Positioning fitness in the marketplace

By Christy Krueger, Inside Tucson Business
Published on Friday, January 09, 2009

Ignoring the poor economy would be an important first step when launching a business these days. So believes Keri Ruffell, owner of Oro Valley’s fitness center 1-2-3 Fit, which opened in July 2008 with a bang. Since then, while some established businesses are closing their doors around her, Ruffell continues to find success in her new enterprise.

The Denver-based fitness franchise started three years ago and currently has approximately 25 locations. Keri Ruffell and her husband, Geoff Ruffell, have exclusive rights to the state of Arizona, which she feels can support up to 30 locations. The Ruffells’ goal is to own two more facilities and sell the remaining franchises to others.

“Part of my role,” said Keri Ruffell, “is to help proposed franchisees - identify them and get them approved. Once underway, I coach them on marketing and explain the system.”

Keri Ruffell. Stuart L. Mattingly photo

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The company’s concept of fitness is to provide a full-body workout through a series of resistance machines combining strength and cardio while spending less time, explained Ruffell. “The circuit that we use – there’s a lot of data that proves they work. It’s like interval training. In 2007, the American Council on Exercise did a study showing that this type of exercise routine burns more calories than other 30-minute programs.”

She also promotes cross-training, encouraging clients to participate in other activities they enjoy such as walking and hiking. “We are a tool, but not the only tool you need,” she emphasized.

Prior to opening 1-2-3 Fit last summer at La Cañada and Lambert Lane, Ruffell and her husband set up a tent in front of their still-under-construction space. They signed up more than 200 people from a table on the sidewalk.

“A lot of people drove by and wondered what was going on. We had pre-opening prices for incentive, and to make them feel comfortable, we offered a 30-day guarantee. It took away their fear of trying something they couldn’t see,” Ruffell noted.

Photographs of other 1-2-3 Fit centers were available to show prospective clients, but for the most part, Ruffell said, “they didn’t care what it looked like – they responded to it being a neighborhood-based business and being small and the personal services and support we give.”

Franchisees’ guidelines for location selection include being in a shopping center with a major anchor tenant. Ruffell conceded, however, that there is room for discussion on this point. Her Oro Valley facility does not follow the recommendation, but it has many things going for it, she said, such as “visibility, cars per day, rent, residential density within two miles. I think clubs not next door to a grocery store do better.”

Once reaching her opening goal of 200 members, Ruffell’s real work began. She understands that retaining clients is as important as obtaining them and she strongly believes in the concept of marketing within your own walls. Membership at Oro Valley’s 1-2-3 Fit includes e-newsletters and e-mailed fitness tips, phone calls to members who are overdue for a workout, rewards for reaching personal goals and providing monthly consultations with body composition analysis. She also holds trip give-aways for members bringing in the most new members.

Additional fitness opportunities are available to those who join such as the Boomer Boot Camp Ruffell leads at CDO Riverfront Park in conjunction with Oro Valley Parks and Recreation. During first quarter 2009 she will be expanding 1-2-3 Fit into the space next door with a studio for exercise and yoga classes.

Within the community, Ruffell forms business partnerships, and she networks extensively. Attending chamber meetings, sponsoring local events and visits to nearby employers are all part of the mix. She presents talks and workshops with organizations such as Northwest Medical Center, promoting the benefits of exercise and encouraging businesses to share the cost of membership for employees. Some physicians have even referred patients to the fitness facility.

Another component in the growth of her business, Ruffell believes, goes back to the clients - who they are and why they are there. “Our demographics – they are not young. They respond differently to the economy. We help them to see that in times of stress they must keep exercising to help with personal challenges. It’s not just a fun thing; it’s for their health.”

Determining what brought customers in is part of Ruffell’s business plan. “We ask everyone who comes in the door how they heard about us and put it in our database.” She learned that prior to opening, a majority of new clients discovered the business by driving past and seeing the sign. “Now it’s referral-based. They say their friend, neighbor or husband works out here. Customers like us, so they tell friends.”

Ruffell also knows geographically and demographically who her customers are. “They either work or live in a three - to four - mile radius. They know they can have a 30-minute workout without driving 30 minutes. The average is a 50-year-old woman. We have about 40 percent men, 60 percent women. Other Fits have more women. I attribute our higher number of men to women bringing their husbands in.”

