GNC and

Gold's Gym
Group 1, Section B
Ayushi Garg 19P013
S Auditya  19P041
Shikhin Garg  19P048
Saketh Chitrapu  19P059
Rahul Samaddar  19P104
Anusha  19P128
Bhaveek Ostwal 19P132
Shrestha Goel  19P158
Vibha Dalal  19P177
Economic Setting
 Fitness Industry
 USA is the world’s largest health and wellness market, with 41,370 clubs, and an annual growth rate of 4.5% (pre-CoVid).
Over 64.2 million Americans belonged to at least one health club.

 The most active companies in the market include key players, such as by LA Fitness International LLC, Planet Fitness, LTF
Holdings Inc., 24 hour Fitness, and Gold's Gym International.

 The global dietary supplements market size was valued at USD 140.3 billion in 2020 and is expected to expand at a
compound annual growth rate (CAGR) of 8.6% from 2021 to 2028. USA emerged as a leading market in the North America
in 2020 owing to the higher spending capacity of the consumers and growing interest in preventive healthcare. This
industry witnessed a surge in demand for immunity-boosting supplements during CoVid-19.
Challenges faced by the fitness industry

 The gym industry has a reputation for a high turnover of members. However, the average retention rate in USA is 72.4%.
 Spread of misinformation related to health and fitness on internet due to lack of regulation on posting of health-related
content.
 The low entry barriers for unorganized players lead to immense difficulties for organized players in the industry. The
substandard products and services provided at cheap prices make it hard for customers to go for organized players
services.
 Partnerships in the fitness industry

Snap Fitness, franchisor of compact, 24/7 express fitness clubs, came into

strategic partnerships with Bioceutica, Health Solutions Ltd. and
HyperStrike

The partnerships give club members access to a package of customizable,

web-based health and wellness planning tools that supplement the
traditional gym workout experience.

The host of services provided are - Build a personal wellness plan, talk
confidentially to health and wellness coaches, create customized workouts,
take a nutritional assessment, etc.
 Partnerships in the fitness industry

Ixcela, a Boston-based, internal fitness company focusing on gut health, in partnership with Lynx
Fitness Club, a local luxury fitness club

The partnership allows Lynx members access to Ixcela test kits. Using its results, Lynx Fitness Club’s
trainers and onsite nutritionists will work directly with members to improve their overall health
outcomes.

The Vitamin Shoppe, a specialty retailer of nutritional products, announced strategic

partnership with WW International, Inc., a global wellness company and the world's
leading commercial weight management program

