Episode #601: Growing Club 16 and She's Fit-Inside British Columbia's Fitness Boom with Trevor Linden and Carl Ulmer

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This is Pete Moore on Halo Talks nyc. I have the pleasure of

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bringing two of my new close friends from

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Vancouver, Canada to the podcast.

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It is only appropriate if we start off this

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segment with a abridged version of O

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Canada. So, gentlemen, Trevor and call. Welcome to the show.

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O Canada Our

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homeland, native land

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True, true patriot love.

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Last verse.

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Strong and free and free.

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Hey. From far and wide O Canada we stand on

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guard for the. Good to see you guys. Welcome to the show.

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You are a Rangers fan. Okay. That is, we are good friends,

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but we've had to work past that fact. Okay. We have worked through that. Well,

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for those of you who don't know, Trevor Linden, welcome to the show.

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Trevor is a all star hockey player from Medicine

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Hat, but also lived in Manhasset, Long Island. So

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probably the only person from Medicine Hat to also reside in

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Manhasset and I'd like to say is the equivalent of booking the

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mayor, the Pope and a first line center as one guest. So thank you for,

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for your, for joining your attendance here. And Carl is also

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a, an esteemed athlete from St. Francis

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on the basketball court sans the skates

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and integrity Square and Club 16 have had a,

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a relationship here in looking at the growth opportunities in the

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industry and talking shop and M and A and

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you know, bringing on partners. So we wanted to showcase what they're

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doing up in British Columbia for our network

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here. So Carl, why don't we kick off from your standpoint and

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you know, this has kind of been a family homegrown business for,

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for quite some time. So take us back to the roots and then we'll,

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you know, we'll basically pause and bring Trevor in once

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he joined the, the team here. Yeah, sure. Thank you. Yeah.

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Well, thanks for having us. You know, my stepdad, he, Chuck

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Lawson, he passed away about a year and a half ago, but in

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1990, prior to 1990, he owned a Gold's Gym in

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British Columbia. So he owned and operated a Gold's Gym and he went to a

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fitness conference out in Chicago and he heard about this crazy new

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concept of women's only facilities. And so he came back, he

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sold his Goals Gym and he opened up his first Just Ladies

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Fitness big, big box, 50

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to $60 a month membership group,

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fitness kids club. And that was our Abbotsford Just

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Ladies Fitness location. And I remember he told me at

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that time he made more money with that one location that he did

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with seven, eight locations. It was just such a booming opportunity

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back then and he took full advantage of it and he moved that brand

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to 11 locations across British Columbia did

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quite well. One of the things that he started to notice

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with that model in general, that mid priced model with group fitness and

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kids club was that his expenses were continuing to rise,

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but his revenue wasn't rising along with it. And so one thing I'll say about

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Chuck Lawson is that he was

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forever changing. He always adapted, he always was

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comfortable taking the big shot, the big leap, the

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big rifle shot. And so at that time,

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a well known brand came out with this crazy new model which was

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a value priced brand. And he took a look at that and said, you know

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what, I think that would work in the women's only space as well. So he

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went through the next four years transitioning our Just Ladies fitness brand

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into She's Fit, which is a value priced model.

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When we transitioned our first She's Fit, which was our Fleetwood

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Surrey location from Just Ladies Fitness to She's Fit,

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so we basically dropped the pricing from 50 to $60 a month to

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$14.99 a month. Everyone thought we were crazy. This

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isn't going to work. We got rid of our group fitness studio, we got rid

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of our child minding. So we optimized the space for what we felt

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the majority of our women only members were looking for, which was

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strength equipment, cardio equipment. And we ended up out

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of a base of 5,000 members. We only ended up losing

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14 original members in that transition. And then

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we added on about 2,500. And so from there we were off

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to the races. And as we transitioned the brand from Just Ladies to

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She's fit, that was replicated over and over and over again.

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And you know Chuck originally being from a Gold's

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gym, being a Gold Gym operator, he wasn't

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nervous or scared to get into the co ed space. And he started doing

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some modeling out of the same concept, but a coed space looking

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to optimize and increase EBITDA in our organization. And

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he came up with a concept and he had a

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friend that was friends with the legendary Trevor Linden,

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the Vancouver Captain Canuck. And so he was

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introduced to Trevor and I'll let Trevor share that story. He's great at sharing that.

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Yeah, great. Thank you. Yeah, awesome, Carl. Love hearing that

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story. I learned a couple things myself, but so I retired from professional

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hockey in 2008 after a 20 year hockey career. We lost to the

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New York Rangers in 1994 in seven games.

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Heartbreaking loss, Carl. Still, our hearts still hurt over that,

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but such is life and professional sports.

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So I retired 2008 and was kind of like figuring out

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where I go, what I do. I did not want to be in hockey and

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I, you know, at that time I was just trying to figure out my life,

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what it looks like. I was 39 years old and I took a lot of

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meetings from anybody who want to talk to me and they pitched everything

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from bowling alleys to restaurants to bars. And I very

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politely listened to them for half an hour, 45 minutes and kind of sent a

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thanks but no thanks email. Good luck. In your. In your. In your. And

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so June 9, 2010,

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Chuck Lawson walked in my office, which I thought was going to be a 30

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minute meeting. And then a thanks but no thanks. We sat and talked for

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two hours and two things that struck me about that

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meeting and that conversation was number one, I liked the

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concept Chuck was talking about. And the other thing is I really like

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Chuck. I could tell that he was an operator. He

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understood how to operate a business, he understood

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the mechanics of fitness, which I didn't. And you

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know, Carl, we met shortly after that and kind of talked

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about what a partnership would look like. We made sure that we were

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aligned on values and how this was going to look. And

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nine months later we opened our first club in Coquitlam

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B.C. and Carl was our first

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manager there. And that club rocked and

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we just kept building from there and

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it's been an awesome journey. You know, we're 17 clubs across lower mainland

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now and yeah, that's, that's how it all

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began. So, so, so a couple of questions, you know, one, welcome to the,

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to the health club and, and Halo fitness industry. Like we say, once you get

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in, you never get out so. Well, well, welcome aboard. Thanks for,

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for joining us. You know, when you play

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professional sports or you play any sports, the benefit of

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that sport is that the, the, the clock runs out and,

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and the season ends and you could reboot on another

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season. Whereas you know, when people come from professional

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sports and go into business, the one thing I, I try to harp on them

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is that like when you become an entrepreneur there is no

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clock. And basically you run this out until you run

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it out. And that is on a daily, monthly and annual basis.