“The third best source for new customers is integrated marketing strategies. They see us in the chamber newsletter or Oro Valley Medical Center or an ad in the newspaper,” Ruffell stated.

When will she stop accepting new members? “When we’re too busy to provide the best service. We think the max is 500-600 members. It’s different with every club. Some have more of a peak time; I have several peaks, so I have a higher capacity.”

As far as advice for businesses during challenging times, Ruffell believes, “If you work hard, once you pull through, you’ll be 100 percent stronger.”

1-2-3 Fit

10370 N. La Cañada Drive,

Suite 170, Oro Valley

(520) 575-9800

www.123fit.com/orovalley

Christy Krueger is a Tucson-based freelance writer.
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Comments

Former 123 Fit wrote on Feb 20, 2009 2:26 PM:

" Good luck with everything. I cannot believe this article after hearing all the former stories of 123 Fit. People reading your article need to be objective. Only 21 clubs left. Over 40 closed. If you have a great location it will help. But protect yourself. People go on hold and people get tired of the workout. Don't believe anything corporate says. "

Glad Its Over wrote on Jan 6, 2009 4:49 PM:

" Keri, I honestly hope that your story has a happy ending. However, let me caution you to not be fooled by the hype that 123 Fit corporate is feeding you. I too ran a club that was busy, with a great staff and clients who raved about how much they loved it. Notice I said "ran" the club, because I never owned anything. No matter how busy we were, or how much the customers loved the staff and workout, it was never enough to pay the bills. Corporate lies. Even if you think you're "in" at corporate, BEWARE. They will leave you hanging out to dry if things don't work out for you. You should never believe anything they tell you. They have consistently changed the 123 Fit concept. When I ran my club there was no personal training, water sales, diet plans, yoga etc. In fact we were sold the bag of goods (BizFit) that said all of those things weren't necessary. After most of the initial guinea pigs closed they realized that didn't work and if what you're saying is true, they're allowing new clubs to employ more revenue streams. Again I warn you to BEWARE and to have an exit plan that you can execute if needed to avoid hundreds of thousands of dollars in losses.

Anyone else reading this should BEWARE as well. While everyone has their own way of expressing their displeasure with 123 Fit, please understand that it's not just sour grapes or just a group of people who aren't cut out to run a business. It's a flawed business plan that is sold as a lie from the very beginning. Do your research, and not just by talking to current franchise owners in the honeymoon stage. Trust me, we've all been there, but it doesn't take long for the rose coloring to wear off the glasses.

Good luck! "

closed 123 fit wrote on Jan 5, 2009 10:05 PM:

" Keri says "development agreement with the franchisor for the state. However, the future of that arrangement is uncertain at this point, for reasons outside my control".............How can we believe anything you say. In the article you state you have exclusive rights to Az and you help get franchisees going.

So which is it? You either do or dont sell?! With remarks like that you should fit well with the 123 fit corporate office. Always contradicting.

My guess is if you did help sell any that you probably did not get paid from the 123 fit franchisor. Probably because 123 fit franchisor is having alot of problems. They even gave up the big office and dowsized to a very small place!

PThey put the so called training facility in another full size gym and let me add that no one uses it. But hey, they had to pawn that off on someone.

You know something is wrong when after the 2nd UFOC is in print and all the directors/officers jumped ship.

RIch Schaden and Ray Wilson were the first to RUN.

Anyone interested in this franchise......RUN AWAY AND DONT LOOK BACK! "

former franchisee and area director wrote on Jan 5, 2009 9:11 PM:

" Let me know if you need list of arbitrators for your mediation. You'll need them. "

Keri Ruffell wrote on Jan 5, 2009 4:34 PM:

" Thanks for all of the feedback! Business is business and some succeed and some don't - for various reasons! That is the risk we take when we go into business (WITH or without a franchise). We (123Fit of Oro Valley) work hard. We lead with our minds and follow our hearts. Meet any entrepreneur and you'll hear that the success and failure of any business depends upon many factors. That being said, I do feel the need to respond to some of the comments....

