Episode #575: Scaling Planet Fitness-Lessons in Execution and Growth from CJ Bouchard

0:02 This is Pete Moore on Halo Talks nyc. I have the pleasure of bringing a friend of mine from the Planet Fitness Network, long time industry veteran like myself, cj Coming in from Excel Fitness, CEO of one of the largest Planet Fitness area developers. Cj, Good to have you on the show. Good morning, man. Good to be here. Appreciate it. Love the podcast. Love what you're doing, man. Awesome. Well, I had the pleasure of working with your team for a while, so you built a nice engine and corporate entity here, you know, as you continue to, to grow with your private equity firm, Olympus Partners. So, you know, what I'd love to do is, you know, you and I have spoken many times in person, over the phone, over text message. You know, I think people need to understand that, you know, where you started back in Connecticut and you know, some of the, some of the tougher times, you know, to actually get to a place where you are today. So maybe, you know, take, take it from the top, if you will, in Connecticut with the, with the Pepe. Yeah, right. Listen, I, I've been in the industry. I'm 55, right, so I've been in the industry since I was 18. You guys could do the math. And I started, you know, as just a guy that wanted to work out, loved the gym and, and decided to, to, to really, you know, kind of go hardcore all in. Never went to college, started working in a club, wanted to do, you know, personal training, did the personal training, nutrition thing, did that for a

1:32 while and it was fantastic. I was, I was in Connecticut, worked with Joe Pepe at his World Gym clubs up there. There were Golds and there were, well, they were Golds and Premier Health and Fitness and World Gym and, and so we switched all around and, and you know, built up a great, great following. Had a, had an awesome group of trainers that I work some worked under me and then sold my training company, went to North Carolina and that was in early, early 2000s, and then found, found that Joe Pepe had, had transferred his clubs over to Planet Fitness in 2004. And if Joe was doing that, something was up with that. So I went and looked into it and found out that Planet was franchising. They started franchising. And I had heard about Planet before. I kind of, I also had worked for Twin Oak Software. We had sold our software company to Twin Oaks. So I was with Twin Oaks for a year, but knew about Planet, but never really kind of knew about Mike, Mark and Chris until I went up there and checked it out, which was kind of cool.

2:43 Saw those guys they were entrepreneurs, they were disrupting the industry. And everything I knew about fitness was, you know, kind of hardcore side everything and but you, when you looked at it from a 30,000 foot view, you're like, hey, this is, this is pretty cool. I mean the interesting part about, yeah, the interesting part about planning, I do this in my, in my Halo Academy case. But like these guys really stumbled upon this business model out of like extreme frustration and basically said hey, like you know, we were a Gold's Gym up in New Hampshire, we're losing money, you know, we're paying all these sales commissions out. Like what if we just take out everything that annoys the shit out of us and take out the group exercise. Let's get these personal trainers off the floor. Like we're not doing a pro shop because I thought I was making 100% of my supplements but like 80% of them get stolen from, from the front desk.

3:32 And I'm paying 22 year old kids to, you know, to sell memberships and, and then sold like 500 memberships or some crazy number. Right? So you know, coming, coming from and, and, and for people's note here on the audience, at one point Planet Fitness actually acquired World Gym as a brand and then actually three years later sold it back because they couldn't convince a lot of World Gym owners that they should reflag to plan it. And I think Mark and Mike got really frustrated be like, dude, let's just get rid of this thing because like we can't educate people. But you on the other hand kind of said like, hey, I come from the personal training, I come from the results side. But like you understood the business model and not necessarily like the delivery of, of like a multi programming, you know, full amenity set that you know, is a complicated business when you come down to like a full service health club. So what was like, what was like the turning point there? And then you know, why'd you move down to North Carolina and then talk about some of your daily road trips and people know that you're not just like an entrepreneur sitting in your office with like a bookshelf behind you.

