Episode #516:Jill Kinney on Medical Fitness Centers and Active Wellness Innovations

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I am super excited to announce that we now have a formal

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partnership with the prospect wizard. And when I say

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wizard, I mean wizard. Obviously, you have a website.

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This allows you to convert your website traffic visitors

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directly into leads. It's not just another chatbot, and it's

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not AI, but it allows a visitor to call, text, or leave a

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voice mail. Immediately goes to you, your sales team, or anyone else in the

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club Instantly, MIT shows a study that if you contact

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the lead within 10 minutes, chance of them converting goes up 9

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times that of the average. We got the Atlanta Clubs on

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it, Vida Fitness, Gold's Gym, Mountainside,

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City Fitness Philly, College Park, Become one

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of the next halo companies to deploy the wizard. It's

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easy to use. Go to the prospectwizard.com. Get

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a free 30 day trial. Talk to my boy, Dave Gallon. He will get you

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all set up and let the leads flow based on the

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wizard. Go get them.

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This is Pete Morron, Halo Talks NYC. I have the pleasure of bringing one of

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my oldest friends in the industry back in the early 2000

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when none of you attended any trade shows, we were here to start

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this pioneership. We are on location Los

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Angeles Convention Center, Ursa now becoming the Health and Fitness

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Association, which I think is a more appropriate name. And, I'm here with

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Joe Kinney and we are excited to talk about the future of

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wellness, the future of partnerships, and bringing our

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expertise in programming to places that need it the most, but for some

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reason have been overlooked. So welcome to the

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show. Thank you, Pete. It's great to be here, and it's great to get some

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time with you again. Yeah. We do go back. We go back. We go back.

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We worked on several deals together. We've toured in many health clubs.

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Not sure we worked out in them, but I know Robert Klaus, rest in peace.

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Yeah. I did a lot of cycling with him. He's getting an award today, by

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the way. We're doing an innovation award for him at our for our event. So,

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I'll I'll see you there. So, look, you you've been in in this industry

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and basically started when there were managed contracts, there were clubs, high end,

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low end, maybe it didn't matter. I'm in the health club industry. We didn't have

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to really define it. And now you're on to active wellness. You know, talk

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about what that business model is and talk about how you've kind of taken all

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your expertise and said, look. Look. I know what this market needs, and I actually

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have a model to actually overlay it with. Yeah. Yeah. I we

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are ActiveWellness is a fitness and wellness management company,

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but we've kinda take it a different twist.

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Our background is predominantly in developing and owning and operating

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clubs, where we build our own brand and we build our own

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model, and we're bringing that to the fitness management

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business. So, we've got 2 models that we've brought to the market.

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One of them is an active wellness center, which is a a version

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of a medical fitness center, but with profitability

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and a business mind. So a competitive brand, something that's much more

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consumer facing. You You know, over over time, a lot of

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hospitals said, hey. It makes sense for me to have a a fitness center on

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my campus. But one, they didn't run it as a commercial club, and they didn't

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really have any DNA of, like, here's how you do sales and marketing. And,

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also, it's probably a part of population says, like, I'm only going near the hospital

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when I need be there. Right. And I'm not like I'm not trying to, like,

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get closer to it. I'm trying to get further away from it. So how do

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you kinda, like, say, hey. Look. You guys have you're onto something, but,

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like, it's not it's not built properly for success long term because

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you're not thinking about the things a consumer thinks about. Yeah. No. I you

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know, I don't think that the health care systems or hospitals per

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se, really understand marketing. You know, most of the folks

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that, that we've dealt with felt like their medical

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fitness center was somehow or another gonna be so unique that it didn't

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compete. And there's there's nothing further from the truth.

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So, you know, I think the what we've been able to do is go

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in and right size facilities, oftentimes

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coming in as the second second group in Right. Right. Right. 2nd

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3rd group in. But we bring our business expertise

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to on the marketing and sales side, and then bringing the consumer facing

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brand, the ActiveWellness brand, wellness brand, because you're right. I mean, who

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wants to go join a gym in a hospital? Yeah. So it's,

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it kind of forces you to scratch your head. What we've done is we've

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kind of taken our, our branding and our marketing and sales

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skills and turn these businesses around, so they're

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profitable. They're generating 18 to 25% EBITDA

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returns. And, you know, so we run it like a business.

