Episode #613: SoulFire's Formula-Blending Brand Identity, Community, and Profitability in Boutique Fitness

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

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bringing 2 of my friends from the DC

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area in the Halo sector boutique side.

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Excited to have our first podcast with Soul

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Fire. Kat and Brooke, how you guys doing? Good, how are you?

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Thanks for having us on. Awesome. So, uh, we've known each other

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for a couple years now and, uh, we've been tracking your progress

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and excited about what bring to the community

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down there in the DC metro area, as I guess we'll call it.

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Plus, you know, being at the beach is not a bad thing also during

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the summertime. So give us a little background on how

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this started and the derivation of the name.

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Yeah, I'll take it away. The one thing Kat and I always

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wanted to do was create a community hub space where people could

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come and feel seen and like they belong somewhere.

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And yoga ended up being the catalyst or the

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container that we created. And our first studio was in

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Rehoboth Beach, Delaware. And at the time, we thought

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this would be it. We would run this little beach studio,

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vacation spot studio. We called it Soul

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Fire from the quote, be fearless in pursuit of what sets your

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soul on fire. At the time, we were both so inspired by that quote, and

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that's what we really wanted to do, was create a space for people to come

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and really tap into, like, what makes them feel alive and a

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part of a community. So we started with the name Soul

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Fire and started in Rehoboth Beach, Delaware. And

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within the first year, it was really a strong

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community of people wanting this same practice

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outside of just a small beach town, and

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requests for it to move to Bethesda and DC area.

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And so Bethesda was our second studio, Bethesda, Maryland.

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And now we have one in Arlington, Virginia as well. I think what's wild is

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this wasn't, like, this wasn't the goal when we first set out. We really,

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Brooke and I were working second jobs at the time and we saw a need

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in Rehoboth for, there's so much community, but there wasn't

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a lot of like, health. There wasn't a lot of wellness community, and we saw

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a big need for that. And we really thought, okay, we'll provide the need. I

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mean, at the time, we were literally biking to and from the studio with dirty

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towels in like on our bike basket because we were just like,

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we are going to figure this out. We're doing the laundry at home. And then

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very quickly it went from like, hey, I mean, I'm sure any

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entrepreneur listening knows you can't be a part-time entrepreneur. Very quickly it came

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from, we're doing this part-time, to like, no, there's actually

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something really here and we're doing something really

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unique, what we're offering. And we kind of put our ear to the

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ground. DC felt like the next market. And if you know DC,

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the DC people will drive to Bethesda, but the Bethesda people will not

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drive to DC because their big SUVs can't park in DC. The cars

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are too big in Bethesda. And we've kind of followed the carrot

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ever since. It's been you know, Bethesda and then Arlington. And this

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past year, Brooke and I looked at each other and we were like, you know,

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what's next? Like, and we really believe

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what we're doing is something that's needed to

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be bigger and reach more people. So, you know, here we are now

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at like this pivot point where we wanna grow this even more.

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Yeah. So when you picked out the first location, what were

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you both doing for employment

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prior to this? So Brooke actually worked in

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restaurants in Rehoboth. And if you know anything about the— I mean,

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to be honest, any beach town kind of falls in this category. The restaurant industry

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really is the greater population of a given area, like

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Rehoboth, Avalon, New Jersey, wherever you're looking at, like, the

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restaurants really are the backbone of the community,

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which was huge for us starting up. And then I actually ran a

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Lululemon store that was in Rehoboth at the time, which,

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you know, while it wasn't the biggest community in the town, it really

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gave me a sense of fitness, wellness, you

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know, entrepreneurship, those sorts of things.

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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 members

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without having to do zero down and one month free, or

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giving away shakes or giving away t-shirts. What you want to do is

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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 deal.

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

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

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

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those members and you're gonna reward them inside your club,

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

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to get them to become loyal, to get them to pay their monthly dues,

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and to be rewarded properly for the actions. A lot of companies

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are cutting back on rewards. You shouldn't be. Promotion Vault's your answer.

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Trust me, this is real.

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And then from a standpoint of picking the modality, you know,

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why was something— was yoga something that both of you were

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already doing, you know, as a practice, and that kind of felt like the

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natural thing to do for the community? Or did

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you see that there was a pocket and a need for a yoga location there?

