Fitness First in France

1. Fitness First in France Best In France Case Study 15th December 2003 Group ES1.e Brian Villapudua Gin Hirayama Hong Li Hsin-Yin Hsieh Richard Robinson

2. Road Map • Corporate Information • Starting-up in France • Constraints and Adaptation • Results • Advice

3. Fitness First • British fitness gym chain • Founded in 1992 by Mr. Mike Balfour • 2ND largest health club chain in the world • 350 clubs and 870,000 members worldwide Australia, Belgium, China, France, Germany, Hong Kong, Malaysia, Netherlands, Philippines, Spain, Thailand, Italy • Moved to London Stock Market in 1999 with 70 gyms • Rapid expansion in 2000 • New Investment Company as of July 2003

4. Fitness First Mission “We put fitness first so that our customers can feel good about life. At Fitness First everybody is welcome – it’s about providing high quality, value for money, fitness facilities and services that are convenient, flexible, and easy to use.”

5. Fitness First in France • Opening in France • Search for new countries to follow success in UK • Recruited a person with fitness background interested in a development in France • First office – Paris - May 2001 • First Gym – September 2001

6. Before Start-up • Did not expect great differences in managing the company in France… • Prepared to implement the UK structure and system • Expected demand as in UK • Planned an aggressive implementation

7. After Start-up • System and structure incompatible • Financial difficulty • Low demand • High costs • Need to turn around

8. Constraints in France • French mentality towards fitness • Legal matters • Labor laws • Contracts • Trainers’ certificates • French employee mentality • Wage structure • Commission • Compensation

9. Adaptations to FranceFrench View of Fitness • Prefer to take walks, go cycling etc with their family rather than going to the gym for a work out • Prefer to buy fitness goods advertised on T.V. • Ex: EMS (Electronic Muscle Stimulation)

10. Adaptations to FranceFrench View of Fitness • Fitness First surprised and gained market through their quality of service and internal organization • Customer care – ex: Phone follow-up, Birthdays • High performance by trainers • Facility – ex: Videos rental, drinks • Change of management

11. Adaptations to FranceLabor Laws • Regulations • The 35 hour work week (UK 49H) • Highly complicated rules on holidays • Ex: If an employees works on a Sunday, he/she must have two consecutive days off • Employee’s rights much larger than in UK

12. Adaptations to FranceLabor Laws • Having a specialist in French labor laws • Creation of a new system for shifts • Creating cooperation • Building good relationships between employees and mangers • Paying attention and rewarding the efforts made by employees

13. Adaptations to FranceHaving the Right People • Firing • Contracts • CDD – Contract Duree Determine • CDI – Contract Duree Indetermine • Use the CDD first and then to CDI • Recording of any problems caused by employees

14. Adaptations to FranceCertificates • French regulations required all fitness trainers to have certificates • Finding trainers extremely difficult • Retention highly important • Inspection by regulators • Extensive use of ANPE (Agence National Pour Emploi) • Introduces potential employees • Free service by government

15. Adaptations to FranceSalaries • Low motivation due to Fixed Salary • Low motivation for higher sales and quality • Low awareness for customer retention • Application of Commissions and Rewards • Sales staff salaries based on commission • Acknowledgment of outstanding sales performance • Bonus paid for retention of customers • Allowances

16. Adaptations to FranceCooperation • Unwilling to work off schedule • Value their private time greatly • Comparatively inflexible • Introduction of bonuses • Bonuses for those who made extra effort in the interest of the company • Ex: filling in for others, working overtime, changing holidays to meet fluctuations in demand of labor

17. Results • Met many constraints in the early period that didn’t happen in other countries • Slower growth than in other countries • Steep learning curve • Most problems solved now and Company consolidating ready for further growth

18. Advice to Followers • Without passion, direction and determination it is impossible to succeed in France • Center activity in Paris first if possible • Keep a good blend of foreign staff with strong company culture • Prepare for legal matters beforehand • Learn the French life style • Some government organizations useful e.g. ANPE

19. We Thank • Lety Bianchi, National Recruitment & Training Manager, HQ Fitness First France,185 rue de Grenelle 75007 Paris • Daniel Chaffey, National Operations and Sales Manager, HQ Fitness First France,185 rue de Grenelle 75007 Paris

20. Our Team • Richard Robinson • Current Address: Residence Eric Tabarly, Appt. No.2.411, 8, Rue Eric Tabarly, 91300, Massy, France • Permanent Address: 45 Brisbane Grove, Hartburn, Stock-On-Tees, Cleveland • Brian Villapudua • Current Address: Residence Eric Tabarly, Appt. No.2.406, 8, Rue Eric Tabarly, 91300, Massy, France • Permanent Address: 2330 West 229th Place, Torrance, CA 90501, USA • Hsin-Yin Hsieh • Current Address: Residence Eric Tabarly, Appt. No.2.404, 8, Rue Eric Tabarly, 91300, Massy, France • Permanent Address: 265, Sanfong Rd., Fongyuan, Taichung County, 420, Taiwan

21. Our Team • Gin Hirayama • Current Address: Residence Eric Tabarly, Appt. No.1.607, 6, Rue Eric Tabarly, 91300, Massy, France • Permanent Address: 612-9 Horiuchi, Hayamamachi, Miuragun, Kanagawa Japan • Hong Li • Current Address: Residence Eric Tabarly, Appt. No.1.507, 6, Rue Eric Tabarly, 91300, Massy, France • Permanent Address: Room 1406, Building 15, Baogang 6th Cun, Shanghai, 201900, China