4:37 Yeah, we thought we had that conversation. I think both know, quite frankly, you know, finding, finding Planet. When I saw Planet, I was like, okay, this is special. I didn't look. Nobody knew how special Planet was going to be, but we all knew it was different. It was Disruptor. We all knew that we had to do something because as you knew, like look back in those days, if you had, if you had 3,000 members and were breaking even or making some money. Like you were doing okay, right? Like, you're like, that's. Those are the guys running the gyms. Like, there was very few people with, you know, with substantial income from, From Fitness Concepts back then. Right. Like, there's a few guys, right. I was working with the average. Yeah. I was working with Gold's Gym guys at three or four thousand members who were like. Right. You know, like the, the, the. The person to talk to at the trade show. Right. In a regional franchise associate. And then. And also I used to go up there and say, like, hey. Because I used to do like, this industry update with the regional guys at the ggfa, they called it. And I would say, like, hey, this Planet Fitness thing, like, you better fuck. You know, better watch out. Like, they, they got something going on here. And the response, C.J. i used to get was like, oh, those guys gonna be out of business soon. Like, they can't. You can't price a membership, you know, and, and so to, to get in it and kind of like, bet your career and bet like, your personal financial statement on Planet. Just everybody knows, like, now it's kind of like, no, like, obviously. Right. But back in the day, it was kind of like, hey, I don't know if I could get this amount of people. And I'm not actually providing the results, I'm providing you access. And I don't know if, like, the market appreciated private equity, didn't appreciate it

6:10 until, you know, really, like 12 years ago, not 25 years ago. No, talk about that. Talk about that and like, how you change your mindset and then what you did to, like, make this work. Yeah, I think, listen, you're spot on. I think what people need to realize is that the guys, you know, that was the seventh, like, the seventh franchisee in the system. Right. And, and, and when I moved to North Carolina, it was to raise a family. Like, that was the deal. I didn't want to raise a family in Connecticut. And I looked at it and said, there's no way I could be an entrepreneur in Connecticut with the costs that are here. And we, you know, I visited North Carolina a lot. My ex wife's from, you know, basically from North Carolina, went to school there. So she. So, so we went there and, and looked to raise our son there. And, and then we had this opportunity came about. And then when you looked at Planet, the guys that started in the beginning, these are guys that are gym guys because that were grinders that just like, from day one, they knew the Business. They understand what it means to service the members. They really looked at the business as how do we take it to the next level? And most of these guys came from Worlds, came from Golds, came from Powerhouse. And they looked at it and said, okay, we, we've got to, we got to make some money in this industry, right? Like, we're putting blood, sweat and tears in this thing and we're not really making any money. In fact, a lot of them are on the brink of going bankrupt. So. True. They go to, they go to Planet. And Planet is like, listen, this, you know, change the model, buy

7:43 in or don't do it. And you know, for me it was, it was, I wanted to, I wanted to get out of trading hours for dollars, right? I didn't want to do personal training anymore. I was looking to, to get to the point to where I could, I could service more people and, and make, make a bigger impact. And of course, yeah, I wanted the American dream. I wanted to be able to, to, to build something and to create something and then at some point in time get, get to the point like where I'm at today. But you know, the success, you know, it's like this overnight success that happened 20 years. You know, it took me 20 years to make it happen. I mean, it's, and we talk about this. I, I was in Wilmington, North Carolina and at the time I looked for opening up clubs in Wilmington and it didn't happen. So corporate basically turned around and said, look, you're gonna have to go to Raleigh. So I just built a house in Wilmington and Wilmington to Raleigh's two hours. So I was like, okay, screw it, I'll go to Raleigh, right? And I find a location in Raleigh. I take all the money that I had, which was, you know, at the time was a couple hundred grand. I was pretty good. You know, we saved some money and we built a house, sold that and built and bought some land and sold that, made some money and, and saved some money and I put everything into the first club, every dime. And quite frankly, it was, you know, it was challenging for the first, you know, first couple of years it was really challenging. And I

9:14 drove from Wilmington to Raleigh basically five days a week. It was, I dropped my son off at 7:00am I would drive to Raleigh, two hours. I'd work for, you know, until 5, 6:00 clock, depending on, you know, if, if, you know. At the time my wife was, was, was able to pick our son up. She was working as well. So, so we were just challenged with this operations but, but we just grinded it out and then it was 18 months later where I went and we decided to move to Raleigh and go all in. But, but I didn't take a paycheck for two years. Yeah, well, I started a company, software company. I didn't take a paycheck for three and a half years and like put 66,000 on credit cards because I didn't know what it was. Like, you know, I was in business school. You know, my grandma paid for it. Thanks, Grandma Helen. But like, they didn't teach you in business school.