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So how is like how has you kind of brain changed and

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calibrated like hey, what do we got to do to get to make the playoffs

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versus what do we got to do to kind of keep re engineering this business

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for success? Yeah, you hit the nail on the head, Pete. You know, I

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played hockey for 20 seasons and you know, training camp started early September and

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you got ready for Training camp and then the clock started. Carl was Carl and

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I think both we get along so well together. He was a high level basketball

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player. So we get that certainly different in this, this world. I

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think as Carl would say, the brain never shuts off. You're always

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thinking about, you know, ways to get better. The G, you know, the season

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is, is forever on. We're doing a,

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a real big club upgrade at our Newton club here. I walked

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into this club at 4:45 this morning because I couldn't sleep because I

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was thinking about things and we're just finishing off today. But I know Carl,

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you know, sleeps, doesn't sleep a lot because he's grinding on stuff.

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So. Absolutely. You know, you realize the world

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of a professional athlete or, or an athlete is very segmented

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and this is a never ending journey where you're just constantly battling and trying to

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get better.

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

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this company called Promotion Vault. And what they do is they give out rewards

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from retailers that allow you to incentivize your

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members without having to do zero down and one month free

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or giving away shakes or giving away T shirts. What you want to

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do is build a rewards program that lasts, that people value

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and that doesn't discount your own products and services. So here's the

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deal. There's something called Rewards Vault. The Rewards Vault is going

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to allow a member to set up their own profile. They are

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going to answer questions, you are going to get those answers. You're going to be

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

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

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

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their monthly dues and to be rewarded properly

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for the actions. A lot of companies are cutting back on rewards. You shouldn't

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be. Promotion Vault, your answer, trust me, this is real.

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From a standpoint of, you know, managing the business and

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also knowing that hey, I've got to make short term investments, long term investments

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and kind of manage through that. What are some of the things that maybe Chuck

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kind of instilled with you or maybe Trevor's kind of, you know,

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come with a different viewpoint that you know, we got to do something now and

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not, not wait till later. You know, like you on a, on a base

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basketball. You know, one thing that Chuck, Chuck always shared with

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me, that I've learned and it's really stuck with me and I share this with

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our group is there's no pride in business. And so don't let your own

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pride get in the way of the decisions you're making or if something's gone wrong,

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wrong, moving the dial a little bit to make sure that it works

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is important. And so that's really been our strategy. Chuck really stuck

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with the strategy around what are the majority of people

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are looking for in our facilities. And that's a model that we stuck with. And

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during COVID I think a lot of. Well, not think a lot of

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gym owners were on pause. Right. Just trying to make it through Covid.

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And our group did a wonderful job through Covid. We were

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connected directly with Dr. Henry, our health minister, and we were able to keep gyms

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open and in British Columbia longer than any other province. We're proud of that.

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But we did have a pause during that time. And one thing that

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Trevor has really brought to our group which is really energizing is this,

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this sort of his mandate which has been really helpful,

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moving from defense to offense. We're no longer in defense

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anymore and we can't sit in defense any longer. And we haven't been over the,

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over the last year in a bit. We've really been with. Trevor's been out in

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the clubs, refreshing our facilities. We've transitioned from a

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value price sort of footprint for equipment to more high

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functional strength equipment, more floor space,

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green turf. Our clubs are beautiful. So we've gone on the offensive there

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and then opening up new facilities like, you know, we've got

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four Lois on right now and we're looking to grow. And

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so Trevor's really helped with that re energizing us and looking at the

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future and that growth. Yeah. So Trevor and I had the

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opportunity to walk through Vancouver in

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certain times where I used to have to take you for a great lunch piece.

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Yeah, we got a great Mexican concept if anyone wants to. Yeah, we are

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exactly. There you go in a Vancouver homegrown

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Mexican concept. I'm not sure if that fits together in

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one sentence. That's going to get a lot of investor

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interest. But who knows, we might do it ourselves.

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Hey, Trevor, one thing that I wanted to take a minute to

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discuss is when you were in that meeting with Chuck and you spent two hours

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with him saying, okay, Trevor

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Lyndon, I've protected my personality, I've protected my brand. I

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protected my meme image, likeness, which nil wasn't a

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thing. It was an acronym back in the day. But

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looking back on that decision to say, look, I'm in a

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membership based business. I know people cancel. I know some People get

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disgruntled, you know, hitting that credit card every month and now, you know, my

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name's on the door and my name almost might be also might be in the

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white pages or, you know, people might be able to get a hold of me.

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So what were some of the considerations you made and,

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and things that you like about it or maybe things that, you know, another

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entrepreneur might want to know before they put their name on? Yeah, for sure, Pete.

