Ensuring Your Health Club’s Success through Exit Strategies and Planning

Creating an exit strategy is like building a safety net for your fitness business and weaving it with a strong material to reduce risks that could result from ownership gaps, loss of employees and loss of clientele in the future. 
According to the Nelson Business Succession Survey, 30 percent of all business failures are due to succession failures. In addition, Richard E. Jackim, author of the “$10 Trillion Opportunity: Designing Successful Exit Strategies for Middle Market Business Owners,” reports that 28 percent of business owners have not engaged in any form of succession planning and 75 percent feel they didn’t get enough from their exit.

It is essential for every business, franchise businesses in particular, to develop a strategic plan from the inception of the business to determine critical roles within an organization or identify potential successors/buyers and provide them with the necessary knowledge and skills to maintain the business after it is transitioned. Although buyers often are not sought until it is time for the owner to transition, setting up the business for selling from day one may make the challenge of finding the right buyer easier.

If business owners can be proactive and plan from the beginning, they are setting up themselves for success. By providing business owners with performance tools that help evaluate growth, they receive the insight they need to help maximize the value of their business when it comes time to transition. But what are the right ways to do that and what should business owners consider when laying the foundation for a seamless and successful exit plan?
The top three things business owners need to consider when building a sellable business are:

1. The business owner. Each business owner should consider their involvement within the organization. If it is a one-person show, the business may value differently. Step back and look at the business processes and make sure someone else can easily take the reins and carry the business forward.

2. The team. The business owner should review his or her team of employees. If your team is completely dependent on you as an owner or a particular manager or trainer, and you know that everyone will leave as soon as a leadership change is made, then you may need to adjust your people strategy. Look at your employees to ensure there still will be main players that have loyalty to the location and the brand, not just the owner. This is typically accomplished by positioning their employees to have some sweat equity and see room to grow within the business. Finding employees that are passionate about your mission also helps. Build a plan that supports important stakeholders sticking around. Whether it comes down to selling to that person or somebody else, your main players should have some skin in the game.

3. The clientele. It is important to make sure you promote the brand at large within the customer/client base rather than just focusing on employee or owner loyalty. Build a customer base that will stay because they love the brand, not the people. (But never lose sight that people bring the brand to life every day.)

If you build systems and processes where employees and clientele love the experience more than the owner, a business may be set up for a smoother exit. It is important to build a business wherein the customer relationships with your employees and the brand at large are both top of mind. Ask yourself this: If you had to hire a brand new staff tomorrow, would your customers stay?

Finding the Right Fit: Legacy or Loyalty

Another important factor to consider is the potential successor or successors. Although every business model is unique in nature, succession can be a great opportunity for someone who has grown through the ranks and is ready to take on the next phase of responsibility without having to build the business from the ground up again. Individuals looking at purchasing an existing business may also want to have it evaluated by an independent professional. This is a smart decision, so be sure not to take it as a signal of mistrust.

Working with an Expert
Just as the buyer may do so, it is a good idea for the owner to bring in advisors, taxation experts and accounting experts to value the business and provide advice on your transition. In general, the larger a business becomes, the more important it is to consult external experts to effectively maximize the exit plan.

Key Takeaways
Exit strategy is not just a buzz word. Inevitably, every business will need to be transitioned at some point if it is going to survive; and smart business owners have a plan. Building out an exit plan requires serious work and attention. A business is your legacy; think about what you want to get out of it as the architect of your business and your exit strategy. Key takeaways of a fruitful exit strategy include:

  • Have a plan. Many owners underestimate the amount of time and dedication it takes to exit successfully. Every owner should make creating a plan a priority.
  • Think sooner rather than later. Today is the best day to start this process. Even if the plan changes, a successful exit will be the result of a carefully thought out strategy.
  • Start with the end in mind. What are your goals? What are you looking to do in three, five or 10 years? If you don’t have a plan, you’re susceptible to having things just happen to you. Life priorities change, and it’s important to have contingencies in place should you need to shift directions unexpectedly.


Eric Goetsch, vice president of franchise operations at Fitness Together Franchise LLC, is a hybrid of fitness expertise and business acumen, with degrees in exercise science and business, as well as two NSCA certifications. Starting his career as a personal trainer in a big box gym, Goetsch soon transitioned to a back-pain clinic corporation as the director of training. Goetsch joined Fitness Together in 2004, starting as a trainer in a Denver-area studio. Ultimately, he transitioned into the support center and eventually becoming the vice president–operations. As the head of operations for Fitness Together, his mission is to ensure franchise owners have the tools and resources to be as successful as possible. From aligning Fitness Together with the latest business improvement strategies, technology advancements and fitness trends to training new systems and procedures, Goetsch lives and breathes Fitness Together. He facilitates continued education and opportunities for franchise owners to network through town halls, regional meeting workshops and conferences. A gym rat through and through, Goetsch lifts heavy, eats his protein and always has a gallon of water in-hand.