Protecting Your Brand: Your Guide to Perfect Partnerships

gym, fitness, franchise, business, work, brand, owners, clients, good, product, big, coach, staff, mcdonald, planet fitness, point, starts, sell, smaller boutique

Tyler 00:00

Ladies and gentlemen, and welcome back to this week's episode of the gym owners podcast. I'm your host, Tyler stone, over there's John Fairbanks, how



John Fairbanks 00:06

you doing? John? Fantastic. Tyler. How are you?



Tyler 00:08

Good? I'm doing great. Guys. Today we're going to talk about where the line is in preserving your own brand versus involving yourself with other brands. Really, even as far as you know, you're going to open a gym, if you're going to do your own thing, are you going to do somebody else's thing, or are you going to do your thing? Are you going to attach yourself to another brand? Are you going to build your own brand from scratch? There is a line where I think we think, I think we think, where we collectively do believe that above a certain scale, there really is value in a franchise gym. I really believe it. There is also just below that line, a spot where, you know, I think the big trend in boutique fitness now is you're starting to see private equity money creep its way in. So you're seeing now the big investors, who are people who are just trying to sink money into a thing that's going to work for the long term, pay off some real estate in the process, that money has made its way pretty far for a lot of years in the larger franchises, the commercial gyms, the very, very, very large scale operations, I think, as the industry as a whole has expanded, I'm not going to say fractured into smaller things, but it really is just expanded into smaller boutique spots with maybe more specificity, a really, a much smaller, what's the word, a much better diff, much different staff to client ratio, for sure, then you'll see it a big commercial gym, but you're starting to see some of this investment money make its way towards boutique gyms, and most investment money is going to lean its way towards pre packaged processes, marketing a system that works. I see this. I have clients in the insurance business, and it's a very big trend that's going on also in the insurance industry right now, which is these firms that have been sitting here doing good business for a long time. There's these very, very big national companies coming in, and they're buying just huge swaths of territory. Buy them up. The owner gets a real fucking big fat payday. Still gets to keep the pay, still gets to keep their employees, and they just continue to expand under this other umbrella. And I think that's valuable in a lot of industries. I think it's also valuable in the fitness industry. But where's the line if you're a boutique, if I'm, if I'm considering opening a small spot, I don't know how many hands you can have on that pie for it to make sense. Can



John Fairbanks 02:38

We also talk about what we're seeing across multiple industries. Like you said, with insurance, you also see it within real estate. But think about what happened in 2020 if you were too small, you closed your doors, like if you couldn't make it. And so I think you see this consolidation, like you're saying, where it's like the little guys, you ended up having to either sell or close, and you're seeing all this vacancy in the same way you see the big animals in the behemoths coming up and they're gobbling up Main Street, or they're gobbling up these storefronts, and you see this stuff happen. You've seen this like exponential expansion from sharks that are now coming into these areas. I think you see that too, which is a shame, right? Like it's in this idea where they saw everybody that failed and couldn't stay open, they're coming up, and they're gobbling up all of the market share within an area, and now they are taking full advantage of the failure of if you were already were too small, so if you weren't a monster or behemoth, and you were just trying to make things meet, you couldn't, you couldn't swing it. You got killed by covid. Now you're seeing all those gyms come back, but now they have the same baby daddy, they all have the same business. Daddy, yeah, and



Tyler 03:50

that's, I think maybe that's kind of what happened with a lot of covid, just like you said, with the main street stuff too, you know, like, yeah, your Walmarts, your targets, and then Amazon starts coming for them. But in the end, like, I think if you're trying to operate a small business, that small business needs to be very profitable for the people that are involved in it, that that's, that's that really is the way that it is. And I think a lot of gym owners out there, these pet projects, these turn my passion into a profession, well, that profession's got to feed you pretty fucking good. Because when it doesn't, I don't know that a lot of gym owners have enough cushion to float another 369 months of closure. There is also, like, a larger conspiracy component to this, where I'm inclined to think that, you know, well, maybe that was what the big money wanted, and maybe that's part of the bigger picture as a whole. Was like, Yeah, well, it's going to get real tough for everybody, except for, you know, just like during covid, you know, who didn't close Walmart? You know, who didn't close liquor stores, Amazon, liquor stores, you know, a lot of the big places were allowed to stay open. Target was open. Your gym couldn't stay. Your gym was not allowed to open. People couldn't walk. It's so I think that that is aside from whatever intent you maybe want to put behind this. Sometimes it's just opportunism, but the outcomes are the same. And so this consolidation isn't even necessarily I mean, obviously there's some players in the fitness industry that are looking to just acquire gyms that are operating, you know, I think that's wasn't that kind of the hormozy model in the end was to get your gym running our systems, get your gym completely boned up on exactly the way that they do things. The gym launch way. And then in the end, when your gym, kind of like is doing stuff that you don't particularly like, but it's profitable. Now you have something that they're willing to buy from you. Well,



John Fairbanks 05:43

more importantly, they were specifically always preparing you within that model. They were preparing you to be no it's a machine that runs itself. You're no longer needed. And it's more specifically involved. It's like that needs to be the mentality of the only mentality, the only person, the type of human that's willing to do every single thing that was inside of that playbook, was someone that was willing to sell their firstborn correct? So it was because, because the idea is, like, this is your baby. You've raised this thing and this business is yours. And they're like, great. The goal then is to no longer have to be in this business, and you are just now making money, and you don't have to do anything. So because they were priming the pump for that the whole way, once you now hit those certain thresholds where you now are a million, million and a half gym per year, it's now, it's all right now, you got enough money, you don't really want to do this. I mean, this is what we've been prepping for you the whole time. How about we just buy time. How about we just buy it, buy it, and then you don't have to worry about it



