To cut her overhead in this area, Pamela Warshay, owner of Sage Fitness, treats her Pilates and Gyrotonic instructors as independent contractors. It is their responsibility to find their own clients and set up their own hours. They simply rent her studio for the hours they need.
She says she structured her business this way because she also recognized that students tend to follow their teachers. So why waste money on training only to have the instructor eventually leave, taking their clients with them?
Gregory Florez, CEO of Fit Advisor, agrees, adding that if they're not staff, then you aren't responsible for their training, certification and ongoing education.
"Although you have less control, if you are good at spotting talent and offer good incentives, I recomend starting out with contractors because it's less risky. You can always, as the cash flow starts, change from contractors to employees. It is harder to do it the other way around."
To Lease or to Buy?
The cost and maintenance of equipment is the third-largest overhead cost you'll have. Deciding whether to buy or lease equipment depends on your budget and your goals. Warshay opted to purchase her Pilates and Gyrotonic equipment over time, as her studio got bigger. Price tag: between $3,500 to $5,500 each. To keep the machinery running smoothly, she does most of the maintenance herself. For the heavier lifting, she has a handyman on speed dial.
Fowler, meanwhile, recommends her franchisees sign a three-year leasing contract. "After three years, you don't want those spinning bikes," she says. "You don't want to lose your reputation because your bikes are crappy."