Positioning Strategy That Snap Fitness Provides - Case Study Example

Customers can use their membership in any of the Snap Fitness centers makes it more convenient for them to work out wherever they are be it office or home or any other place and do not have to skip working out because of location. In today’s stressful society convenience is given utmost priority by customers in choosing a service or product. However I do not think this is the only advantage Snap Fitness is offering its members, its affordable membership and no contracts only monthly membership fees, and easily managing franchises also add to its appeal to both members as well as franchisees and give a competitive edge over its rivals.

2. Look at figure 15.1 in the chapter. What type of franchise system makes the most sense for Snap Fitness?
For Snap Fitness the most appropriate Franchise system would be the Business Format Franchise because it is a service they are selling and Snap Fitness has a unique business model for both its franchisees and its members. In this format, Snap Fitness needs to provide Franchisee with its unique business formula, training, advertising, equipment, and other assistance. It can use an area franchise agreement that allows the franchisee in a geographical area to own and operate a given number of franchises that is Snap Fitness centers (Barringer and Ireland, 516).

3. What types of characteristics do you think Snap Fitness looks for in its franchisees?
In its franchisees, the characteristics Snap Fitness is looking for are that Franchisees are able to deliver its members its unique business model, must be able to handle billing and collecting processes, Franchisees should be able to maintain the company’s lean business model and have a financial net worth of $250, 000 and $500,000 in Liquid assets and that Franchisees are able to deliver on the “must-haves” list prepared by Pete Taunton.

As the business requires normal working hours and can be managed remotely, it is looking for part-time entrepreneurs who can be students, semi-retirees or have other jobs but are committed to the Franchise and are ethical. Apart from that, it is also looking for franchisees who can maintain its business model, quality of service and ambiance without complicating it and turning it into the usual bigger fitness center diluting its uniqueness.
4. What do you think lies ahead for Snap Fitness? What are some of the things that can go right and what are some of the things that can go wrong as this firm continues to sell franchises and grows?

With a strong start, Snap Fitness will continue to be the fastest-growing franchise in the 24/7 category and maintain its position by opening more franchises, because of its unique business model and positioning itself as a convenient, affordable and round-the-clock fitness centre.
The things that can go right for Snap Fitness are a rapid expansion of its market in an $18.5 billion industry as more Snap Fitness centers about 20 to 30 a month open in new locations and enter the UK market.

However, as the number of franchises increases, there is a possibility that it would lead to cannibalization of other franchises’ market share decreasing the profitability of the franchises and making it less attractive for Franchisees. Also lack of commitment because of absent owners or remote running of the franchises might also impact the service quality. Apart from that lack of add on facilities like locker rooms, child care, juice bars, aerobic classes, racquetball courts or swimming pools limit the market penetration only to a niche segment and hinder capturing of the large market like women with children or people who also want to use other recreation facilities for fitness. Starting and taking off of a business model is easy with unique features however sustaining it, in the long run, is challenging because of imitation of the model by competitors, unable to expand markets to other segments resulting in a decrease in profits and losing control over franchisees. There are also chances that Snap Fitness might not be as successful in the UK market as in the US because it is different. Read More