Tyler 06:45

anymore. And, you know, a lot of that is, I think the hang up there is, is really that the detachment from it, and I think that's the big difference between a McDonald's a pizza joint, that when you talk a larger franchise and everything, even in restaurants like, well, you're not coming in trying to make the best cheeseburgers. You're just not. You're trying to make cheeseburgers that you can sell a lot of, and you're trying to get a lot of people in. And quality is aligned with what, you know, what is, what is McDonald's quality control? What? What is it compared to just McDonald's? That's a nice thing. It's just a McDonald's like, oh yeah, this McDonald's cheeseburger sucks. Okay. Well, compared to another one you got, how fantastic was that other one? The service sucked. Okay? Well, compared to what you had to wait two minutes instead of 45 seconds. So, and



John Fairbanks 07:34

it's consistency is all that matters, not quality,



Tyler 07:38

exactly. So that's the one, and maybe that's the point we want to kind of dig in on here, John or dive John, or dive into is that what you will get from deciding to launch under somebody else's brand or to maybe being acquired, is if the brand is not yours, if the product is not yours, if the system is not yours, it's not necessarily a bad thing as long as it's good. Yeah, I think that's the and good at what it does, right? I'm not sitting here saying, Well, here's the fucking problem with McDonald's, is their pasta sucks. You know what? I mean? Like, nobody gives a shit for McDonald's to be good at pasta. So if you're going to whether it's a global gym or an orange theory or what is it? F 45 there's not a lot of wiggle room to do things differently, which, for the consumer, I think is important. And I think as gym owners, when we want to do things well, we want to be like a good coach, and I want to be hands -on, connected to my clients. I want to build a gym, a system where my staff cares about the clients. Client Results is first. Client Experience comes first. Profitability is tied hand in hand with that, because that's what it takes to deliver a good product. But John my coaching, while I am consistent, the experience for my clients are very different. They're not all coming in, going, you're going to bike for this amount of time, and your heart rate will be into here, and then we're going to get up and swing kettlebells here. All that is a predictable fitness product, which is great because people do want to know what they're going to do. A consumer who doesn't know fuck all about fitness, doesn't give a shit about movement quality. They don't necessarily care about their deadlift going up. They don't give a shit about squats, their squat numbers. They don't care about being stronger. To be honest with you, as a person who's always been like a strength focused, strength biased personal trainer, I have to trick people into getting strong because or to working on strength because I believe that's one of the best methods towards actually building a sustainable lifestyle. Regard in in regards to fitness, I believe it's also a great way to lose weight, but I gotta, like, fucking massage that subject, you know, you gotta, you kind of gotta work that into work that into position and but that means that it's hard to define what it's going to be like you. Working with me, right? Working with me, working with the gyms that we work with. It's hard, necessarily, to say, Oh, we come in and soul cycles, super easy. John, what are we going to do? It's but it is. It's easy to define. People don't want these, all these question marks. People who are new to fitness, they go, I don't know. I think I could sit on a bike. It's less intimidating. Someone's going to tell me what to do and how hard to go, and there's going to be a timer. I think that that actually has a lot of appeal to the consumer. The hang up that we always find is that there's a very limited scope of fitness, which means for someone really to get super long term results, not for anybody, but for a high percentage of your people to get the outcomes that they want. Fitness wise, health wise, weight loss wise, most likely this is going to be one of many pieces of their current fitness journey, let alone over the lifetime.



John Fairbanks 10:51

But if you open a soul cycle, and let's say it's called Appalachia cycle, because where I live, that would be your own spot, and it's going to be a cycling gym, you would assume, if you open it, you like cycling. Yep, you like it. You like it. You live it, you eat it, you breathe it. You think it's awesome. You want other people to think it's awesome, and you're going to be awesome at creating community around this style. What gets me when it comes to the franchises, and we've talked about this for the plays, a lot of times, for the larger franchises, the law, larger animals that come in and want to be able to combine forces so that they can throw down a quarter of a million dollars, or have $5 million to their name, whatever allows them to be able to run something. But it's when you talk about these larger franchises. Do you think you have to look at it? Do they love cycling like, and that's, and that's my problem, is that you may have had these, these smaller boutique styles, all these different types of yogas that are out there now, and different types of Pilates gyms, like really small operations that are almost like personal training style studios that are dedicated to. Have you seen, like the aerial dance studios, where they have, like, what we're we're bouncing around and like floating around like, it's okay, great, you love that thing. So when you love and you ooze passion for that thing, other people want to be a part of that thing. But when you see someone try and like package it and monetize it and scale it and scale it at an unreasonable pace as