10:02 Like, well, like, this is what you do. Like, this is how you wind down a company. This is how you, like, you elegantly fail. Right? So I'm just like, dude, I'm all in. And yeah, I mean, while you're going through that, just to like get into the psyche of an entrepreneur, Ye know, when you were going from, from Wilmington to Raleigh, I'm sure like during that ride you weren't like, one day I want to have a private equity firm and 166 clubs. You're like, no, dude, I gotta make sure I meet payroll. I gotta look for the next location, I gotta meet my milestones. I gotta make sure I get my kid picked up and I got food on the table and I got like $0 in my savings account. Like, you're crazy entrepreneur at the time, you know, that wasn't that long ago, right? No, no, no, this, I mean, you're talking to 2004 to 2006, right? So yeah, you know, I, I, I was putting payroll on credit cards, like literally. I mean, it was, it was one of those. And look, I did everything. I was the, I was the payroll guy, I was the HR guy, I was a bad HR guy. I, you know, I, I, I did everything. I cleaned the toilets. We, you know, we, we put up signage, we moved equipment. We, you know, it was that, that's what you did. And quite frankly, you know, there's a little bit of that grit that, you know, you miss a little bit of that because you get separated. You get, you know, four lines of separation. But my team knows I still have guys that work for me since day one. I gotta, I gotta, guys work for me. Two guys that have been with me over 20 years from Raleigh, another, another that's been with me, you know, in Texas. He's been with our company for over 20 years

11:35 as well. So these guys have seen it, they've seen it from the ground up. And that's, that's what I love and I Love seeing them where they're at today. Which, you know, again, you're right. Nobody knew we were going to have private equity backed business. Nobody knew we'd have a, you know, today we're 167 clubs will be 174 by the end of this year, you know, possibly more. We're, we're going to, we've got 15 under, under, under construction right now. We got a massive team, we got 3200 employees. Nobody knew that was going to happen. All we knew was that we had a, we, we had a lease payment on equipment coming up soon and how the hell we were going to pay it, right? Like that's, that's what the deal was. That's why like, you know, there's like two types of people that come and call me up there. There's someone who comes and says like him. And I built 10 clubs. I basically built them with my hands, my blood, sweat and tears.

12:26 I lived in these, these clubs for a period of time. I could do everything. I know where everything is. Like when I to go on a club tour with somebody like you, okay, usually you're like picking up like small pieces of paper or like in the parking lot, you pick it up like a cup, right? Or when you go into a club, like you don't put it in the fucking GPS because you actually know exactly where it is. I've been with guys that travel around be like, oh, let me put the gps. Like, dude, don't you go here every day? How do you, what do we need a GPS for to get to this club? Like, and those are the guys that come in from the industry, from the top and don't really like understand like what it took to build this thing. They don't really know exactly where it is. And then you walk the club and they're like shaking hands with people and people like, I don't know who this guy is, right? You go in there, you're like, dude, I hired you. I probably have trained with you. Like we closed the club, we opened the club together. I'm like, whatever you need me to do. Like, there's no, my title is relevant to what, to what the deal is.

13:22 So I get those guys and then, and then you get an operator that comes around and like when you walk a club with somebody like you, you know, like you actually get insight into. Let me show you how this thing was built. Let me tell you what I did with this, you know, with this wall. Let me tell you, you know, where other guys come in, they'd be like, yeah, this club has X number of members and X number ebitda. And I'm like, do you know anything about the history? Like, oh, I. No, I don't. I think it might have been a grocery store. I'm like, what the. How do you not know, like, the history of, like, this box? Right. So how do you. How do you think you know? Yeah. So many stories, man. I mean, just. I mean, quite frankly. Listen, we. We went. Planet was supposed to be in the. You know, in the beginning, it was like, oh, just build it, and they're going to come. I was like, well, that didn't happen because they were in Dover, New Hampshire at the time. I'm in Raleigh, North Carolina. Nobody knew us. Nobody. So I had people coming up to us, and we took over an old gym, and the gym was called Big Ape Gym. Okay? That was the name of the gym, Big Ape Gym in Raleigh. And the guy that owned it was. His name was Todd. So we're selling memberships, and people would come up to us and be like, hey, where's Todd? He owes me money. And I'm like, we're Planet Fitness. I don't know where Todd is.

