The Issue: New Franchise Is a Tough Sell

New franchise operators struggle to compete with scads of chains. Peter Taunton set his fitness franchise apart with an unusual fee structure

Less than a year after launching three small, independent gyms near Minneapolis, Peter Taunton believed he had a business concept ripe for franchising. His Snap Fitness health clubs cost relatively little in terms of overhead, maintenance, and personnel, and had proved simple for him to run on his own. What's more, he says all three locations had turned a profit less than 90 days after opening. So in 2004 Taunton, experienced in the fitness industry but new to franchising, registered his concept as a franchise and began to court potential buyers of all stripes, emphasizing the gym's profit potential.

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