They launched co-branded nutritional supplements, introduced select member-

favourite WW snacks and protein boosters to The Vitamin Shoppe and provide the
opportunity to purchase a digital WW membership package at The Vitamin Shoppe.
Business Case
for Alliance
 GNC
• Founded in 1935 by David Shakarian
• Headquarters : Pittsburgh, Pennsylvania
• Mission: Motivate & Support the desire to live well
• “Living mighty. Living long. Living fit.”
• Specializes in health and nutrition related products, including vitamins, supplements,
protein, performance, herbs and natural solutions, sports nutrition, diet, and energy
products.
• Focus on:
• Innovative solutions and high quality products
• Personalized shopping experience
• Convenience; available worldwide even
at local stores, day and night
 Gold’s Gym
• Founded in 1965 by Joe Gold in Venice Beach, California.
• Headquarters : Dallas, Texas
• Largest Co-Ed Gym Chain In The World With Over 700+ Clubs In 28 Countries
• At gold’s gym it’s not only about working out but having A healthy lifestyle
• Offers a variety of cardio and strength training equipment through programs like:
• Corporate wellness program
• Quick result program
• Group exercise program
• Personal training program
• Commitment to diversity, equity and inclusion
 Culture Fit – Focus on Healthy Living
GNC
Mission to motivate and support the
desire to live well
The Live Well Foundation
Committed to a world where everyone
can pursue a healthier life by providing
education, research and nutrition.
Gold’s Gym
 At gold’s gym it’s not only about working
out but having A healthy lifestyle, Fitness
is the power to overcome all obstacles
 Corporate & Community Wellness
Programs
 Reaching out to people who want to get
fit but cannot make it to gym
 Relevance of JV for GNC and Gold’s Gym
• Has been facing losses for the past 12
quarters
• Had to close 1100 stores to cut losses
• Closing of stores led to nearly 10% decline
in revenue from US and Canada market
• Wholesale business also lost 21% revenue
as Walgreen’s closed their store within
store when they acquired Rite Aid stores
chain
GNC has to explore all avenues through
which it can increase sales
• Though still one of the biggest chains, it
has been falling behind younger chains
• Its Venice Beach gym is called “The Mecca
of Bodybuilding”. Despite having such high
brand value, it is unable to interest
franchisees in joining them
• Gold’s Gym has not been able to make any
additions to its chain in the last two years,
whereas other chains have almost doubled
Gold’s Gym has to regain its attractiveness
among Franchisees
 Why go for a JV now ?
Awareness of Fitness is growing rapidly
• Adoption of healthy living practices is on rise and people are looking for ways to include fitness
into their life
Acceptance of supplements is on rise. However, awareness of types is low
• Survey conducted by bodybuilding.com in 2018 showed that ~92% of the survey respondents
(4,938) accepted that supplements are safe if taken in prescribed dosage. However, only 12% of
the respondents were aware of all the major types of supplements available
What will GNC get out of this
• Gold’s Gym has a member base of 3 million. A JV with Gold’s will open access to these 3 million
members
• Gold’s Gym provides personalized training and diet plans to its members. Inclusion of daily
supplement packages increases the value derived by the member and also opens up a new
revenue stream for GNC
What will Gold’s Gym get out of this
• Higher margins on supplements will lead to higher profitability for franchisees and attract them
Partner Selection
 Fitness Chains
Gold's Gym International, Inc. is an American chain of international co-ed fitness centers originally started
Gold’s Gym
by Joe Gold in Venice Beach, California. 
Anytime Fitness is a franchise of 24-hour health and fitness clubs that is headquartered in Woodbury,
Anytime Fitness Minnesota, United States. The company operates over 4,000 franchised locations in 50 countries. In
2015, Entrepreneur Magazine ranked Anytime Fitness first on its global franchise list.
Snap Fitness is a privately owned and operated health and fitness club founded in 2003 by Peter Taunton.
Snap Fitness is associated by ownership and otherwise with other fitness and franchise businesses
Snap Fitness
through its parent Lift Brands and various affiliate companies.  Those brands include 9Round, YogaFit
Studios, Insurgence, Steele Fitness, Kosama and TRUMAV.
World Gym International is an American fitness center founded in 1976 by Joe Gold during the glory days
World Gym of "Muscle Beach" in Venice Beach, California. Joe Gold is also the founder of Gold's Gym, another gym
chain, which he sold in 1973.
Planet Fitness (PFIP LLC) is an American franchisor and operator of fitness centers based in Hampton, New
Planet Fitness Hampshire.
Cult.fit Cult fit is an Indian gym chain wherein people can do different fitness classes like yoga, Zumba, boxing,
prowl and HRX workout.
Fitness First Fitness First is an international fitness centre brand founded in 1993 in the United Kingdom. 
Blink Fitness Equinox Group is an American luxury fitness company which operates several lifestyle brands and blink
fitness being one of them.
 Partner Selection
Geographical
Fitness Chains Number of outlets Existing tie-ups 24*7 open or not
spread
Virtual health
Gold’s Gym 701 + 30 countries Yes
partners, fitbit

Anytime Fitness 4200 50 countries Lumen, ON, Yes

Musclepharm
Bioceutica, Health
Snap Fitness 2000 24 countries solutions ltd and Yes
HyperStrike
World Gym 220 20 countries Les Mills, Dymatize Yes
Planet Fitness 2039 6 countries Kohl’s, iFit Not all
Cult.fit 130 1 country Disney+Hotstar No
Fitness First 360 17 countries Home Nations No
Blink Fitness 70 + 1 country FlexIt No
Terms of
Transaction
Terms of Alliance
 This Alliance shall commence on the date the official agreement is
signed by both the partners and continue for 1 year thereafter.

 It shall be automatically renewed for additional periods of 6 months,

unless terminated by either Party by notice given not less than 15 days
before the scheduled date of expiry, or earlier terminated in accordance
with the terms mentioned under the section “Exit terms”.

  When negotiating with Customers, the Parties shall offer Products and
Services strictly in accordance with the terms and conditions of the
contract of sale which the other Party has communicated to it.

 The Parties each agree to use their respective reasonable best efforts to
promote the sale of the Products and Services in the new market in
accordance with each other’s reasonable instructions and shall protect
the other Party’s interests with the diligence of a responsible
businessman.
 Roles and responsibilities of partners

ROLES
DESCRIPTION

 Create special packages based on different customer types and offer the
same through Gold's Gym.
 Run a cross loyalty program through which purchase of GNC products will
fetch points redeemable in Gold's Gym and vice versa.

