Strength Training Specific Globo-Gyms Have Arrived
A historically old-thinking sector of the fitness industry is getting smarter.
So, F45 is having a rough Q3, huh?
Hell, it’s been a rough year for the global franchise brand F45, especially given the optimistic IPO they completed in Q3 2021. I did a write up on their IPO Form S-1 documents (required for public access when a company goes public) almost a year ago, so this recent turn of events has been quite interesting to watch unfold.
F45 had high hopes for its company, but even they are not impervious to this undeniable truth:
You go out of business in one of two ways: Grow too fast or grow too slow. Either way, you’re fucked.
I’ll be doing a full write-up as the storyline progresses, but here are some of the highlights:
60% drop in stock this week
Laid off 110 employees from their Austin, TX headquarters
Key investor Mark Wahlberg has sold off almost 50% of his shares
Currently under investigation for a “bait & switch” maneuver at their IPO last year
CEO forced to resign (who is also the co-founder) due to missed earning projections
So yeah, things are looking stellar for a company that boasted such a promising future for its franchisees and stockholders.
Is it time for a comeback?
Or time to call it quits?
Only time will tell. But a piece of advice from someone who prides himself on watching the industry at large and analyzing the ups + down…don’t headline read.
The bigger the news story, the more skeptical you should be.
Don’t digest a blog article and form your whole opinion around it. Do your homework and independent research and formulate a thesis that is your own.
Any one of us can read Club Industry each week and regurgitate what we’ve read to sound intelligent in our most recent LinkedIn post.
But the real industry titans read, read some more, research what’s not being talked about, and then make their own statement or opinion.
So don’t jump on the “F45 is completely fucked” bandwagon yet.
Just like I hope you didn’t buy a ton of stock in 2021 during F45’s IPO and proclaim to everyone how they’re going to reshape the industry - don’t slowly formulate your opinions, but certainly don’t be too fast.
xoxo
Stu
Out With The Treadmills. In With The Turf + Sleds.
World Gym is debuting a new franchise model that will cost less to startup, allow smaller square footage allocation, and is niching into those who want to follow their own workout programming, but without having to wait for the squat rack to open up.
It’s called World Gym Legacy and it’s one of two new models they will be debuting.
Essentially, a smaller-sized globo-gym that is removing all traditional cardio equipment (replacing it with erg-based machines - rowers, bikes, manual treadmills, ski ergs, etc), increasing the inventory of strength training equipment, and adding turf, sleds, and Olympic weightlifting platforms.
This news is exciting for the industry.
Why?
Because this fitness industry business model, what I refer to as the “Globo-Gym” business model is long overdue for an evolution.
Sure, the bigger brands like LA Fitness have continuously upgraded their facilities, but only with sexier, more Instagramable amenities.
And yes, Lifetime Fitness went as far as to add massive co-working extensions to their brand - but that’s not the evolution I’ve been hoping would hit the radar.
But this move - a higher operational capacity, niched globo-gym is exactly what I’m talking about it.
MY TAKE
If you’re in the microgym space, own an online training company, or even operate an HVLP (High Volume, Low Price) model - the ripple effect that World Gym Legacy could set in place would be a great impact on all of your different business models.
Yes, there are different business models in the fitness industry, I teach them inside of Microgym University, but here’s a brief overview:
HVLP (Planet Fitness)
Globo-Gym/Health Club (World Gym, Lifetime Fitness)
Premium Globo-Gym (Equinox)
Microgym/Boutique (CrossFit, OTF)
Private/Semi-Private (Alloy Personal Training)
Individual Design (OPEX)
Online/Digital (Functional Bodybuilding)
Hybrid (the newest addition to my courses)
This is important information to have because when there’s a significant evolution in any one of these business models, it will create an influence or direct impact on the others.
IMO, this is great news for the industry, individual businesses, and fitness consumers - here’s why:
How The Industry Benefits
The microgym/boutique sector has been trying to sell the general public on strength training for years.
We dress it up as HIIT or group strength & conditioning, make sure to throw sweat-inducing cardio elements into the program to attract the average person, and then work in some style of resistance training to lead the ignorant prospect to the promised land of a well-rounded workout.
And guess what? It fucking works.
Nothing has done a better job of getting barbells, dumbbells, and kettlebells into people’s hands than incorporating them with cardio.
CrossFit is certainly at the forefront of this movement and the rest of us have followed suit, cooking up our own unique beliefs in fitness (UBF.)
But all of us still end up at the same conclusion: The general public needs more strength training.
Cardio is readily available with outdoor activities and at-home fitness products, without needing any significant experience.
But strength training requires education and equipment.
You don’t need much education to walk, hike or use your Peloton.
But if you want to squat, deadlift, press, and pull - you’ll be on YouTube for a while without the proper guidance of a coach.
Fast forward 20+ years of the microgym industry providing resistance training knowledge and supplying the necessary equipment, and what we have is a much more educated fitness consumer.