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Give us, give us some background on that. To be honest,

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yoga was something we were both doing. It wasn't something we

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started doing to fill a need. It was something we were already actively

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really engaged in. And I would say what's really interesting about the

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two of us is neither one of us on paper are

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like your traditional yogi. Like, I am an ultra

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endurance athlete. I played college basketball. You know, Brooke's done a lot of ultra

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running and marathon running. So we are like

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kind of really great spokespeople for yoga because we're not

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just yoga. We're using it to service our our lives as a whole.

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So, we were doing a lot of yoga and we became quickly

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very passionate about bringing that modality to Rehoboth

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and not just seeing a need but bringing something we were already

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passionate about. I mean, that's interesting that you come from

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a traditional yoga studio with

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a formal yoga training. I'm going to try and say

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this as nicely as possible. typically doesn't turn into

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a commercially viable business that is run by

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people like yourselves. That's the nicest thing I think I've ever said about the

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industry just there. I just said it really well. No, it's great.

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But, you know, there's something to be said about you coming in from the outside,

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taking the modality and turning it into something that people like you

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would do. And therefore that probably built the community in a way

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that made it more Mainstream. Okay,

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so why don't you take it from there? Yeah, for sure. I

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think for us, I think that's been the

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biggest thing that's been epic to our growth is we're coming

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at it from a completely different angle. We're not coming at it from necessarily the

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epicenter of yoga. We're coming at it from 2

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busy athletes, you know, who want to build a community,

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and yoga really We have all the respect in the world for yoga, and this

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is not a knock to yoga, but we have— Yeah, no, it's the

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modality that, that we wanted to

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offer because it is, it has become integral to our success and really

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everything. Um, and I think it makes us a little different than,

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than most yoga that's out there, and it's what makes it also more

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scalable and the ability to grow. Okay,

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so let's say hypothetically I'm investing in a business that has

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3 yoga studios and I got One woman that ran a Lululemon store,

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so she knows how to, you know, think about, okay, here's dollars per

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transaction, here's the amount of traffic we need, here's how marketing works, here's

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how we're going to grow a business. And I've got another woman who works

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in restaurants and knows, okay, we got to turn tables, we got it, we got

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times, we got costs that we got to make sure that are, you know,

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uh, tightened up, uh, because that's how you got to run a restaurant business is

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based on cost and based on throughput. So, what is that combination of

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your guys' backgrounds kind of turned into

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when you take a look at, hey, we're running a profitable

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yoga studio and it's not by accident? Yeah. I

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think to go even deeper into our backgrounds, so Brooke and I,

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not to go into our full relationship, but we are married to one another. And,

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we actually years ago, this is probably 15 years now, we

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worked together at Lululemon. Oh, okay.

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She worked for Lululemon for about 7 or 8 years. I worked for about 8

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or 9 years. We didn't— when we moved to Rehoboth, we couldn't work together,

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obviously, for like, you know, conflict of interest reasons. But

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what I think is really interesting is we both

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have really, like, very different strong

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suits that we honor in each other. I am very

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like blue sky, let's create the marketing,

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the brand identity, like, let's make that repeatable and and tie that all up

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with a bow. And Brooke is very like logistics,

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you know, let's look at the like scheduling and the people and

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like, that's where she falls in line. Brooke also is

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the one who likes, we always laugh 'cause Brooke is the mom who likes to

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spend the money and I'm the one who's like, we are not getting that. So

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I keep her in check from that like fiscal perspective. But I think

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what's cool is we balance each other

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out in that sense. So I've become like, I've become brand and

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I've taken a lot of the spearheading with this, like investing, like we're

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trying to raise capital. I've taken a lot of the lifting with that.

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And Brooke is really great about creating systems for our people and, you know,

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people development and training programs and, you know,

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making those things really repeatable. Yeah. Well, I will say

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that we've been doing this now for 26 years.

