If you’re looking at KID-FIT as a business opportunity (as opposed to a single location or non-profit program) you should know how KID-FIT is different from children’s fitness franchises.
KID-FIT is a structured P.E. curriculum in which all children on location participate instead of just a select few. Children’s fitness franchises sell their service as pull-out programs. Also known as a “parent pay” or “fee per child” classes, there are a number of disadvantages of building a business this way. Here are some of the most important:
| All Children Participate | Pull-Out Programs |
|---|---|
| Need to convince one person (Director/Owner) to make a sale | Need to convince parents of each child to make a sale |
| Year long contracts | Month by month contracts |
| Buyers make a buying decision once a year | Buyers make a buying decision each month |
| Stable cash flow all year long | Sporadic monthly cash flow |
| Less sensitive to the economy | More sensitive to the economy |
| Difficult to terminate yearlong contract | Easy to terminate monthly agreement/contract |
| Easy accounting -1 payment per account each month | Time consuming accounting - payments from many parents |
| Minimal returned check fees | Regular returned check fees |
| Enrollment is never a concern since all children participate | Enrollment is always a concern, especially for holidays/vacations |
| Average cost per child low - leads to greater volume | Average cost per child high - leads to lower volume |
| Convenient for schools - entire class takes the program with their regular staff teachers | Inconvenient for schools - select children are taken out, other children are upset and some school teachers have to leave their classrooms to help |
| All the staff sees, knows and values the program | Few staff members see the program or know what children do each week |
| Accepted as an important part of the curriculum - fees part of tuition | Not an important part of the curriculum - an optional extra |
| Yearly renewal likely | May not make it a full year |
| Higher overall account retention | Lower overall account retention |
| Instructor hours and income are stable | Instructor hours and income are unstable |
| Class size is large - motivating for instructors | Class size may be very small - not motivating for instructors |
| Low instructor turnover | High instructor turnover |
| Greater long term financial security | Questionable long term financial security |
To summarize, conducting a pull-out program will cost a massive amount of capital for:
1) Selling and retaining clients
2) Accounting
3) Hiring and retaining instructors
Long term success is directly related to each of these areas. And, it’s not cost effective to start a business with so many unnecessary worries.
Be careful if you are considering investing in a pull-out program promising large profits. These profits are often based on unrealistic sign-up numbers and lead to all the disadvantages listed above.