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And then, you know, when we have an opportunity to, design and

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develop new ones, we start with classic

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club feasibility marketing analysis. We're not really looking at the benefit

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of what comes from the healthcare system. We're looking at whether that's a great place

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for a club. And then all of the sites we have are the best clubs

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in the market. Yep. So we run them with a level of customer experience

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that, attracts members. Yeah. One of the interesting

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parts about, you know, running a hospital, running a nonprofit, you know, they seem to

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have a fair amount of real estate that's kinda been accumulated over time. Some of

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it is mission critical, and they probably should have it. And

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some of it's like, I'm not really sure how you got a hold of this

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or why you actually own this. So when you have conversations

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with groups like this and the CEO or the CFO of a hospital, you say,

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look. I know you might let me let me try to erase what you know

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about people that have been in front of you before. Like, I could show you

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I always say this term. You know, experience is what you get when you don't

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get what you want. I've tried a lot of things. I nailed this. Like, give

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me, like, a clean sheet of paper, and let me explain how we can actually

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take this real estate and turn it into, like, income producing real estate. Right.

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And give me a shot at that. What are some of the things that, like,

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some of the things you hear and and are able to say, look. I I

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know you understand that that's how it used to be, but let me tell you

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how it works with active wellness. Yep. Well, you know, what what we've been able

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to do, Providence, the health care system, is a major

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investor of ours and got a chance to spend time working

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on their executive committee for the ambulatory care network. And

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so really got a chance to work side by side with them in terms of

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what was needed and where an integration can actually happen and how

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that can become a profitable clinical operation.

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And what we've done is we've created a,

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small footprint, 5 to

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10000 square feet, where we can deliver

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what we call Activate as the brand. Right. And Activate

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is a high touch personalized wellness and fitness

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program with every member having their own personal health

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coach, their own personal trainer. We have a registered dietitian.

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We have sleep specialists. We have people who come

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to build out the ultimate wellness and

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fitness program for this individual. And they come we're using eGym

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equipment. Okay. Yeah. We've got a recovery area. We've got brain

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training using Dividot and Smart Fitness. So it's a

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small footprint, but a very robust personalized wellness

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program. And the you know, what we're bringing to

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the health care community now and others is

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that you can do this in a small footprint.

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We've got, it the this is turnkey, a $2,000,000

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drop in place product. We're putting it into,

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ASCs, ambulatory surgery centers, where the

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orthopedic surgeons that are are, essentially building

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these things around the country. They put their,

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their medical group office in and maybe a 4 suite ASC,

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and we're dropping an activate in there so they can they can churn

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more patients through surgery. We prep the patients for surgery.

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They go in and do the surgery. They come out, and they do PT, and

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then they come back to us for fitness.

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This is Pete Moore. I wanna let you in on a little secret. There's this

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company called Promotion Vault, and what they do is they give out rewards from

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retailers that allow you to incentivize your

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members without having to do zero down and 1 month

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free or giving away shakes or giving away t shirts.

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What you wanna do is build a rewards program that lasts,

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that people value, and that doesn't discount your own products and services.

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So here's the deal. There's something called rewards vault. The rewards

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vault is going to allow a member to set up their own profile.

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They are going to answer questions. You are gonna get those answers. You're gonna be

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able to target those members, and you're gonna reward them inside your

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club, inside your spa, and outside of the club and

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outside of the spa to get them to become loyal, to get them

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to pay their monthly dues, and to be rewarded

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properly for the actions. A lot of companies are cutting back on rewards.

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You shouldn't be. Promotion Vault's your answer. Trust me. This is

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real.

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So on the door of the location, it says activate. It says activate.

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And and that's the brand that you're in the market with, as a a brand

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of active wellness. Correct? Okay. So we're doing that as a joint

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venture. We're working with developers. We're working with, we're

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actually launching sites in senior living and

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independent living. I mean, I spent so much time in my grandmother's assisted

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living facility, and I was, like, shocked that they didn't have a fitness

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component or a stretching area or and I felt like these

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these locations, the the owners of those businesses are

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not necessarily thinking about the business the way they should be. Like, assisted living should

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be the longevity. Right? Because now I have a recurring bed

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filled. Like, why not try and optimize this person's health and

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fitness while they're here? So I don't have to note, like, we're talking

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about death and dying and longevity. So Yep. I'm sorry about that topic, but, you

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know, why not have somebody there till 95 instead of 88? Yep. I mean Yeah.