Tyler 12:29

a standalone not only product, but like a standalone business, with building and staff and marketing and sales and it's what is what is it? So it's so easy to do for people, so easy to execute for people that are just throwing money at a project. This is why, you know, we run into this here. John all the time, two businesses that pop up in this area constantly, car washes, like automatic, automatic car washes, yeah, and coffee shops mostly drive that have a drive through, and there's an infinite amount of them, essentially, in a town like this, this is the only thing that gets open new because of the reason that's the case is, if I want to put a million and a half dollars into something, well, this is just going to it's money in money out, money in money out, whether the thing is good doesn't really matter. Where the coffee is good. It doesn't matter. It's a location that's been scouted. There's been enough market research. I don't have to go in and teach a constantly turning over fucking like rotation of morons that are the type No offense. But let's be real. Your your average drive through coffee staff is very limited in staff, and there's maybe one person there who knows and is responsible about the business, and the rest is this, it's a lot of flunkies, man, your car wash staff, it's a lot of flunkies, and they turn over a bunch, meaning onboarding new employees, getting them to be doing some sort of work that's beneficial and profitable to the business. Early on, that's fucking really hard tale of two businesses. Friend of mine opened a restaurant here. He's a brilliant Cook, like a really great chef, you know, trained in Europe, and it's the type of stuff that people here just don't, don't appreciate, frankly, right? I can't talk to him about it early on. It's like, Jesus. I mean, I know it's good, but like, this isn't the type of place where being the best at something necessarily means you're going to make money unfortunately. But he went forward and he's, he is doing a great job delivering his product, but he's the all of the employees, the four or five employees that he had at the beginning, like pre opening, who he was training and getting work on and they did their stuff have all turned over just because that's the nature of it. No call, no shows, just disappearing. Somebody just isn't cut out for delivering any sort of reasonable level of customer service. So essentially, that entire staff has turned over eight times in less than a year. So now most of your job at that point is one, doing all of the costs. Doing it yourself, which is a lot of manual labor, is a kind of high skill. Also, like you have to have a pretty good understanding of stuff. It's not pulling up the iPad. It says, add this. Add this. Add this, mix. It's not how that works. It's not, you're not selling coffee with pumps of sugar and this and that. There's not this very limited menu of easy to execute stuff. It's not just a checklist business, unfortunately, and that's a very fucking hard way to operate a business. So if I was going to invest in a business, to be honest, if he would have asked me for $150,000 to start this thing, I would have been like, no, absolutely not. Just because all of it is an uphill battle. Every step, every single thing you have to do in that business, you have to devise it from scratch, every process, literally everything that's just operations of the business, let alone the back end, the marketing and all the shit. So compare that to I open a drive through only coffee spot that's a franchise. Every employee, onboarding, every interviewing process, the first two days of training, like all of this stuff, every person can be in there pumping out coffee within a day on their own right, nearly everything super easy. The business has such a narrow scope that, frankly, a nearly illiterate person could execute it as long as they could see the pictures. You know, so in fitness, that is why it's very easy to open a cycling studio, because literally anyone who likes to cycle can go in and kind of run that class, as long as they have a couple just a couple of the social requirements in order to do it like it's just not that hard. The programming is very likely designed already, and so you see that in that's the appeal. If I'm if someone's going to launch a franchise by doing a very large scale, then no labor. A large scale franchise with a big, huge price tag to get started, it's your cheap gym. The crunch. Fitness is a planet. Fitness is your snap. Fitness is some of those others, anytime those big, huge global chains, they're almost zero labor, no labor, no skill. There's almost no skilled labor, labor that goes into that at all. All this is, is space rental, set a vibe, rent some space. You can come in and you can use your stuff, and you can use all the equipment that we have here. That's a much easier to execute thing, because once the investment is there, it's pretty easy to keep that investment secure. For the most part, you can always market to get new people in. You know, you spend money on advertising and get new people in, but if you say, are a functional fitness gym, it's very the product requires the person standing in front of you to be good, not only good at communicating, good at coaching, good at teaching movement, good at getting people to scale back, replacing exercises. It's very what's the word? It's high labor. It's



John Fairbanks 17:53

high labor, high skill, high



Tyler 17:54

skill. It's a very involved process. And the problem is that is your product, that's your product. And while I think that obviously CrossFit HQ has done very well, suppose the CrossFit affiliates as a whole is, I don't know, it's a crapshoot. And which ones do well, which ones don't? The tide is Rose, Rosen, and the tide is pulled back, Risen and The tide is tied, has pulled back a little bit. But I think one of the reasons that one you do not have as much consistency out of CrossFit affiliates as you do out of Snap Fitness, out of Planet Fitness, out of you just you don't have that level of consistent experience to where my grandfather invested in McDonald's way, way, way back when. So I think it paid off pretty well for him. I'm going to guess, I guess he hasn't worked in a while, but he's pretty old, but investing in McDonald's, the reason he invested in McDonald's, and I think it was in like, the mid to late 80s, when the and so he was on very early on. And the reason he went with McDonald's was because he would go to a McDonald's and he'd go to a different town, and he just knew that he would be able. This is what he told me. He said, I go in and I know I'm going to get this double cheeseburger. The fries are always the same, and that matters, because I don't have to go get a burger from a burger joint job, you know? I mean, like the wild variety of just getting a burger from even, like a place that does their pride is on their meat and good burgers, and not just fast food. You got no fucking clue what you're going to get



John Fairbanks 19:25

and change the town, yep, a burger place here, and then rebel burger with you. Yeah, totally different machine. And like, it just,



Tyler 19:34

It's a total burger not just a burger. So, so if you're going to be all over the place, you realize that consistency is the product like, consistency is the thing that makes the overall brand matter, because the the product itself is always going to be what the product is, it's going to fall into, wherever it falls into, in regards to people's psyche. So what is your version of that in your gym like? Or for a gym for what your business is, where does it fit? Is it consistent? Can see that important



John Fairbanks 20:03

between your coaches, for you personal trainers, your



Tyler 20:05

coaches, for your trainers, in my opinion, I want professionalism to be consistent. I want my clients to come in and be astonished at how nice, welcoming, professional and knowledgeable my staff is. But what is the linchpin of that my staff being nice, knowledgeable, professional, skilled, kind like good at their jobs, they need to be able to help, got to connect with a person to guide them through a very involved and frankly, a very personal product, if someone's actually making changes in their life. Now, if that's not what you want from your business, if you want your business be a place where people you where people can come and work out and work out on their then, then, great, but you then know where you fit a gym that does not depend on a single person to coach is one of the most consistent products you could deliver. No, you don't gotta worry about some guy stealing all your clients, because everyone liked him, and then he got too big for his britches, or simply just got ambitious, you know? And then boom, how does every fucking CrossFit affiliate start after the first five, six years, a co person starts training in a CrossFit gym, right? And the coach there decides that they want to do things differently so they get too big for their britches, or they start training, then they start coaching, then they get too big for their britches. They decide they want to do it full time. They could do it better, and then boom, they go. It's how every electrical contractor starts, every plant, every every carpentry business starts. That's how it all starts. You cannot do that. That can't happen in NAT fitness on a planet, fitness in Anytime Fitness, in crunch fitness, putting fitness at the end of your name, by the way, what a cliche at this point. But it's



