Globo-gyms aren't dying. They're evolving.
And not gonna lie, this new version is pretty dope...
2,000 subscribers in one week! What in the actual fuck just happened?!
Thank you to everyone who shared the first issue of the newsletter and is spreading the word to other fitness entrepreneurs - it means the world to me.
With the long weekend, I hope you took time to either catch up on work that needed to be done, or caught up on personal time that needed to be had.
For me - it was a delicate balance of working out, whiskey, and planning some live, IRL, business seminars that I’d love to host at your microgym.
If you’re down, reply to this newsletter, let me know what city you’re in, and let’s talk shop!
Much love,
Stu
Today’s Rundown
✔︎ A look at the impressive evolution of the globo-gym coming to a city near you
✔︎ The EIDL loan program has some new changes that are ideal for microgyms
✔︎ The details on MADabolic’s underrated, yet insane growth
The Guys Who Bought Gold's Gym Are Leading The Globo-Gym Evolution
Don't write the obituary for globo-gyms just yet…
RSG Group, which acquired Gold's Gym for an estimated $100 million last year, and recently opened the first US location of its nightclub-themed gym John Reed Fitness has announced a new gym concept due to open in late 2021.
Heimat, a new luxury gym concept, will be located in the trendy Sycamore District near Hollywood. The facility will transform a 75,000-square-foot commercial warehouse into a day-to-night fitness and wellness hot-spot.
The concept is reminiscent of much boujee-er, much sexier, much more exclusive Lifetime Fitness – blending the lines between fitness and lifestyle.
The gym will include a rooftop pool and jacuzzi, an events space and outdoor bar, a restaurant, a state-of-the-art spa, a co-working space, and ongoing cultural programming.
Monthly rates are TBD, and to become a member, one must apply and pass a screening test – serving me hot-or-not-list nostalgia.
MY TAKE
Despite what many might say, the globo-gym market is not waning, especially when a company like RSG buys up 900+ locations in one-fell-swoop.
In fact, trends show globo-gyms are not going to die; they are going to evolve.
Why?
First, there are not enough boutique fitness studios or microgyms to handle the market. Out of the 184 million humans on this earth that carry a gym membership, the majority belong to a globo-gym compared to the microgym.
Second, a large portion of the fitness market doesn't want to participate in group classes. Instead, they want an open gym concept to perform their own programming and the status symbol that accompanies being a member at one of these locations.
But for the average microgym owner, how globo-gyms are evolving is the shit to pay attention to.
And in the case of Heimat, we can take notes from their design and amenities.
UK Design is finally entering the US market.
If you didn't know, UK gyms are by far the most interesting, well-designed, creative spaces for working out on the planet – John Reed Fitness and 1Rebel are prime examples of this. And while the US may be hashtag-winning the reality TV game, we pale in comparison when creating interactive workout spaces.
Here is what your microgym can learn from UK design:
architectural design that screams, "Take pictures of me and share it right now!"
scent and visual-based marketing for subconscious branding
creating true 'Third Place' facilities you don't want to leave
knowing that getting people hype about working out is just as important as the actual workout
Amenities are attractive and bring in attractive prospects.
If you still think having a clean bathroom is an amenity, please walk your lazy ass into traffic.
It’s time accept that the fitness industry has matured, and members have been conditioned to expect more.
Now, microgyms certainly don't need to compete with the high-price tag, luxury amenities of large globo-gyms. Still, you should be asking yourself, "what low barrier amenities could I offer members?" and "what can I do to make the client experience better?"
Pre and post-workout towel service, charging stations, DJ-curated playlists, or membership perks offered at other local businesses in collaboration could be an option.
It is important to remember you are not competing against the amenities of a globo-gym; you are competing with the amenities of other local microgyms in your area.
And odds are those fuckers have set the bar pretty low.
Here is one final takeaway for the microgym owners who may still get butt-hurt when they read about the investments and growth being funneled into the globo-gym space;
If you zoom out, you'll realize that you want variance in the marketplace.
The more any of the fitness models evolve, the better it is for all of us. So get your scarcity mindset out of here and realize that innovation and improvement across any industry sector puts more money in all of our pockets.
EIDL Loans Updated To Practically 'Free Money'
Did you say free money?
Last week came with changes regarding the Small Business Administration's (SBA) COVID-19 Economic Injury Disaster Loan (EIDL) program.
IHRSA, The Global Health & Fitness Association, and the SBA are working to ease restrictions on the EIDL program - making it easier for microgyms to get the help they need.
While the EIDL was undoubtedly a tremendous help to many, some of their restrictions limited borrowers ability to deploy the funds as they saw fit.
The most recent development to the EIDL allows far more flexibility in borrowing money with the these very favorable terms:
The cap on how much you can borrow will increase to $2,000,000
The deferment period of the loan has increased to a full 24 months
Can be used to pay off higher-interest loans
No Personal Guarantee required (under $200,000)
30 year payback term
3.75% interest rate
The application takes less than 10 minutes, and approval is just as expedited.
MY TAKE
For the most part, IHRSA is a shit organization that specializes in helping the 1% in the fitness industry through lobbying and back door deals.
However, if they genuinely had any hand in this process, I'm grateful.
But should you take the money? Let’s look at both options.
Don't take the money:
If you're currently profitable, not carrying any debt, and you don't need the extra money - don't take it.
The beauty of the microgym model is that we generally have manageable overhead and lower startup costs. So unless you get into financial trouble, you're typically able to stay profitable since you're not paying down a large loan. So if you don't need it, don't take it.
Take the money:
If you had future plans (even before COVID) of expansion, buying a building, opening a second location, or other significant improvements to your business that would eventually generate more revenue, then take the money.
If you do have significant debt that's higher than 3.75%, take the money and pay that shit off.
It is doubtful that any of us will ever have another opportunity for this level of financial government support at such favorable terms.
Here's what I did…
My microgym, Urban MVMNT, didn't take any. We didn't need it.
However, WTF Gym Talk first received $93,000 that I left in an account, untouched.
When these EIDL revisions were made, I increased the amount to $140,000 that I will be using on a new production studio and hiring content creators (like Creativ_Matters, who wrote this).
That’s my two cents. Take it or leave it (just like the money).
The Dark Horse In The Fitness Franchise Space
By the time you read this, they’ll probably have a location in your city.
While visiting new franchise locations in San Antonio, TX, I had the opportunity to chat with MADabolic co-founders Brandon Cullen and Kirk DeWaele about their brand's rapid growth since signing with Z-Growth partners in 2019.
You can listen to the entire conversation here, but I'm going to hit you with some key details:
MADabolic home grew its first ten franchises on their own. Then in 2019, partnered with Z-Growth to help catapult them into the fucking stratosphere! (Wolf of Wall Street, anyone?)
Currently, they have 39 locations in various stages of development. This puts them just under the 50 unit mark in less than two years with their new partners.
Many of their multi-unit franchisees started as clients and have had such success with their first location, they've purchased several units.
Their franchise model is one of the most approachable in terms of financial requirements. Some quick Googling will get you the following information:
Investments:
$200,000 – $300,000
Franchise fee: $35,000
Royalty fee: 5%
Currently, they predict 2x growth by this time next year. TBH, I think they can surpass that.
If you've never been to one of their locations and want to see a true, niche fitness brand - do yourself a favor and drop into one of their locations.
Interesting article, But I would argue that the worlds best Globo gym designs are coming out of Germany not hThe UK. In fact John Reed Fitness is German. Another superb Globo gym model to look at in Germany is Fitx.