Episode #583: Building Gold's Gym Success-Bryce Berry's Journey from Dairy Queen to Fitness Club Leader

0:01 This is Pete Moore on Halo Talks nyc. I have the pleasure of bringing a New York native by way of Salt Lake City, a legacy phenom in the Gold's Gym network coming to you live on location 65 miles an hour. Bryce Berry, welcome to the show. Thank you. I Hope I'm going 65. I know I'm not driving. That's good. That's good. The Halo sector is about safety first, fun second, impact third. So here we are talking about Gold's Gym. And Bryce, why don't you give the audience here your personal background, given you're originally from the Westchester county part of the world and then how you made your way to the Salt Lake area and why you stayed. When I in grade school and high school, Westchester county, grew up in Yorktown Heights, enjoyed the area. I went to college at Brigham Young University and fell in love with the mountains. And I just have never left.

1:07 Even though I work in other states all the time. I like. I mean, I'm miles away from ski resorts. Miles, you know, eight miles, six miles in some cases. But. And so I just, I love the area, but. And I worked there in other businesses prior to the Gold's Gym industry. Management of other companies, production companies, things like that. 20 years ago is when I signed my first franchise agreement with Gold's Gym. And we started in Colorado. There wasn't any at the time, there wasn't anything available in Utah. That's where Vasa started, was Utah. And hence prior to them being Vasa, they were Gold and they had the entire state locked up. So I had to go to Colorado.

1:53 And Colorado's been a great experience. We, you know, just. We've had upwards of nine gyms there. I've sold a couple that we had de branded. And then now, now we're to six Gold's Gyms in Colorado and one in Cheyenne. Now, I'd be remiss if we didn't start back and talk about your operational experience and attention to detail at the beloved Dairy Queen. So please, without leaving out any detail, because we need to know who the person you are in order to work in the health club industry. You know, some of the best operators were running shoe stores back in the day. And really attention to detail and behavior. There were people that came from the hospitality industry, people that were personal trainers. You came from a unique perspective of putting the blizzards together. So please give us that background so we have that on record for the rest of the life of the Internet. Well, this operation that Pete and I are discussing, we call it Operation Blizzard. I introduced Pete to blizzards. I was just in Dairy Queen for a short period of time. I bought, I started with one and eventually had five Dairy Queens that I purchased in the Utah area, in my area. But I, I have to say I didn't really enjoy it. It's really long hours, hard, hard work. But it was okay. But I mean, but Dairy Queen had good food and

3:24 good product and I enjoyed that part. But yeah, it is. I mean, I used to go into stores that I didn't own and everybody's heard of a peanut butter parfait. And I would go up to the counter and I'd tell the cashier, hey, if I can make a peanut butter parfait myself, and I know that it's supposed to weigh 11 and a half ounces, if I can do that, can I get it for free? You know, just joking around and every once in a while somebody would say, can you do that, boss? And they said, sure, come back. I had made thousands of them, so I mean, I could just make it, put it on the scale 11 and a half ounces and take very much. I will tell you with the new OSHA laws and not let people behind the register. I said, those days have passed with those type of customer challenges. But you know, as you looked at the Gold's Gyms and you know, Scott Felstead and crew and I toured all their locations and it's a pretty big Gold's Gym boxes. You know, as you were getting into the health club industry at the time, you know, Gold's Gym, you know, people probably snicker, don't understand this, but like, Gold's Gym was the coveted franchise brand to get your hands on back in the day.

4:33 So talk about what your affinity to that was. And then, you know, why you thought, you know, bringing it to Colorado and, and how you thought about site selection, you know, even 20 years ago when it wasn't, you know, you can go to a database and say, okay, look, what's the best site for me? I mean, you kind of canvas those markets. Yeah, well, I just, I actually, knowing that I couldn't be Utah, I drew, I drew a 300 mile radius around my house and said, that's how far I'll go to put in a gym. And so I, I had two options. I had, I had Idaho Falls, which I knew very well, and, and then Grand Junction, Colorado, which I knew very well because, okay, after Dairy Queen, I had a, I had a book bindery. In fact, it was the largest book bindery in the Western states and had customers.

