When Chuck Runyon and Dave Mortensen opened the first Anytime Fitness gym in 2002 in Minnesota, they had little experience in franchising—nothing more than stints at a Pizza Hut and McDonald’s.
“We don’t mind saying often ‘We don’t know the answer, but let’s get to work and figure it out,’ ” says Runyon, who today is the CEO of Anytime, its parent company Self Esteem Brands, and sister company Waxing the City. With Mortensen as president of each operation, together they have propelled their Woodbury-based gym business to a stratospheric growth rate.
Of the roughly two dozen franchised companies to open a 4,000th location, it has taken an average of 32 years to reach such a milestone, according to Anya Nowakowski, a senior research analyst at FranData. It took Anytime only 16 years in business to do so (in Shanghai), cementing it as the fastest-growing fitness franchise around the world. Only Subway achieved the 4,000-location feat in less time.
So how did two businessmen without much franchising savvy build such a rapidly growing company? “Our biggest advantage is authenticity,” Runyon notes. “A lot of companies put up their mission statement, but Dave and I live it. I mean, we really, really live it, and I think people can feel that energy.”
Unlike most franchised operations, Anytime didn’t start with a corporate-owned location. Instead, the first 30 or so gyms under the brand’s name were franchised to individuals, most of whom had built up a solid rapport with Runyon and Mortensen when the pair ran Health and Fitness Group, a marketing firm that drummed up memberships for fitness clubs across the U.S., Canada, and Australia. The two ran the company for a decade and a half, until 2005, when they closed it to focus exclusively on Anytime.
Anytime’s concept of offering workout equipment all hours of the day (and night) with little human supervision wasn’t a hard sell for prospective franchisees, Mortensen says. Rather, lawmakers were the hardest to convince. “The challenge,” he says, “was there was no real written law about it. But we always felt that unsupervised fitness was happening for a very, very long time. For example, how many hotel gyms that you walked in even back then had supervision as people were exercising?”
The toughest battles, Runyon says, came in Illinois, New York, Pennsylvania, California, and in the company’s home state—all of which were won in the first couple of years. Anytime often faces the same challenge when it is expanding into new countries, Runyon says, noting China as a recent case. Having recently cleared that hurdle, Mortensen and Runyon aren’t the only ones excited about the possibilities of doing business in the world’s most populous country.
“The population of Shanghai alone is more than the population of all of Australia, where we have opened up 400 gyms in four years,” says Maurice Levine, master franchisee of Anytime Fitness Asia. Like most franchised operations, Levine is among a select group—one of 17, in Anytime’s case—who acquired exclusive rights to license Anytime’s brand and business model to prospective franchisees.
Just 0.4 percent of China’s 1.4 billion population belongs to a health club, Levine says. “But that doesn’t mean there isn’t an interest in fitness,” he says. “In the heartland, which is mainly where people live, there are no fitness facilities.” In fact, there are only about 3,300 gyms in China, he says, bringing the ratio to about one gym per every 424,000 people. Levine argues that Anytime, as the only U.S. gym franchise in the country, can change that.
Likewise, the company is literally breaking new ground in Africa, as it plans to launch its first gym in Casablanca, Morocco, this fall. The expansion will bring Anytime’s operations to all but one remaining continent: Antarctica. But that doesn’t mean Runyon and Mortensen aren’t eyeing the possibility of being the first company in history to be on every major land mass.
“We are already in some stages of discussions with a couple parties,” Runyon says, citing gyms for research facilities or one on a Chilean cruise line that docks in the frozen continent for five months of the year as possible homes for the Antarctica facility.
“This brand should not be contained within the status quo,” Runyon adds. “We’re at 4,000 today, but for the next five or more years, we should be opening 550 or more every single year. Are 10,000 or 20,000 gyms achievable one day? Absolutely.”
Sam Schaust is the online and e-newsletter editor of Twin Cities Business.