Viva Leisure, which owns the Plus Fitness franchise chain, has reported a half year revenue of $34 million, a drop of $2 million on the same period last year. The figure reflects the Covid lockdown constraints which hit the fitness sector.
A strategic acquisition of Rebalance Pilates & Yoga studios was completed in December 2021, and during the six month period Viva’s total corporate and franchise locations increased by 16 to 325 at 31 December 2021.
Commenting on the Company’s 1H FY2022 performance, Viva Leisure CEO and managing director Harry Konstantinou said “We have remained focused on our operational plans and growth aspirations even with Covid lockdown constraints creating earnings headwinds across the health club industry in the first half. We continued to invest in club acquisitions and greenfield locations, growing our footprint to 325 locations across five states and territories in Australia and three countries.”
The half year report showed network membership had declined -0.3 per cent from 30 June 2021 during lockdown.
“Now that trading conditions are improving we are seeing the trust we have created in our brands paying dividends with increasing member enrolments,” said Konstantinou. “We remain dedicated to providing an exceptional member experience and providing a fitness environment that meets our members’ needs.”
Konstantinou told Inside Franchise Business Executive “Plus Fitness has sold more than 23 new territories that are expected to open in the next 12 months, five planned to be open before the end of June.
“We have resourced the business and prepared it as part of its new branding and look-and-feel strategy to continue to grow in FY23,” he said.
“While we have a strong focus on growing our Plus Fitness franchise network, the real growth in the business comes from corporate-owned locations and members as we grow from our 137 corporate owned operating locations now to 150 by mid-year on our way to our target of 400 locations.”
Last year there were publicised concerns that Plus Fitness franchisees were unhappy with the franchise agreement, however Konstantinou said “We have not received any formal proceedings following on from franchisee matters that we notified to the market last year.
“Engagement with our franchisee network has never been more positive as we have continued to share the broad strategy of the company and outline the value for them as operators.”
Revenue generation will diversify as the franchise network expands, he said.
“For example we will start to see our VivaLabs team start to generate revenue as part of licencing our membership, access control, direct debit and other technologies to the Plus Fitness network.
“In terms of Rebalance and our Hiit republic brands, we expect to provide more updates on these in Q1-FY23, however with approximately 10 Rebalance and 23 hiit republic locations now operating, the foundations to start growing the franchising part of these brands has already been laid.”
In the Rebalance acquisition Viva bought eight studios as well as the master franchisor rights and IP.
“We are preparing the business to start franchising Rebalance shortly, but will continue to open corporate-owned locations. We expect to have all the systems, processes, documentation, and training in place to offer territories for sale by the end of 2022.”
