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50-year-old Franklin Athletic Club undergoes $4 million renovation as fitness flourishes

As gyms and fitness centers open on what seems like every corner in metro Detroit, the owner of Franklin Athletic Club in Southfield is making a $4 million bet that exercise won’t go out of style.

Rick Brode started the largest renovation in the history of his 50-year-old gym on Northwestern Highway in late 2017, and updates continue. The 230,000-square-foot building has been topped with a new roof, lined with new floors, layered in new paint and outfitted with new equipment. Work is about 60 percent done, Brode said, and he expects a near-term return on investment.

“I feel not only will renovations drive up membership, but along with renovations, we’re also making other changes, too, with personnel and new classes,” he said.

The gym’s member count has hovered around 4,200 for the past few years. With membership accounting for most of the company’s revenue, business has been steady — “no big spikes up, no big spikes down,” Brode said. He would not disclose revenue.

He’s been working at the club for 24 years and owned it for five years, recently watching the market flood with competition. Instead of saturation, though, he sees opportunity.

It could be the perfect time to invest in exercise. New Year’s resolutions are driving droves of people to gyms. In turn, many fitness centers rely on this influx of memberships to generate revenue for the rest of the year. The Detroit area, like other metropolitan areas across the country, has been inundated with fitness centers, from massive new developments by LA Fitness to former department store-filling franchises of Planet Fitness, in addition to smaller chains like Orangetheory Fitness and one-off concept gyms. The sustaining buzz in this space suggests there’s still market share to be had.

The fitness industry has grown steadily for the past decade in the U.S. — the single largest market in the world for gym revenue and membership, according to market researcher Statista. Revenue for fitness centers in the U.S. rose to $30 billion in 2017, representing the most recent peak of a 10-year trend that is expected to continue strong.

“I think the future of the industry looks bright even with the competition because people recognize the importance of health, nurturing themselves and having fun,” Brode said.

Brode said he believes his club is unique because of its size and expansive, open design. The renovations were needed to bring it up to date and give it an edge over competitors, he said. In addition to fresh aesthetics and new gym equipment, crews remodeled the center’s indoor and outdoor pools, 13 indoor tennis courts, locker rooms, service areas and banquet room. The center has remained open during construction, but some areas, such as the restaurant now, have been closed temporarily. More exterior work is planned this spring.

The general contractor is Oak Park-based PCI One Source, while management and design is being handled by Southfield-based Signature Associates.

Many of the members at Franklin Athletic Club are families, and it prides itself on taking “a family approach,” Brode said. Tradition and loyalty have served the center well so far, but new gimmicks — Area 45 Fitness in Troy, for example — are luring some away from the conventional gym. There are also many less costly alternatives — $10 a month at Planet Fitness being the most obvious.

A full membership at Franklin Athletic Club costs $127 per month. That includes access to all its amenities. A tennis-only membership is $50 per month. Brode said there’s a possibility prices could increase after renovations are complete. Full memberships also include access to classes, and there are more being added, such as kickboxing, in part as a response to diverse offerings from competitors.

“We’ve always been constantly changing and creating trends,” Brode said.  Renovations are expected to be complete in the fall, when the gym officially celebrates 50 years in business.  “We plan on being here another 50 years,” Brode said.

 

Posted By: Crain’s Detroit Business on January 2, 2019.  For more information, please click here to read the source article.

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