14:29 I don't know who he is. Like, I don't care. Right? Like, this is the kind of, like, stuff that we dealt with right in the beginning. And I'm thinking, I'm building this beautiful new club for you, and all you want to do is talk to some dude that, you know, stole your money before. I'm like, that's not me. Right? And, you know, we build the first club, you build the second club, build a third club. And quite frankly, we built three clubs. And I was like, they're not performing. And I'm like, well, what's going on? Why aren't they performing? Well, come to find out, like, I. I realized at a very early time in our career building, thank goodness. But it was in three, 36 months that we were underserving the market. We were building our clubs too small. We had no idea that it was going to be as popular. But when people came through and they started joining and more people came in, it was like, well, there's just. It's not that same effect. So I went and visited a couple of the big planets that were doing really well, took a tour, and I was like, all right, I get it. We got to build them bigger. And that's when we built our fourth club, which, you know, at the time we were building that club, and we eventually made it 20,000 square feet, which, which even today's standards, not giant, but it was better than what we were doing. How small were the other, how small were the first? 3:12. Oh, okay. Like a bad 12,000 square feet, you know, so, so we just, we just thought we were doing the right thing. We just, you know, we didn't, we didn't realize, you know, the market wanted bigger and better and, and more and.

15:58 But it taught me a really valuable lesson, like, I wouldn't take anything back, like, from where I sit today. Like, I learned so much from building our business up the way that we did. You know, instead of like building from, from, you know, the, the inside out of like Raleigh, you know, we, we, you know, we did, we did a better job building from the outside in, quite frankly, in some other markets, you know, and there's some, there's a lot of learnings, I would say, along the way where we're just like, man, it, it was a, it was a struggle, but I'm glad where we're at today, you know. Well, I, I use this quote that a guy told me a long time ago, Peter Brockway. He's like, experience is what you get when you don't get what you want. And I always like, kind of think about the only reason why, you know, what, you know, or when I, when someone's like, hey, can you advise me on this and you know, how much you have to pay or whatever. I'm like, look, dude, I've seen this movie so many times. Like, I will tell you every different, like, rabbit hole that this thing may go down and I'm going to tell you how we get out of it or we avoid it.

16:56 So like, what's that worth Club? Like, you could go look at a club, be like, hey man, this site's not gonna work. You know, it might not show up on a Buxton report, but you're gonna be like, look, the egress, you know, like egress, egress thing here or like traffic patterns or like all the houses on this side, you gotta cross over this road. No one's cross. You know, like that kind of stuff is like, you don't, you can't train somebody on that. You gotta live it. That's funny. I just had that conversation with one of the other franchisees the other day and we were talking about the systems in place and you know, we mentioned a different, a different franchise, non fitness franchise on how well they're doing with their, you know, with their site selection. I'm like, yeah, because actually they've got some planet guys that are in there at an early stage, and they knew what we did in the beginning and what, what did work and what didn't work. And that's how they put it in. Put it in their new systems for this other franchise. Right. And the thing is, is that what, like today when you look at it, there's these guys that come in. You're 100% right. These guys that come in that don't have that knowledge. I can go. I can go to any one of my markets, doesn't matter what market. And I can go to anybody's market and be like, oh, that's a prime spot, that spot. You need to put a club right there.

18:04 And. And I can look at another. Look at another market and look at another location and be like, you're gonna get out here, you're gonna get out position pretty quickly. If you put a club. Yeah, you know, I mean, you got. You got clubs in Dallas as well. We'll go through the territories. Yeah. But one thing in Dallas, that's a great story. I gotta get it on, get it on recording. Cause I don't know if I've ever recorded this, but I was at a meeting with a guy and he was bringing in private equity money. I was working with the private equity group and they bring in the head of real estate. And they had a real estate guy. This is like 15 years ago. He's like, our software on the real estate is so good that I actually don't have to visit the location. And I'm thinking to myself, bro, that is the worst thing you could say. Like, it costs like 300 bucks on Southwest to get to this, to Dallas. Whenever you want to, love, feel like, go and visit the location. So we end up getting money from another private equity fund. Not the one that I was working with, fortunately or unfortunately, because I told him to stay in his territory. And he ends up putting in a location. And in Dallas, you can attest to this. Like, all the freeways in Dallas, like, have hundreds of thousands of cars. But if there's no exit, then this location that's down here, that's got 300 cars, you can't get to it.

