Fitness Premier’s Small-Market Strategy: How Community Focus and Strategic Real Estate Drive 30% Growth

Through thoughtful location choices and deep community involvement, the gym chain is expanding its footprint and impact across the U.S.

Fitness Premier takes a holistic approach to community building. It engages both within the gym walls and beyond. Their success in this area stems from a strategic focus on real estate and location.

By concentrating on smaller markets where traditional gyms often don’t operate, the brand is able to embed itself fully into the local culture, thus creating a strong presence in communities that are highly receptive to this kind of engagement.

This approach seems to be paying off.

In the first half of 2024, the 20-year-old, 19-location Midwest-based gym chain expanded its system footprint by 30% and signed deals for six new gyms, now extending its reach into the Southeastern U.S.

Thriving in Smaller Markets

Fitness Premier works hard to establish itself as a vital part of the community collaborating with youth sports teams, police and fire departments, the military and more and establishing itself as a vital part of the community fabric.

“We offer a great product while becoming a great neighbor, and that’s where we excel,” said Jason Markowicz, the gym’s founder and CEO.  “Most gyms focus on building their community within their four walls. We go out into the existing community, get involved, support it, and offer our services. We work to be a hub of positivity and change in the areas we serve.”

Markowicz cites a recent partnership with a local high school’s special needs class as an example of this.

“We’ve developed training for this group and we take it to them,” he said. “Offerings like this are harder to create in urban environments with dozens of schools and potential red tape. In smaller markets, we can simply call the school principal, introduce ourselves, and ask how we can be of service.”

Financial Benefits of the Small-Market Model

From a financial perspective, Fitness Premier’s focus offers several advantages.

First, real estate costs per square foot are lower in these markets, allowing the brand to avoid paying premium rents.

“The cost to open a gym is less, the cost of real estate is less, and we can enter a market, establish ourselves, and maintain our position, making it difficult for competitors to come in,” Markowicz explained.

“Another benefit is it’s less costly to market ourselves in a small town,” he says. “If you come in and do a good job, people talk and the word spreads.”

The company also owns about half of the commercial real estate it operates in, an innovative strategy that further enhances financial stability.

Strategic Real Estate Scouting

Fitness Premier’s real estate scouting is handled by Texas-based Fishers Real Estate.

“They conduct a national search for suitable sites, focusing on communities with a population of more than 10,000 within a five-mile radius,” says Markowicz. “These sites are then cross-referenced with factors such as age, education level, and income to ensure they meet the brand’s criteria.”

He says that over the years they’ve created a model that can then be adjusted to fit the needs of each community.

“We have a newer facility in Beecher, Illinois, which is a town of 6,000,” he says. “We simply scaled down the footprint and size of the facility we chose to fit what the market calls for. After years of learning, we understand our product and our consumer and these types of markets.”

Franchisee Support and Future Growth

Fitness Premier’s approach to market selection not only creates wins for the overall business, it also provides a protective environment for franchisees, helping them sustain their operations.

Markowicz, who has owned franchises in other brands, knows the importance of protecting revenue and margins from competitive pressures. Therefore, Fitness Premier’s model helps franchisees establish multiple revenue streams, integrate members effectively, and receive robust back-office support.

The gym offers three membership tiers—basic, platinum and a premium tier that includes Relax and Restore suites focused on recovery. They also provide small group training, personal training, nutrition coaching, boot camps, and sports performance programs, offering multiple revenue streams.

Looking ahead, Fitness Premier is poised for continued growth.

“We’re very excited about the future,” said Markowicz. “Our corporate team has been around a long time, and we have a deep bench behind the scenes to support our locations. We’re doubling down on franchise development to attract investors in Colorado, South Carolina and Florida.”

As Fitness Premier continues to grow, the brand remains committed to entering new communities in alignment with its franchisees and maintaining a pace of growth that allows it to find and attract strong leadership that serves the communities it enters.

“At the end of day, we are focused on being a good neighbor, and on getting as many people as possible off of their couches and into the gym to get healthy.”

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