As of the date of interview for this article, I was under a development agreement with the franchisor for the state. However, the future of that arrangement is uncertain at this point, for reasons outside my control. I was never and am not involved in any of the other AZ locations (123Fit sold to those current owners prior to my involvement). I began as a single franchisee and was offered an opportunity to help grow the state subsequent to that. So as of today, I remain just a franchisee...and have been happy with our success in Oro Valley. The Oro Valley club is thriving because we do a lot of strategic marketing, have a viable demographic and good location, and are involved in the community. Of course, we take great care of customers (thanks to the member that posted a testimony to this!) My location is diversifying our offering (adding classes) because we recognized the additional needs (and the opportunity) to do so within our marketplace early on after our opening. I have a personal conviction to meet those needs. Proactively, I did discuss the expansion with the franchisor. (UFOC allows for this as long as it is approved and included under the tradename).

While I appreciate the caution/support (and even criticisms) offered by the readers here, and I cannot speak to the situations at other 123Fit locations or their relationships with the corporate offices. All I know is that we (in Oro Valley) are doing well, with a lot of hard work, and have plans to continue to do well. "

Rich wrote on Jan 5, 2009 1:49 PM:

" DO NOT BELIEVE ANYTHING THAT THIS 123 FIT FRANCHISE!!!

CONTACT AN ATTORNEY!!! IT WILL BE THE BEST $$$$$ YOU EVER SPEND!!! ;-) "

S- wrote on Jan 5, 2009 1:45 PM:

" Tell me how you can expand a studio to accomodate exercise and yoga ?I DO NOT believe that is allowed according the UFOC.

I believe the UFOC says you can only do as the 123 fit franchisor says, sells, promotes,etc. Did they grant you the right to be doing this in writing? Because if not I would say you are violating the contract you signed. Maybe you ought to check with the club in Calif that added a vitamin place next door and later closed it.

Is the 123 fit franchisor finally admitting that the franchisees cannot make it on the 123 fit workout alone or the stupid personalized training they added to the clubs.

Watch out Keri.......Brooksy will be increasing your royalties to cover you expansions! "

Anon wrote on Jan 5, 2009 10:50 AM:

" All hype. The proof is that 40 clubs have closed. How many never opened?Anyone who goes into this franchise commits financial suicice. Don't believe anything this franchise says. The leaders use to be part of Quiznos. Read all the horror stories on Quiznos. "

Dennis wrote on Jan 5, 2009 8:28 AM:

" Well the facts are that this place is always crowded and doing well. Maybe in other areas they arent doing well, but here there is definately a market, as you can tell if you walk into this location. The staff is great and the results are evident. "

Bob wrote on Jan 5, 2009 8:01 AM:

" Maybe Kelly ought to check on her other 2 franchises she sold Az. The clubs in Chandler and Scottsdale are struggling terrible.

And anyone who believes this story and thinking about buying this franchise had really better search this 123 fit franchise out. They have closed over 40 clubs. One closed last week in Grand Junction, CO.

The lawsuits against this franchise have already started. After all this franchise was started by Quiznos, Richard Schaden and Ray Wilson. They jumped ship after the first year. Google, Google, Google for information.

The owner of 123 fit, Brooksy Smith, closed 2 of his 3 clubs and gave the last struggling club to a member. What does that tell you?

CALL every franchisee that exists on that UFOC. They are hard to find, their numbers have been disconnected, write them, look for them on the internet. 123 fit has purposely made it hard for franchisee prospects contact ex-owners.

ASK Kelly, owner mentioned above, that you want to see her money she makes. Ask to see her taxes she files! She should be willing if she is making money!

Kelly may brag that she has over 200 members. But.....here is the tricky thing, how many are paying and how much are they paying. Those are the records you want to see. If she dont show you, dollars, then she is hiding the true facts.

DONT BE SOLD ON THIS FRANCHISE without have a business/franchises attorney read that FRANCHISE AGREEMENT. It is worth the money. Because that agreement is all for the FRANCHISOR. It is very one sided.

AND one more thing that is in that Franchise Agreement that YOU have to sign. It is a release claim that you release 123 fit from everything but yet they will gain everything when you CLOSE!!!!!

COSTS are averaging about $250,000 to $500,000 that people have lost in this franchise. Can you spare that? "

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