Small health clubs begin to muscle their way into the Milwaukee area

There's no pool, tennis court or even a locker room. But more small fitness centers are coming for people who crave a no-frills workout day or night.

One of the next 24-hour centers is Snap Fitness, opening next month in Milwaukee's Bay View neighborhood. There are at least 15 similar centers, of various franchise brands, scheduled to open soon in the Milwaukee area, according to the franchise operators.

The fitness industry is in a "bit of a land grab right now," with everyone jockeying for the best locations, said David Remick with Mercanti Group, a Minneapolis investment bank.

Snap Fitness will be the first 24-hour health club on Milwaukee's south side, according to franchisees Carrie Steinberger and Jill Zimmerman.

Clients of the 2,900-square-foot center, at 2797 S. Kinnickinnic Ave., will use a key card to enter the facility at any time of the day or night. It will probably be staffed during the day but not in the middle of the night.

Six video cameras will record who enters and leaves, and clients can expect to be under security surveillance. A courtesy phone will be available for 911 calls, and members can wear panic buttons that dial emergency services if help is needed.

The club will have aerobic and strength-training equipment such as treadmills, elliptical machines and weights. There will be "cubbies" to place a gym bag, but no lockers or showers. That's because most people will probably come from home, within about a 4-mile radius of the club, and they can shower at their residence.

It's supposed to be a neighborhood fitness center, drawing from a population of about 180,000 people, according to Zimmerman.

"We love the fact that you can look out the window and see homes in almost every direction," she said.
Rapid growth

Minnesota-based Snap Fitness was one of the nation's fastest-growing franchise operations in 2006. Only 3 years old, it now has nearly 700 locations either open or under development. In the first three months of this year, Snap Fitness went from 202 to 285 locations.

"We opened 41 stores last month," said Peter Taunton, company founder and CEO.

Snap Fitness has about 75 locations in Wisconsin, with more on the way. There are stores in Oconomowoc and Waterford, besides the Bay View operation that's under construction in a former Mexican restaurant.

"We aren't worried about over-capacity," Taunton said. "We typically like to keep at least three or four driving miles between stores."

For consumers, Snap Fitness is an alternative to big-box health clubs where members typically get amenities such as a pool, locker rooms, racquetball courts and organized activities for kids.

Snap Fitness offers memberships starting at about $26 a month without annual contracts.

"We are a fast, convenient and affordable alternative," Taunton said. "But we don't cut corners by putting in a bunch of cheap equipment that would compromise our members' workout experience."

A typical Snap Fitness location is staffed between 15 and 25 hours a week. The franchise operators haven't had security problems, even with locations that are open all night, according to Taunton.

It costs about $184,000 to open a Snap Fitness location, including the $15,000 franchise fee and $120,000 equipment lease.

The equipment lease includes workout machines, security and card-key systems.

"We pull up with an 18-wheel truck that's essentially a store ready to be unpacked. We set up everything," Taunton said.

Another 24-hour chain, Anytime Fitness Inc., has a similar business plan.

Anytime Fitness has at least 80 clubs either open or under development in Wisconsin.

With about 450 locations nationwide, it claims to have started the system that Snap Fitness modeled itself after.

"This is the most competitive environment our industry has ever seen," said Chuck Runyon, Anytime Fitness co-founder.

To turn a profit, one of the small, 24-hour fitness centers might need only about 300 members, depending on the location and lease expenses.
Boom in fitness clubs

Nationally, the number of fitness clubs built has outstripped membership growth.

There were about 29,000 clubs in operation in 2005, up from roughly 12,000 a decade earlier, according to the International Health, Racquet & Sportsclub Association.

The market will decide how many such centers a community can support, said Ray O'Connor, CEO of Wisconsin Athletic Club, which has six locations in the Milwaukee area.

WAC has one location, in West Allis, that's open 24 hours a day and is fully staffed.

Fitness centers without staffing aren't appealing to some people, O'Connor said.

"My guess is the corporate parents for Snap and Anytime Fitness will be terribly successful in making money for themselves.

But for the people running the franchises, that's ultimately where the consumer will vote," he said.