Muscle, a sports nutrition, weight loss, and
general fitness franchise, has emerged as a
destination business with an interesting site
selection approach: locate strategically near
health clubs or within eyesight of a gym.
What better time and place to buy
vitamins and supplements than right after
a grueling workout?
“Our ideal location is a 1200-square-foot
store within sight of a Bally’s or Gold’s
Gym,” explains Marc Kiekenapp, vice
president of franchise development for Max
Muscle. He says the company has regional
directors throughout the country who
develop relationships with Gold’s, Bally’s,
and other fitness centers. “It’s a perfect
complementary relationship,” he says. The
company plans to soon have 40 regional
directors throughout the U.S. constantly
scoping out gym locations and looking for
nearby potential sites for Max Muscle.
’06 Retail Real Estate Outlook Strong
Predictions for commercial and industrial real estate indicate
substantial expansion for the remainder of 2006, with vacancy levels
projected to drop and rents poised to rise, according to Colliers
International, a partnership of independently owned commercial real
estate firms. The organization’s more than 9,000 employees span the
world in approximately 250 offices in 51 countries. On a worldwide
basis, Colliers manages more than 660 million square feet and has
revenue in excess of $1.17 billion.
“The U.S. commercial real estate sector will be remarkably strong,”
says Ross Moore, senior vice president and director of market and
economic research for Colliers. “Even if the economy grinds to a
standstill tomorrow, we have enough momentum and inertia to carry
us through until at least mid-year.”
On the office side, healthy job growth is fueling demand for space,
which continues to surge. Colliers also remains bullish on industrial
space, as indicators in manufacturing, imports/exports, and industrial
production are all pointing upward. Retail also is predicted to continue
to thrive, fueled by consumer spending, expansion into new markets,
and the revitalization of urban downtowns.
“We are well aware of the challenges the U.S. economy faces in the
form of high energy costs, rising interest rates, and an uncertain
housing market,” says Moore. “But we also believe that because so
many businesses are well capitalized and financially secure, they are
primed for expansion. This can only invigorate the real estate boom.”
After launching its franchise opportunity
in 2003, Max Muscle today has more than
100 franchise locations operating in the
U.S., with 500 new sites projected in the
next five years. Kiekenapp says the company
is currently looking to expand in Florida,
Arizona, Chicago, and the Northeast.
In areas of the country where the brand
doesn’t yet have a local regional director on
the ground, Max Muscle works with real
estate agents and brokers. “We have a super
PowerPoint presentation that gives all the
details and specs we’re looking for to local
agents,” says Kiekenapp. In addition to a
nearby gym, the company is looking for
areas with a population of at least 100,000,
good visibility, good parking, and a market
of baby boomers interested in health and
fitness. “We also know from our research
that people will not drive more than 15
minutes to a gym, so that weighs heavily as
well,” he says.
Again, after a prime spot is identified, a
lease must be negotiated. Kiekenapp says
franchisees are ultimately responsible for
working out the details of the lease and
hiring their own attorneys to review it. “It’s
critical, because if you end up with a lousy
lease, it can make resale very difficult,” he
says—adding that it’s imperative to factor in
options and flexibility that will allow for
growth or moving, if necessary.
After the lease is signed, it’s time for the
actual build-out. “We use a professional
build-out company that constructs the
facility to specs for us. Then we can go in
and finish out the inside of the store,”
Kiekenapp says. The company’s president
personally oversees every build-out. “All of
these systems are in place so that we ensure
consistency and our franchisees know the
store will be done right.”
Market size isn’t everything
Montana Mike’s is a full-service
steakhouse concept specializing in big
portions at great value. But you won’t find
them in any major U.S. cities, and that’s just
fine with them, according to vice president
of franchise development, Madison Jobe.
“We look beyond the clutter of the one
million-plus metropolitan areas that are
already saturated with food concepts and
franchises,” says Jobe. “There’s a perfect
place for what we offer in the smaller B and
C markets of America.” In fact, of the
company’s 21 Montana Mike’s restaurants,
8 are in B markets and 13 in C markets,
mainly throughout the central part of the
country in Oklahoma, Kansas, Missouri,
and Indiana. Jobe doesn’t rule out the
possibility of expansion into A markets