John Fairbanks 21:52

yeah and, and I'm okay with it, in theory of like, the idea where, like, the franchise model, um, gives me that, that benefit of consistency. Yeah, it gives me what I need. It gives me all these pieces, but there is and so then I can go and I can move, and I can and I can work quickly, where I get the benefit of the branding, where it's a benefit and not a hindrance. But there is a point where, and we talked about it in the very beginning, where it's like, at some point all of those positives that we talked about, there is a point of diminishing returns depending on the size of the place that you want to run. It works when you have a massive access only spot. It's big. You're playing a different model, right? We talked about it an episode or two ago, where the goal is 5000 members, right? Inconceivable, right? For somebody like that, I would love to have just 100 members, 200 if I could, yeah, if I could get just 75 athletes. I was talking to a gym owner yesterday, and we're like, if I could just get 75 clients, I would be two. I would be almost a quarter million dollars a year at the gym, if I could just get 75 like that. Was it? That was the goal. So the idea of talking to them about 5000 it's completely ridiculous, yeah. But unless you're that size, there is a moment, like we said, of diminishing returns. There's a moment where it's now, it's, are you being benefited by your franchise, consistency and model and branding, or is it a detriment? Are you being successful in spite of your business, daddy? And that's where I start to see some of these smaller boutiques. There's a couple of these animals that are out there that are like these massive type investment firms that own, like, three to six different, totally, radically different. They're not like each other at all, and they're all these boutique style gyms, and they own all of them. And that's where, immediately the antenna goes up, where it's like, oh, these guys that are being traded publicly on the stock exchange, that are being funded by big money, the same motherfuckers that are paying out for fucking political campaigns. Yeah. Do you think they give a shit about your little cycling studio or your little fucking Pilates joint like it's you? They're so far removed.



Tyler 24:19

Not only that, do you think that there is anywhere in their meetings conversation about client results, client outcomes? I think the only reason a system that large would give a shit about it is we're starting to get a lot of bad reviews, and it's reflecting poorly upon us outwardly, but it has very little do with your product being aligned with what your clients actually need to be successful for, whatever it is they're coming to you for. And I think that that's a big red flag is that you end up with a gym that is on borrowed time. A brand can become popular, a brand can grow and you can be a part of that brand that's not yours. You can attach it to whatever these. Are, you know, these, I don't care if it's the Nike stuff, there's some bar studios that are underneath this one Pilates. It's a lot of this kind of, like micro gyms, but very, very narrow focus. And if it ends up having a larger brand attached to it, maybe it's easy for someone. Oh, this, I've heard of this Pilates joint, right? I've heard of this and so that can get them in, but I think you're running into, like, a very, very low ceiling, and it's going to come very quickly. If it's not one, it's not diverse enough to occupy a bunch of space in somebody's client journey. And if your systems are not you better just be an ace who sits in this system and operates it and gives it a soul, otherwise, a business without a soul is going to die. It just, it is, it's, it's going to get John. We see it's, I see it still with these, with a lot of these larger franchise gyms, is they still closed, by the way, Planet Fitness is going tits up all the time, sure, all the time. Why investment is so fucking high, like it takes so much money, and you do have to sell, sell, sell, sell. So if they cannot get fucking asses on the equipment in there to be, least being enough to be sold and never come back, they're fucked. They're completely fucked. And you can most people are going to enter a type of fitness and either stick with it or move on, but eventually, usually they move on from a type of fitness. So I think the big thing is, if you're a narrow focus in what you're trying to do, not a narrow scope of fitness that you do, if I'm just powerlifting at the gym, that is, I like that to take this analogy. There's not a fucking power lifting franchise gym that fucking will ever be successful, nor should it. Who gives a franchise? You know what I mean? You just don't. It's just not that valuable to a person who's already it just doesn't matter. They those guys know what they want. I just want the right equipment. I don't want to be around a bunch of dickheads, like, there's no juggernaut that's going to come in that's going to like be the spot, who's going to have all the perfect equipment and the vibe is going to be fully curated. It's just not going to be the case.



John Fairbanks 27:11

Now, go ahead and finish with that, because I want but



Tyler 27:15

they do that with things like, you have your soul cycles. I'm just going to keep repeating the same few brands. But you know what I mean? Um, I think that that's the big indicator of what it is that you do. If you think that somebody else out there does it better or has a better brand, the perception of that brand is stronger and more appealing to a completely unknown consumer who doesn't know you from Adam, then that's worth considering. But I think unless you're trying to just get big money tied into your system to get to get it started, and to be able to be really hands off and be a low labor project, I think there's almost no value in at least having my entire thing be about somebody else's brand



John Fairbanks 27:58

and because it is, in the end, the pros versus the cons are just they're weighed way, way too high. Because if you do have somebody that is too big, that is now offering something that's too too reachable, like if a franchise is too affordable, like if it's too affordable for you to get you look like Subway is incredibly inexpensive to get in. But do you know why it's so inexpensive to get in? They take the largest percentage away from the franchise owner than any other franchise. So if subways will, they it's something astronomical in comparison to other other restaurant franchises that are out there, subway takes the deepest cut now they and the way they make up for this is that they market more than anyone else on the fucking planet. They got Charles Barkley and every NFL football player and fucking Peyton Manning deep throating a goddamn 12 inch, because they have now taken all that money and they invest a fuck ton back into their marketing, but they



Tyler 29:03

12 and a half percent of their gross sales, 8% towards franchise royalties, and four and a half percent towards advertising. Average profit margins only. So literally, half of the money that you get that clears cost goes to them. Essentially, it's profit margins are less than 25



John Fairbanks 29:25

so guess who's not dedicated to making the best fucking sandwich? It's gonna be consistency, and you're just gonna hang on fucking white knuckling that bitch like you just have to be happy with your one to 2% that you're gonna make. It's because that's all that they're like, that's the point of the investment. But there's the other piece, where, for me, it's like, that's their then, that's what they care about. And this is why we see these franchises that pop up then, then they tout these massive numbers, and they're just, they're just trying to be able to help their investors. They just care about what the stock price is so that they can. L, have you heard about Red Lobster? Yeah. Okay, so the goal, right? Red Lobster restaurants open with what they did there wasn't the goal. That was it. The vampires got a hold of it. Red Lobster owned all of, pretty much all of their properties. They own the land they own, the plots, and these vampires come in, and they then sell all of the lots so they could get flush with cash. And then they sign lease agreements with the new owners so they can be flush, artificially pump up what happens, and then immediately extract all of the money out of it, and just let them go fucking tits up and go bankrupt,



