Just Say No to Dues Taxes!

How can government justify taxing health club membership dues, and what are you doing to help put a stop to this? Especially at a time when the obesity epidemic is causing a national healthcare crisis! Federal officials have estimated that treating obesity-related illnesses costs about $93 billion a year, and that was from a report in 2004.

It’s not like government hasn’t recognized the importance of this issue and taken numerous others steps to raise awareness and provide incentives for people to take better care of their health. In 2004, the Centers for Disease Control and Prevention predicted that obesity, caused by a sedentary lifestyle and poor nutrition habits, would overcome tobacco as the leading cause of death in the U.S. In 2006, the Health and Human Services secretary announced plans to develop physical activity guidelines, and in 2007, members of the advisory committee who will develop them were announced.

Other industries have also played a role in raising awareness and helping to curb the trend. The media has published countless studies on the benefits of fitness to combat obesity, which is a major cause of death. And, in the past several years, insurance companies have begun offering premium discounts to individuals who work out at fitness facilities. The company that has been most in the news lately is Medica Insurance Company. In 2003, Medica Insurance Company started offering $20-per-month incentive payments to members of fully insured plans who exercised at Life Time fitness centers at least eight times per month. It now also has agreements with most YMCAs and YWCAs in the Minnesota area, and, most recently, it added Curves fitness centers to its plan.

Currently, 25 states (almost half) impose a tax on fitness center dues. (You can view a summary of these on IHRSA’s website.) Yet, in 2004, the IRS approved tax deductions for obese Americans for doctor-approved weight-loss expenses, which include stomach-stapling surgery, approved weight-loss drugs and nutritional counseling. What kind of a mixed message is this?

For now, a few changes have been seen. On November 7, the Michigan Senate repealed its newly imposed sales tax on health club services. Then, in mid-November, the Maryland sales tax bill deleted health clubs after more than 14,000 emails, petition signatures, postcards and phone calls in protest.

This issue should be at the top of the fitness industry’s list to nip in the bud before it’s too late. It’s time for every fitness facility operator to do their part in making a major impact on reversing the tax on fitness center dues. Keep informed, write to your legislators and help be a part of fixing this national healthcare crisis — not just on a business level, but on a national level.

The Bandwagon Effect

It sounded like a good idea.

Curves for Women franchises were springing up like dandelions all over the country. It was no surprise that the “what’s good for the gander is good for the goose” mentality was close behind. Enter Cuts Fitness for Men.

The franchise was an unabashed disciple — some would say copycat — of the Curves’ formula for success. Still, despite a strong push for a ride on the single-sex bandwagon, the concept so popular with women failed when applied to men. “Cuts Fitness for Men advertised their franchise opportunity aggressively, promoted its story continuously through the press and strategic alliance partners, then seemed to go silent all at once,” say the folks at FranchisePick.com. The Cuts Fitness for Men website now simply hawks a Cuts book, as if the whole thing never happened.

So, was the Cuts story a fireworks-like flameout after a spectacular start? Or did the franchise ever get off the ground in the first place?

FranchisePick.com reports that “an April 2006 Cuts Fitness press release boasted that the men-only 30-minute fitness company … had more than 100 franchises open in five countries, more than 200 franchises sold, and expected to sell 250 more franchises in 2006.” The media bought the hype, and proclaimed Cuts Fitness for Men as a hot franchise investment. Entrepreneur Magazine ranked Cuts Fitness No. 17 in its Top 20 New Franchises list, No. 65 in its Fastest Growing Franchises list and No. 300 in its 2006 Franchise 500. “The hype continued through mid-2006, when the company press releases slowed and stopped mentioning the number of units,” says FranchsePick.com. “In September 2006, in an otherwise positive article, the New York Times reported that “67 Cuts for Men clubs have either closed or never opened.”

