Newsbeat: Club Industry's Fitness Business Pro -- Sport & Health Sells 26 Clubs

Are You a Franchisor?
If you are, you'll want your information included in a franchising seminar to be conducted by Michael Scott Scudder at the Club Industry East Show in June. E-mail answers to the following questions to Michael (copied to Pamela Kufahl, editor of Club Industry's Fitness Business Pro magazine).

Name of your franchise

Type/size of franchise (large club, gym, small club, express club, niche club, etc.)

In business as a franchisor since what year

Franchise fee

Monthly or yearly royalties

What systems and training your franchise provides to a franchisee

What equipment and/or other services your franchise provides to a franchisee

Approximate upfront capital needed to open a franchise

Financing available for franchisees

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Hot News

Sport & Health Sells 26 Clubs
WASHINGTON, D.C. -- The Sport & Health Company announced that a Washington, D.C. real estate group purchased its 26 full-service health clubs and three full-service day spas for $75 million, including assumed liabilities. The announcement, made by Donald Konz, the company's new chief executive officer, returns the clubs, all of which are located in the Washington, D.C. metropolitan area, back into local hands. Konz said the new owners would use their health club, business and real estate experience to help the company's 2,200 associates deliver health and fitness programming, facilities and services to its more than 80,000 members.

The acquisition of the company was organized by Tom Fauquier, who is a partner in the new ownership group, Sport & Health Holdings, LLC, and a principal in the Vanguard Realty Group. Along with Fauquier and Konz, other members of the ownership group include Jonathan Adler, who becomes president and COO; John Ariail, a long standing partner of Konz; and local real estate developers and investors Barry and Rusty Minkoff and Paul Chod of Minkoff Development. Mitch Batkin, current vice president of fitness of Sport & Health, will continue his role under the new management.

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Club Hopping

Bally Turns to Franchising to Promote Growth
CHICAGO -- After a two-year moratorium on expansions, Bally Total Fitness is now trying to double its number of gyms through franchising. The fitness chain has 412 company-owned centers and 20 franchises, compared to Gold's Gym, which has 580 franchises. Bally added 152 clubs between 1997 and 2002 after its initial public offering in 1996, and when he became CEO of Bally, Paul Toback slowed growth to increase the profitability of the existing clubs. According to Crain's Chicago Business, Bally will focus first on second-tier markets such as Madison, WI, or Louisville, KY, then on selling company-owned clubs to franchisees and finally offering franchises in major metropolitan areas. The initial fees will range from about $25,000 to $30,000 per center. Royalty fees will be about 3 percent of gross revenues and national marketing fees will be 3 percent.

Capital Fitness Returns Some Fees
RALEIGH, NC -- Capital Fitness and Spa Health Clubs in Raleigh, NC, will return fees collected from some of its membership. Members complained to the state's Attorney General that the club was automatically withdrawing a one-time $25 fee from the bank accounts of its 40,000 members. The club CEO Rick Quinn had stated that the fee was for club upgrades.

After drafting the bank accounts of many of its members, the chain now has to return the money to many of its members after the attorney general said the possibility of this fee was not stated in older contracts. The chain will not be able to collect the fee from the 33,000 members who signed an older version of the contract, but Quinn is hoping to charge the 6,600 members who signed a newer contract. If the club was able to collect the fee from all of its members, it would have made $1 million. Instead, the club will not be able to collect $835,000 in fees, and for the money the eight-club chain does collect, they will need to show the attorney general how the funds were used for upgrades.

Cedar Valley Y Sponsors Biggest Loser Contest
WATERLOO, IA -- Two teams of residents in Cedar Valley, IA, faced off in a 12-week competition to see who could lose the most weight. The winner, Beth Glessner, had two goals when she started the program -- to lose 40 pounds and run a mile. She ended up losing 37 pounds with the guidance of Y fitness staff. She and the other participants worked out a minimum of three days a week. Norm Johnson, YMCA director, led them through many workouts including a Boot Camp class. When determining the winner, the staff considered the participants' weight, body fat percentage, abdominal circumference, flexibility, cardio-respiratory recovery, and strength and endurance in abdominal crunches. Johnson said the program was a success.

"They've made lifestyle changes that go beyond the 12 weeks," he said. "I've seen every member continue to be here. I'm so proud of them."

Whatever your flooring needs, we hope you'll think of us first. We deliver the highest quality sports flooring available - on time and at a reasonable price. When you need us, we'll be here as we have for nearly 25 years, at 1-800-428-5306.