Tyler 30:43

and their restaurant operators are now handcuffed to an absolute millstone around their neck, chucked in the water. And it doesn't matter, because they got the big payday out of it, and it was and then they blame the endless shrimp. And by the way, was Red Lobster going to make it 25 more years at their current pit? Probably, probably not, but this was a, this was a liquidation play, and this was it's, it's not unlike what has happened to local newspapers and shit like that as well. It's really the same thing as big dogs coming in. There's a thing that it has value. It has waning value. It's constantly going to be worth less and less and less. So you have, like, our newspaper here is owned by a company in Wisconsin that owns tons of small and regional newspapers. They bought it up, I don't know, eight, nine years ago, and they own all of them, the John they're fucking they now they stopped doing daily newspapers. And I get it, hey, profitability matters. Yeah, they don't pay. They've gradually fired all the staff, like they know who's next. They just keep, they just keep shrinking and shrinking and shrinking the staff. Now the manager, the ladies, who's like in charge of the whole local newspaper, doesn't even live here. There's almost no staff. I think they released two, two papers, two physical papers a week. Their Facebook is literally all stock images. Today is my obituary. This was like the big local newspaper. It's all gone, and it's all acquired so that they can milk it for the most that they can. In the long run, whoever bought it, they're going to get their purchase price out of it and then some. But they are going to ride it all the way into the rocks. They're going to grind it down until there's nothing left. They end up ahead of the game, and then they move on. And that is kind of what happens with all of this stuff. When you're involved just investment money is one thing that's just the way that it's going to be. They don't care, as long as they get what they need out of it. It really, really doesn't matter what the product is or or how good it is. The other thing is, these larger brands don't care about the product. So it's not that you are being consolidated and owned by a bunch of other motherfuckers. That's its own. That's its own can of worms. But know that a franchise brand is only concerned about its brand. That's it. And shareholders, yeah, and the shareholders. So when we looking into your gym, there's another aspect to this conversation that's related, which is, what about bringing other people's brands inside your walls, allowing somebody to either develop their own brand or a secondary brand, whether it's a smoothie shop partnership that's in your walls, whether you have somebody There's any number of other things you have a martial arts gym that also operates out of your facility, under your umbrella, or what if you do? We've had gyms that have had spin cycle classes. Yeah, in that place, we've had gyms that have had entire kettlebell programs. It's a kind of its own very different thing from what the actual product is, that there are very similar risks and similar thought exercises, I think that need to be done when you're considering doing this. You know, we work with a gym that's brought in a kind of a, this is a youth training gym. And so they brought in a, kind of, like, a larger national company that allows them to do, like, really fix, almost like combine level, but very like laser done, yeah, measurements and shit like this. So that for high school athletes that are looking to really see where they are, and get good, not hand measured, you know, and end up on the database, and then get quality results for all of their all of these things. And there's larger systems in play too, that you can get involved in that give your staff development. It's kind of now a part of that for programming, workout programming, giving your coaches you know what to do, how to do it, whatever. Also with some marks. This is now another system that you can plug into your gym, but it does not need to be your gym. That's that. That's the biggest difference, because you can always if their brand gets a little weird or they start doing like, some of these other larger, you know, the larger players in some of those fitness studios, they end up being like, really, like, kind of shitty and misleading, and they, they get you involved in these things just to pump up their own numbers. But now you can do it, and you can pull the plug on it, and it's not really going to fully affect your brand, but there is, you. Own brand, your own business, can be exposed to a fair amount of risk based on who and what you attach to your name.



John Fairbanks 35:09

Yeah, and if you get, if you get we, I mean, it's we have, we have first hand experience of being a of being a fitness equipment supplier, and then people being so passionate about the equipment that they're buying that they want to turn their entire gym into this equipment, like, for our personal experience with sandbags, right? It was selling, working for a company that sold tools. Yeah, it was great. But then there's gym owners that are like, great when we're getting rid of all of our barbells, yeah? And we're no longer a CrossFit gym. We're now a



Tyler 35:47

gym, yeah, and, and once, once, once people get too tied up and that, John, that's what fucking soul cycle is, right? That's all this is. So we just ride bikes. So there's a lot of gym owners that got like that, at least in our not a lot. But this isn't a larger scale situation. This is a very focused thing. But there were quite a few gym owners that we were running into that realized, Oh, these tools were nicer. It was a good way to, kind of, get people good quality work and build some, like, robust structures where I'm not exposing them and bending them around a barbell all the time. The problem is, is people are as interested in carrying and squatting and pressing sandbags the general public probably less than fucking barbell. So all the convincing and catty posts in the world about how much better that is or how much more approachable it is, let's be honest, it's just another fucking tool. It's just another thing that you have. So making your whole identity about it is just as dumb as making your entire identity about a heart rate monitor that now is going to project it there, and then everybody's going to know who's working hard, and you'll know when you're in the fat, burning zone and and that's literally the whole thing about orange fitness, orange theory. It's just, that's just kind of it. They really had one measuring tool. You know, a measurement tool would fucking rule John, to make about your business, to make your entire fitness thing about. The best measuring tool isn't the heart rate so that people come in and check, let's just check your fucking body fat once a fucking week. And if that keeps going down, I feel like actual results matter. Not just the sizzle, but people attach themselves to a single product just like that. And then what happened John a bunch of their clients who liked the things that they were doing, instead of them giving the out get being given the opportunity to also try a different thing in addition to the stuff that they're doing, instead, all of the things that they liked about the gym that they were already going was taken away from them and Some fucking awkward, dusty shit that they didn't particularly have any idea what that was good or bad or whatever, that they didn't really want to be doing it, and they're stuck doing it. Lose clients in droves, you know? And by the way, like with my gym, we did a ton of sandbank stuff because it was a pathway, but we also did plenty of barbell work. You know, you just cannot attach yourself to somebody else's thing fully, without being prepared to pay the price. What happens Anyways, if you attach yourself to a brand like that, and you know, some fucking dude ends up being some fucking kind of weird, creepy groomer type, meaning, like, shit, you know what? I mean, like, god damn it. That'd be a real fucking bummer if that was the case, and all of and the stuff were to really pop off me like, Oh, this guy's a fucking creep, you know. And now you're, now you're that guy. Your gym is you're that guy. And that's a cross film, yeah, yeah, yeah.



