Brand Recognition
Lifecycle: Expansion
BRW. August 23-29 2007
Page 80
DAVID HUNDT, CHIEF EXECUTIVE, COUNTOURS
Building a successful franchise requires delicate talents. The Contours franchise has more than doubled its turnover in the past year, but David Hundt knows that maintaining profitability involves constantly redefining how a growing business is run. “We’re still very much in our infancy,” he says.
Hundt is chief executive of the franchise group that brought the Australian and New Zealand rights to the women-only fitness centre centre Contours Express franchise in 2004. The first studio opened the following March in Bendigo. The group’s success since then has exceeded Hundt’s initial expectations, which he says were, at the time, ambitious. “It was a bit pie in the sky to begin with,” he admits of his initial goal of opening 300 studios within three years.
With 189 studios sold, and 112 already in operation, Hundt’s vision seems more attainable. “The process is only becoming easier as the brand becomes more recognised,” he says. Hundt estimates that the revenue for the Australasia Franchise Group as a whole in Australia for the 2007 financial year will be almost $20 million, an increase of 160 per cent on the 2006 figure of $7.7 million.
The reason, Hundt says, is the simplicity of the business model. “We have a very specific niche market.”
The women-only operation offers a 29-minute workout on a circuit of weight-bearing equipment, and nutrition information, but not the add-on services found in larger health clubs, like spas, child care or diet plans. The studios draw a core clientele of women aged 25 to 54, attracted to a routine that takes up the minimum of time, and an environment that is free of the glamour and intimidating atmosphere of some larger gyms.
Hundt is not content to rely on the franchise’s increased brand awareness and impressive performance to date. The launch of the chain in New Zealand has been delayed by the process of rebranding, and he has plans to secure and maximise the franchise’s profitability in Australia.
One step is to automate the functions where possible, to ensure a scalable model that doesn’t rely on ever-increasing staff numbers. The search also continues for alternative revenue streams for franchisees. New product lines include in-studio advertising, a range of vitamin and mineral supplements through an alliance with Herron Pharmaceuticals, and a protein supplement.
These developments are the product of negotiation with franchisees to ensure they support the additions, and that these new product lines don’t compromise the simplicity that attracts women to Contours. The heart of the business is still the quick, effective, non-intimidating workout for women.
“We don’t want to become a 7-11 where we have shelves full of products but people don’t know what we really offer,” Hundt explains. “Our retention figures have been exceptional and we hope that continues in the short and long term.”
SARAH NEILL