19:12 It was. And he put it next to a methadone clinic. So I'm like, dude, like, come on, man. Like, go down there and figure this out. So location selection will either. It'll either make you or break you. And quite frankly, to me, that's the most fun thing I could do is go travel in my markets, go look at new sites and then go visit the other clubs and talk to members and team members. Like, that's the most fun I could be doing on a daily basis instead of answering, you know, five, you know, major issues that I got to deal with on a daily basis. I'd much rather be doing that stuff. Foreign. This is Pete Moore. I want to let you in on a little secret. There's this company called Promotion Vault. And what they do is they give. Out rewards from retailers that allow you to incentivize your members without having to do zero down and one month free or giving away shakes or giving away T shirts. What you want to do is build a rewards program that lasts, that people value and that doesn't discount your own products and services. So here's the deal.

20:17 There's something called Rewards Vault. The Rewards Vault is going to allow a member to set up their own profile. They are going to answer questions, you. Are going to get those answers. You're going to be able to target those members, and you're going to reward them inside your club, inside your spa, and outside of the club and outside of the spa to get them to become loyal, to get them to pay their monthly dues and to be rewarded properly for the actions. A lot of companies are cutting back on rewards. You shouldn't be. Promotion Vault, your answer, trust me, this is real. So from a standpoint of the markets that you went into, talk about, you know, from Raleigh, right. You get, you take over North Carolina and then where'd you jump to next? And just talk a little bit about the market territories that you have right now, what you're trying to build through Greenfield or acquisition. Yeah.

21:14 So 2000, 2005, we opened our first club, and that was in the Raleigh market. And then 2016, we did an acquisition of a couple of clubs in Virginia and. And then in 2018, strategically sold our company to Excel Fitness. So we operate, we operate clubs in, in three of the top five population growth markets. So you look at Dallas, Austin, Raleigh, and then you throw in, you know, Northwest Arkansas, you throw in, you know, Tulsa, you know, some of these other markets that we have, just great markets. They really are. They're fantastic markets. We're so, we're so fortunate to be that. But strategically, you know, we didn't go to market to sell the company in North Carolina. We wanted to align with Excel Fitness. At the time they were, it was being run by a good buddy of mine, and he and I wanted to work together, and I knew he wanted to exit at some point as the CEO.

22:14 So it was, it was a, it was a good fit. Like, operationally, I was dialed in, be able to take over. They had 39 clubs at the time. We had 17. So we, we. We merged everybody so we didn't lose any one of our team members. I mean, everybody from my side came over. We ended up having, you know, kind of like an east west operation thing there. And right now, like I said, we operate 100 and there's 167 clubs, and we got, you know, a few more under, but. But the Dallas market skews for us. It's ground zero. Everybody's there. We get it. And I think, I think, quite frankly, you know, I'm talking about everybody being there. Like, that's making us better. That's making our franchisor look at, look at our, our business and say, how do we be better? Look, we don't. We don't want to be everybody else. We just. We just want to beat everybody else. It's that simple. Okay, Right.

23:04 Like, we just, you know, I don't, I don't look at it and say, I don't have to be these guys. I don't need to be, you know, our competitors. We don't want to be the competitors. What we want to do is we want to be able to provide, you know, the, the members with the best, best service and the best opportunities. Right. And the best product. So we work on that every single day. And I think, I think the nice thing about it is that people need to understand, like, I, I'm involved in this business on a daily basis, right? I may be the visionary of the company and look at it and say, hey, we want to, we want to try to acquire this or go over here. We're going to build clubs here. We're gonna, we're gonna buy land. We're gonna build buildings like that. Yeah, we may be, you know, that, that may be what I do. But on a daily basis, the biggest thing that I could do is make sure that I provide clarity and vision to my team so that they can go execute underneath what I feel is a good moral compass of how we want to provide fitness, which is we want to build communities through fitness.