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There's always— there needs to be someone in each one of these

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roles. or the C-suite is kind of

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incomplete. I've seen like sole entrepreneurs try and do things

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and it typically is a glaring

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hole in what somebody's trying to complete. And also there's either

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like a number 1 and number 2 person who's like, hey, I'm setting a vision

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and I'm actually like making that happen. Yeah. Like a CEO, COO

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type of role. So it seems like you both fill that

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in a big way based on your experience and I guess, you know, background and

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personalities and what you think is best use of your

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return on your own time. For sure. You know, so as

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you take a look at, you've got 3 locations right now. I've seen

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the financials, you know, very, very strong and profitable businesses, which

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in the boutique fitness space, you know, they're somewhat few and far

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between as you see some of the people that are

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exiting the business, and I'll just say them by name because I can, because it's

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my show, so I'll say whatever I want. Like an

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F45 or some of the early

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yoga concepts that got rolled up by,

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let's say, YogaWorks that weren't successful. You take a look at

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cycle studios, CycleBar, the

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ones that have really had staying power post-COVID, You know, if we take a

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small list of groups that, that I'm excited about, one is I'm a

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huge SoulCycle fanatic. So I got my

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650th class coming up. That doesn't

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include the ones I did online, you know, on my bike at home. So

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I'm a big, big believer in that business and the unit

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economics. I'm a big believer in Barry's Bootcamp. And

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I'm, you know, I was a big believer and still hope that

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Orangetheory kind of comes back to glory days that it had,

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you know, pre-COVID. But, you know, the F45

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story, the Cycle Barre, the exponential

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concepts, you know, Pure Barre and so on and so forth, like, they're

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gone. So I feel like this next wave of

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fitness studios is gonna be Soul Fire, you know, what's

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left of SoulCycle, Barry's Bootcamp, maybe a couple

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of concepts that are going into some large demographic

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markets, um, that, that actually are— have some yoga,

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uh, involved in it, uh, which could be super interesting.

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And, um, you know, so how do you kind of like look at the landscape

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of who you're competing with and say, hey, I like the place that I'm in

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and I feel like my community is ready for me to

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basically like create this concentric circle and now,

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now kind of expand it but stay in the same market? I think

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what's really interesting, and I think what's made Brooke and I unique over the years

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and what's helped us survive COVID and all these things, is the first thing for

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us is we're really good at keeping our ear to the ground and listening for

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what's needed, but also keeping everything that we shift or

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change really on brand and really aligned. So what I've

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seen a lot of these businesses do, and like,

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is they start to add things on that don't really make sense for what they're

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already doing. Like, we have a boxing gym that was down the road and They

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started doing like Pilates and then breathwork and then all of these things. And I

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think when I look at the market and the SoulCycles and

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the Barrys and these businesses that are doing really well, I think the one

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gap right now is yoga. I think there's like a need for someone

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to step into that yoga. Like we can talk about CorePower, but you know,

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whatever. And where I think we fit that's really unique is our

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focus is a couple of things. One, obviously

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community, that's huge, musically driven. That's great too. But I think

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the big thing that we do that's a little bit different is human

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readiness is like a huge conversation in our business.

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Like how— Explain what that means. Essentially, we are

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in an age where we're shifting away from— we can't de-stress life,

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right? Life is gonna life however we deal with it. You're gonna go

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out and you're gonna have a job that stresses you. Your home life sometimes can

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stress you, and we can't eliminate all the stressors. That is Just

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not the reality. But what we can do is we can learn to

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handle those things better, and we can learn to develop skills and

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resilience to handle all of these things that are thrown our way. And I think

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our focus is how do we create things under this

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umbrella that get people ready for what

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happens when they walk out the front door? So one way we do that is

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through a power yoga, which is our signature power yoga. We do it through

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activating breathwork, which is another pillar, another class we offer. We have a

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mat strength that's like a 45-minute, more

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high-intensity HIIT class, does the same thing. So we're

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filtering all of those things through. How can

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we better equip humans to walk out the front door and not

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crumble when life gets thrown their way? And we

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also add a little spirituality. We don't want this practice to lose its

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essence. And it's what makes yoga really beautiful. We don't want it to just

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become this watered-down corporate whatever.