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You know, I, and I was, you know, I had a 20 year career. Sixteen

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of them were in Vancouver. So this was really my home. I built my

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brand here in Vancouver. It was extremely important to me, you know,

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and my, my reputation in this city, in this province was

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extremely important to me. One of the reasons why I said no to a lot

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of things, you know, because I just wasn't comfortable with it. And so

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one of the things that identified with Chuck was this. I like

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the space. Fitness and, and activity had always been such a

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big part of my life because I was a professional athlete. What I also

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realized is that it wasn't just about the physicality of it is about the mental

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health. I realized halfway through my career that I wasn't

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training in the summer because I had to. I trained because I wanted

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to. And I knew that I felt better. I, that was becoming part of my

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lifestyle. So when we talked about fitness and value

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priced fitness and bringing fitness to the people that

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maybe aren't gym people, you know, you

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know, bringing, making a comfortable space where people, whether they're

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25 or 85 can go in and train.

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It's even more relative now because we're seeing older people

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wanting to get fit, wanting to stay strong, wanting to, wanting to keep their

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independence, wanting to work on their balance. My parents are 83

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and 82. They're working out three times a week. So we're seeing that in our

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facilities. And for me, and after I spent time

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with Chuck, that was part of our courting, I guess you'd say, is that

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I wanted to know that Chuck and I shared the same values,

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that we were aligned on what we, our expectations. So

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the concept aligned with it was important to me. It meant, it

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authentically meant something to me that we could

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develop this and we could help people, help people get fit, get heart

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healthy. Wherever their fitness journey was, we could support that.

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And I think Carl, when we opened Coquitlam, one of the best things I saw

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was, was that we had a group of, I think they're 75 years old, they

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go for coffee at Tim Hortons and they come in for a workout and it

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was a, it was exactly what we wanted to see is that is,

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is bringing fitness to, making it accessible for people.

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And so, but yeah, I mean I was in. One of the

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things I said to Chuck, I said, listen, I don't want to just give you

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my name for a royalty. If I'm in, I'm in. I

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want to be partners. I want to be equal partners. I want to work on

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this together. I want to be involved. And we, Chuck was awesome with that. Like,

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you know, we, you know, as we not only

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were business partners but we became good friends and, and we both were sports fans

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and had a lot to talk about and we had a lot of fun on

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the way and I miss, I miss Chuck dearly and, and

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so kind of carrying on his legacy. But no doubt about it, Pete, I was

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really, really sensitive to my brand, my likeness,

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my name and making sure that the values of this company

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upheld that and you know, never perfect. But you

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know, I'm really proud of the work that our teams do in the club and

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what we've done and what we've established here in bc. Yeah,

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I would say, you know, as a, as a tip to

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my hat to you guys, that there really aren't that many other

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happy stories related to people using their brand

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and their name in the health club industry. I mean there were some

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clubs in New York that were, you know, Derek Jeter, you

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know, affiliated clubs. There was Magic Johnson partnered

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up with 24 hour back in the day. Like all those things are basically

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non existent anymore. So, you know, congrats to you guys for, for making

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it work. If I could make a clear distinction there, my, my belief is,

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I think sometimes people get in business with a name

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and don't completely understand it's the people that work within the

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organization, not the name that makes them great. Right. And so I think people

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can lean on that name too much. And that's to Trevor's point, that was

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his key and he wanted a culture within our organization that aligned with

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him and we wanted the same and we've really worked hard towards that. So

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leaning on a name is not going to make you a great company. It's not

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going to bring your EBITDA up. It's the people that do that

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100%. And I think, you know, I think, you know that we've,

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in the last three years, especially the work we've done with Tom Johnston

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and work that our team, our executive team has done,

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you know, and even myself, I've become more involved in the business.

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And so, you know, the people that receptionist at 6am

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in the club, she's an extension of me, you know, and so

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that's, she's, you know, and I think that we're, we're creating that,

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that feeling within our company that, you know, I'm, I'm working side

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by side with, with our Newton team right now. We're

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schlepping weight around, moving around, and so they know that I care and

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I think that in turn, you know, they know how much our executive team

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cares and so we've done a good job working with, with, with

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Tom and our team. Yeah. So Trevor,

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you've kind of, you pivoted into the, this Chief Development

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Officer. What are some of the things that

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you're excited about when, when you're not sleeping and you're on your way to the

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club? Meaning in the business. Yeah. In the business

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side, like, you seem to have, have a good

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lens on, on where you want to take it, you know, from, you know, you

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guys focus on British Columbia, looking at new locations, like

305
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repurposing. Talk about some of the repurposing of the, the, the

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club space internally. Yeah, I think in Carl, we've,

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we've, I mean, we've been just, it feels like we've just

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been so, so much going on here in the last 18 months and it's been

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awesome. But you know, one of the, one of the initiatives I looked at

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when, you know, about 16 months ago was just our facilities and

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when, you know, through the course of our first club in Coquitlam, like

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some of the, some of our clubs are 12, 14 years old and, and they

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started out as, you know, because, let's be honest, the fitness landscape has

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changed. You know, you know, every one of our facilities has a She's

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Fit, a Ladies Only and they're, they're awesome spaces. But like, you

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know, people are doing less cardio now. They want more functional training, they want

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more, more room to move, they want more strength. Even

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our women members in our She's Fit. I mean, they want platforms, they

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want hack squat, they want leg press, they want functional stuff, they

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want the same equipment. And, and so that is something that

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I've, we've looked at upgrading all our facilities

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to bring them up to another level. So

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that's, that's the one thing and the other thing is that, you know, we're really

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excited about continuing to develop our, Our Ladies Only

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brand. She's Fit. I mean, they're great performers within

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our company. We're seeing a real push that women want private

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spaces for women. And so like Carl

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said, I mean we, we're, we're looking forward to

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going on the offense a little bit and we've got, we're looking at new locations

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whether they be Club 16 and she's fit or even we're

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excited about the opportunity of building a standalone She's

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Fit which Carl we haven't done in 20 plus years and,

