ANYTIME FITNESS FRANCHISE How did Anytime Fitness grow to 3,264 locations in 2016 after only starting the franchise in 2002? It almost defies logic in that the fitness space is as competitive as any market segment in franchising and has been for many years. Many large fitness franchise brands have come and gone during this time frame and certainly, with brands such as SNAP and Planet Fitness, the barriers to entry are significant for a new franchise brand. Anytime Fitness seems to have overcome all of these odds and with 307 new units added in 2015 alone, the brand isnt slowing down at all. Anytime Fitness hired Franchise Marketing Systems to develop processes and infrastructure needed to facilitate better recruitment processes and franchise sales models. The business was already successfully recruiting franchisees, but with a growing sales team and larger corporate staff to manage the wave of new franchisees, it became apparent that systems, procedures and policies needed to be implemented in order to confirm that the presentation was compliant, documentation was being presented franchisees in the appropriate manner and that the sales personnel were making presentations according to corporate policy. Anytime Fitness has struck a chord with franchise investors by hitting some of the key value points in a franchise transaction. Anytime is one of the growing trends of franchisors who use an earnings claim and present impressive financials. Appropriate disclosure and a detailed review of how these financials have been developed allow this is a significant part of the franchise presentation. Anytime Fitness also presents a simple operating model with a lower initial investment. This combined with great financing relationships with third-party lenders minimizes the cash out of pocket from a potential franchisee and allows for a lower barrier of entry for new franchise investors. Anytime Fitness has also done a great job with branding, PR and industry exposure both within the fitness industry and the franchise industry. The business has been ranked as the top global franchise by the Entrepreneur Franchise 500 for several consecutive years. The brand has been consistent in promoting the franchise model with a dedicated, regionalized franchise recruitment lead generation plan. The budget has been supported by an in-house franchise sales team with the time and resources needed to work with the leads and effectively introduce the brand to new franchise buyers. The last aspect of Anytimes success has been the relevance of the business model for todays market. More and more people are concerned primarily with time and convenience, they have busy lifestyles and cant waste time on anything. Anytime fits the market and answers these key demands of todays consumers. The bottom line, the business model is relevant and makes sense to the consumer, so it has made sense to the franchise investor as well. Source: https://www.fmsfranchise.com/anytime-fitness-franchise/

QUESTION FIVE (20 Marks)

You are a manager at a popular fast-food chain that has been operating in a specific area for many years. Recently, a new fast-food chain has opened up in the same area, offering a similar menu at slightly lower prices. This has caused your sales to decline and you are concerned about the threat of entry as a competitive force. Using the scenario provided, describe the threat of entry as a competitive force and how it is affecting the fast-food chain. What actions can the fast-food chain take to mitigate the threat of entry and remain competitive in the market? Provide at least FIVE (5) strategies and explain how they could be implemented.