Club: Introduction)
The other location where this group has its facility in Sydney is in Castle Hill. Apart from this, they have facilities in other cities as well. This facility in Castle Hill seems to be older and has been recently refurbished. This is situated in 6, Victoria Avenue, Castle Hill, NSW2154. This club provides free parking as they may have a bigger area or the parking may not be a problem in this area of Sydney. The total area of the club is 3500 square meters, and this means an area of 15,000 square feet. This also clearly indicates that a separate building is required in this area, since the parking will have to be provided, and that is much easier with an independent building than with a strip mall accommodation. They have recently fully refurbished their facilities, set up new luxurious change rooms, resistance equipment that are cybex pin loaded and resistance equipment that are plate loaded. They emphasize the fact that they have two cardio theatres, a new spinning studio and a huge range of weights.
The emphasis here seems to be on speed and they have a Total Body Express Room, which was also seen in the other branch. Thus this seems to be an essential requirement for a gymnasium in Sydney. On top of this they have a physiotherapist, hairdresser and beautician in the premises. Obviously the attempt at work outs is to make people look better. They also have a very large clientele with more than70 group fitness classes, cardio and resistance equipments, physiotherapy, personal training, hair and beauty salon, child minding facilities, complementary toiletries, pro-shop, solarium and luxury changing rooms. In addition to being a gymnasium, they are also a retailer for KIS solarium products. Here the gymnasium opens and closes later, from 6:00 AM to 10:00 PM for four days of the week. On Friday, it closes at 9:00 PM. On Saturday and Sunday it runs from 8:00 AM to 6:00 PM (Living Well-Find a Club: Castle Hill)
The maximum numbers of gymnasiums that are advertised about in Sydney are the ones in different hotels. There the concentration is not on the gymnasium but on a combination including steam rooms, spas and the like. As an example let us look the details that are provided by a Holiday Inn in Sydney. This just states that one can unwind in their gymnasium, spa, sauna and steam room on level 3. It also gives the opening hours of the gymnasium as being between 6:00 AM and 9:00 PM. (Leisure). Thus these gymnasiums are present in large numbers, but are not expected to be a serious competition for the proposed one to be set up. They seem to exist only for the demand of the residents of the hotels.
Lower down the economic level, there are also gymnasiums which have been set up by the city council. One such gymnasium is situated near the Olympic pool and is called the Lane 9. This is controlled by the North Sydney City Council, PO Box 12, North Sydney 2059. The customer service center is situated at 200 Miller Street in North Sydney and works from Mondays through Fridays from 8:30 AM to 5:30 PM. This is said to be ideal for the people who live close to this facility or people who work in the Central Business District of North Sydney which is only "ten-minute walk" away. This is said to have the latest in gymnasium equipment, shock resistant flooring and air conditioning. There are also provisions for seeing free to air channels and pay channels on TV, but there is no facility for music, for which people are expected to bring their own Walkman. They have also employed experienced and qualified staff to advise people on what exercises they should do. When one becomes a member there, the experts will assess the fitness of the person and recommend a suitable fitness program for him. Having an Olympic Pool attached, they have the benefit of specialized programs on aerobics and aqua aerobics. This would be very difficult to match for any regular gymnasium. (Spectacular Spot For Health and Fitness)
Apart fro these gymnasiums, there are also gymnasiums for the college students which will later develop more demand for fitness from future generations. One such college which is interested in fitness is the Hampden Sydney College. They had an opening of their new weight room just a few days ago on November 16th. This was just before their annual match against the football team from Randolph Macon. The room was opened by four of their famous football players. This weight room is situated in the Gammon gymnasium. The room was expanded at a pretty steep expenditure of nearly half million dollars. The people who contributed for this renovation were Joey Viar (class of; 63), Bill Kirk (class of '72), George "Deke" Summers (class of '67) and Whitey Lipscomb (class of '66). The gymnasium is quite large and has an area of 2,700 square feet and has five multi- use Olympic platforms, twelve self-contained weigh machines, and three pieces of hammer strength equipment and over a total of 11,000 pounds of free weights. There has been also the addition of special equipment for the improvement of speed, agility and cardiovascular conditioning of the players. However the college president felt that "The new weight room is an important first step in the renovation and expansion of Gammon Gymnasium." (Gammon Gymnasium) Thus we see that the gymnasiums at all levels in the city of Sydney are fairly large, developed regularly and expanded, and also have good equipment. This means that it is better to have one's own building so that new facilities may be needed should the need arise.
Strategy to obtain economies of scale and scope of the outlet
The successful gymnasiums in Sydney are all fairly large and contain good quantities of equipment. The list of equipment can be taken from the existing list at one of the outlets. For our purpose, one would say that the best choice would be to choose the list available at LivingWell in castle Hills. The equipment should be enough for more than70 group fitness classes, cardio and resistance equipments, physiotherapy, personal training, hair and beauty salon, child minding facilities, complementary toiletries, pro-shop, solarium and luxury changing rooms. Going by the existing facilities this will also require a space of more than 35,000 sq. ft. In addition, the specialties of Bally's will have to be accommodated. This will require more equipment. Some of the facilities mentioned here may not be available in all outlets of Bally's, but they seem to be required here. In the case of the competing outlet, there is an outlet for solarium equipment there. Bally's on the other hand specializes in some types of treatment, and the necessary clinics may be accommodated along with the necessary specialists to attend to the people.