There’s a lesson in here somewhere. Actually, there are a few of them. The most obvious is that there is no one-size-fits-all solution to attracting niche markets. Bandwagons are like any other vehicle: The more weight they take on, the slower they move. But consider the marketing angle. Was Cuts Fitness for Men a victim of its own hype? Its PR was making promises franchisees couldn’t deliver, and a relentless forward surge didn’t allow room for a slow-down or slide-back in its business plan. The end result seems, in hindsight, inevitable.

How strong is the temptation to cash in on someone else’s popular idea? Has your fitness center ever fallen victim to the bandwagon effect? Take it from Cuts Fitness for Men: Sometimes the safest place for a business is on solid ground, waving at the bandwagon as it goes by. Don’t worry too much about missing it; another will be along shortly.

What’s Next? Paw-sonal Trainers?

With the ever-present photos of celebrities and their dogs, and warnings that pets are becoming just as overweight as their owners, it is no secret that pets are big news – and big bucks.

While fitness centers are usually no place for pets, some are offering classes for humans and their canine companions, and some manufacturers are using their products to benefit pets, especially those requiring rehabilitation.

Pet Pavilion in London, U.K., offers yoga for dogs and their humans. Running Paws Athletic Club in New York City offers play time, indoor and outdoor running, and training and agility classes for dogs. Good Dog Aquatic Fitness in North Andover, Mass., offers physical therapy for older or injured dogs. Another facility, Next Step Animal Rehabilitation & Fitness at the Mid-Atlantic Animal Specialty Hospital in Huntingtown, Md., installed a SwimEx 400-OT aquatic therapy pool to aid in dog rehabilitation.

Obviously, most fitness centers aren’t going to run out and buy a therapy pool to treat dogs. However, the recent surge in products and services for pets does have a place at some fitness facilities. For example, you could offer an outdoor walking class for members (and non-members) and their dogs. Or, you could sponsor a fundraising event that benefits a local humane society or animal organization. You could offer a doggie day care - maybe one that includes “working out” the dogs. This could especially work if you are in a market where your members don’t have young children at home. Finally, you could even offer some type of doggie yoga class.

All of these programs could be fun – and great money-makers for your facility. In any case, you could establish a unique market niche, and attract animal lovers who may not otherwise become members.

Learning a Valuable Lesson in the Fitness Center

Just when your members thought it was safe to go to the gym, it is reported that a series of larcenies at fitness centers in the Ballston and Clarendon areas of Arlington, Va., is being investigated. According to a news release sent out Aug. 9, 2007, from the Arlington County Police Department, at least 10 incidents of stolen wallets and/or credit cards in locker rooms have been reported since June 20. In most cases, those items were taken from unlocked lockers, and the culprits quickly used the credit cards to make expensive purchases after stealing them.

While this string of thefts seems to be limited to the Arlington vicinity, theft in fitness centers is nothing new, and it occurs in facilities everywhere. In January 2004, our publication reported on an FBI investigation into locker room crime in an editorial titled Locker Room Crime Alert. In this operation, the thieves made it a point to not disturb any contents of lockers so that members were unaware that their belongings had been tampered with. All they would take is one credit card from each wallet, and only if that wallet contained multiple credit cards. They would then use the credit cards at casinos to make multiple cash withdrawals until the credit line on the card was reached. This string of crimes began in the early 1990s, and occurred in states all across the U.S., even those that didn’t have casinos.

While one of the perpetrators has been arrested in the Arlington investigation, the others are still up to no good. And, I am unaware of what happened with the FBI investigation, or how many other types of operations are now going on. Therefore, it’s up to fitness center management to let their members know that they need to be extra cautious about their valuables when in the facility. First of all, it would be wise for staff to suggest to members that they not bring any valuables to the fitness center. If that’s not possible, then provide a safe place for them to lock up their valuables near the front desk where they will be supervised by staff members at all times. Or, better yet, encourage members to keep their valuables on them, if possible. If they do store their valuables in lockers, by all means be sure to tell members to lock them!

Other tips for helping your members to avoid getting ripped off in your facility can be found in a recent article in FM titled Locker-Room Crime: The Aftermath.