100 Starting Strength gyms in 5 years

[chrisd]

I don’t doubt that the Y picks up a lot of training income, but they also have open access and a larger community. A lot of these folks paying for training are also paying for personal interaction. And you know as well as I do that telling these folks to do 4/5 lifts over and over again is likely not going to retain them as well as “let’s try something new today."

Actually, my strength-focused clients - which was a bit over half of them - had the best retention. And it was the same for the other guy who did stuff like me. There's less of them, but they stick with it.

Personally I'm very sceptical of franchises. If it's such a sure thing, why wouldn't you just open the place yourself and employ someone to run it for you? Instead you're shifting at least some of the financial risk onto the staff. Now, what could be the reason you wish to minimise your financial exposure to a new place opening, hmmm? Is it because you think it'll succeed so much the big wads of cash flowing in will frighten you too much?

Because, Kyle, it takes money to expand a business. You can wait until you have enough surplus from your initial business. You can borrow it. You can go public and have a share issue. Or you can franchise. A franchisee should be looking to buy a business with a proven track record. Buying, then next big thing is a gamble.

Speaking of gambles. Gyms are a growth area. Not so long ago a couple of major gym chains in the Uk had to divest themselves of a lot of branches. They branches were taken over, presumably by someone who can run them more profitably.

[quark]

My perception is that XFit members are largely in their 20s and early 30s, higher than average income but not very high income and that the social aspects are key, but I have no idea if that's accurate.

According to this:
https://rallyfitness.com/blogs/news/the ... earch-2017

42% are 25-34, another 27% 35-54.
50/50 male/female
86% white
>50% income over $150K
59% have children
40% have post-graduate degrees

Thanks!

It would be interesting to see how SS and SSOC compare.

I do wonder how important the social aspects and sense of community are to Xfit. 59% with children suggests it's less of a meet market than I imagined.

Forbes estimated Xfit, Inc. is pulling in $100 million/year with minimal costs. Gym failure rate is under 2%.

[Monoides]

So I had another post but lost it, but basically: Franchising works because it outsources risk (on both sides) and it allows the parent company to expand more quickly and at lower cost. This is mostly useful if you're dealing with blue-ocean territories (i.e. the opposite of the fitness market, which is hopelessly over-saturated.)

The more sensible approach for an organisation like SS is probably some kind of reverse franchise. Go out to the SSCs who've already built profitable gyms, and say 'So here's the deal - we pay you $xxxx for a stake in your business, we tone up the SS branding a little, and become a silent partner in your business. You can use that money to do whatever you want. We'll also give you a salary to travel to new gyms in your 'territory' that are opening and help the people running them to get set up. After a set period of time, we'll start taking a cut of your profits, but we'll grant you a clause to sell your gym BACK to us after a certain period of time if you ever want an out.'

Unfortunately for them, I suspect the people best positioned to do this sort of thing are the ones who'd least want to do it.

[mgil]

59% with children suggests it's less of a meet market than I imagined.

It doesn't matter where you get your appetite as long as you eat at home.

-Abraham Johnson

[Allentown]

I think there’s actually monetary value to this thread.

I know, right?
My wife's vet clinic is moving out of a retail space in a shopping center on the corner of two busy roads and into a larger location across the street, where a bunch of new stores have popped up recently.
There's even a GNC in the shopping center where her old clinic is...

I do wonder how important the social aspects and sense of community are to Xfit. 59% with children suggests it's less of a meet market than I imagined.

Even if you are not looking for booty, the social aspect is big.
You've got a built-in common interest, you can go anywhere (basically) around the world and have instant friends, etc... I stayed at my old Xfit gym for a pretty long time simply because I didn't know anyone else in town, and didn't want to lose my group. Sure none of them were real friends, but I got to know a bunch pretty well.

[mgil]

One of the best equipped gyms I ever visited was a complete meathead gym. Rich Piana posters everywhere (this was recently so well after his passing), coolers stocked with bullshit energy and protein drinks, wraps straps and belts for sale, and tons of people on gear in bikinis plastered all over the walls. While I was there, a few folks who looked juicy were hanging around. Some other folks there lifting for the 'gram. But the racks were open and they had every bar one could imagine along with chains and bands and whatever. Tons of machines. A DL platform also. A fantastic place to get swole.

They were located in an older strip mall that wasn't in a great part of town and I'm pretty sure folks were dealing supplements in the parking lot.