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or longer so. And really taking that brand

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to a, to the next elevated place. Yeah Carl, so

335
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you've been, you know at this, it's almost kind of like come full circle

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at this point. There's been a lot of chatter and a lot of articles written

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about women's fitness and, and you know, their,

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their safe place for the third place. There's also been

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a lot more strength training that's happening as Trevor indicated

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and it looks like all your sheets fit are basically like at

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capacity, almost like over capacity from the amount of people in there. Do you

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think there's some underlying trend or you know, the

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diversity of ethnicities in Vancouver kind

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of leans into that even more or what do you kind of,

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what are some of like reading the tea leaves and what's really going on? Well,

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I think you nailed it. The diversity of our cities out here in

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British Columbia really support that brand. I

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mean quite honestly, looking at the EBITDA per square foot in our

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facilities, the growth in a she's fit is a no brainer. It's an absolute

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no brainer. And right now is the exact time to be doing that. And our

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country continues to diversify if you will. I

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mean major cities across Canada, you look at Calgary and

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Winnipeg and basically all of British

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Columbia support this women's only space.

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Particular ethnicities are looking for that space to be able to come in

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and work out amongst other women. And so that

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coupled with the huge drive in

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the women's side for women to be active and not just be

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active but use strength equipment, use floor space

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and you know I do have, I'll circle back quickly to Trevor because he doesn't

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give himself enough credit. I talk to a lot of people, a lot of operators

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and owners in our industry and he's up there with the

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top ones in the amount of time and effort and

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just digging into what people want now in terms of equipment and

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he's brilliant when it comes to optimizing space and so he's really been a help

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there. But back to the women's only space. Like just based on the numbers, it's

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A no brainer. I mean we're super excited. We're going to be opening up

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our next She's Fit location the next year, year and a half. And

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you know, just like you said, just based on the articles we're reading, based on

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our own numbers, it's a no brainer. Women's space is back and it's going to

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explode for sure. So when you take a look at your portfolio right now you

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got 14 Club 16s and you got three

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she's fit. So if you had a crystal ball of,

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you know, what does this company look like in three to five

375
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years from now? What, what do you think those numbers are from a unit

376
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under each brand? Kind of. Yeah, yeah, we're gonna open up, we're gonna, we're

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gonna work towards opening up three she's fit and two club 16s a year starting

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in 27. So by 2030 we're looking about

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41 locations company wide. A mix of both She's

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Fit and Club 16. Yeah, and, and Trevor, you're, you're

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obviously, you know, British Columbia and

382
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you know, following the Canucks is kind of, you know,

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go, go hand in hand. You know, if you go into to Calgary, you

384
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go into Alberta. You know what would be the strategic

385
00:24:06,410 --> 00:24:09,890
play there? Yeah, for those, for our

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American friends and New Yorkers, it'd be like, it'd be like

387
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the, the rivalry between Calgary and Vancouver is kind of like the

388
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Red Sox and Yankees, they don't like each other. So even though there won't be

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an arid Judge Fitness in downtown, even though I'm an Alberta

390
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boy, I'm from Alberta Medicine at Alber, I, I, I was a

391
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Vancouver Canuck. So, so you know,

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I think that's the one thing when we think about our

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growth and you know, the She's Fit brand we have actually 17 she's

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fit because 14 of them are within our club and we have three

395
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standalones. So you know that, that

396
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model I think really can work. I'm not sure

397
00:24:50,750 --> 00:24:54,030
Trevor Lyndon Fitness works in Alberta. You know, I mean,

398
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but I do think the She's Fit brand works in Alberta. Here's what

399
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I'll say Pete as well. Sorry to interrupt you guys, but what I'm super excited,

400
00:25:01,460 --> 00:25:05,140
like I'm so excited about is, you

401
00:25:05,140 --> 00:25:08,300
know, women's fitness is blowing up and

402
00:25:08,860 --> 00:25:12,300
in this moment we have a proven model. Right now we have three

403
00:25:12,300 --> 00:25:15,900
standalone cheese fits that do extremely well and replicating that

404
00:25:16,380 --> 00:25:19,300
isn't going to be challenging for us. We're not coming up with a new concept

405
00:25:19,300 --> 00:25:22,820
and having to prove out the model. We have a model that works today. All

406
00:25:22,820 --> 00:25:26,620
we need is a space and Bob's your uncle. Right. And so that's what we're

407
00:25:26,620 --> 00:25:30,260
super excited about. We're not reinventing the wheel here. We have the wheel and we

408
00:25:30,260 --> 00:25:33,740
just need to keep pushing that wheel forward. And so that's super exciting.

409
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We feel like we're in a real strong position with the She's Fit brand for

410
00:25:37,140 --> 00:25:40,700
sure. Yeah. And then, you know, as you take a look at

411
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the landscape over the past 18 months, there's more

412
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and more private equity backed players that you're going

413
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to compete with or are competing with at the same time.

