From Local Ads to Global Brand: Crunch Fitness's Unique Growth Strategy with Founder, Doug Levine

6:27 Welcome to Halo Talks Live Sid's Gym, October 17, 2024. We've got a great show for you today right before the pregame of the ALCS and NLCS, which we hope that New York Yankees and the New York Mets will come after this, and we'll do a postgame. Now what we have tonight is 2 guests that are coming on. They're gonna be representing the captain of Movement, which will be Sue Hitsman coming in from MELT Method. The pleasure of having Doug LaVine, who I call the king of branding in the health club industry, will be with us today. This might be one of his first interviews ever since he left Crunch. I don't know if that's true, but we are gonna go with that. I use the term halo.

7:12 It stands for health, active lifestyle, outdoors. This is much bigger than wellness. Wellness was started by a guy at the Mayo Clinic to become the antonym of illness. Illness is a disease. Wellness is a lifestyle. I think halo is the evangelist movement that we need to be a part of. So I refer to everything as the halo sector, halo companies. And we're gonna tell you how we are getting money into solving loneliness, obesity, and diabetes by making sure that investment groups, wealthy investors, and strategic partners know that the halo sector is where you need to invest because that's where people are gonna be spending their money and that is self care. So I wanna thank Sid Ray Raymond here. Raman? Yes, sir. Exponential.

8:00 We're gonna talk about his virtual reality treadmill that is next gen. You'll come down to the studio. Afterwards, we'll host you to a, a workout. Roger Harvey and Ethan, cofounders of Sids Gym here. We've got the AV crew. I wanna thank everyone there. My partner, Dave Ganulin, on the marketing side, and some of our sponsors, HigherDose on infrared products, melt method, BFS. And, we hopefully hopefully these this this conversation spawn some really good ideas, which turn into action, which turn into results, which turn into better lifestyles. So that's why we're here. Take a quick commercial break. Wanna thank everyone for coming. We are in front of a live studio audience at Sid's Gym. Take it away.

9:00 Welcome to experiential. We've reimagined the age old treadmill into a novel simulator, Blending hardware, software, and AI, we deliver movement experiences that are immersive and fun. We've replaced buttons with gestures, which empower and free the user to move naturally. From youth to seniors, beginner to advanced, our adventurous scenes, proprietary games, and virtual race courses offer a wide content library suitable for all.

10:11 Now if you do what most people do when you have these symptoms, you pop a pill to mask your symptoms, you're setting yourself up for more problems down the road. If you think of your brain's pain response as the smoke detector going off when your toaster's on fire, taking a pain reliever is kinda like walking over to the smoke detector and pulling the batteries out to stop the alarm, but the toaster is still on fire. If you think of the fluid in fascia like a river, repetitive postures and movements of daily living create sediment that alters the river's natural flow causing excessive tension compression and friction on the system which on a global level alters joint stability and mobility. It's also the origin of many symptoms like prolonged muscle soreness, poor balance and flexibility, and low grade inflammation which causes your joints to ache all the time.

11:51 Welcome to experiential. We've reimagined the age old treadmill into a novel simulator. Blending hardware, software and AI, we deliver movement experiences that are immersive and fun. We've replaced buttons with gestures, which empower and free the user to move naturally. From youth to seniors, beginner to advanced, our adventurous scenes, proprietary games, and virtual race courses offer a wide content library suitable for all. And we are back at Sige Gym experiential is the equipment. Pete Moore is the host, and I'm a pleasure to have my good friend, Sue Hitchman here. Good to see you again. Thank you very much. Thanks for coming.

12:38 Very, very, very tough woman to book on the show. Alright. Thank you for coming here. You are welcome. So, so you were here back in the day from 1990 3 to 2006 in inside of Crunch. We've got a Crunch thread moving through this whole Yeah. You know, podcast. So give us a little background on how you got there and then what Crunch was like for you. Yeah. I mean, I I started in fitness, at 17 years old when Jazzercise was a thing. Oh, good. And then I moved down to New York, and I started auditioning. I landed a job at vertical club, and then one of the girls who was there was like, dude, you gotta work at Crunch. It's the best club. It's got such a great vibe. So I went and I auditioned, and I think Donna Cyrus is the one who hired me originally. Shout out to Donna who's here today. Pretty pretty sure.

13:26 And, it was a family. It was a community, and I think that Doug really created a community of amazing fitness pros. And Roger pulled me into the office one time, and he said, hey. We've got a new program that we wanna do. We want you to get trained. And I didn't have any money at the time, so I said, I can't afford it. And he's like, no. We're gonna pay for it. And I thought I won an award. I I was like, wow. My, like, my my health club is supporting my education. And so that's really why I thought I was really a part of something new and different than any of the other health clubs because they were supporting education and trying new things. And by the time the 2nd year I was working with them, I was doing step, sculpt, stretch, hip hop, high impact aerobics. I taught everything there. Cycling when cycling.