Probably a good recipe for a profitable gym.

[MPhelps]

59% with children suggests it's less of a meet market than I imagined.

It doesn't matter where you get your appetite as long as you eat at home.

-Abraham Johnson

[Allentown]

They were located in an older strip mall that wasn't in a great part of town and I'm pretty sure folks were dealing supplements in the parking lot.

Wife's clinic is at the edge of the upscale part of town. There have been a few little personal training centers in the little "downtown" area of "east" but the rent in those places has to be really high, parking is mostly street, and it's a small area. The clinic has a parking lot shared with an upscale men's clothing store, a Lululemon, a sports bar...

[Jerry]

There are a million possible reasons why Rip & Co *might* not succeed with their grand plan. Personally I wish them success, but I think the level of professionalism and sheer hard work needed to build a successful business as a franchisor may surprise them. Also, if the concept succeeds it will inspire copycats, and barriers to entry (i.e. being a branded SSC) may not be as high as the owners hope.

However, I wouldn't question whether barbell training facilities charging $n00 per month can ever succeed. Apparently they can and already do for the right coaches/gym owners in the right markets. Probably don't even need exclusively high income customers, just solvent ones.

It's the same as Xfit and Xfit-alike facilities charging $n00 per month to go train in a drafty warehouse in a sketchy location with minimal equipment and facilities. I think the coaches/business owners are selling highly personalised services and building communities of people who become committed to turning up and training together because they enjoy it and discover it is enhancing/transforming their lives. And a friendly, charismatic coach who can build such a community can build a loyal customer base. Those customers will pay because they perceive they're getting value. They'll stay as long as the experience is valuable to them. Customer turnover can become manageable.

Not every market can support this. Not every coach can make it work, and those who can are probably least likely to start/stay within the franchise model, since their talents can take them further on their own in such a highly personal business.

But for sure it can work for some of the people some of the time. As can Xfit, as can owning a print shop or a doughnut bakery. So I think good luck to them.

[Chebass88]

Kyle - thanks for posting some of the "behind the curtains" numbers for the training business.

[Hanley]

Personally I wish them success

I think their success would be very good for the broverse at large.

[TheFlush]

Clearly I am not in the target market for this service. I am not paying ~$300 a month for anything I can't haul my family around in (and even then I would pay cash for something used). Even before I bought my home gym equipment (now up to ~$1200 for mostly used stuff that I know I can sell for what I spent on it), I only paid about $36/mo for 24 hour gym access which covered my son and me. It was old equipment, but it was heavy. No barbell coaching/programming, but there are enough free resources that most people should be able to get by (thanks MM). Twice I drove 2 hours each way to visit a SSC for $60 for each 90 minute session for some form coaching. I make more than double the median household income around here (albeit in a poor area), so I could spend more, but there are a lot of higher priorities for me.

As someone who is clearly not in their target market, I can't see it being very successful. I do wish the franchisees well and hope that they are successful though.

[quark]

I do wonder how important the social aspects and sense of community are to Xfit. 59% with children suggests it's less of a meet market than I imagined.

Even if you are not looking for booty, the social aspect is big.
You've got a built-in common interest, you can go anywhere (basically) around the world and have instant friends, etc... I stayed at my old Xfit gym for a pretty long time simply because I didn't know anyone else in town, and didn't want to lose my group. Sure none of them were real friends, but I got to know a bunch pretty well.

Yep. It's nice to have a bunch of familiar people with a common interest. This seems the appeal of a lot of trainers - someone to chat with for an hour, even if it's at $100/hour. Many of the trainers I see don't appear to provide much more value than that.

Will the SS gyms have this social aspect?

[Allentown]

Will the SS gyms have this social aspect?

Assuming they have people doing SSNLP, it will. At a bare minimum it's going to give you accountabilibuddies.

[Mkgillman]

Edit: though this comment gives me pause.

To illustrate the calculus, the Dallas location is within a 3 mile radius of 70,000 discreet visitors to the website. We need to sign up 100 of them, at a monthly rate cheaper than personal training by an inexperienced kid at a commercial gym. [...] Very intelligent people have developed this plan. We've got this, thanks.

hmmm....

Okay, no I am pissed off at a professional level. Geospatial data analysis is HARD and if they are starting off with IP addresses to determine location of perspective clients, their dataset is garbage from the start. The geographic location your IP address resolves to depends entirely on your ISP network configuration. If someone visits the forums on their work computer, phone connected to a mobile network, and their home computer, they could easily present as 3 discreet visitors.

