When asked about SoulCycle and its popularity, Gabby Etrog Cohen, director of public relations and marketing for the Equinox-owned cycle studio, found it difficult to explain the brand to someone who has never been inside a SoulCycle.
“It’s like talking about ice cream you’ve never tasted,” she says.
Etrog Cohen’s analogy speaks to the experience that SoulCycle produces, and that’s the goal of a number of personal training and group training studio owners trying to differentiate themselves from their traditional fitness club counterparts. These operators want their members to get the most results in the time they are there while also enjoying the experience at their studios.
SoulCycle, which New York-based Equinox acquired in 2011, has 11 studios in the New York area, three in Los Angeles and two set to open in April in the San Francisco area. Riders spend $34 on a single class ($25 in California) up to $3,500 for a 50-class series. Etrog Cohen says SoulCycle is seeing more growth now and at a more rapid pace than when the company was founded in 2006, thanks largely to the Equinox acquisition.
Etrog Cohen also says SoulCycle receives 25 to 50 “Soul in Your Area” email requests every day from people who want a SoulCycle in their city.
“The response has been overwhelming for consumers to ask for SoulCycle,” Etrog Cohen says.
Of the 14 open SoulCycle studios, 11 are in the New York City area. The other three studios are in Los Angeles. Two studios are set to open in April in San Francisco. Photo courtesy of SoulCycle.
The distinct yellow branding buoyed by the bright yellow spokes in SoulCycle bikes makes SoulCycle stand out from other cycle studios and fitness options. Like SoulCycle, Orangetheory Fitness, Fort Lauderdale, FL, has a distinct color branding. The obvious color is orange, but the reason for the color is not so obvious.
Orangetheory Fitness offers a group personal training concept that includes treadmills, rowing machines, suspension systems and free weights backed by the science of excess post-exercise oxygen consumption (EPOC). The heart-monitored training, according to the company, is designed to keep heart rates in a target zone that stimulates metabolism and increases energy, thus producing an “orange effect” on members with more energy, visible toning and extra calorie burn.
The first Orangetheory Fitness studio opened in 2010, and it now has 27 locations open in the United States and 75 franchises awarded in North America, says Dave Long, CEO and partner of Orangetheory Fitness. By the end of this year, Orangetheory Fitness projects to have 200 franchises awarded and between 75 and 100 studios open, each of which are about 2,500 to 2,800 square feet, Long says.
Although he did not give specific numbers, Long says company revenue tripled from 2011 to 2012, and same-store sales have increased more than 50 percent during that time. The goal is for each location to produce $1 million in revenue annually, Long adds.
“We’ve been fortunate to be able to build a brand that has a lot of brand stickiness, where consumers are getting very involved in it,” Long says. “From people getting their logo tattooed on their bodies to wearing a lot of the Orangetheory gear, we have a really high percentage of people who are getting a lot more connected to the brand than just a gym they go to. It becomes a part of their lifestyle.”
Orangetheory Fitness expects to have between 75 and 100 studios open by the end of 2013. Photo courtesy of Orangetheory Fitness.
UFC Gym, which fuses mixed martial arts with traditional fitness, gained more than 80 franchises when parent company New Evolution Ventures (NeV), Lafayette, CA, announced its acquisition of LA Boxing, Santa Ana, CA. When UFC Gym was founded in 2009, one of the impetuses was to create a brand that was an alternative to the traditional fitness club, NeV CEO Jim Rowley says.
“It was our intention for some time to make a big splash with this brand,” Rowley says. “What we set out to do was be pragmatic about understanding the brand, its resonance with the community and the style aspects of it in terms of fusing traditional fitness with mixed martial arts. We took the better part of three years to curate it and really understand where we can improve the traditional fitness club. We knew we had something.”
Although they technically are not called franchises, CrossFit studios continue to grow nationwide as the most recognized training gym in the country. Founder Greg Glassman purchased the remaining half of the Washington, DC-based company from his wife last year as the two began to settle divorce proceedings. CrossFit has 5,000 studios in operation around the world with 400 more in the pipeline.
Even lesser-known training gyms and studios around the country are showing profits, partly because members are willing to spend anywhere from $800 to $2,000 or more per month for a variety of personal training sessions at these studios. Members who participate in the group training that many of these studios offer typically pay less than that per month.