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We still want people to have something to think about, to talk about when

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they walk out the front door. So when I think about the greater fitness landscape,

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I think we are like the missing piece. I think what

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we're doing is so missing and so needed and is actually,

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as people start to de-optimize their lives, like this is where we're

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going. Got it. And then from a standpoint of,

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of where do you take that and what communities do you go into

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next, what kind of research have you done? Or when an

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investor says, okay, I'm going to— I believe in the

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platform, right? Every investor that wants to invest

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in a, in a growth business wants to say, at least I

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tell them, which is the prototype, right? And we basically have 3

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prototypes that have been successful, each in, in different types

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of markets. You know, we got your SUV market that you're talking about in Bethesda.

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You've got your Bethany Beach, which is seasonal but packed during the

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season. Yeah. And then you've got Arlington, which is in a little more competitive

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market, probably has a little bit of an excuse to a different demographic, but

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is a profitable, you know, business model in and of itself. So

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you take a look at those 3, you know, what are some of the next

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either specific, you know, towns and zip codes do you go

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into? Because as an investor, I want to say, okay, how do I

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de-risk my investment by knowing that the founders are

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taking this into a place that makes sense, that they know that they're not

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going to overstretch on, you know, paying double the amount of rent and going

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into, you know, downtown DC, or like, hey, we're gonna go put a

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location in, you know, uh, New York City on the, you know, in

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Chelsea. Like, we're not, we're not trying to do anything that doesn't make any

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strategic sense or risk the company.

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So So maybe answer like, what's the next couple of towns?

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And if you want to use names of people that know them or zip codes

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or types of demos. Yeah. So

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you touched on the one studio which really would be our prototype is Bethesda. That

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is the market that we would go after. If you don't know anything about Bethesda,

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we're looking at an average age of 45 years old,

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expendable income, multiple memberships to other

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fitness franchises. Solid Core, Equinox, whatever. And

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they see value in adding

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yoga onto their everyday. So when we look at markets,

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the Bethesda-type market is what we're looking at. So kind of sitting on the outskirts

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of a massive metropolitan area, but not necessarily in it. So

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you're getting better, like a better rent, you know, better rent and leasing

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options. So for us, we're looking more like suburban

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DC, like a Falls Church, if you know the area, would be like a

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really beautiful option. Yep. And then as we start to travel out of

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DC, looking at those like suburban Philly markets,

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like the Main Line area where we can get better rent and also have

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that option of those options of people who have dual income,

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45-ish years old, have children, could have multiple homes,

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looking at those types of markets as we start to expand.

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

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307
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members walk outta the club and going into one of their locations for

308
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309
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and sweating, and the recovery should be just as good as the workout.

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And what kind of work have you done so far on

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identifying either specific locations or knowing

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that those rents that you're paying in Bethesda are

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replicable in the aforementioned, you

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know, you know, Falls Church and other suburban areas?

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Well, we've looked at it ourselves. We've used our,

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our broker to look into it. We actually started working with—

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we're just about to work with a broker who's done a lot of actually Barry's

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Boot Camp expansions to help us come up with a better

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overall long-term 5-year strategy for

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not just like, okay, where we're going the next 2, but like, where are we

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going the next 10 to come up with a better idea and not just look

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at, you know, the income that these people have, but like, what are

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their habits? Where are they traveling? Where else are they sweating? I think one

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business that pairs really nice for us that we've been paying attention to

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that's helped us cull some information is Solidcore.

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I think Solidcore is a really great—

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Mm-hmm. Like, we see a lot of people coming between the

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two businesses, and I think us looking at where are they going, where have they

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said yes to and where have they said no to, are places where we've really

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started to to dial in because they're also

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not going crazy on rents. They're also

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smaller spaces, um, and they are a premium product that

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people are willing to spend whatever to go and take those classes.

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Yeah, I mean, some of the things that I really like that what they've done

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is, one, I, I agree with you, following someone who you know has done

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the research and has successful locations, um,

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is, is not a strategy that someone says, oh, that's a

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copycat strategy. It's actually a prudent strategy. When I started working

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in private equity back in 1999, I was working with

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the owners of Gold's Gym. I was at the private equity

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fund and they wanted to commission this huge study from like a

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big real estate group for like $300 grand to like figure out like

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where to put the Gold's Gyms. And I said, well, why don't we just go

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next to the Home Depot? Like, they definitely did the work. Like, they know where

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the rooftops are going to be. Yeah. Like, maybe that's a good person, you know,

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good group to follow. And they're like, oh yeah, we'll probably do the research anyway.