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No. The the their margins can go way up. What you know, but the seniors,

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that are going into independent living or in CCRCs,

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which are the groups that we're primarily working with, they're high end.

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People are demanding a different level of experience. Yeah. You know, it's not just

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a treadmill and a, you know, a a bike in the other room. This is

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a full blown, robust, personalized wellness program, one

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that's data driven, one that's, can be connected with your

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personal physician, on the electronic health record. So it's

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really techie, and it's also really effective. But we

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bring in a solution. So we say, hey, up your amenity.

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Right. We bring in Activate, and we locate it like a retail

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operation. So all of the residents have access to it as part of their

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cost their their cost, but we open it up to the public too.

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So it's a a mixed retail amenity. I gotta tell you,

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in addition to that, just thinking about myself going, like and my

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grandmother, she passed away, but she went she was at Sunrise. It's just the living

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all the time. We We just used to say, grandma, just don't get to the

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3rd floor. That's when you really, like, say things that people aren't allowed to. Like

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I say, she was always on the 2nd floor. God love her. Helen Helen Schultz.

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My mom will like that. I I give her a shout out. If I was

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able to go see her and I was actually also able to go to a

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workout for a half hour, then I could go back upstairs and and have lunch

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with her. It's actually like an amenity for, like, the family. Yeah. Yeah. I never

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really thought about that as, like, a I gotta pay $20 for a guest pass

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to go and see my grandmother and stay there for 2 hours instead of, like,

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45 minutes or an hour. Yeah. But, you know, I and the people we're

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dealing with are are generally healthy. You know? Yeah. A

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75 year old today is not a 75 year old from 20

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years ago. You know? People are coming in and they're working out. We've got,

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you know, we've got our average age on a couple of the senior

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facilities that we operate today is, like, 83. You walk in and

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people are buff. You know? They are not in bad shape. They're

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in incredible shape. So it's just a you know, it's a new thinking, and

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and what we've done is we have created these models,

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and they're we're pushing them out into the market. The thing that I love about

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Activate is it's it's a $2,000,000 all in turnkey

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package. Yep. Generates a 28 to 35%

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ROI on, return on invested capital annual return

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on invested capital starting in year 2. You know, so it's a really

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it's a smart model, and, we've got we've got, we've

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got Square footage on that? Can be as little as

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5,000 square feet. The new ones that we're doing are about

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75100. Actually, one up into 9,000 square feet where we've

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added a therapy pool. But, basically, it's a relatively

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small footprint with a robust program. It's awesome. And

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it's been historically an amenity that was a cost center. So we come in

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and say, hey. Up your spending a little bit, and

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let's turn it into a profit center and a huge mean, think about, like,

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the Equinox deal with related group. Like, one of their thesis behind it was like,

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look. I'm gonna build a building. I'm gonna put an Equinox below it. You're gonna

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pay me more for rent per per apartment because of that, and and it

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works. Right. Did a couple of questions I had for you. Given this

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whole, you know, you know, potentially huge

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opportunity and and windfall of, like, HSA, FSA, and it was,

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like, $150,000,000,000 supposedly that's gonna get unlocked and you get a letter of

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medical necessity, and now that can pay for things. Are you seeing that

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flow into activate location yet, and and how big of it is of a

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magnitude is it? Right now, it's about 20%, if you don't mind me asking. Yeah.

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No. 20% of our membership is coming up. I love to hear that. And and

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it's booming. And, you know, and and we're charging a lot. I mean,

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with the this What what's the average? Did, like, go through, like, this personalized assessment

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and, like, evaluation and tracking? It's 2.50 a month. That's

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awesome. Good. That's what it should be, though. Right? Like, I'm so tainted to be

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like, oh, maybe that's, like, $49 a month. Like No. No, dude. Like, let's actually

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make some money and actually put the right resources towards it so we could actually

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deliver the results instead of, like, look at our p and l and say, like,

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why do we do this again? Yeah. Who's win who wins on this?