5:16 My customers were printers and I. So I called on printers all over the western states. I knew Colorado like the back of my hand. And so when I saw that, that Grand Junction was in that three mile, 300 mile radius, said, oh that's, that's where we got to go. And here I am driving in this car with my partner Cole. He was the GM of that first gym. 56,000ft. And people in the gym industry, what in the world are you building a 56,000 square foot gym for? We had pool, basketball, four racquetball courts, a huge 5,000 square foot aerobics room, awesome weightlifting. We had, I think we had 130 pieces of cardio. When you take the Cardio cinema into a place and then all the open area.

5:59 But. Well, it's because I copied Scott out of his Gold Sims in Utah. We're like that and he was killing it. And so we, we kind of copied that model here in Grand Junction. We put two gyms in Grand Junction and we had a lot of success. I mean that first Grand Junction gym was what an attorney would call a rainmaker. You know, when your first year, I don't know if this is inappropriate, I guess you can void it out, but I mean when your first year you net and distribute 1.4 million, I'd say that's a rainmaker. That's a big win for sure. And everybody that ever came in contact with this is, that'll never happen again.

6:44 It has happened again, but it's just been recently. But that model does work and it has worked for us. So we started there in Grand Junction, in Clifton. I put my third one was Montrose, which was an experiment, a smaller gym, 30,000 square feet in a small community. Yeah. And that was a little tougher thing. And then we, then we went up to the Front Range and put a gym in Cheyenne which was exactly like Grand Junction and ran just like Grand Junction. Great gym. It's the king of the community up there now. Great facility, 45,000 square feet. Has all the amenities.

7:28 We have a gym in Longmont. We have, we bought a canceled or a closed 24 Hour Fitness in Greeley. We're able to get a good deal because that we did that in covet 2020. Been a very successful gym there, Gold's Gym. And then we put one in. I missed some after Greeley we went to Thornton, Colorado that it's one year anniversary, December 27th. It's coming up. Congrats. I said that. They said we were Never gonna have another rainmaker. Well, Thornton was a rainmaker. You got another club. Right now In Arvada? Yeah. 10 miles away from from Thornton in Arvada. Great facility, and we're excited to get. We'll be open probably May or June.

8:18 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. 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 Vaults. Your answer, Trust me, this is real.

9:22 You know, I talked to a number of private equity firms, and sometimes they'll call and they'll say, hey, I want to buy a cluster of clubs. You know, I mentioned I've been. I've been working in the Gold Gym industry, you know, category and network for 25 years. And they. They usually abruptly, like, stop me and say, well, I don't. I wouldn't want to buy a Gold Gym. I want to buy an eos. I want to buy a Vasa. I want to buy a Fitness Connection. I want to buy something like One Life. I want to buy something like the Fitness Edge. And I'm like, hey, news flash. Those are all Gold Gyms with different brands. They are the. On. On the storefront, right? So, you know, if you think back to. To the play that you're running right now, the unit economics that you're getting under Gold, you know, you're kind of punching at the same weight and the same kind of performance indicators as those other clubs that have rebranded. How do you think about that? As does the Gold Gym brand, you know, hurt you? Does it help you? As more people are doing strength training, it almost like, is the pendulum almost swings back to Gold's Gym.

10:24 Well, I can tell you I'll just give you an example of Colorado. If you're walking down the street in Colorado and you stop 10 people on the street and you say, okay, so I think Vasa has. There's. I think there's eight VASA's within an hour of Denver, an hour of the Denver market. They're as far north as me and Greeley, and then they're as far south as Colorado Springs. So like an hour, they. They have about eight EOs is not there. Oh, but there's Chews. Another similar market. Now, Cheese choose started out on their own. There's eight of those, nine of those. If you were to ask anyone on the street, hey, where's. Where. Where's the local? Where's the closest choose at? Or where's the closest Vasa? They'd give you this weird look like, what are you talking about? Right? What's that? But if you say, hey, where's the closest Gold Gym?

11:20 Oh, I know there. I know there's some in Colorado. I could tell you exactly where they're at, but they're gonna know. Gold's Gym. The retail sales of what does the name and the name brand, it creates excitement. It's. It's just different. And I, I personally have never been big on the. The high volume, they call it now. They call it high volume. High, high volume, high amenity. But it's low price. It's low price, high volume. You know, I, I'm. If that's what they want to charge for their great amenities, great, go for it. We don't. We don't do that. And so our, our success, we've been able to succeed without giving it away. And to me, $10 a month, $15 a month is giving it away. I told somebody the other day when they were asking me about the pricing market in New York metro area.

