The Orangetheory Fitness brand experienced explosive growth in Canada in 2018 with plans to continue its aggressive expansion plans this year and beyond as it also looks to increase its presence in more urban areas of major markets.
There are currently 85 locations in Canada with 24 new studios having opened in 2018, representing a 40 per cent year-over-year growth rate.
Hifa Maleki, Orangetheory Fitness Canada’s VP of Franchise Development & Operations, said the company is looking to open an additional 30 plus locations this year.
“We’re pretty much opening a location every week and a half throughout the rest of the year. By the end of February, we’re going to have 90. We definitely have a bit of a great and consistent pipeline of locations opening across the country,” said Maleki.
The company’s first location was in St. Albert, Alberta in October 2012. The majority of the growth has come in the past three years or so. In just over three years. Orangetheory has opened 75 locations in Canada.
“We didn’t even start franchising in Canada until 2014,” said Blake MacDonald, a 20-year veteran executive in the fitness industry, in the full time role of President of Orangetheory. “We had several corporately-owned locations just in Edmonton and our first franchise location was in Fairview, southern Ontario . . . Didn’t have a lot of development in the first few years. A lot of it was perfecting the business model and ultimately making it so that the franchisee could be successful.”
Maleki said the company’s current projections anticipate having 200 locations open by the end of 2022. It plans to open 12 new studios across the country in the first quarter of this year with plans to open its first location in New Brunswick later in the year, putting it in nine of 10 provinces.
Maleki said Orangetheory is launching this year several new proprietary wearable fitness trackers, a new app and challenge tracker system, as well as state-of-the-art technology, which will not only track participants’ heart rates during the workout, but also the distances achieved by running and rowing.
“We are no longer just a fitness concept; we have evolved into a fitness and technology company,” she said. “Canadians continue to flock to the best one-hour workout in the country because we’re staying connected to our roots as industry innovators in the fitness and technology hybrid member experience.
“All of this data can be rolled up through our app and used to show members that results don’t just come from the inches you’re losing off your waistline. Collecting multiple sources of fitness data points in our Challenge Tracker app in 2019, will allow us to gamify the workouts in a way that uses members’ competitive natures to drive results they never thought they could obtain.”
When it comes to location, said Maleki, the company is looking for three things – the franchisee is its franchise partner and it’s very critical they’re a market expert; ensuring that an Orangetheory studio will actually fit into the location and be able to cater to and accommodate the right number of memberships; and making sure the location is something a franchisee believes will be there for the long haul.
Orangetheory has prefered real estate brokers across Canada it uses.
“We look at competition a little bit differently than other fitness concepts where some of them they want to shy away where there’s a lot of different fitness studios or locations, that’s actually where we want to be,” said MacDonald.
“Becoming a fitness and technology company has really allowed us to become the forefront leader in the large group personal training sector of the market. We always talk about it being affordable large group personal training as opposed to a fitness participant who’s working with a personal trainer paying $60 to $70 an hour. You can work out and get just as good if not better workout, more structure, more components to the workout, metrics afterwards sent to you about how you’ve done and how you’ve performed for as little as $15 a session. That’s the unique selling proposition and ultimately that’s what’s driving a lot of the success at the studio level.”
Maleki said the average studio space is about 3,000 square feet. She said where the company decides to place a location depends on the city and the market penetration. There has been some great success with some urban high-density areas. For example, the Yonge Street and Eglinton location in downtown Toronto has been very successful.
But the majority of locations are in suburban areas. The company’s number one location in all of Canada is in the Riverbend community in Edmonton. It has the highest number of memberships in Canada at about 1,200.
“The top 30 locations in Canada are in suburban locations,” said Maleki, adding that the company does see more inner-city locations in its future.
“The reason we’ve seen so much success is also because a lot of these (suburban) locations opened first. Over 99 per cent of our franchisees were members first so they were very passionate about bringing a studio to their home neighbourhood. So what we’re seeing is that now that those neighbourhoods are kind of sold out we’re going into more of these urban, high-density locations. It’s also very much based on real estate. The availability of real estate . . . For us, it’s not necessarily that we’ve been focused on suburban. It’s very partially based on growth and availability.
“I’m very excited that we’re opening so many more urban, high-density locations. We’re going to see three locations opening in downtown Toronto this year. We’re opening more in the central Montreal area as well as getting into Quebec City . . . As the brand awareness is growing we find that it’s actually opening up more opportunities for real estate.”
MacDonald said the company is now being sought out by building landlords because of its growth. Orangetheory can become a great amenity to a downtown building for example for its commercial or residential tenants.
“It also draws traffic to other retailers who are located in those sites,” he said.
Recently, Orangetheory Fitness Canada announced a new national partnership with Arcane, one of Canada’s leading digital and full service ad agencies out of London, Ontario.