24:04 That's the goal. That's the goal for Excel Fitness. We want to impact lives and create opportunities for people, and we want to do that by building communities through fitness, period. So what's going on on my business side? So people that listen here know that my day job is to help people buy and sell companies in the halo sector. Mostly health club chains and boutique fitness ch. What's going on right now is that a lot of the Gold's Gym operators and guys that I met 25 years ago, they were in their 40s when they started. 30s. 40s. Right. And a lot of those guys are now in men and. Men and women and families that own this business. Their kids aren't in the business. Right. They went and did something else, and there's really no succession plan. So they come to me and say, hey, do you think I could sell my business? And, you know, not just, like, wind down my lease, but, like, who's a good strategic buyer? And obviously, there's a lot of private equity out there right now in a couple of different brands. If somebody's got a, you know, a Gold's Gym or a World Gym or an old powerhouse or an independent club, and they're saying, like, come to me, or they come to you directly and say, hey, we want to turn this into a planet, you know, and buy me out. How does that. How has that gone? Because you've done the Texas Family Fitness deal, which I was involved in a while ago. We got a couple of things that you and I are working on now on, you know, buying some clubs from independent operators that are. That were good guys that, you know, serve their community and for them to turn into a planet. Obviously, some of the. The programming might change, but, you know, you're dialed in on, like, what I'm providing, and I might

25:37 not have everything that you used to have, but, like, I'm going to be on the. The front end of equipment, I'm going to do services, and. And like, Planet's here to stay. So what's the. Besides what I just reeled off, like, what are some of the things that you have a conversation with, like Texas Family Fitness or people like that to say, look, like, just trust me with this asset, obviously you're gonna get paid, like, a fair price. Right? But, like, what. Why should I do this deal with you? Well, I look at it, if I was on the other side and. And because I've been there before, right? I. I was there. I actually had a small operating gym. It was about 6,000 square feet.

26:17 And my. My business partner for a very long time, Joe Pepe, actually put me out of business. And I went to him, you know, hat in hand, and was like, hey, man, I need. I need a job. You know, like, all my members came here, what I needed, you know, what can I do now? So I think about that often as we're Having these discussions, which is a difficult conversation to have with somebody who has, has served the community, has put their blood, sweat and tears into their business. And, and I think, I think they need to understand that I, that I do, I have that compassion. I have the sympathy for them. I've been there, you know, I had a bankruptcy early on in my, in my life, so I get it. And, you know, that was, you know, I'm not afraid to say, like, I had these major failures and, and, and I've been there. So I want to protect the asset as much as possible. I think that there's a couple of different ways of looking at it, right? Like, we could go there, steamroll it and be like, we're just going to open up a club, you know, two miles down the road or across the street or something like that.

27:20 I can't look at myself in the mirror and say, I want to build communities through fitness and be opening up clubs like across the street from somebody. I don't love that. That's just not what I want to do. So the conversation is, although it's difficult, it's one of those, that I am private equity backed. I do have to have these discussions. We are growing, right? So it's a real business discussion and saying, look, we want to have this discussion with you. We want to take care of the members. We want to make sure that we don't skip a beat. We're going to look to switch it over to a planet. They're going to be able to have. People are going to be able to have access to 2,800 units, you know, with a black card membership. They can, they can use all of those clubs. We're going to, we're going to provide newer equipment, we're going to update the clubs, you know, so all of those things matter. And I think a good legacy is, look, we're going to, we're going to allow you to, you know, ride off into the sunset and your white horse and say, hey, I did it the right way.

28:20 I, you know, executed a deal with a group of good people that care about their team members, care about the members. And, you know, I feel, I feel good about it. I don't, I don't love the situation because I'm out of the business that I love. And sometimes, quite frankly, maybe there's a spot for somebody that we can plug and play into our business. And we love that. That's great too. Yeah. You know, like before private equity got into this business, people used to finance the sale of their Club to their general manager or to a, a member used to have to take a big seller note and basically say like hey, I'm going to get paid out over time. And they basically never really got any upfront cash. I think just as like a commercial for private equity, like they actually come in with real money, you get a real wire transfer and you know, you might have some residual value or earn out or what have you on the back end. But I think people really need to realize like you don't have to post your business up on like a biz by sell or like for sale by owner when a planet comes in. The other thing I want to, I want to mention because I think it's important for the audience to understand like when a, when a Planet Fitness area developer buys territory from Planet Corporate or a crunch group buys territory from corporate, it's not like, it's not like they, they, they have the option of developing. Like I have a, I have a mandatory responsibility to, to find a location in this county,

