Feb 1, 2008 12:00 PM

The troubles that continue to plague circuit club companies also extend to business-savvy franchisees who trusted the reputations of some of the biggest names in the industry.

New Franchise Company Trying to Do It the Right Way

Shana Conradt and Lisa Welko were just 24 and 30, respectively, when they opened their group fitness studio five years ago in Appleton, WI.

Today, not only are the co-owners still in business, but they're also a franchise company, Ellipse Fitness. In addition to the corporate store in Appleton, Conradt and Welko own five franchised stores throughout Wisconsin. Ellipse Fitness features 45-minute classes of high-intensity cardiovascular work. Although it is a coed studio, most of the members are women, Conradt says.

Conradt and Welko began selling franchises in September 2006 after visiting The iFranchise Group, a franchise consulting company outside of Chicago. Conradt says she and Welko spent $125,000 to set up their franchise company.

The co-owners want to avoid some of the pitfalls that have plagued express club companies in the industry.

“I don't want to just make a buck,” Conradt says. “I want to choose people that are going to complement our business well and help us get stronger.”

The start-up costs, estimated at $100,000, are broken down to potential franchisees in the company's Uniform Franchise Offering Circular. Part of the breakdown of the costs includes $25,000 for a franchise fee, $30,000 for the build-out and $20,000 for equipment.

“No one has spent $100,000,” Welko says of her franchisees. “It's less than what they thought they would spend.”

Conradt and Welko pledge to support their franchisees. The co-owners still run and operate their corporate store.

“We still do the day-to-day things that they do,” Conradt says of her franchisees. “That's so important to me. I don't ever want to take for granted what they go through to be successful.”

Before they franchised their company, the co-owners attended sales meetings of other fitness franchise companies to learn how they operated their businesses. They took down notes of what to do and what not to do.

Conradt says she and Welko have an advantage over other franchise company owners because they are women.

“Women helping women works better because we understand each other better,” Conradt says. “When most of the people in the highest positions [in franchise companies] are male and most of these [franchise] owners are women, there's going to be problems.”

Potential Ellipse Fitness franchisees need to have a passion for fitness, Conradt says. All of the current owners teach classes. Other potential owners who want to just run the business must hire an American Council on Exercise-certified instructor to teach the classes.

Ellipse Fitness is registered to open studios in 43 states, and Conradt and Welko are talking to their consultants as to where to expand the company. They want to add another 20 franchises this year before expanding even more in their third year.

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