John Fairbanks 38:34

Cross. The problem is, there's too many examples so that's mainly that was the spirit of it, because there was, you check the headlines enough you see stuff that just doesn't add up. There's fuckery afoot. You see where these dudes are doing, they're doing bad shit, and they just hide behind being able to sell or rename themselves or move over to Europe, and now they're just gonna run the same playbook they ran in the States. And they come to Europe, and you all are none of the fucking wiser, and then you end up getting fleeced in the same way. But there's so many examples. Whether you're selling pizza, you're really stoked not to be part of Papa John's, when that dude decided to go off and start using the N word, and it's like, Well, shit, I'm glad I'm not Papa John's right now, and it's exactly like you talked about. There's just too many examples where you are not the master of your domain, and I think that that that is ultimately where it's you can risk it if you don't give a fuck about your people. And this is just an investment play so you are not fucking listening to this podcast. I promise, if that's you. So for the rest of you, it's that you do care about what you do. You do care about the communities you live in. You do care about the people that you train with. Community is super important to you. It's like, that is where, especially if you are thinking about opening a gym, you're thinking you're a coach or your trainer, and you're thinking about forecasting the next five years for what you want to do. It's, that is where it's that, for me, is like, this is why. This is the red flag it needs to be where. Like, beware of this situation.



Tyler 40:02

You know who ends up running big franchise gyms, usually black rock but I mean, like, operate, it just you end up not being these aren't really people that were coaches or fitness professionals, and that's not a pathway that I see. John, have you seen it much? I very rarely see someone who is like a passionate fitness coach, personal trainer, dabbles in a little bit of their own business, small personal training studios, and then now runs a Planet Fitness.



John Fairbanks 40:37

No, they're all. They're all 17. You're gonna



Tyler 40:39

get some. You're going to get some you're going to get one person who's going to be a general manager, who's got a fucking business degree, who's like, who at least can't look like absolute dog. And then that's pretty much it. And then you're going to hire a bunch of teenagers,



John Fairbanks 40:54

or they were just a dude that decided not to go McDonald's Planet Fitness. And then they work their way up from lore, trash can emptier, to now I've been here for five years, the last guy, Oded or left, and now I'm the guy that's going to move in. And now I can be the manager. I walked into Planet Fitness because one of my personal training clients doesn't work there. Wanted to train at Planet Fitness. I'm like, alright, we'll train out of Planet Fitness. I never stepped foot into Planet Fitness up to this point. One walked in and I was like, alright, this place is the tits. Like, this is pretty awesome. So I walk up to the desk and I go, not trained here before. I would like to be able to get a membership. And they go, yeah. Like, we don't know how to do any of that. So do it online. You gotta do it online. Can you download the app? So they just literally had me download the app, right. There they go, actually. How about this? They go, actually, our computer systems are acting wonky, and the guy literally pulls up the iPad to show me and go see if you, if you click, start fitness membership, it takes you to an Anytime Fitness location in Birmingham. So think about whatever system they're using, maybe their franchise owner. But I'm not in Alabama, so I'm in Virginia, and when I tap in my local town in Virginia, it tries to get me to sign up for an Anytime Fitness location in fucking Alabama, because



Tyler 42:20

they got their websites designed all design, all their other locations, with all the other franchises they don't, they own that they don't give a shit about. And somebody muffed a link. They copied a page for the last time. They did the same website for anytime fitness, and then they did this and extra darked up the purple, purple, but it's but great experience the gym again, the product, there you go, in there, like, that's nice. It's huge. There's tons of room. I really, really like the product is great, as long as you don't ever have to talk to somebody and but that does create a ceiling for that business, because what is going to happen if they want to start doing some high end personal training, or they want to do some things that maybe are less able to be systemized, right? Like, I got a coach who wants to run a, like, a weekend lifting group here for, like, high school kids. Like, how are we going to run this out of Planet Fitness? That kid who you talk to is going to go, I don't know. I don't think we can do that. They couldn't even, they probably couldn't even figure out how to accept the money for it. There's just not many people in play in a business like that. So doing anything, introducing new money, accepting payments for things that aren't just the fucking membership, are nearly off the table as options, let alone scaling things up and doing things better and doing things with having more coverage, they're going to add nutrition coaching and some like real guided weight loss stuff, or a specific nope, nope, nope, nope. Which means then your product's going to stay what your product is, it's not going to evolve. And if somebody wants more hands on stuff, you know where they're going to have to go. What if somebody wants a better experience, with a better, more connected experience. Their only choice is to spend more money, usually way more money than they're spending on that facility, and they're going to spend it on somebody else. So this is where I kind of think that that's what I like to settle in, which is, okay, we have all of the space where someone can have, like, a really nice, I mean, DIY experience. It's great when they talk to the people there, there's always an opportunity for someone to start slipping behind or not quite making progress. They feel stuck or maybe they're just in a rut. Six, nine months later, they're plateaued, instead of them just completely falling off and going somewhere else and paying the rest of their paying the next nine months that's left on their contract without showing up, which, by the way, only gets you an extra 90 bucks at the prices of some of those memberships. What if they started paying $700- $800 a month for personal training? Boy, would that be nice for your business, especially since they're already. Your business, and they like training like that. Seems like that'd be a great opportunity to extend to them, but you can't. So they're going to leave, they're going to never come back, and they're going to go somewhere else, they're going to spend more money, god damn it, they're going to get results. Because it's better , it's a better product, it's better guidance, it's a higher likelihood of them succeeding, and they're never coming back. And so that's this. That's why I think the ceiling is limited on some of those businesses. For you guys out there that care about doing a real product that matters, right? Or open a fucking car wash, I don't know what to say. Open a car wash, they make lots of money. It's fine, and you don't gotta worry about cleaning up the fucking toilets don't have protein, and pre workout shits splattering your toilets all the time.



