4. Title Boxing Club
Corporate locations: 1
Franchise fee: $34,900 for a single, $29,000 for two or moreInvestment: $150,000, which includes working capital Monthly customer fee: $59 John Rotche first heard of Title Boxing Club when its owners, retired pro-boxer Danny Campbell and now-CEO Tom Lyons, approached him for advice on how to best execute franchise plans for their boxing workout classes. But Rotche, now the company's president and a veteran executive in the franchise industry, was won over by the idea after he hung out in a Title Boxing Club parking lot one day eyeing the parade of soccer moms wearing their Lululemon (LULU) yoga pants and sporting Title brand boxing gear as they went to class. He realized that co-owners were on to something. Campbell and Lyon opened their first club in 2008 in Overland Park, Kansas. Soon after they started to franchise but quickly decided to step back and make sure they knew what they were doing before they expanded. They brought on Rotche full time. Today there are 35 franchises open. The company is on pace to have 70 clubs by the end of 2012, with another 235 franchises in the pipeline. Title Boxin Club expects to have up to 500 clubs open by the end of 2015. The franchise eventually plans to expand internationally as well, given the strong awareness of the Title Boxing brand. "What I liked about the business is it's not a fighting gym. Danny has always believed that boxing was one of the best workouts they can do. Imagine if we just take the training of boxing -- take it from the bad part of town and open it up next to Target (TGT)and Bed, Bath and Beyond (BBBY) and so forth," Rotche says. Another plus is that they were able to solidify a partnership with Title Boxing, the premiere manufacturer of boxing gear and products, to use its name and become a main distributor of its products. Why won't Title Boxing Club just be one more fad? Rotche says it's not teaching people how to box, instead it's teaching members how to train like a boxer to be more fit. "In the fitness industry right now you're seeing a big trend to group classes, group dynamics -- people want to be part of a community. The days of going to the Gold's Gym and working out by yourself, that's going away. People are gravitating toward the yoga, the spinning, the Pilates -- they're a lot more fun," Rotche says. "We don't compete with the gyms. In fact, we will open up right next door to a fitness concept," likening the training to a group-centered personal training session. The model is working. With the manufacturer as a partner, franchisees are basically getting all the equipment at cost. The company is also laser focused so there isn't a lot of overhead to pay. Combine the low overhead, reoccurring revenue and small square footage per location, and franchisees are "blowing past" break even within a year of buying the franchise, Rotche says. "We didn't invent boxing. All we've done is move it to the suburbs and the fact that we have the brand of Title behind us really gives us the strong competitive moat if you will," Rotche says. "It's a very simple business."