No-frills fitness

Most CEOs this writer meets tend to turn up for interviews in formal suits, with dark ties and gleaming shoes. But when we meet Peter Taunton, CEO of Snap Fitness, a developer of no-frills fitness chains, change is in the air. The tanned and fit Taunton is in a cobalt blue Tshirt with khakis and, from the looks of things, he takes fitness very seriously.

Over the last couple of decades, Taunton has played racquetball professionally (rising as high as #2 in the US) and run six large “big box” fitness centres across the US. In his latest venture, Taunton wants to turn the multi-billion dollar fitness industry in the US on its head with his innovation, Snap Fitness. Over the last three years, he has opened 1,600 fitness centres, which don’t have any of the trappings offered by large competitors; there is no juice bar, climbing wall or sauna and steam room. Instead, these centres (Snap has 1,600 locations and is adding 3-5 new ones every week) will offer barebones 24-hour access to the latest fitness equipment, with a smattering of instructors to keep watch.

According to Taunton, his centres are around 2,000-3,000 sq. ft in size, compared to his big box rivals who can run facilities that can be as large as 20,000 sq. ft and operate across multiple floors. “Most of our 400,000-plus members don’t have to commute more than two miles to reach a gym,” he boasts.

“They just want to get in, get out and get on with life.” To enable this, Taunton provides smart card access to his units and members can use gyms anywhere in the country and, indeed, globally.

After expanding his chain to Canada, Taunton is now looking to make inroads into the Indian market and hopes a combination of low costs and rapid expansion will make his chain competitive.

Snap’s membership fees are around $30-40 per month, compared to $50-75 charged by larger (and more feature-rich) rivals and Taunton expects to keep this cost differential here, too. “The Indian market can support 500-1,000 units,” Taunton says. Snap operates on a franchisee model to keep costs low.

For the moment, Taunton plans to start with gyms in Mumbai and Bangalore, before expanding into other cities. “Fitness is getting a lot more attention in India, especially with the rise of new-age lifestyle diseases in the last few years,” he says.

Large fitness chains such as Gold’s Gym have been on a national roll out, while home-grown players such as Fitness One are also looking to cash in on this fad. Then, Snap may also tie up with large corporates looking to set up in-house gyms, especially for those operating in 24x7 industries such as BPO, which require round-the-clock workout access. “There is a massive gap between luxury fitness chains and rustic, barebones gyms in India that we want to occupy,” says Taunton.

Before he can do that, Taunton faces several immediate challenges in India. Taunton himself admits that spiralling real estate and rental costs could be a dampener to his business. “Rentals have doubled or even tripled in some places; we’ll have to be flexible on locations and look to minimise the impact from these changes,” he says. Then, many cities may not legally permit his gyms to stay open all night. It is a grey area in Bangalore, for example, where “curfew” is 11.30 p.m. “We do have similar problems in some cities and we’re compelled to shut for a few hours and we’ll need to find a way past the problem here, too,” he adds. Finally (and perhaps most critically), a critical shortage of trainers and managers to run his gyms could yet play spoilsport with Taunton’s ambitious plans.

—Rahul Sachitanand