29:51 right? There's like a dot on the map that if you don't develop that county it either gets removed or you get defaulted on your area development agreements. What I tell a lot of independent operators is like right, if Planet Fitness calls you, it says hey, I'm coming into your county, do you want to try and do a deal with me? They're not coming in, in like a bully mentality. It's like look, I'm now, you know, my, my corporate entity is obligated to build a location because I made an agreement with my private equity fund to the franchisor which is a publicly traded five plus billion dollar business that I'm going to, to, to to build a planet on their behalf effectively and on my behalf to go into this territory because it's available territory based on serving that community. So I feel like sometimes people think like oh shit, plan is coming into my area. Like what the fuck, right? But at the end of the day it's like dude, I don't really have a choice in the matter. Like I have to come there and I'm coming. So like do a deal with me and I'll be fair about it, compassionate and I'll try and get a fair deal with you. If not, I have to open up, you know, in your area. What Would you comment to that?

30:56 Yeah, I think. Well, let me, let me say first and foremost I've been very blessed with two great private equity firms. Altamont, who owned us previously, was, was awesome. I have some really good friends of Mine that are still there. And, and I enjoyed working with, with that group. And they're, they're a very sophisticated group. The group that, that, that bought us in 22 Olympus Capital Partners couldn't be happier with them. They, they came right in and we're like, hey, what can we do? What's the best thing that we could do? I was like, listen, man, can, you know, can we do some M and A work? Can you open it? And they're like, absolutely, let's do it. And, and, and never, not once has, has our group said to me, hey, you gotta cut this out, you gotta cut that out. Or, or you can't do this, you can't do that. They're like, dude, you're the, you guys are the professionals, run the business. Yeah, we got our, we got our, our weekly meetings that we have to have, which, you know, at this point, like, you look forward to having those discussions. It's like, hey, here's what's going on, right? And we've, we've built this really good bond with our private equity group who is, you know, they're, they're a large, they're a large group, large cap group, but they have a small office. But they're not, they're not the group that's, that's looking to, you know, put two or three people in your business and have you, you know, report to them. It's just not how it works.

32:16 So even though we're, we're leveraged with PE has nothing to do with the way we operate our business. I mean, and, and there's some other planet guys, it's not the case. So we've been like, so I say we've been very, very blessed with the group that we have. I can't say enough good things about it. So I would say, you know, when it comes to, you know, operating the business and developing territory, like, we have a minimum of clubs that we have to open in certain markets in our area development agreement is broken up into different markets. So you got to open up X amount of clubs in Dallas, X amount of clubs in North Carolina, X amount of clubs in northwest Arkansas. So all of that stuff matters. And then what also matters is the refurbishing of the equipment. So I think that plays into your area development agreements as well.

33:09 Are you keeping up with equipment reallocations? Are you, you making sure that you're, you know, you're retrofitting your clubs? All of those things matter. And obviously as you get to scale, that's even more difficult. So, so the best thing that we could do in our business, the most value to our business is opening up good new clubs. So if I know I can open up a good new club and it's going to be two miles down the street from a competitor opening the club, yeah, it's gonna happen because that club pays for the next club and the next club pays for the next club. So, you know, we, we have a very, like, we have a very low leverage model in our business and we look at that and like, we just, we want to continue to open up good new clubs. And whether that's through M A or whether that's through opening clubs, like, if, if we do, if we do say, listen, we're coming to your market, we're, we're coming like it's happening Real estate team that's out there, that's, that's putting it together, you know. Right. And if the location that that owner has makes sense to turn into a planet and it fast tracks your entry into the market and somewhat seamless because now you guys know how to do this, you know, based on experience, you know, it's good for everyone.

34:25 I think the point that I'll leave with, with the entrepreneurs and the independent operators, like, once you build that location two miles down the road, like, the only thing that you could ever want to do for the next 10 years is do a member transfer. Right. And give you like a percentage of the revenue of that. So my point of this, of going through this segment is to say there's a lot of private equity capital. There's, there's significant area development opportunities that people are now forced to and want to and are excited about executing on. And if you could fit into that filter as an independent operator and get liquidity at a good price for your club, don't dismiss it. Is, is the, the short answer, like, take that call.