John Fairbanks 45:48

Yeah, and that's, and that's ultimately, that is the deal, which is, Can you stay in the pocket? Can you maintain your soul? Can you open your spot and have it be your spot, and you can be unapologetic about exactly how you want to run it, and run it the right way, and not get tempted by the siren song that you'll make more money, or they'll have better systems, or they'll have whatever that then you can just, oh, I don't have to worry about any of these things, because they'll be taken care of. No, they won't. Yes, they'll be done, but they're going to be done a certain way that is no way impossible. It will align with what you want to do. So it is there is a way for you to be able to do it, and that's the pocket right we're living in, which is you have everything you need in your spot, and if you don't think so, you're not thinking about it the right way. There is a way to be able to take advantage of everything you've already got going and use those things to be able to actually make enough money to be able to eat and have your coaches take care of themselves. Now on the other side, so



Tyler 46:47

We just talk people out like, if you don't want a big, large, large-scale joint, and you want to make more money per member, and you want to do all of that stuff right, you want to deliver a high quality product that gets clients results. Don't take us saying that as an indication that you should not still try to become a fucking huge, colossal juggernaut in your community. And this is where I'd like some gym owners to have some fucking balls here, which is, you're going to start doing a good job with the people you have, and you're going to get fucking good and you're going to get them results, but to completely, then abandon the idea of growing or scaling your membership base, or saying, Oh, this is just the facility we got. You know, Dylan gear Academy member here, yeah, like, started in a small boutique studio, then got himself. He was capped out, so he moved up. Listen back a few episodes. We have Dylan on Dylan on the show Dylan Harris, and it gets to the point where he's like, Okay, well, I gotta do something else. I can't just keep charging these people more money. I'm maxed out. Well, guys, a little bit of fucking ambition will get you a long way. And I meet a lot of good coaches who lack ambition for actual success. They just want to be a good coach. Okay, well, you're going to be very hungry, and then you're not going to be a very good coach when you're working at the fucking tire factory for the rest of your life, because you gotta feed your kids. So he then goes to get himself his own location. It's a big leap. Spends a bunch of money on more equipment, slowly starts bringing in more staff. Maybe took some big jumps with stuffing ahead of time that maybe we would have talked him out of had we been there, but, but it worked. We got our roles filled. Staff was productive very quickly to the point where nano was okay. We need more staff, more staff. Every new coach, he hires just boom jumps, because we have a system where those coaches are working. He is there for one reason and one reason only, quality control, and guidance of the business. That's it. So he's there to just plug people in. He's doing some coaching, right? He's the one there. He's still the soul of the business. And you don't have to be fully hands on. But again, now he's at the point where that gym is full, boom, buying another 10,000 square foot facility, putting it up like it's time to go. I think that that pathway is something that I wish good coaches and gym owners would seek more often, like seek actual success your then your clients are going to be really, really stoked to see the empire that you've built based on, like, literally, the changes you've made to their families, their health, their community, their co workers, their grandparents, their neighbors, everybody is going to start to know. And I just think that that is where we gym owners get complacent in not even fucking making good money. If you guys were putting 25 grand a month in your pocket, awesome, but I don't like a gym. And no offense to the guy we were talking to the other day, but if your goal is to be a $250,000 a year gym, great until you get there. Now we better let's tool up here, because that's not that's not yet. That's not enough. That's just, that's not what it is and not simply because you want to line your pockets, but because if you're already doing what you do really well and having an impact, then you. Becoming a $500,000 gym, theoretically, wouldn't you be doubling your impact? Wouldn't you now be twice as important to the people in your community? And by the way, isn't making twice as much money? Kind of the point, I don't go past nobody else, I don't know. Nobody's goal is that you would not get into entrepreneurship if your goal was to make a three to 7% a two and a half percent cost of living increase every three years or whatever. But you can get any number of jobs that'll throw you a bone, like that. Every once in a while you ever work for a place that gives you like a 25 cent an hour raise, yeah, as an employee. I remember when I started in the industry, and I'll give these numbers, it doesn't really matter. But like I when I started, was like, seven and a half, 725, an hour as a labor heating and air conditioning fucking fought my ass off. I was like, two years at that good to the point until I got to, like, so he was the guy who then realized how little I was getting paid, it was like, Oh, shit. So then I had a $2 an hour raise, then I moved, I got a $3 an hour raise, then I went to another spot, I got a $4 an hour raise. And then we're like, Okay, well, we're gonna renegotiate in six months. I said, perfect. So I spent six months sequestering off a lot of responsibilities and making sure that like I was the ACE, then what that gave me was leverage. So then I got a $6 an hour raise, followed by six months later, like a $9 an hour raise. That's what leverage and being ambitious does for you. None of those people, any step of those bosses, weren't stoked that I was holding their feet to the fire. But they knew, they knew, if it wasn't worth it, they wouldn't have done it. They were like, fuck, Tyler, fuck. But every step by the way, until I decided to start my own business, that's because then I had, I can continue to make those wage increases, maybe not in perpetuity, but it gets to the point where I know I'm not going to get $9 and I'm not going to make an extra $1,200 a month, starting in six months. That's so how am I going to do that? Well, I can take control of the whole ship myself. And so then what I did was make almost no money for you instead, but, but if you want, if you were worried about getting a job and just giving yourself these, like incremental increases, this, like slow burn to gradual, gradual mediocrity, you wouldn't be working for yourself. So the same ambition that calls you to seek that freedom and that decision making and that independence and to be out here making my own decisions and I work for myself that should still apply to your income. Just think it should. So you should be sitting here going, how can I double my income? How can I double my business? And I get that along that way, that's a lot of two and 3% increases. But God damn it, I gym owners set their sights so low, and it's frustrating to me sometimes the lack of ambition,



