Opening a Bally\'s Total Fitness Franchise in Sydney Australia

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.

The future for any health maintenance facility in Australia seems to be bright as the people are quite health conscious, and one of their favorite methods of health exercises seem to be through weights. This aspect should be carefully studied and the necessary facilities provided. There seems also to be good consciousness about exercises among certain types of sportsmen and they are also conscious enough to be contributing for gymnasiums. It may be worthwhile to try and collect endorsements for Bally's from them. This can be done by seeking their help at the design level or the expert level. The association may be maintained through long-term linkages through awards and other rewards for sportsmen. The ladies seem to be beauty conscious and for this purpose also some action should be taken. Once there is consciousness on these lines, it seems that the future possibilities are immense. For expansion, it may be worthwhile to think in terms of branches in Australia and even within Sydney. Here the ordinary facilities seem to be available nearby for most people and though there are facilities available close by, still some people may be interested enough in quality served by Bally's to travel a little distance. This however does not mean that everybody will be interested enough to travel all across the city, and that is why branches are needed.

Best Strategy for management of inventory

Management principles say that the inventory should be maintained at the lowest level possible. This would be difficult in the case of a single branch operation, but not impossible. To maintain low levels of inventory, local suppliers should be appointed, and for this purpose also a supplier has been suggested. They have in turn a large number of suppliers for their own equipment, and these people may be given the responsibility of making the supplies to Bally's. This will enable the management to maintain the supplies at the lowest possible level. This may need certain adjustments in terms of the brands used by Bally's or teaching of the suppliers to bring them up to the level that is used by Bally's. This is a normal process that one has to go through when one goes to a new market. The new market in this case is fairly well developed and also has its own long history in the field of health build up. The emphasis is also in the area of cardiovascular care which is an area of emphasis today the world over. The necessary trouble in finding local suppliers is expected to be worth it.

Import export regulations and duties

There are a lot of consultants available in Sydney it self who can take the responsibility of fitting up a gymnasium. There help may be sought in this regard. They can supply people for the initial period at any type of gymnasium that is set up. There are people available for supplying developers and architects for the design of gymnasiums, for the layout, sourcing of equipment and fitness services for the people visiting. Their sales and marketing director has said that there aim is to help people create the fitness studio environment by delivering complete fitness solutions. They have experience on the subject as they already have a number of studios and gymnasiums under private ownership being operated by them. The consultancy has only been recently started by them in March 2002. (Fitness Inside Out: About us)

They have already worked out with a lot of clients and the clients have been in different age levels and fitness levels. Their concentration has been in the area of apartment gymnasiums, and it is easily possible to trace them in quite a few apartments in Sydney. They even promise to train the individual in a nearby park if the apartment concerned does not have a suitable gymnasium. As a sales measure they offer to provide services everywhere. They have offices all over Sydney including Republic 2, Elan and Horizon in the East; Grandview and Pinnacle in the North; Edgewood and Balmain Cove in the West; and in Rushcutters bay Park. The statements made by their users are of the usual type. Pamela Ferrier said "Since I commenced with Fitness Inside Out, my general health, body definition, co-ordination & balance have greatly improved. There is no doubt their training regime covers all aspects of healthy living & the quality of my life has improved." Dr. Ralph and Mrs. Jeanette Higgins said "It is so much easier to move around in everyday life and we have so much more energy." Jan Eakin and Rachel Hadfield said "After a session with Fitness Inside Out, we are full of energy which lasts the rest of the day. It's also a great way to improve your fitness in a fun and interesting way." Michael Signal said "Fitness Inside Out has improved my fitness levels 100%. Their friendly and personal techniques are the best I've seen in Sydney. If your fitness is important to you I would defiantly recommend an assessment." They seem to be quite professional in their work and may be useful as local consultants. (Residential)