35:05 Right. And then I want to close out. Yeah, good. I was just gonna say too, like, I, I think the other thing is that, like, if Excel Fitness is calling, like, I've been in the meeting, I've made that decision and I'm, you know, I'm a gym guy that, that is, is been turned into this entrepreneur. Entrepreneur and turned into, you know, this executive running Excel Fitness at this point in time. But if we've identified this location and we've looked at it and we've said that we're gonna, we want to do this, I've been in that conversation and I've approved it and, and, and I want to make sure that People understand, like, we're going to take care of it. Like, we're going to. We're going to either build the right club there, we're going to, we're gonna, we're gonna try to take care of all the members that are there, take care of the team members who can take care of. That's. That's the goal.

35:59 This is Pete Moore. Here's the last tip for you of the podcast. We are partnered up with a company called higher dose higherdose.com they are the leader in workout recovery products. Infrared technology, LED light masks, neck enhancers, and other products such as PEMF mats and sauna blankets. If you have not gotten on the workout recovery train yet, your time and your stop is now. You got to get these products in there before these workout recovery and spas end up saturating your market. Having your members walk out of the club and going into one of their locations for 200 bucks per month, where they're paying 39 to you. Let's become an expert in workout recovery. If we are already an authority in workouts, Higher dose, check it out. There's a wholesale code. And we look forward to helping you augment your products and services to meet the demands of your members. And hey, let's get people happy, healthy, and sweating. And the recovery should be just as good as the workout.

37:10 Okay, so let's close out the. The podcast on. You know, something that I said to you one of the first times we met, I'm like, bro, hope is not a strategy. And then you, like, give me the forearm and show me that you actually got it tattooed. Hope is not a strategy. I love that, bro. There's a labubu that somebody gave me, and the name of the labo was Hope. So I brought it to this fitness technology summit last month and I said, you know, hope is a labubu, not a business strategy. Can ask my boy cj. So, you know, talk about why you got that stamped on your arm here and like, how it kind of guides you. Yeah. So listen, I'm, I'm big on execution. Like, like, to me, like, my. This year, like last year, my. My word of the year was recovery. I wanted to recover right? This year. My, My year, this year is. Is execution. Like, my word of the year is execution. So nice. So, so I look, I look at that and I'm like, to execute, you gotta have a strategy, right? And, and every. Listen, everybody excel Fitness. Since I've been here since day one, probably for the last 20 years at Planet, they've all heard me say this. I've been saying this forever. I've been saying two things. Preparation plus opportunity equals success. Right? And I say that to my team all the time. If you're prepared, the opportunity comes about, will be successful. And the last thing is, like, hope is not a strategy. Hope makes you feel warm and fuzzy, but if you don't have a strategy, you can't execute. You have to be able to execute. And so to me, like, it's all about execution.

38:37 So I put it on my arm. So every time I'm in a meeting and I'm sitting there across from my team, they look across and they're like, oh, shit. Like, it's right there in front of. You know. And, you know, my girl, she doesn't love it because she loves hope. And. And she's like. She's like, I don't know. She's like. And I'm like, it's good to have hope when you don't have anything else. That's. That's the way I look at it. Right? And it's not. Not a bad thing. Yeah. And the last thing about the tattoo is it's awesome that you have it where, like, the person can see it where it's not like sometimes people. I look at people's tattoos and it's like a note to themselves. I'm like, dude, you can write a post it note to. To yourself, but if you actually have it on your arm in a. In a meeting, like, that's actually. It's actually more powerful. All right, man. Well, great to have you on the podcast. Awesome to talk to you. As always. Excel fitness growing in the territories we discussed. We'll have all that information up there.

39:25 Integrity Squares work with CJ and his awesome team to. To help grow the planet brand. We're excited to work with them and to a strong 2026 brother. Thank you very much. Thanks for all you guys do, man. I appreciate it. Thanks for having me me on the podcast. Awesome. This is Pete Moore on Halo Talks. Your captain speaking. I am the founder and managing partner at Integrity Square. We've been around now for 15 and 1/2 years. We have been helping people like yourselves get capital, do mergers and acquisitions consulting strategies, strategic advice in the health, active lifestyle, and outdoor halo sector. Trying to help as many entrepreneurs as possible get to the next level and take that inflection point and be the. Force behind your growth.

40:18 We are helping companies that have at least $3 million of EBITDA, around $10 million of revenue, and we are positioned to help you get institutional growth capital or to negotiate deals with strategic partners. If you go to integrity.com isq you can see our capabilities. Deck Happy to set up a consultation at any time that is free of charge and we look forward to you helping solve obesity, loneliness and diabetes. Go Halo. Sam.