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School Days

Bravo Kids Workout Expands
VENICE, CA -- Ashleigh Bravo thinks there should be a "Jane Fonda" for kids. And, she hopes she can be it.

Creator of the Bravo Kids Workout, Bravo who has a decade of experience in the industry and is a personal trainer, teaches a fitness class for kids ages 6-8 in Los Angeles. She plays contemporary music to get the kids warmed up and uses equipment, like brightly colored exercise balls, to keep them active and entertained. Currently, Bravo is bringing her children's workout to California public schools and Los Angeles area gyms. She has also written the book, What Would You Do For A Cookie?, and is launching a DVD that will be available in March 2006. She hopes to expand to gyms across the west coast in spring of 2006 with the help of a "Train the Train" DVD and manual that shows anyone who is already certified to teach aerobics, how to teach kids.

Congress Continues PEP Funding
WASHINGTON -- Congress approved continued funding of the Physical Education for Progress (PEP) grant program in late December. As they did in 2005, $73.4 million was approved for 2006. The only change expected from 2005 is a 1 percent cut, which is an across the board reduction to the entire Labor Department of Health and Human Services bill that contains the PEP program. According to a report from the Department of Education, the application notice for PEP grants will be on Feb. 27, with applications due on April 12. The Department of Education estimates that there will be 63 grants at an average $250,000 each.

Boot Camp

Navy Breaks Ground on Physical Fitness Center in Pensacola
PENSACOLA, FL -- Personnel assigned to Naval Air Station Pensacola broke ground on new facilities. A $79-million contract was award to construct a 53,377-square-foot Physical Fitness Center (see U.S. Navy illustration above), a 34,844-square-foot Aviation Rescue Swimmer School and two new visitors' quarters. The projects, a result of the base's destruction from Hurricane Ivan in 2004, are expected to be completed in summer of 2007. The Physical Fitness Center will serve active duty, enlisted Department of Defense personnel, naval aviation rating students, base transient personnel, reservists and retirees at the base.

Industry Beat

Men's Fitness Names Baltimore Fittest, Chicago Fattest
BALTIMORE -- Baltimore's urban renewal and economic revival landed the city on the top of Men's Fitness magazine's Fittest Cities list. Last year Baltimore ranked as the 25th Fattest City. Neal Boulton, the magazine's editor, attributes the city's turnaround to its increased level of safety and prosperity and the fact that the city is more conducive to fitness. The other factors that worked in the city's favor were the amount of public park space, access to health care, air quality, the relatively small number of fast-food restaurants and the leadership of Mayor Martin O'Malley. The 10 Fittest Cities were as follows: Baltimore; Honolulu; Virginia Beach, VA; Tucson, AZ; Milwaukee, WI; Colorado Springs, CO; San Francisco; Seattle; and Louisville-Jefferson, KY. Chicago overtook Houston as America's Fattest City. The other nine cities on the Fattest Cities list were Las Vegas; Los Angeles; Dallas; Houston; Memphis; Long Beach, CA; El Paso, TX; Kansas City, MO; and Mesa, AZ.

Fit to Print

IN BRIEF...

KI Software released MyClub BETA, a new software module that enables health and fitness clubs to provide online account access to their members. MyClub is a Web-based module that allows fitness organizations to help their customers access relevant data. Members are able to view past transactions and club visits, make purchases, change billing or contact details and more.

NFPT-CPT earned its National Commission of Certifying Agencies accreditation in mid-November. The organization is the fourth certifying agency to receive NCAA accreditation. IHRSA has recommended that as of Jan. 1, club owners only hire personal trainers with a certification from an NCAA accredited agency.

Keiser College will give a $500 scholarship towards Keiser College's two-year online Aquatic Engineering Degree program to any student who completes the CPO(R) Program, or the CPI™ course and holds a current certification from the National Swimming Pool Foundation(R).

The Glens Family YMCA's new fitness center is quadruple the size of its former workout facility. The Glens Falls, NY-based center features a rubberized track, state-of-the-art equipment and a lot of natural light. The fitness center is part of an expansion plan that includes a new gymnastics center, a group exercise room and a dance studio.

The Q45e elliptical from Octane Fitness earned Health magazine's Best of Fitness 2006 award in the category of elliptical trainers over $1,500.

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GOT NEWS?
If you know some news, we want to hear it. Contact our staff to let them know what's happening at your club, school or organization.

For-profit fitness facilities:
Pamela Kufahl
913-967-1815

Nonprofit and corporate fitness facilities:
Amy Fischbach
913-967-1807

Schools, universities, and the military:
Jennipher Shaver
913-967-1802

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