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Nobody. Not me. Yeah. Not me. And the and the member doesn't get results at

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$49 anyway. So, like, I'm actually doing a disservice to my own business

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to gen for joint venture partner and the members. Yeah. I'm not kidding. So let's

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actually put more money into it. HFA, s s FSA, I think, is gonna

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be very valuable to this industry. So, I just

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finished 4 years as the chairman of the Buck Institute For Research

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on Aging, which is a leading the global leading

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research institute, on

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purely focused on aging. It's been around for about 25 years. Where is

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it? It's in, Marin County. Okay. It's called the Buck

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Institute For Research on Aging. And we've got a rock

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star CEO, Eric Verdin, who's now,

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you know, literally changing what's

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gonna be viewed as fitness and wellness going forward. We just launched

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the Phenome Health Center, which is being led by Lee Hood, who

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is the guy that did the human genome project back in the

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eighties. Not not a small, accomplishment. No. And and

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what we're focused on now is essentially building

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the science of wellness. Yeah. And when that becomes

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validated, real science, real research, I

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think it's gonna change the fitness industry. So we're I'm working with

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scientists at the Buck who are building out the data that we're collecting on our

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activate members so that we're gonna be ready when the as more

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funds become available, we're gonna be ready to get it. How important and and, you

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know, we're familiar with, with EGM. You know, how

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how important is is their technology, you know, the relationship with them?

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Is, you know, hardware, software? Huge. And and, you know, one of

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the key things for us was to be able to have that data. Right. And,

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you know, EGIM has been incredible. They're a great partner, and

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they allow us to to, bring this level of,

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programming Yes. At a relatively low cost because, you

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know, it used to be having personal trainers drafting

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programs and supervising programs. Now we draft it

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once, got AI driven outcomes and program,

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and it's, it's written they've been a great partner for us. Yeah.

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That's amazing. So, you know, as you kinda

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look at a lot of the real estate opportunities out there and

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you think about presenting this activate model, presenting the

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$2,000,000 potentially to a new build or to basically

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say, look. I know you you haven't had success here, but I'm actually overlaying

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a new business model to this. There aren't that many as

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as you and I both know. We scour around. Like, there's investors in real estate.

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There's investors in operating businesses. Now there's more investors who understand, like, hey. I'd

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like to own the real estate. It gives me the ability to do a lot

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more. I could actually, like, re retrofit this entire place whenever I want

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because I own it. I don't have to ask anybody's permission. Do you see that

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as, like, a big competitive advantage for you on the JV side where Yeah.

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I'm kinda locked in. Not only I'm am I your partner, and we're not gonna

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do, like, annual RFPs. Right? Let's let's end that nonsense. Right?

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I'm your partner. I'm not your vendor. I say people like, I'm your adviser.

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I'm not your vendor. If you're gonna treat me like a customer or yeah.

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I'm gonna treat you if you treat me like a vendor, I'm gonna treat you

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like a customer. Treat me like your adviser, I'm gonna treat you as a client

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or some something to that effect. Right. So how is, like, the narrative changed on

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your end to to walk in there and say, like, I'm not I'm not

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coming in here to, like, manage your stuff. I'm not a staffing company. Yep. And

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and, like, just like, let me, like, re re recalibrate where we're

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at. So talk talk through that for a minute. Yeah. So, you know,

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there's we've got skin in the game. We're we're

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coming in with a solution. We're creating a new co for each one of

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the sites. We're it's a joint venture partnership. We've got a

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lease, and the developer's got, a, you

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know, a commitment, and we've got a commitment. And there's

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a, you know, our contracts are 20 year management agreements,

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but we're basically in it for, you know, we're we're

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there. Yeah. We're partners. And and it's our commitment to

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deliver on this because this is an amenity. They this has to work, and

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it also has to be a a bottom line profit. So it's,

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yeah. We're gonna get we're gonna have 20 of these up and running in the

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next couple of years. That's true. And I really wanna put my foot

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down and start, hitting the accelerator. We wanna get 50

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to a 100 of them up. And I think, you know, at that point, you

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have a distribution channel. It's pretty amazing. Mhmm. You also

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have a profitable individual business. And if we get our

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way and we've got a connection on the, on the

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health care side and on the insured payer side, you you've

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got a you've got a really interesting distribution model there. So I I

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think that the investors are coming in. We're talking to private equity right now,

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and we've got a we've got a profile of, being

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able to get these things up. And because part of the partnership is the

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developers coming in with TIs and capital contribution, doesn't take

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much for us to get these things up and going. And so it's a but

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we're we're different. You know? We're not just a staffing company. Right. We're we're

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creating models that are appropriate and and successful,

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and we're we're pushing them out.