But that wasn’t the case just a few short decades ago.
Look at the layout of the average globo-gym back in the 80s, 90s and 2000s - the majority of the floor was cardio equipment and seated, pin-selector strength training equipment - because they were easy to use and required minimal education.
Now, every globo-gym is constantly hit with customer requests:
“When can we get more squat racks?”
“Can’t you guys take out the racquetball courts and add in a few pull-up rigs?”
“The ellipticals are always broken. Can we get a few rowers instead?”
Don’t you see what’s happening?
The customer marketplace is more educated in how to strength train.
Hence, the average globo-gym is going to have to start to accommodate that need.
If they are laggards in this evolution, the microgym/boutique, online and hybrid sectors will benefit from their slow action.
If they take notes from the World Gym Legacy model (assuming its success), then there is now a great proof of concept to be installed by other organizations. This model will then receive hyper-focused attention, which will benefit all parties involved as more smart people think of ways to improve it.
How Your Business Could Benefit
If you’ve ever wanted to add a legit globo-gym/health club franchise or even your own version to your company portfolio, this could be a great option.
For potential World Gym franchisees, you now have the opportunity to start a location in a smaller 7,500-10,000 square foot building for a price within the estimated range of $460,000 - $1,250,000.
I know most of us don’t see this as a huge price break. But believe me, with a cost breakdown equaling over $2,000,000 for their status-quo model - Legacy is less expensive and has a higher profit margin opportunity if you want to be in the health club space.
And if you’ve ever had this idea, but didn’t want to be the first one through the door, you can sit back, watch and wait. From a distance, you’ll be able to see how a veteran company handles the execution and learn from its wins + losses.
But now niching in, which we all know works in business, is being adopted by those who refused to niche.
Most of us have either been involved with or witnessed the art of niching within the fitness industry. That’s what the microgym/boutique sector has been doing since its inception.
Smaller players, targeting very specific clientele with a very specific brand.
Now the giants of the industry are recognizing our game plan, seeing its success, and giving it a go by not creating a facility for everyBODY (I fucking hate that in fitness marketing. Please make it stop.)
They are now validating the strategy of niching. But what does that mean for the microgym industry?
Relax. Your business isn’t at risk. Probably.
If you’re a microgym/boutique owner who has a group class operating model, you’re probably just fine.
World Gym Legacy and those who follow their lead will still utilize the Open Gym operating model.
Yes, there are several operating models in our industry. Plenty of courses inside Microgym University on those as well. Here’s a quick breakdown of the fitness operating models currently used (excluding online/digital):
Open Gym
Group Class
PT First
Straight to Class
Hybrid (running both concurrently)
Remember, group fitness took a stronghold in the market because education was low and access to the type of equipment you find in the average microgym was scarce.
This means you need coaches to educate you.
And being in a beta position (not having the education) is intimidating. But do it in a group of others who also don’t know how to perform a power clean and now we have community.
Use equipment that your local YMCA and globo-gym won’t invest in and you have the perfect storm for microgym success.
As long as the market continues to seek coach lead fitness, these unique globo-gym models won’t pose a threat to your microgym.
But…
If the market becomes educated enough and chooses to follow their own fitness journey, deviating from your UBF, then you might be seeing your members on a local World Gym Legacy Instagram post instead of yours.
How The Fitness Consumer Benefits
This one is easy peasy.
Piggybacking off my previous statement that consumers who have been educated inside of microgyms may want to spread their wings and try a different UBF from one of their favorite influencers - is where things get awesome for customers.
If you love Ben Patrick (aka KneesOverToesGuy), you’ve probably found it difficult to complete your sled work because your gym doesn’t have the space.
If you’re following Marcus Filly’s Functional Bodybuilding program, you may find that your gym’s limited inventory of equipment creates a real bottleneck for your workouts.
Perhaps you have a microgym membership that also offers open gym. However, they can’t offer open gym during class times, so their calendar and your need for convenience aren’t lining up.
Or simply the fact that anyone with a regular globo-gym membership, who doesn’t give a shit about the cardio movie theater, will now have a new option in the marketplace.
These scenarios and more all create the desire for something very similar to what World Gym Legacy is creating.
And while I realize that there probably won’t be this specific brand coming to a town near you soon, their success could spark a new wave of companies wanting to cash in on this unique model.
For us customers, the more evolution we see in the industry, the more variety we’ll have to choose from.
Closing Thoughts
Shit like this excites me.
I love seeing the industry react to the needs and problems of the customers, all the while still battling to create profit and take market share away from their competition.
This is the beauty of being on the business side and consumer side of the fitness industry. I’m able to look at both sides playbooks, understand their needs and wants and work with companies who are trying to close the gap.
So tell me, what do you think of the World Gym Legacy idea?
Is that coming from a business owner or customer perspective?
Can you seperate the two?
Looking forward to the replies.
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