Marketing Partnership - GNC will market its new line of products as a

RESPONSIBILITIES collaborative effort between GNC and Gold's Gym. GNC can leverage Gold's
position as expert and brand recall among fitness enthusiasts. Gold's Gym can
leverage GNC's advertising.
Franchising - Gold's runs on a franchise model. Fitness supplements offers
higher margin which will encourage gym owners to collaborate with GNC rather
than other brands
 Type of Alliance Ownership
This is proposed to be a Contractual Joint Venture
GNC and Gold’s Gym will not share ownership in
(CJV) in which a new jointly owned entity will not
any form but each will exercise some elements of
be created. A typical example is a franchisee
control in the joint venture
relationship.

Relationship Accounting and Finance

The relationship will not be a transaction-to- Both will continue to operate separately with a
transaction relationship but will have a character shared goal but with no pooling of profits or losses.
of relatively longer duration Each keep their accounting records separate.
 Scope of the alliance

Product - Gold’s Gym would get access to GNC’s product line.

Services -
Loyalty Program - Both the Loyalty program’s would become more attractive
Marketing – Shared marketing costs, increased membership for Gold’s gym

Geographical Reach – Increased membership/awareness would potentially result in

rising interest and a greater number of franchised stores, which would in
turn drive up sales volumes of GNC products
Management
of Alliance
Management of Alliance
 Both the partners shall appoint 2 designated executives to the management team
which will analyze the operations falling under the alliance

 GNC will be primarily responsible for the supply of the health and nutritional
products and Gold’s Gym will be in charge of the disbursal of the products to the
end users(members).

 A team comprising both the partner’s members would be formed for the targeted
marketing (via customized plans) of GNC’s products and increasing Gold Gym’s
membership

 Regular meetings involving the management should be held quarterly to track the
progress of the alliance

 To avoid the cultural differences between both the partners, if any, some events
will be organized wherein employees from both the companies can come together
and have a cross cultural experience and slowly adapt to the differences
Exit Terms of the Agreement

Expiration or Consent of Parties Breach of Contract Distribution of Liabilities upon

Termination Products Expiration

This Agreement This Agreement In the event of a Upon expiration or The termination of
shall initially shall terminate breach of any termination, the the Agreement
continue for 1 year, upon mutual representation, Parties shall shall not relieve any
post which it shall agreement in warranty, covenant immediately cease Party from the
be automatically writing by the or agreement of to distribute the liabilities arising
renewed for Parties involved. this Agreement by Products and from the breach of
additional periods a Party, the Services, and cease contract
of 6 months, Agreement will be any activity in
unless terminated automatically connection with
before the terminated the marketing of
scheduled date of such products
expiry
 Alliance Plan

Competence compared against best in market

Make, Buy, Ally Matrix
Low Medium High

High Ally Build Build

Strategic
importance of Medium Ally Ally Build
activity
Low Buy Buy Buy

Joint Venture Objectives

 Increased revenues for GNC
 Increase profitability for Gold Gym’s franchisees and thus make it more attractive
 Provide end to end fitness solution and improve customer satisfaction and subscribers base (Gold’s Gym)
 Recommendation of GNC product bundles to Gold Gym members will boost sales for GNC
 Satisfied customers will act as evangelists for both Gold’s Gym and GNC brands
References
1. https://www.gnc.com/about-us.html
2. https://goldsgym.in/about.html4
3. https://www.newhope.com/news/vitamin-shoppe-and-ww-international-partner-support-healthy-livin
g
4. https://www.fooddive.com/news/why-gyms-are-the-best-place-for-health-focused-products-to-get-in-
shape/526988/
5. https://www.glofox.com/blog/partnership-marketing-for-fitness-studios/
6. https://www.newhope.com/retail-and-distribution/9-ways-attract-and-serve-sports-nutrition-custome
rs
7. https://www.snapfitness.com/us/news/snap-fitness-launches-partnerships-with-leading-online-health
-and-fitness-companies/
8. https://www.businesswire.com/news/home/20181001005581/en/Boston-Biotech-Company-Partners-
with-Local-Luxury-Fitness-Club-to-Improve-Gut-Health-and-Wellness
9. https://www.bodybuilding.com/store/affiliate.htm
10. https://www.prnewswire.com/news-releases/virtual-health-partners-in-partnership-with-fitness-form
ula-clubs-launches-ffc-on-demand-a-revolutionary-app-offering-virtual-fitness-nutrition-and-wellness-s
ervices-300968457.html
Thank You !!