The geographic resolution of IP addresses also tends to be clustered into nodes, so while it may look like all these people are in a 3 mile radius, they are certainly not. They are claiming that with a 3 mile radius (area ~30 sq mi) they have 70,000 discreet visitors. The Dallas metro area has a population density of under 650 people/sq mi. which would give them under 20,000 people total. Downtown Dallas has over 3,600 people/sq. mi. which would give them about 110,000 people, but if you believe that over 60% of those people visit the same webpage, well, you are wrong.

This is also completely ignoring data relating to household income and broader demographic modeling that would be required to sort out the people that would likely pay for such an expensive service. After that you should be diving into property, zoning, traffic, and other data to determine where there are storefront locations that would be the best fit for your proposed franchise. Even with a robust model, you are still going to have someone go through a weed out the false positives or any obvious artifacts.

I mean, or you could just draw a buffer ring around a point and say, "70,000 people in a 3 mile radius."

[hsilman]

But for sure it can work for some of the people some of the time. As can Xfit, as can owning a print shop or a doughnut bakery. So I think good luck to them.

But that was my point. I think Xfit already has this market, and at a lower price point. I don't see many people not already in the SS-Sphere understanding the distinction between them. They both lift weights with barbells, with coaching in small groups.

The people at Xfit are hotter(on average), they do familiar stuff as well as unfamiliar, and the name recognition is there.

Edit: I mean, they already seem to be targeting those who know SS already. But again, SSCs work out of Xfit boxes. If I wanted to learn from Wolf, why would I pay $300+/month to do novice LP, when I could do the same thing for $200/month at CrossFit Solstice? And get all the other Xfit related stuff.

[quark]

Will the SS gyms have this social aspect?

Assuming they have people doing SSNLP, it will. At a bare minimum it's going to give you accountabilibuddies.

Can they convert this into long-term client relationships?

[rjharris]

Very intelligent people have developed this plan

Are we including someone who failed calc 1 5 or more times in this set or what

[mgil]

Very intelligent people have developed this plan

Are we including someone who failed calc 1 5 or more times in this set or what

I think the use of the word "very" implies yes.

I don't think any of us want the business to fail. In general, failing businesses are bad for local economies. Most would rather avoid that. Rather, the discussion at hand is if all of these questions have been asked and the critical analysis done. The print copy says yes, but the data really isn't there. Extrapolating from existing gyms using the SS model doesn't necessarily work well.

@hsilman, maybe SS Gyms are just Xfit for the elderly. I could actually see that marketing spun well and working for the ED medication crowd.

@Mkgillman, thank you for your GIS rants/insights. I agree that using an IP address and unique site visitors is poor data mining. But we've seen some other detective work at SS using IP addresses in the past and we know that interwebbing isn't their strong suit.

[Allentown]

But for sure it can work for some of the people some of the time. As can Xfit, as can owning a print shop or a doughnut bakery. So I think good luck to them.

But that was my point. I think Xfit already has this market, and at a lower price point. I don't see many people not already in the SS-Sphere understanding the distinction between them. They both lift weights with barbells, with coaching in small groups.

The people at Xfit are hotter(on average), they do familiar stuff as well as unfamiliar, and the name recognition is there.

Edit: I mean, they already seem to be targeting those who know SS already. But again, SSCs work out of Xfit boxes. If I wanted to learn from Wolf, why would I pay $300+/month to do novice LP, when I could do the same thing for $200/month at CrossFit Solstice? And get all the other Xfit related stuff.

This is all true. Crossfit is on TV. They do lots of things people see on TV outside of Xfit (strongman, running, oly lifting, gymnastics, etc). They flash abs all day. They don't have the coaching rigor of even SS, but they don't need it, because it takes so long to get anyone to the point they can hurt themselves unless you are truly awful and give someone rhabdo (like my wife, twice). They get you tired and sweaty and people lose weight, which is what most people want anyways. And because they don't need particularly logical programming, or particularly insightful or intelligent coaches, they don't charge as much as SS.

hsilman, maybe SS Gyms are just Xfit for the elderly. I could actually see that marketing spun well and working for the ED medication crowd.

This is good. The elderly and people who got injured by Xfit.


-My recent posting might imply otherwise, but I think Xfit is pretty dumb.-