Peter Taunton

Consumer Services Category, Snap Fitness
Peter Taunton

Snap Fitness founder Peter Taunton built his company on not making fitness centers more complicated than they need to be.

Headquarters: Chanhassen

Founded: 2003

Revenues: $25 million–$30 million (2009 estimated)

What It Does: Franchises “express fitness centers” across the country.

“It’s so easy to overthink this industry,” Taunton says. All you really have to do, he believes, is keep your club clean, treat your customers well, and engage with your community. “If you just do those three things, I think you’re going to do just fine.”

The same principle of simplicity applies to his company’s centers. Climbing walls. Swimming pools. Racquetball courts. All nice amenities. But what if you just need an affordable, convenient place to work out? Taunton’s answer: Snap Fitness, the chain of simple “express fitness centers” that has become one of the nation’s fastest-growing franchises, with more than 1,100 clubs operating in 44 states and in Canada, Mexico, India, Australia, and New Zealand.

Members pay about $35 a month and get a keycard that gives them 24/7 access to any Snap Fitness club, where they’ll get access to free weights, treadmills, stationary bikes, and other basic exercise equipment. No spas, no juice bars. In fact, they’re not staffed 24/7 (though they have rigorous security systems). But don’t call them “no frills.”

“It’s not about frills,” Taunton says. “It’s about necessity. It’s about giving you everything you need to have to get in shape.”

Taunton began to contemplate the concept after two decades in the industry. He got a job in 10th grade as a front desk clerk at a local fitness club in his hometown of Willmar. After attending St. Cloud State University, he became a professional racquetball player in Florida, then returned to Willmar when his former boss offered him $16,000 a year plus equity if he could help turn the failing club around.

“It was a very stressful time of my life, but very rewarding because it really taught me how to get the most out of a dollar,” Taunton says. At first, he bartered so that he could upgrade the facilities, offering memberships in exchange for fresh paint and new carpeting. He also approached local companies about buying memberships for employees. Within a few years, the club had turned a profit—and Taunton soon became its owner.

His success in Willmar would eventually lead to his co-owning a chain of large fitness centers across Greater Minnesota. He sold his stake in that company in 2001 as he began to envision a leaner model, one with lower overhead that could be easily franchised over and over again.

“This club I was thinking about in my head just kept getting smaller and smaller, and before I knew it I had this box that was about 3,000 square feet—literally one-tenth the size of the clubs that I had. But it was full of the things people used most.”

It’s an understatement to say Taunton was hands-on during the building of early Snap locations. If he wasn’t hanging TVs or mirrors or helping to lay carpet, he was taking meticulous notes on the entire process. Those notes became the step-by-step manual that’s still used today to guide new franchisees.

He was on a first-name basis with the first couple hundred franchisees. He can’t keep that up anymore, but he makes himself accessible on weekly conference calls and at Snap University, the company’s training academy for new owners.

Snap Fitness has identified 1,300 cities where it plans to open new locations, including several international markets. It also sees real estate opportunities as retail chains (such as video rental stores) trim locations.

“To me, it’s not work,” Taunton says. “I just feel so fortunate, so blessed, to be in an industry where everything around me is so positive. I impact my customers’ lives by helping them get healthier. That’s positive. Number two, I help my franchisees realize the dream of owning their own business. That’s very positive.” And just that simple.