12:20 I said, you could basically pay more to take an Uber to a crunch, then it'll cost you for the crunch membership. From where I was standing at the time, which I thought was pretty pathetic from a pricing standpoint. You know, when you look at the markets that you're in and you're in kind of the mid-40s price point, you know, some people would say, hey, Bryce, you're kind of like caught in the middle. And your response might be, well, 80% of the middle is the market, right? So if you think that I'm priced in the middle because you want to take your business school matrix and, like, put it in front of me, yeah, I'm in the middle, but I'm appropriately in the middle because that's where people are willing to spend and that's the price to value.

13:02 So what do you say to those people that, that say to you, hey, price, you should really go lower cost to get more volume or you should go to $99 and you know, skim the market. You know, I assume I know the answer to that. Yeah, I know. We just haven't, that is not, that's just not been our, our answer. We have had, we've had gyms, you know, and I haven't, I haven't mentioned the two that we run in, in this conversation. I've mentioned the two that we run up in Tri Cities up in Washington. But that's really where the gyms we really need to be talking about right now because they're just great examples of what we're talking of. Mid range pricing, great clientele, a growing community.

13:46 And, and we, and we do well up there. Yeah. So look, I don't know how many people, Yes. I don't know how many people know of, of the Tri Cities, but Pasco, Washington and Kennewick and Richland. Yeah, I think a lot of people have heard of them, but I don't know. I mean that's where they're at. We call the Tri City area. The airport is in Pasco. It's really easy to get there. And in Richland and Kennewick we have two. You take a look at that market and when you and I were talking about touring the clubs, I was shocked at one that the 34 age median of the market there. You know, you're a couple hours south of Tacoma, probably three and a half hours east of Portland and maybe the same amount of time to go, you know, northwest up to Seattle.

14:40 But that market seems to be growing. I think you got a new power plant coming out there as well and. Well, yeah, they have a nuclear power plant there and they have, they, they're housing, they're growing. They're building thousands of homes every year. So, so as you look at that market, you know, talk about how you got up there, you know, with, with Cherokee and Walker as a, as a business partner and, and how that, that evolved those gyms. Yeah, Cherokee Walker is one of the, the firms that owns that. And there's, there's one other large firm that partners with them on that and they actually were very aware. They, they watched our success at Grand Junction and Clifton and so they immediately wanted to copy it and they, and they found that that area up there fit the exact model in Fact, the Richland gym, they used the plans that we used for Grand Junction. It's the exact same model we just caught. We, we made them so that they were legal for the city and, and put the plans together and presented the exact same gym and put it in there in Richland. Kennewick actually happens to be the same size as my, our gym in Clifton.

16:01 40, you know, 42,000. About 42,000ft. And in a, in a community that's very mostly Hispanic and that's the same as Clifton. Just, it's just so the similarities are so weird. You know, we found something that was, we could copy there and that's kind of what we've done. And you know, Cherokee Walker, they're private equity fund slash holding company based in Salt Lake. And what got them involved in backing you or partnering with you and you managing those clubs? They, they, they were partners in my. When I, when you first start with a gym and you haven't done a gym before, you can't just go to a landlord and say, hey, I want to put in a gym. I said, oh, nice, you know, so instead I went to a bank and said, I want to put in a gym. And they said, okay. And so you have to buy, you have to own the land and building, which for me, 20 years ago, it was a little more than I wanted to do. So I went out and got, you know, between eight and 12 partners depending upon the project, and they would all invest minimum 100,000. We had investors that would invest as much as 300,000, 400,000 in the land and then I would be the tenant and they would get, we would set up their return via the lease. Gotcha. And those things are. All those projects are all expired. We've sold the land and building

17:32 back to another, to a reit, the ones in Colorado. And I'm not, I'm not partners with them directly now, other than. Other than what I do in Tri Cities running those facilities. 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.

18:31 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. So when you look at the two clubs that you have, and obviously they're under the gold Shim brand up in Kennewick and Richland, and you look at that footprint of 56,000 and 43,000, respectively, the other players in the space that have come in there are either hvlp, you know, smaller boxes or some of the rec centers and sports complexes.

19:21 So what are these two clubs serve the community from a standpoint of almost, you know, an urban country club or suburban country club. And you have all these different amenities in there. I know you got basketball. I know you got some pickleball. Talk about like four racquetball courts. Yeah, and we have pickleball. Not. We have pickleball nights. We have volleyball nights. Basketball is very popular there, especially in Kennewick. And we have basketball courts in both locations. And it's a big community thing for them to be able to participate in those sports. But we have by far and away the best weightlifting and cardio areas probably in the state, you know, because we just overloaded it. We overloaded it with cardio, we overloaded it with weights and cardio. And we just.