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But I think they actually like took that and took it to heart of,

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you know, following success, other successful studios, especially

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ones that are intense like a Solid Core,

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where I probably do— when I'm, when I'm into my Solid Core,

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you know, don't tell my SoulCycle. Is this being recorded? Oh shit.

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Oh yeah. Yeah, if I'm not doing my SoulCycle, I'm probably doing Solid Core,

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but I'll probably only do Solid Core like 3 days a week. So, you know,

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being able to do SoulFire and Solid Core are probably a nice

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combo, you know, from a spiritual and from a

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physical, you know, intensity standpoint, I would think.

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For sure. But I think that's a great strategy. When somebody asks

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you, you know, do you have the team in place and do you have the

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instructors which obviously is a big component of

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any fitness boutique, of the quality instructors, to

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double the size of the company? How have you been able to answer that question?

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Yeah, I mean, we have an in-house training that we use to

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onboard, and I think we have done an incredible job of

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law of attraction is how we've brought on most of our team. But we have

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a really solid in-house training that we can train people.

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And I feel really confident about the people that we have and the outreach that

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we have and the product and the consistency that we'll produce.

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I think what's really cool is, so typically with yoga, if anyone's listening, and

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some people know, some people don't, is it's a 200-hour model

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where you do 200 hours of training on a— in a yoga school

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that's certified by Yoga Alliance. Now, for those listening, Yoga

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Alliance was started, I think, 1998 or 1996, and basically it's like you

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know, a self-proclaimed dubbed body that's collecting

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money for people to be certified in yoga. And

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they're also deciding, like, they're also

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giving out accreditations to these schools. And I

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think when Brooke and I were talking about the growth of our business, we were

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like, this $200 model is— it really

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isn't designed for growth. And it's not really— it's

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really designed for quick money-making for yoga. Like, I know

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CorePower— most of CorePower's money is coming from their teacher training. I know they make

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a lot of it. 100%. That is their thing. So

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their cash flow is coming from that, correct? You know, their cash flow is coming

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from teacher training. So Brooke and I was like, if this

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model is not built for scaling and this model is not built

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for growing quickly, what can we do in order

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to create something where we get teachers who are trained and are

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really great, but also we don't have to wait 200

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hours plus teach-outs plus all these things. So

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we brought it, we brought it all in-house. We decided we're not going to go

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through yoga lines because to be honest, who are they anyway?

397
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I mean, no shade, but just like, who are they? And we're gonna

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make it an immersive model. So we shrink the amount of time that they're training.

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And we put more on the trainees to, like, do

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practice teaches and do all those things, and we can accelerate

401
00:25:12,279 --> 00:25:15,651
getting them to be able to teach the room so that we can grow

402
00:25:15,651 --> 00:25:19,151
quicker and not lose, like, quality,

403
00:25:19,504 --> 00:25:23,341
essentially. Mm-hmm. So it's instead of, hey, everybody take our teacher

404
00:25:23,341 --> 00:25:27,050
training, we're, like, actually actively recruiting and interviewing to be like,

405
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do you want to take our training? And then we don't charge. So,

406
00:25:31,464 --> 00:25:35,136
it's not about the money, it's literally about us growing and how can

407
00:25:35,136 --> 00:25:38,648
we get that going. Well, I think that model has been successfully

408
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deployed by— SoulCycle was the first one to do that.

409
00:25:43,572 --> 00:25:47,340
Solidcore trains all their instructors as well. And, I'm

410
00:25:47,340 --> 00:25:50,853
pretty sure some of the other groups. No one's really at—

411
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no one that's on the high end of quality,

412
00:25:54,798 --> 00:25:58,181
performance, community, is letting that

413
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happen externally as like a personal trainer, be like, oh, you have these

414
00:26:02,011 --> 00:26:05,602
credentials, come on in, here, learn our

415
00:26:05,858 --> 00:26:09,593
cadence. So that's great to hear. So in

416
00:26:09,625 --> 00:26:13,231
closing here, you guys are raising a couple million dollars to go and

