Athletic Nation is 120 men strong, but founder Dennis Mulgannon says that's just the start.
Mulgannon launched the men-only gym franchise in February, and there are now five locations around the country, with plans for two more in November and another two before the end of the year. Within five years, the San Jose native aspires to open 500 to 1,500 gyms to cater to the growing market segment.
The concept takes men back to their glory days when they played sports in high school or college, Mulgannon says. His workout program -- customers pay $200 to $300 a month for twice-weekly weight-lifting sessions with a personal trainer and three weekly mile-runs -- creates a locker-room atmosphere.
"There's no self-consciousness. It's like they're back in high-school. They can spit on the floor. They can make noise. They can be themselves," Mulgannon says. "Can I bring a woman into that gym? No, it would offset that energy."
The launch of Athletic Nation comes at a time when same-sex gyms for adults are said to be flourishing and driving the growth of the entire industry.
"We estimate there are between 10,000 and 12,000, which is approximately a third of the health clubs in the U.S.," says Rosemary Lavely, spokeswoman for the International Health, Racquet & Sportsclub Association. "Single-sex clubs accounted for a large portion of the growth in the market for the last 10 years."
The appeal is that men and women tend to be less distracted and more comfortable in single-sex gyms, Lavely says.
The majority of single-gender clubs are for women, which is likely why they make up 53 percent of health club members, according to the group.
In 2006, about 20 million men were members of the growing U.S. health club industry. Total membership increased 6 percent to 98,594 facilities worldwide and industry revenue of $55.7 billion, the association reports.
Mulgannon has worked for 25 years in the franchise industry, and his work there led him into an online business called ourpool.com, which linked homeowners with the services and products to maintain their pools. The company lost its funding in 2000, and the business setback and a divorce prompted him to focus on his family and fitness from 2000 to 2003. He then wrote a book called "Reality Fitness in 90 Days ... For Men," which he sold online.
The target audience of his book and program is males, age 30 to 60, who are usually married and work in high-stress environments.
"I know our demographic because I am our demographic," says Mulgannon, who's turning 46 in November. "I know the excuses -- they're too busy and don't have time to go to the gym. I fight it every week myself. But we don't allow excuses."
The online sales and e-mails from prospective clients prompted him to open a gym in San Jose and use his franchising background to take the company nationwide. Athletic Nation has nine franchisees in six states -- California, Arizona, Texas, Florida, North Carolina and Massachusetts -- and is looking at 55 new markets for 2008, when Mulgannon wants to open four or five franchises a month.
The future of Athletic Nation could be in strength-training programs for golfers, paraplegics and high schoolers, Mulgannon says.
Developing the brand
Athletic Nation faces plenty of competition in the franchise industry, which accounted for nearly 10 million jobs and $625 billion in economic impact in 2001, according to a Pricewaterhouse-Coopers study. There are 16 gym franchises marketed on franchisegator.com, which is where Mulgannon says he gets most of his prospective clients.
Mulgannon says the concept behind Athletic Nation is unique enough to sell the brand to franchisees and clients. Another strength of the franchise is that most owners can maintain their careers while owning the gym, he says.
Athletic Nation requires an investment of between $43,000 and $57,000. Thirteen clients a month will make the business break even, Mulgannon says.
Jeff Whettschurack opened an Athletic Nation Gym in Fountain Hills, Ariz., three and half months ago and has 22 clients. At the current business growth, he expects to recoup his investment within a year and a half.
"We've done very, very well in that short amount of time," Whettschurack says. "We serve the average Joes who want to come in and not be intimidated by body-building 20-year-olds."
The gyms average 28 to 32 clients but can accommodate up to 60, Mulgannon says. The corporate office employs four people; each gym has two to five workers, made up of the manager and part-time personal trainers. The company developed a program to uniformly certify the trainers, usually guys in their mid-twenties, who ensure that clients show up for appointments.
"We'll call them. We'll e-mail them," Mulgannon says. "They cannot do it alone. We push these guys so hard, and they pay us well for it."
EMMA RITCH covers clean technology, hospitality and small business for the Business Journal. Reach her at (408) 299-1830.