20:14 In the last couple of years, we've. We've remodeled the space, how the format of how we had our weights and cardio, and also how, you know, the interior design. So it's just very appealing. And one other thing that's kind of unique to what you're running up there and run by a woman with the same name as the woman that runs Fidelity, Abigail Johnson. So I always remember her name. You've got. You've got a. You've got a tanning and, you know, red light concept that's, you know, at the front of the location that's unique and very profitable and seems like has a lot of demand in town.

20:56 Talk about that for a minute. Well, it's really, when you talk about tanning, you say, well, it's not. We're talking red light tanning, blue light therapy, red light therapy. We have all sorts of esthetician services, skin services. And I'll be honest, I don't understand everything we do there. But they're awesome and they're busy and we sell quite a bit of retail in terms of people that want purses and shirts and stuff like that related to that market. Tanning or gym or gym workout or whatever like that. But they're not your typical. It's not your typical tanning salon.

21:42 We have the sun angel that it can't burn, it read your skin and that's such a tan. Or we have a mixture you can shut off UV and just run red light or blue light which has been proven to heal your skin and help with. What is that the stuff when you, when your skin shows fat. Cellulite. Thank you. When the skin goes cellulite, this red light therapy. Yeah. So just the last, last thing. Yeah, it's been a great enterprise. Yeah. And then the last thing just to kind of get your crystal ball for 20, 26. I know your clubs in Thornton and the new one that you've got coming up in Oveda, very heavy on the strength equipment side.

22:32 What are you seeing kind of the new wave of 20 year olds that are coming into your clubs. Where are they gravitating towards? What are some of the things you're doubling down on? Our newer facilities here it's weights and cardio, one of the few. We have the amenity. We put in oversized dry saunas in the men's and women's oversized dry sauna rooms. We're putting in recovery rooms, recovery areas I guess to work afterwards. And then we offer quite a bit of supplement and recovery drinks, things like that. I mean that, that. But, but the gym is, is the best.

23:16 The gyms are the, we have the best equipment money can buy. Weights. I, not. I think most anybody in the gym industry is familiar with the Woodway treadmill, the slats, the sprockets and there. And then about five years ago their patent expired and so there's three or four manufacturing equipment companies that have copied that. Woodway. I didn't know that treadmill. We happen to like. Yeah, we happen to like the Matrix Treadmill that copies that Woodway and you know, it's just, it's, it's triple the price of your typical belt treadmill. But that's all I put in in all my gyms now I'm replacing all my treadmills with this, the Matrix Treadmill that it's, it's run on sprockets and slats. You can run in bare feet.

24:08 You can be £300. And it's. And it's awesome. Yeah, it's just the, it's the best equipment, best cardio money can buy. And then our weight equipment is from all over the world. If somebody like we. And sometimes it takes a long time to get those pieces and so we'll open up. Like for instance, we opened up in December in Thornton last year and we didn't actually have all our equipment in that we had ordered until like maybe, but there were people that were waiting for some certain pieces. As soon as those pieces came in, they said, okay, I'm on my way, I'm canceling, I'm going to be there at yours. But I mean, regardless, that market of going after the 18 to 40 year olds, it's made our world. Well, shout out to your daughter Jackie, who's been integral into the business and the rest of your team that I met with. Congrats on what you built.

25:05 Cole, thanks for driving on this podcast. We appreciate that. So we didn't have Bryce on any kind of, you know, prohibited, you know, driving and that that model somehow, you know, got us in trouble from a safety standpoint. And Bryce, look forward to seeing you in person. Thanks for your contributions to the Halo sector at large and for what you're giving out to these communities, you know, and always thinking about the quality of the workout, the member and what it brings back to helping people live a better lifestyle. So have a safe trip and happy holidays and from all of us here, appreciate you. Thanks, Pete. It's been great. All right, take care. Thank you.

25:55 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, strategic advice in the health, active lifestyle and outdoor halo sector, trying to help as many entrepreneurs as possible get to the next level, take that inflection point and be the force behind your growth. 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 integritysq.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 helping solve obesity, loneliness and diabetes.

26:54 And go Halo. Sam.