Frank Nash says he was “born and raised” in big-box health clubs. But he has found his niche with his Frank Nash Training Systems, Worcester, MA, which is celebrating its 10-year anniversary next month. The 5,500-square-foot club produced about $800,000 in revenue last year, according to Nash.
“We’re not your traditional club,” Nash says. “We’re not selling a gym membership here. We’re selling a solution. You’re paying for the experience, the expertise and some real-deal great coaches who will get you there.”
Because of their small size, training studios are cheaper to operate than bigger-box clubs, Nash says, which produces lower risk for the owner. Training studios also have less fitness equipment than traditional fitness clubs do. Nash refers to rows of machines as “the enemy.”
“It’s not about having a bunch of equipment and pretty machines,” he says. “It’s about the coaching. It’s about the motivation. It’s about the results. Good people and good coaches are the hardest things to find. My best piece of equipment is my staff.”
Like most training gyms, Frank Nash Training Systems in Worcester, MA, includes exercises in which members pull heavy objects behind them. Photo courtesy of Frank Nash Training Systems.
North Point Fitness, Roswell, GA, just north of Atlanta, was created in 2005, but owner Rick Mayo has operated a training studio in the same space for the past 20 years. Last year, North Point Fitness generated about $1.5 million in a 6,000-square-foot space, a 10 percent increase from the previous year, Mayo says. The club is scheduled to complete its expansion to 8,000 square feet this month, and Mayo hopes to add 50 new members to the 350 members already at the studio.
Mayo licenses his North Point Personal Training Systems to such brands as Gold’s Gym, Anytime Fitness and World Gym. More than 50 gyms worldwide have the North Point training systems, Mayo says.
“It’s just a huge advantage to be in the smaller space that we’re in, doing what we’re doing, because we really are the anti-gym,” Mayo says. “If somebody really wants to get results and get a little bit of coaching, which I think everybody wants, then that’s what we do. It’s almost a complete opposite of what you would find in the larger clubs.”
The larger clubs are recognizing that difference, which is driving the growth in the licensing side of Mayo’s business, he says. When Mayo visits a gym in which 100 of the 4,000 members are participating in personal training, he knows that many more members would like the extra coaching.
“They just don’t want what they’ve been offered,” Mayo says.
Mayo consulted Todd Levine and George Schaffer, owners of the 25,000-square-foot Gold’s Gym in Webster, NY, just outside of Rochester, when they implemented a small group
training system in their gym last April. The owners already had a strong large group team training system in place, Schaffer says. Once the small group training system was added, the investment began to pay off. Training revenue is up about 25 percent, says Schaffer, who calls the move a “game-changer” for the gym.
“We’re actually making fitness fun again,” Schaffer says. “This is what the consumer is interested in. The old days of … being in the gym for two hours is gone. We can do everything that people want to accomplish in about 55 minutes. Fifty-five minutes is the perfect workout.”
The goal for the partners is that by June 1, the club’s personal training revenue will match its membership revenue.
“And we’re headed in the right direction,” Schaffer says. “If we do that, we can really bulletproof ourselves from any competitor.”
Susan Taylor made a similar change at The Woman’s Workout Co. in Hyannis, MA, which at 13,000 square feet is not exactly a big-box club but had been more of a traditional club. Taylor owned the club, sold it, then bought it back three years ago. At that time, she closed the swimming pool and expanded the floor footprint of the women-only club to provide more space for private and group training.
The goal for The Woman’s Workout Co. is to get 45 training memberships per month at an average of $249, which would equate to about $11,000 per month, Taylor says.
“It was a perfect fit,” Taylor says of the change. “Women like the group environment, the energy, the support. It was just simply a natural. Good music and hard workouts bring such an incredible energy to the gym. And they started seeing results, whereas sitting down on the selectorized [equipment] just wasn’t happening. They’re flipping tires and pulling sleds and hanging from rings. They’re working harder than they probably ever have but having the best time that they’ve ever had, too.”
Personal training, group training and cycle studios may not completely replace the traditional fitness club model, but they are having enough of an impact to make big-box clubs and others like them take notice.
“We’re seeing a gradual shift away from the big-box clubs to the microgym, or what we do with Orangetheory Fitness,” Long says. “How big? I’m not sure, but we definitely see that people are gravitating toward the smaller, more convenient model.”
Editor’s Note: To learn how these microgyms are changing the sales strategies of health clubs, purchase Club Industry’s “Health Club Sales Strategies 2012” report by going to http://clubindustry.com/expert-advice/club-industry-reports.