414
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There's something to be said about, hey, I've got an independently operated

415
00:25:55,870 --> 00:25:59,510
homegrown business. We make our own decisions, we have access to

416
00:25:59,510 --> 00:26:03,190
capital, might not be the same institutional capital without, you know,

417
00:26:03,190 --> 00:26:06,950
personal guarantees or, you know, maybe has somebody

418
00:26:06,950 --> 00:26:10,710
who wants to try and build the business and then with the side

419
00:26:10,710 --> 00:26:13,950
of exiting where you guys have the ability to basically say, hey, we're going to

420
00:26:13,950 --> 00:26:17,550
build the best business we can and don't have any constraints related

421
00:26:17,630 --> 00:26:21,060
to, you know, some kind of internal rate of return or limited

422
00:26:21,060 --> 00:26:24,820
partners. You did do a deal years ago with

423
00:26:25,300 --> 00:26:28,540
Founders Equity. Maybe you could talk about, you know,

424
00:26:28,540 --> 00:26:32,180
maintaining your independence and your ability to grow

425
00:26:32,500 --> 00:26:36,180
with the potential to say, hey, look, if we want to pour rocket fuel

426
00:26:36,340 --> 00:26:40,060
on top of this business, you know, under our own terms, you know,

427
00:26:40,060 --> 00:26:43,860
we might put up more locations. Yeah, I mean,

428
00:26:43,860 --> 00:26:47,580
our relationship with Founders was real strong. And I guess

429
00:26:47,580 --> 00:26:51,380
I say that because partnering with an

430
00:26:51,380 --> 00:26:54,940
equity firm that was in the stock market

431
00:26:56,700 --> 00:27:00,300
really forced our hand and stepped up the urgency to have

432
00:27:00,300 --> 00:27:04,060
books that aligned with the stock market. We have real tight books because of

433
00:27:04,060 --> 00:27:07,500
that relationship. And so our forecasting is strong,

434
00:27:09,020 --> 00:27:12,580
our financials are strong, and so there's never really any questions there. So that was

435
00:27:12,580 --> 00:27:16,260
a benefit of working with them as well as just like in the

436
00:27:16,260 --> 00:27:19,500
name Founders Advantage, they really had a.

437
00:27:20,250 --> 00:27:24,050
They leaned into the expertise of the founders of

438
00:27:24,050 --> 00:27:27,690
the organizations that they partnered with. And that was no exception to

439
00:27:27,690 --> 00:27:31,210
us. And with them we did grow the business in a strong way.

440
00:27:31,610 --> 00:27:35,410
Covid hit and we were able to take that opportunity to purchase our

441
00:27:35,410 --> 00:27:38,970
shares back. And that's been the best decision our organization has ever made.

442
00:27:39,530 --> 00:27:43,130
So we don't shy away from that. But certainly we have the capital

443
00:27:43,210 --> 00:27:47,050
available to us to grow ourselves for sure. And

444
00:27:47,210 --> 00:27:50,850
that's what we're going to do unless another opportunity comes our way

445
00:27:50,850 --> 00:27:54,590
that we see it is a viable option. But we're really you know,

446
00:27:54,590 --> 00:27:58,350
if we were to partner, we definitely would want, you know, that

447
00:27:58,350 --> 00:28:02,150
founders sort of feel leaning on our expertise because again,

448
00:28:02,150 --> 00:28:05,870
we have a proven model, we have a proven cheese fit standalone model

449
00:28:05,870 --> 00:28:09,710
and we're ready to grow and we really don't want to be held back from

450
00:28:09,710 --> 00:28:13,270
that growth. We just want to grow. I think, I think, you know exactly,

451
00:28:13,270 --> 00:28:16,710
Pete. I think that we have the ability to do this ourselves.

452
00:28:16,790 --> 00:28:20,330
We've got zero debt on our company right now. We've got

453
00:28:20,410 --> 00:28:23,610
access to capital, we can self fund ourselves.

454
00:28:24,490 --> 00:28:28,290
So that's, we've got, we've got that ability at least so we

455
00:28:28,290 --> 00:28:31,690
don't have to do anything. And you know, there's certainly advantages to have

456
00:28:31,930 --> 00:28:35,289
having a partner. But this is the one thing I do know is that

457
00:28:35,930 --> 00:28:38,770
you know, and I, I will say this, you know, and this is a big

458
00:28:38,770 --> 00:28:42,530
tip to Carl and RADA, our COO and Lucy,

459
00:28:42,530 --> 00:28:46,270
our CFO. Been with our company for 20 plus years, everyone and the

460
00:28:46,270 --> 00:28:48,990
way Chuck operated, very well run operation,

461
00:28:49,950 --> 00:28:53,630
tight, organized. I think we've actually gotten

462
00:28:53,630 --> 00:28:57,350
better over the last three to five years. So we're poised to

463
00:28:57,350 --> 00:29:01,150
do this how we want to and I think that's, that's

464
00:29:01,150 --> 00:29:01,790
an advantage.

465
00:29:04,990 --> 00:29:08,830
This is Pete Moore. Here's the last tip for you of the podcast.

466
00:29:09,070 --> 00:29:12,100
We are partnered up with a company called haier dose

467
00:29:12,180 --> 00:29:15,620
higherdose.com they are the leader in

468
00:29:15,780 --> 00:29:18,740
workout recovery products. Infrared technology,

469
00:29:19,460 --> 00:29:22,980
LED light masks, neck enhancers and

470
00:29:23,220 --> 00:29:26,860
other products such as PEMF mats and sauna

471
00:29:26,860 --> 00:29:30,140
blankets. If you have not gotten on the workout

472
00:29:30,140 --> 00:29:33,540
recovery train yet, your time and your stop

473
00:29:33,700 --> 00:29:37,260
is now. You got to get these products in there before these workout

474
00:29:37,260 --> 00:29:40,500
recovery and spas end up saturating your market.

475
00:29:40,820 --> 00:29:44,460
Having your members walk out of the club and going into one of their locations

476
00:29:44,460 --> 00:29:48,060
for 200 bucks per month where they're paying 39 to

477
00:29:48,060 --> 00:29:51,900
you. Let's become an expert in workout recovery. If we

478
00:29:51,900 --> 00:29:55,300
are already an authority in workouts, higher dose,

479
00:29:55,620 --> 00:29:59,300
check it out. There's a wholesale code and we look

480
00:29:59,300 --> 00:30:02,580
forward to helping you augment your products and services

481
00:30:03,060 --> 00:30:06,830
to meet the demands of your members. And hey, let's get people

482
00:30:06,830 --> 00:30:10,670
happy, healthy and sweating. And the recovery should be

483
00:30:10,670 --> 00:30:11,870
just as good as the workout.

