Lady of America CEO Roger Wittenberns

BY PATRICK DANNER pdanner@herald.com

For nearly two decades, Roger Wittenberns has been the man behind Lady of America.

Since launching a women-only fitness center -- originally called Texas Lady -- in Houston in 1984, ittenberns has expanded the chain to 290 franchise locations.

But now Wittenberns, president and chief executive of Fort Lauderdale-based Lady of America Franchise Corp., is two-timing. With the $1 million acquisition of Ladies Workout Express -- an Atlanta-based chain of 88 fitness centers -- in August, Wittenberns is mapping out an ambitious expansion plan for a company that already is ranked the 73rd fastest growing franchise by Entrepreneur magazine.

''By 2005, our goal is to be at 2,000 [centers], but I think we can go way past that,'' Wittenberns said. He believes 10,000 locations worldwide is realistic.

''The great need for health and fitness is causing two things: one, greater profitability for health clubs in general, and two, the opportunity for more diversified types of facilities to open,'' he says.

While all health clubs may seem the same to the average couch potato, fitness chains Lady of America and Ladies Workout Express are different. A typical Lady of America center spreads out 5,000 square feet and offers an array of workout equipment and classes, such as aerobics, kick boxing, spinning and body sculpting. It also provides baby-sitting.

A Ladies Workout Express center, on the other hand, covers about 1,700 square feet and is designed to provide a workout in less than 30 minutes. It operates under a circuit-training concept, where the user spends about 40 seconds on each of the 16 to 24 pieces of hydraulic workout equipment.

While the Lady of America centers have been the foundation of the company, Ladies Workout Express will supplant Lady of America as the company carries out its growth plans. For every Lady of America franchise that opens, the company will franchise 10 or 15 Ladies Workout Express centers, he says.

The reason for that is simple: the cost to a franchisee to open a Ladies Workout Express averages about $25,000, compared with $110,000 for a Lady of America, even though the franchise fee for each is $12,500, Wittenberns says. Costs include about three months of start-up capital.

''It's a more affordable franchise opportunity,'' Wittenberns says of Ladies Workout Express. The company has sold 178 Ladies Workout Express franchise locations since agreeing to acquire Ladies Workout Express early this year.

''In essence, we took [something] like a large steakhouse and turned it into a very profitable McDonald's,'' Wittenberns quips.

Now the company has a combined 590 existing or planned Lady of America and Ladies Workout Express locations.

A Ladies Workout Express needs about 200 members to break even, compared with 500 for Lady of America, Wittenberns says. That will allow the company to franchise in markets it hasn't gone in because they were too small for a Lady of America location, he adds.

Besides the franchise fee, Wittenberns' company collects royalties from each of the franchises. Lady of America franchisees pay 10 percent of monthly revenue, while Ladies Workout Express franchises pay $500 a month. The company projects corporate revenue (franchise fees and royalties) at about $36.5 million this year, up 20 percent from $30.3 million in 2001. The privately-held company doesn't disclose its bottom line.

Lady of America's growth exceeds the industry's. The number of fitness centers in the country rose 2.8 percent to 18,302 as of July, according to the International Health, Racquet & Sportsclub Association. It counts 33.8 million people as health-club members.

''The fitness industry and wellness industry is a large market that, as a whole, is untapped,'' says Alan Platt, director of the sports and wellness management program at Nova Southeastern University's Wayne Huizenga School of Business. ``It's going to make great financial sense for people to pay attention to their fitness, their wellness and their health because healthcare is getting awfully expensive. It's just good medicine.''

Fitness clubs have a large market still to exploit: nearly 59 million Americans, or 31 percent of all adults, are considered obese, according to a government survey released last month.

Wittenberns, who began his career as a lifeguard and fitness consultant at Jack LaLanne's Health Spa in New Jersey, says the idea for a women-only fitness facility was a natural. Co-ed gyms can be intimidating and uncomfortable for women because they may be worried about their looks or dodging men looking for dates.

''What we have built is a chain of women-only fitness centers that your wife or girlfriend can safely go to,''Roger Wittenberns says.

Retiree Shirley Gadol, who was working out at a Lady of America in Fort Lauderdale one recent afternoon, says she likes the atmosphere of the club.

''I'm a little overweight, and I'm self-conscious,'' she says. ''I like it here because it's for women, and all of the machines are set for women.'' Membership dues vary by location, but average $29.95 a month for both Lady of America and Ladies Workout Express, Wittenberns says.

The company employs 30 full-time workers in its corporate office in downtown Fort Lauderdale; 60 other corporate employees are in the field. When a franchisee meets the requirements to purchase a franchise, Wittenberns says the company handles site selection and lease negotiations. It also assists the franchisee in obtaining financing and screening and hiring managers.

The company has been selling about 50 Ladies Workout Express franchises a month, he says. Among recent purchasers is Mara Reheusser, who just opened her franchise in Oakdale, N.Y., in late September. She says she went with Ladies Workout Express because of the corporate support.

''There are other franchise opportunities out there for similar facilities,'' Reheusser says. ''They seemed to offer the training and support to be successful.'' The company operates a prototype Ladies Workout Express in Fort Lauderdale and has three in the planning stages in South Florida.

Once the company reaches 2,000 locations between the two brands, Wittenberns says he may take Lady of America public.

In the meantime, he faces some competitive challenges. Curves for Women, a fitness operation that offers circuit training similar to Ladies Workout Express, already has more than 5,000 locations and has plans to double its size within three years, according to Gary Heavin, founder and chief executive of Curves International in Waco, Texas. Curves has 1.3 million members.

And Curves is selling about 250 franchises a month, making it the third-fastest-growing franchise in the Entrepreneur magazine ranking. Heavin says his company already has blanketed small towns around the country, which he says will be a formidable barrier for Lady of America's expansion plans.

''It's smart for them [to expand] because they will find pockets, but they will not reach 5,000, 10,000 or even 2,000 locations,'' Heavin says. ''But 1,000 locations is still a lot.''

Wittenberns isn't intimidated by Curves' dominance and will be going into many locations where his rival is already established.

''We are going to go head-to-head in those towns,'' he says. ``And I feel we'll come out on top simply because we offer more attractive facilities with greater services.''