Basic Fit France: Rural Expansion & Clustering Strategy
Former Director at Basic Fit France
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Basic Fit France: Rural Expansion & Clustering Strategy(January 23, 2025)
Former Director at Basic Fit France
Interview Transcript
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What about the differences in mature clubs and members per mature clubs in rural versus urban? How was that?
The concept with rural areas was interesting. When I left, the number of mature clubs wasn't the largest part yet because most mature clubs at that time were still the first ones, the bigger ones. In mature areas, they were calculated with lower rents, leading to a faster return on investment with fewer members. We always aimed for a number of members, around 3,200 to 3,250, to have a mature club. This was based on rent in larger cities. In smaller areas, where rent is lower, you can have fewer members and still achieve a profit margin above 30%. So, the number of members needed for a successful club was lower than the 3,200 required for maturity, and it would be higher for a club in Paris due to higher rents.
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Can you elaborate on that? Why do you think that's the case?
We kept a long-term focus on expansion and new clubs, but didn't start early enough to invest more in capital expenditure for the mature clubs, the first mature clubs from 2018 and 2019. I know they're doing it now.
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Why are you laughing?
Because the 30% return was so ingrained. We cannot accept a location unless we're sure it will achieve 30%. Of course, there will be a few selected quickly that might not make it, but that's always been part of the process. If you want to capture the market quickly, some will be less successful. However, if that percentage remains low, it doesn't mean the new clubs will be less successful. I've seen clubs that were in the best areas when opened, but over time, cities change. For example, a new neighborhood or commercial zone might develop elsewhere, affecting club performance. It's not due to poor selection but rather changes over time. So, some clubs may be less successful, but not because of recent openings or too many Basic-Fits.
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