417
00:26:13,231 --> 00:26:16,725
basically build the next set of studios. What would be the ideal

418
00:26:16,854 --> 00:26:20,428
investor in this? And if any of your

419
00:26:20,428 --> 00:26:24,130
members are listening here, since it's my podcast and I can say whatever I

420
00:26:24,211 --> 00:26:28,000
want, We're really excited about what you're doing and think that it's

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00:26:28,000 --> 00:26:31,614
a no-brainer to hit on the gas pedal now and add

422
00:26:31,614 --> 00:26:35,437
another 3 to 4 locations and really own the territory that you're in

423
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and then see what the next several years hold after

424
00:26:39,132 --> 00:26:42,810
those locations are established. So who would be the ideal

425
00:26:43,388 --> 00:26:47,083
investor? Is it a member? Is it somebody on your team? Is it an

426
00:26:47,083 --> 00:26:50,777
outside group that is in the communities that you're

427
00:26:50,777 --> 00:26:54,487
already in or that you plan to go into? I think for us, there's,

428
00:26:54,728 --> 00:26:58,501
there's kind of like 2 sets of investors we're looking at. Obviously, a

429
00:26:58,501 --> 00:27:02,097
community member or someone who's like really invested already in the

430
00:27:02,097 --> 00:27:05,806
community and sees what's happening and is passionate. We want them to

431
00:27:05,806 --> 00:27:08,600
have the passion that we have for this business. So that's like,

432
00:27:09,322 --> 00:27:12,999
that's one piece. And then there's also the other side where it's like, if

433
00:27:13,031 --> 00:27:16,370
there is someone who genuinely has a level of

434
00:27:17,125 --> 00:27:20,946
knowledge or expertise or passion for this industry

435
00:27:21,138 --> 00:27:24,943
who maybe isn't necessarily a member, but, you know, they are someone who

436
00:27:24,975 --> 00:27:28,683
could offer like support beyond the

437
00:27:28,683 --> 00:27:32,472
financials and a passion and understanding for fitness and growth and yoga

438
00:27:33,339 --> 00:27:36,598
in general. I think so. I think there's kind of 2 investor types we're falling

439
00:27:36,614 --> 00:27:40,322
into. That's great. Well, if you want to reach out

440
00:27:40,322 --> 00:27:44,159
to Kat and Brooke, this has been Pete Moore at

441
00:27:44,159 --> 00:27:47,986
Integrity Square. We've helped the company get to this point, got to

442
00:27:47,986 --> 00:27:51,587
know the team, got really excited about the unit economics of this

443
00:27:51,587 --> 00:27:55,172
business. If you are looking at it, obviously do your due diligence, get your attorney

444
00:27:55,204 --> 00:27:58,875
involved. But we do think it's something exciting. We're not here selling

445
00:27:58,908 --> 00:28:02,499
securities, but we are talking about growing companies

446
00:28:02,692 --> 00:28:05,806
that are making a difference in helping people

447
00:28:07,373 --> 00:28:11,188
operate at peak performance. So excited about what you guys are doing.

448
00:28:11,333 --> 00:28:15,119
Look forward to you being on Halo Talks in another 18 months and tell us

449
00:28:15,119 --> 00:28:18,867
how things are going when you have 6 studios and, uh, rocking

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and rolling in the DC market. So thanks for coming on. Thank you for

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having us. Awesome. Go Halo!

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This

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is Pete Moore on Halo Talks, your captain speaking. I am the

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founder and managing partner at Integrity Square. We've been around now

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for 15 and a half years. We have been helping people

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We help people like yourselves get capital, do mergers and acquisitions,

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consulting, strategic advice in the health, active lifestyle,

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and outdoor, helo sector, trying to help as many

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entrepreneurs as possible get to the next level and take that inflection

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point and be the force behind your growth. We are helping

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companies that have at least $3 million of EBITDA,

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around $10 million of revenue, And we are positioned to help

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you get institutional growth capital or to

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negotiate deals with strategic partners. If you go to integritysq.com/ISQ,

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you can see our capabilities deck. Happy to set up a consultation at any time.

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That is free of charge. And we look forward to helping

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solve obesity, loneliness, and diabetes. Go Halo.