John Fairbanks 52:57

yeah, and we can't pull them forward. That's usually the hardest part is, if we're talking to you as a gym owner, if we if we get deep enough into a conversation and we see enough and you share enough, we can't help but try and we drag you out into deep water, because we can forecast and look at like this is what we would do. This is how we would do this. This is where we would go first, and we would hit these pieces. All that happens naturally, and we can't help it, because it's how the brain works. But the reality is, if, if it's not on your five year plan to have a new location, okay, what? What's the plan? What is the plan? Then there needs to be a plan where it's like, either I've grown enough to be able to have to move or to strongly consider it, or I've hit a threshold that that gym owner that wants to hit we talked to that wants to hit a goal of a quarter of a million dollars that's in his existing location, because he knows he wants to be able to move to a larger location, like there's there's so many levels and layers to the game, and I think it is the culture of trying to get everything done as click baby, and as overnight and as fast as humanly possible. It's the only reason why those motherfuckers that are going to guarantee you 30 members in 30 days even exist. You fall prey to the idea that, Oh, I need to do this as fast as I can, as fast as I can, and team, no sleep, but we're going to hustle this thing through. We're just going to fucking shove as much as we can. It's like, Dude, this is like, how old are you? No, if you are not going to retire, it's like, this is a long term fucking game. So it's like this, we're talking about, talking about the lifetime of a of a fitness journey for a client, about the lifetime fitness journey of the fucking owner, like this. These are not things that are going to get done in a year. Like, it fucking takes time. Yeah,



Tyler 54:42

yeah. So I was the owner who, by the way, like, literally, the things the owner, the owner likes about fitness, is going to change, very likely. So is your business able to handle that? Do you do enough to keep yourself interested in your own business? If not, it's okay. It's gotta be managed by someone who gives a shit about what's going. On there, though, so then you need to scale yourself to the point where you can start to delegate some of that stuff.



John Fairbanks 55:05

And how many, how many gym owners, Tyler, not only do you not realistically, do they not give a fuck at the end of the day about fitness and the way you know it is, how many gym owners, when we meet them, look a certain way. They're athletic. They were doing the thing. Maybe they had been gym owners for just a little bit, so they still kind of got that coaching vibe. Still probably coached on the floor, whatever. But there's this thing that happens where, once you get more responsibility, you start becoming a fat, lazy person that stops doing like it's, I promise you, they're correlated. I promise, yeah, well, and



Tyler 55:43

then you'll worry less about Yeah. But guys, we love you. We believe it, yeah, I want you to be more ambitious. That's all. That's all so brand building is hard. Then I think that is the gist of a lot of this. Is there an appeal to a brand? Building your own brand from scratch is tough, but if what you do is different than what some of these franchise opportunities are offering you. I think it is very important that you do what you do, and you figure out how to communicate that your brand needs to be around things that you do and the things that you do. Well, plenty of great systems you can buy, systems you can plug in, and there's plenty of that shit that, but somebody's got to be steering your ship. I believe, for it to work for the long haul, at least for it to be impactful and deliver like a not a fully consistent experience, but a consistently effective experience for your clients, consistently successful when people go to your spot. I want it when somebody goes to my gym or chooses to come work with me. I want the people that they tell about it to go, oh yeah, yeah, dude, this is awesome. Yeah. People that go there, they get results. They really get results. I had somebody I work with, a high school student, and the dad was in, do I want to give it to him? But the dad was in, doing some business with another guy who I know, who's pretty respected around here and strength trains. And so his recommendation around the legitimacy of the type of training I do would matter if it's coming out of the blue. And so this guy was like, Yeah, so my kids are training with Tyler. The guy goes, good. Keep him there. Do not, do not let him go to anybody else. Do not take him to anybody else. Don't let some dipshit fucking high school coach, high school weight room coach, try to fucking take it like just don't keep them with Tyler. It's this that is, you're very, very, very lucky. And if people say that about you in your business and the place that when that's all you need now that is what it takes. You have to build a brand. You have to build a reputation. But now that's perfect. That's McDonald's. That's the thing is, that's McDonald's. I'm going to go to McDonald's. I'm going to go to Tyler. Oh, good. He knows what he's doing. He's going to make sure you're doing, you're doing exactly what you need to do. And he's going to and then they're going to tell the client, don't fuck this up because he's good. Don't fuck this up. Same goes for my wife. It's very similar. People are people around her, around her, clients are telling them, oh, you know, instead of people telling their friends how awesome their personal trainer is, when someone signs up to go work with Megan, their friends tell them how awesome Megan is, and how good it's going to be. That sets an expectation for success, and that we're not really going to tolerate failure, that we're here to make sure you have a chance. So your brand is your brand. I think that's important. Do what you do. You know, if you got fucking two or $3 million to sink into investing in something I don't know, maybe invested in getting your own processes robust? Yeah, maybe, maybe, maybe, really invest in yourself, or, by the way, probably the best place, own your own real estate in this process, that's going to get you a long way. So that's all we got for today. That's the lay of the land. As far as what you should or shouldn't do, based on John and I's opinions, you're welcome to go to gym owners revolution.com we still have we taken people for the month of August, August. So if you you want your gym and your business to start heading down this road of, like, being fucking awesome and growing, um, every gym that we work with we work with grows, and not in a little way, and not in a got nine more members kind of way and like real way. Your systems grow, your reputation grows, your social media presence grows, everything. Everything is on a pathway for success for you and your clients. So if you want to work with us directly, go to gym owners revolution com. Follow the gym owners podcast on Instagram. Follow me at Tyler F and stone. That's Tyler E, F, F, I



John Fairbanks 59:37

and stone and John, and you can follow me at J banks. FL, All right, thanks for listening, everybody.



Tyler 59:41

We'll see you next week. You.






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