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This is Pete Moore. Here's the last tip for you of the podcast.

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We are partnered up with a company called Higher Dose, higher dose

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dot com. They are the leader in workout

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recovery products, infrared technology, LED

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products such as PEMF mats and sauna blankets.

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00:19:31,559 --> 00:19:35,080
If you have not gotten on the workout recovery train

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00:19:35,080 --> 00:19:38,895
yet, your time and your stop is now. You gotta

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00:19:38,895 --> 00:19:42,655
get these products in there before these workout recovery and spas end

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00:19:42,655 --> 00:19:46,415
up saturating your market, having your members walk out of the club and

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00:19:46,415 --> 00:19:49,880
going into one of their locations for $200 per

327
00:19:49,880 --> 00:19:53,720
month where they're paying 39 to you, let's become an expert

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00:19:53,720 --> 00:19:57,534
in workout recovery if we are already an authority in workouts.

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Higher dose, check it out. There's a wholesale code,

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and we look forward to helping you augment your products

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00:20:05,860 --> 00:20:09,220
and services to meet the demands of your members. And,

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hey, let's get people happy, healthy, and sweating, and

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the recovery should be just as good as the workout.

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And the last question I have on this is brilliant to, like, open

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it up to other people. Like, I'm not just captive where, you know, I'm I'm

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running inside of a assisted living facility, but I'm opening it up to the public.

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What are some of the things that you've either heard or, like, a

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story or, hey. We got, like, these kids in here and,

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like, we didn't think that would happen, but, like, it's happening organically that you're

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like, wow. Like, something so there's some special sauce moving around here. I'm not sure

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what it is. I don't know if I need to, like, figure it out. It's

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just happening on its own. Yeah. Yeah. You know, you know, it's

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interesting because we're we're really not dealing with assisted living and memory

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care and that sort of thing. We're dealing with seniors. Right. You know, we're like

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active. Yeah. Active aging. Yeah. You know, that that audience.

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So, and, you know, the interesting thing is is that

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we've started, you know, looking at the market assessments and doing

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some doing a little work there.

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And the millennials are more interested in longevity

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than the seniors are. Uh-huh. You know? So when you start talking about a

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program that's gonna be data driven, that's gonna be, these people are gonna

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be tested and retested. They're gonna be the most well

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understood bodies. Yes. And and that doesn't necessarily mean

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you have be a senior to appreciate that. So so, yeah,

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actually, with 2 models, we're opening 1 in Sunnyvale and one

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out, in Cedar Park, Texas. And, both of those

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are, you know, originally designed for seniors, but all of a sudden now we're kind

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of shifting because Yeah. The market that we're gonna be selling to is not necessarily

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senior. Yeah. I mean, I'll go I'll go into a SoulCycle class. You know, I'm

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not that old, but I'm, like, the oldest person in there. But there's, like, 16,

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17 year olds that are, you know, getting their fitness in. They don't care that

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I'm there. I don't care that they're there. Like, we're all just participating in this

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program and getting what we want out of it. I heard the same thing, like,

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you know, Orangetheory. That could go, you know, from, like, 18 to, like, 80

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Yeah. In certain locations. So I think it's great that, like, people aren't, like,

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shoehorned into, like, a a brand. They're shoehorned into, like, an experience and, like,

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what resonates with them regardless of what age they're at. Because some people might want

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data at at any age. Right? Some people want to feel, and some

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people want community and safety. You know? So Yep. I guess it's great what you're

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doing. Yeah. No. I think this is this is the, you know,

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following the biometrics of individuals is you know, that's

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that's not an age thing. That's a that's an efficiency and a and a

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quality of life thing. So, yeah. Activate. We're fired up about

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it. I love it. Alright. Active wellness, you heard it here first on Halo Talks.

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If you need a joint venture, erase your brain. Call

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Jill and team and she will show you what the current state and the

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future of the bricks and mortar is going to be and the

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programming to go with it. So thanks for coming on. Great to see you again.

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I love what you're doing and it's needed. And, you know, it's

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it's great when, like, you've talked to somebody and, like, you nailed it because, like,

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you just know at this point. Right? If not, like, maybe maybe we should go

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do something else, and then we ain't doing anything else. So go Halo and go

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active ones. Thank you, Pete.