484
00:30:15,870 --> 00:30:19,510
When you take a look at, you know, let's, let's, let's use

485
00:30:19,510 --> 00:30:23,070
it the sports analogies here. But

486
00:30:23,710 --> 00:30:27,190
you know, sometimes groups might take on a new

487
00:30:27,190 --> 00:30:30,670
investor and they might go and spend a lot of money, you know, bringing in

488
00:30:30,670 --> 00:30:33,550
free agents and maybe like, maybe grow out of

489
00:30:34,510 --> 00:30:38,350
actually like the team that they needed to be successful. Or,

490
00:30:38,590 --> 00:30:41,230
you know, you see a private equity deal,

491
00:30:42,270 --> 00:30:46,030
you know, let's say like an F45 or something, that just like grew for the

492
00:30:46,030 --> 00:30:49,710
sake of growing their revenue. And now, you know, it's basically a penny stock.

493
00:30:50,270 --> 00:30:53,990
Or you see some companies that, you know, at one point you thought like,

494
00:30:53,990 --> 00:30:57,270
oh man, I'm kind of a little bit scared of what these guys could do.

495
00:30:57,270 --> 00:31:00,830
And then they just don't execute. So how comfortable are you

496
00:31:00,830 --> 00:31:04,580
with, you know, being on the offense but not like pulling

497
00:31:04,580 --> 00:31:08,060
you goalie at the same time? Well, I'll use another sports

498
00:31:08,060 --> 00:31:11,660
analogy. Back to you is our bench is strong and our bench is

499
00:31:11,660 --> 00:31:15,340
deep. We spent the last two years working with Tom Johnson with

500
00:31:16,060 --> 00:31:19,900
Talent Optimizer Group, and our culture's strong. You know,

501
00:31:20,060 --> 00:31:23,580
we do employee engagement surveys every quarter

502
00:31:23,580 --> 00:31:27,380
or so, and we respond to those surveys in a town

503
00:31:27,380 --> 00:31:31,040
hall and we let our teams know what goals, what

504
00:31:31,040 --> 00:31:34,080
rocks we have ahead of us that are going to help support some of their

505
00:31:34,080 --> 00:31:37,840
needs and their wants, and we execute on those things. And through that process,

506
00:31:37,840 --> 00:31:40,920
that forever process of hearing our teams

507
00:31:41,160 --> 00:31:44,800
responding, we've really increased our level of engagement across

508
00:31:44,800 --> 00:31:48,600
our organization. And through that, we've been able to keep people. Our

509
00:31:48,600 --> 00:31:52,440
senior leadership team is a bench of 16

510
00:31:52,520 --> 00:31:56,240
people. And I think the shortest tenure we have on that bench

511
00:31:56,240 --> 00:31:59,960
right now is six or seven years with some people being

512
00:31:59,960 --> 00:32:03,780
over 20. We have a general manager in every facility, we have a

513
00:32:03,780 --> 00:32:07,420
fitness manager in every facility and our assistant fitness

514
00:32:07,420 --> 00:32:11,140
managers and assistant fitness managers in terms of that bank bench rank is strong.

515
00:32:11,220 --> 00:32:14,540
So we've really been building up for this moment because obviously

516
00:32:14,540 --> 00:32:18,299
internal promotions are going to be an advantage to us as

517
00:32:18,299 --> 00:32:22,060
we continue to grow. And we do want to keep that club 16, she's fit

518
00:32:22,060 --> 00:32:25,420
culture. In order to do that, we need a deep bench. And so we have

519
00:32:25,420 --> 00:32:28,660
a heavy bench right now. We're ready to grow. So we're pretty confident when it

520
00:32:28,660 --> 00:32:32,300
comes to that. That's great. Hey, Trevor, back to you on, you

521
00:32:32,300 --> 00:32:35,700
know, you referenced the she's fit and like the next generation

522
00:32:36,340 --> 00:32:40,140
of what that is. We invested probably,

523
00:32:40,140 --> 00:32:43,820
geez, back in 2016, probably about eight, nine years ago, we

524
00:32:43,820 --> 00:32:47,660
invested in a workout recovery business. There

525
00:32:47,660 --> 00:32:50,860
was red light therapy and infrared

526
00:32:50,860 --> 00:32:54,420
saunas, electromagnetic field mats. And

527
00:32:54,750 --> 00:32:58,110
you know, I had to explain what each one of those technologies are now that

528
00:32:58,110 --> 00:33:01,950
they're kind of mainstream. So given your sports background. And

529
00:33:01,950 --> 00:33:05,550
also, you know, I know your son's, you know, in little league and

530
00:33:05,630 --> 00:33:09,350
Carl, your son's in playing travel basketball. You know, what are

531
00:33:09,350 --> 00:33:12,870
some of the things that you guys are seeing that's like, hey, I'm actually going

532
00:33:12,870 --> 00:33:16,710
to stock these clubs with a lot more workout recovery because I

533
00:33:16,710 --> 00:33:20,510
already see firsthand what it does for you and then what it's,

534
00:33:20,510 --> 00:33:23,710
you know, these kids are actually now using it. You know, you can basically take

535
00:33:23,710 --> 00:33:26,940
that to the masses and probably, you know, increase the membership,

536
00:33:27,340 --> 00:33:30,900
amenity set and price of what a

537
00:33:30,900 --> 00:33:34,340
membership's worth. So there is a question there somewhere. I'm not sure what it is,

538
00:33:34,340 --> 00:33:38,060
but please answer. No, I think exactly. I think what you're seeing is

539
00:33:38,060 --> 00:33:40,540
a, especially in the women's space, you know,

540
00:33:41,420 --> 00:33:44,940
wellness, health, recovery are all things

541
00:33:45,260 --> 00:33:49,020
and I think ultimately a safe, comfortable space.

542
00:33:50,220 --> 00:33:53,900
So I think there's a lot of, you know, that wellness space,

543
00:33:53,980 --> 00:33:57,820
recovery space. There are, you know, just down at,

544
00:33:58,620 --> 00:34:02,380
down to the HFA show, just, you know, pulling in a bunch of

545
00:34:02,380 --> 00:34:06,140
ideas and you know, just curating those spaces. So they're,

546
00:34:06,860 --> 00:34:10,300
they're meaningful, they're comfortable, they're accessible.

547
00:34:10,700 --> 00:34:14,340
You know, that in itself is, is a whole nother area where

548
00:34:14,340 --> 00:34:17,850
we can, I think, develop and create

549
00:34:17,930 --> 00:34:21,530
this environment for our members. And so

550
00:34:21,770 --> 00:34:25,610
for me, that's exciting. I think that, you know, in our current facilities, we

551
00:34:25,690 --> 00:34:29,130
built these facilities without those spaces. So then we

552
00:34:29,370 --> 00:34:32,730
went through this transition of putting those facilities in.

553
00:34:33,050 --> 00:34:36,450
But you know, to be able to do it from the ground floor is special.

554
00:34:36,450 --> 00:34:40,290
Our latest club, I guess would be Langley and in Chilliwack, we kind of had

555
00:34:40,290 --> 00:34:43,530
a better feel for that. So where those spaces are a little bit more

556
00:34:43,850 --> 00:34:47,600
curated. So yeah, that's definitely exciting

557
00:34:47,680 --> 00:34:51,400
for us for sure. Yeah. The red light, the infrared, the hydro

558
00:34:51,400 --> 00:34:55,120
massage, the tanning that we offer in our facilities has been really meaningful

559
00:34:55,520 --> 00:34:58,000
for us to be able to have a two tiered membership. And

560
00:34:59,280 --> 00:35:02,640
when our guests come into our facilities, we're able to

561
00:35:02,640 --> 00:35:06,000
qualify what their needs and interests are and align them with the right membership. And

562
00:35:06,160 --> 00:35:09,880
40% of the time, 50% of the time, they're going for that

563
00:35:09,880 --> 00:35:13,680
what we call VIP membership, which includes that wellness space. That's a

564
00:35:13,680 --> 00:35:17,320
big factor for us, serving our community and helping them be healthier and also

565
00:35:17,320 --> 00:35:21,120
serving our business. Gotcha. And then last

566
00:35:21,120 --> 00:35:24,960
question here is, you know, you guys kind of operate in this,

567
00:35:25,360 --> 00:35:28,960
you know, let's say a high volume, you know, high

568
00:35:28,960 --> 00:35:32,560
amenity, you know, high value. You know, I wouldn't say low

569
00:35:32,560 --> 00:35:36,360
price. I would say, you know, kind of, you know, in the middle market,

570
00:35:36,360 --> 00:35:40,000
which is 80% of the market. What's kind of like the

571
00:35:40,480 --> 00:35:44,270
give and take between, hey, I'm going to offer you all these new

572
00:35:44,270 --> 00:35:48,070
amenities I'm not necessarily looking to, to raise the price. I know you go into

573
00:35:48,070 --> 00:35:51,830
like 16 bi weekly, you know, for the basic membership

574
00:35:51,830 --> 00:35:54,790
to, to for the anniversary.

575
00:35:55,430 --> 00:35:59,230
So, so kind of where do you see as like you're. When

576
00:35:59,230 --> 00:36:02,710
people think of she's fit, people think of Club 16. It's like an elevated

577
00:36:02,790 --> 00:36:06,630
experience. But you're not paying, you know, through the nose to actually like,

578
00:36:06,630 --> 00:36:10,180
you know, we're not, we're not trying to target the top 10%. We actually

579
00:36:10,180 --> 00:36:13,900
want the majority of the population here. Yeah,

580
00:36:14,060 --> 00:36:17,100
Pete, I would say I would. And Carl and I, we talked about this,

581
00:36:17,980 --> 00:36:21,780
we talked about all this. I, I just, I would say our members and

582
00:36:21,780 --> 00:36:24,940
I'm in the clubs a lot, I talk to our members. I love getting their

583
00:36:24,940 --> 00:36:28,180
feedback on how we can better what we can do. But you know, I do

584
00:36:28,180 --> 00:36:32,020
hear like, I do feel like our members feel we are a tremendous

585
00:36:32,020 --> 00:36:35,820
value right now. Like, I mean they, they, we may not

586
00:36:35,820 --> 00:36:39,660
be the lowest price out there, but I think they feel like they are getting

587
00:36:39,660 --> 00:36:42,780
a great value. And so that's,

588
00:36:43,340 --> 00:36:47,020
you know, quantifying exactly what the price is, I think is kind of like,

589
00:36:47,020 --> 00:36:50,220
well, we're not the lowest, but I think our members would say

590
00:36:50,780 --> 00:36:54,620
they feel great about the value they are getting. Yeah. And I

591
00:36:54,620 --> 00:36:58,260
hate to sound like every statement I've made, I sound like I'm gloating about how

592
00:36:58,260 --> 00:37:01,910
great we are. Again, this is about our people. But we

593
00:37:01,910 --> 00:37:05,750
use Real Time as a software that provides us constant feedback from

594
00:37:05,750 --> 00:37:09,430
our members and generates AI reports so we know exactly where we

595
00:37:09,430 --> 00:37:13,230
stand in terms of how our members are feeling. And we can relate that value

596
00:37:13,630 --> 00:37:16,270
very easily through those reports.

597
00:37:17,390 --> 00:37:20,750
And on the other end, Trevor leads our

598
00:37:20,830 --> 00:37:24,470
maintenance team. Our maintenance team does tremendous work. Darrell

599
00:37:24,470 --> 00:37:27,950
runs that maintenance team. And we keep a scorecard on a daily

600
00:37:27,950 --> 00:37:31,760
basis. We report on that. Scorecard. Scorecard. And we're really proud of where our,

601
00:37:31,760 --> 00:37:35,400
what we call our ticket numbers are at below 200 company wide at

602
00:37:35,400 --> 00:37:38,760
17 locations. And so we're able to track that. So, you know, we talk about

603
00:37:38,760 --> 00:37:42,440
our uniques all the time. Trevor Linden and what comes with

604
00:37:42,440 --> 00:37:46,240
that culture, the she's fit. And then also that we care. We

605
00:37:46,240 --> 00:37:49,920
believe we have the cleanest facilities and the most well maintained facilities in

606
00:37:49,920 --> 00:37:53,640
British Columbia. We truly believe that. Again, it sounds like I'm gloating. That's not coming

607
00:37:53,640 --> 00:37:57,490
from us, it's coming from our people. But you know, we do track

608
00:37:57,490 --> 00:38:01,210
stats. We have KPIs on all of those things and we keep our eyes on

609
00:38:01,210 --> 00:38:04,930
them. And if we have to break the glass, sound the alarm and take a

610
00:38:04,930 --> 00:38:07,690
look at something and change something so it gets better. We do. But, yeah, we

611
00:38:07,690 --> 00:38:11,410
take a lot of pride in that. And I agree with Trevor. The value

612
00:38:11,410 --> 00:38:14,930
is definitely there, and that's what we hear from our members. Yeah. So I guess

613
00:38:14,930 --> 00:38:18,530
the last question here is, you know, Trevor, how does winning in

614
00:38:18,530 --> 00:38:22,360
business compare to winning in sports? Yeah.

615
00:38:22,360 --> 00:38:26,040
You know, Pete, it's interesting, I have to say. Carl and we.

616
00:38:26,040 --> 00:38:28,840
Carl and I talked five times a day, it feels like, but

617
00:38:29,640 --> 00:38:32,360
it's very. There's a lot of similarities, I gotta say.

618
00:38:33,240 --> 00:38:36,840
You know, when Chuck passed away, you know, 16, 18 months ago,

619
00:38:37,400 --> 00:38:41,240
you know, that kind of. Kind of pushed myself, really. You know, I was

620
00:38:41,240 --> 00:38:44,440
involved before, but now I'm day to day

621
00:38:44,840 --> 00:38:48,640
and I have enjoyed every second of it. I've enjoyed the business. I've

622
00:38:48,640 --> 00:38:52,200
enjoyed working with a team. The wins are awesome.

623
00:38:52,840 --> 00:38:56,120
And, you know, it's like being on a, you know, winning a game or having

624
00:38:56,120 --> 00:38:59,600
a good game or scoring a goal. I mean, the. The losses

625
00:38:59,600 --> 00:39:02,840
hurt, but that's. That's what's great about.

626
00:39:04,040 --> 00:39:07,400
That's. That's what life's about. And I live that world for 20 years in the

627
00:39:07,400 --> 00:39:11,000
hockey world. And, you know, nothing gets me more

628
00:39:11,000 --> 00:39:14,680
stoked than a good text from Carl or a positive, you know,

629
00:39:14,680 --> 00:39:18,180
what we're doing. And then on the flip side of that, I feel the pain

630
00:39:18,180 --> 00:39:22,020
on the other side. So thrill of victory and the agony, defeat is always

631
00:39:22,020 --> 00:39:25,140
there. And whether you're in business or sport, I think it's. I think it's important

632
00:39:25,140 --> 00:39:28,700
and it's meaningful. Awesome. Well, congrats on what you guys have

633
00:39:28,700 --> 00:39:32,420
built. It's noticeable, Carl, from a standpoint of

634
00:39:32,820 --> 00:39:36,580
that people do care. Places are immaculate that I've gone through.

635
00:39:36,980 --> 00:39:40,540
And we're excited that you guys are a

636
00:39:40,540 --> 00:39:44,390
bellwether in the Halo sector is how to run and operate a strong

637
00:39:44,390 --> 00:39:48,190
business. So thanks for your efforts and I look forward to seeing you guys soon.

638
00:39:48,430 --> 00:39:51,470
Awesome. Good. Thanks, guys. Cheers. Thanks.

639
00:39:58,270 --> 00:40:01,990
This is Pete Moore on Halo Talks, your captain speaking. I am

640
00:40:01,990 --> 00:40:05,550
the founder and managing partner at Integrity Square. We've been around

641
00:40:05,550 --> 00:40:08,880
now for 15 and 1/2 years. We have been

642
00:40:08,880 --> 00:40:12,320
helping people like yourselves get capital, do

643
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mergers and acquisitions, consulting, strategic advice in the

644
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health, active lifestyle and outdoor halo sector,

645
00:40:19,800 --> 00:40:23,560
trying to help as many entrepreneurs as possible get to the next level,

646
00:40:24,120 --> 00:40:27,560
take that inflection point and be the force behind your growth.

647
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We are helping companies that have at least $3 million of

648
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EBITDA, around $10 million of revenue, and

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we are positioned to help you get institutional growth capital

650
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or to negotiate deals with strategic partners. If

651
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you go to integritysq.com isq

652
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you can see our capabilities. Deck Happy to set up a consultation at any

653
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654
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655
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here.