14:18 Yeah. When you look back to to Tug and starting the business and building that brand and then Roger coming in and a couple of the other, you know, key people at the top, you know, work working with Roger, you know, one, maybe talk about that relationship and how, you know, that helped kinda build the culture. And then knowing that that brand was always much bigger than it actually was in number of units. How did it made you feel as an employee, you know, growing? I think that's it is Crunch personified this I it seems like a massive company. But when you got in the internal workings of Crunch, it was a community. The instructors knew one another. We took each other's classes. We learned from one another.

14:58 And I just think that it was a health club that supported the instructors and made them feel valuable. They paid us very well, and they really took an investment in the group exercise community, and then we also did personal training. So we were on the floor and teaching group classes and really growing a brand of community. And I think that's why our classes were always packed. People came back all of the time, and we always supported the other instructors and told each other to take other people's classes. Now if I'm correct, you were part of the the, best selling boot camps? At at Crunch, there was some DVD actions. If anyone has a DVD anymore I auditioned for the when Crunch became an ESPN 2 show, and I auditioned for it. And I landed I did I did a whole bunch of sculpt and strength and booty boot camp where they made me wear really, really short shorts, which was very weird and self conscious for me. And then I auditioned, and I got the boot camp video. I did a auditioned and I got the boot camp video. I did a crunch boot camp video and, it became one of the best sellers. It sold over a 1000000 copies worldwide, and it's still on the top ten best list for, boot camp videos.

16:15 So you so you wrote a best seller as well. The sequel is is this book here. Right? That's Melt Performance. I've got the sequel. You also run a podcast called Anatomical Gangster. I do. Did I say it right? I do Anatomical Gangster. I do. Talk talk about what you've built at the melt melt method. And also talk about the areas that it should be going into, but maybe there's more education that's needed to to make it widespread. Yeah. I mean, I was a fitness pro. And in the late nineties, I got myself into chronic pain. I woke up one day, the bottom of my foot hurt me, and it kinda sent me into a tailspin of body wide ache and fatigue. And I went down the road to try to discover how to get myself out of pain, and I discovered this emerging field of neuroscience and fascial research that was trying to answer the same question. What's the relationship of fascia to our pain symptoms? And I became a founding member of the Fascial Research Society. I started bringing neuroscience and fascial research into the health clubs and was trying to teach it. And I came up with the idea of a term MELT, which at first stood for myofascial energetic length technique, but it's kind of outgrown its acronym. And it's just about taking a stiff body and turning it into a more malleable hydrated body. And what I discovered in fitness is that it it is kind of the dirty little secret of fitness as most of the fitness professionals and people in fitness are injured.

17:35 So I approached the health club to say, hey. I wanna teach this as a group class. It exploded. It became a real phenomenon in the health clubs. And today, we've got 38100 instructors in 28 countries. And, an app called Melt on Demand where we share the self care methodology, and we infuse it into fitness. And so we have a lot of health clubs that, have it around the world. But, also, I think that more health clubs need to engage in the restorative mentality that there is a missing piece to diet and exercise. Because, look, if diet and exercise were all that was needed, everybody in fitness would be pain free. But, again, it's a dirty little secret is that lots of people eat right and exercise and still have persistent pain issues. So this is really a missing piece that needs to be incorporated into fitness. The one of the trends now that I would say would would be trying to capture what you're discussing is workout recovery. But you referenced before that maybe workout recovery is not the right terminology or not the way to think about it. So how should we think about it? Yeah. So I just think the word recovery, you recover from an injury. But what you wanna do is think proactive, not reactive. So if you take a proactive approach, then it's prepare, perform, restore, repeat. So if you prepare your body for performance, you restore your body, you'll spend a lot less time and money trying to recover from an injury later on.

18:59 And that's what MELT is founded on. Got it. So as an entrepreneur, you're sitting on a a a program that works Mhmm. That's been tested world wide. You know, when you take a look at we do some work like SilverSneakers and like Medicare Advantage Plans. We've got health clubs that have some group programming, but maybe you're shying away from more depth of that because of cost or not knowing who the demo is. And then you've also got, you you know, physical therapy, and you've got groups that are, you know, doing competitions inside of corporate wellness. So how do you how do you push this and not maybe knock your head against the wall saying, like, you guys don't get it yet? How is that from an entrepreneurial Yeah. Kind of lensing? How how do you get through it? I'm first, I'm very ahead of the or a lens? How how do you get through it? I'm first I'm very ahead of the curve. Right? I started this in the late nineties. It's now 2024. People are still like, what's the melt method? I'm like, I I've been maybe I'm hiding under a rock. But Right. You know, person again, physical therapy, we use physical therapy after we have a problem. So this is really proactive, not reactive. People are reactive to pain. So if we can educate people that if you have this as a supplement, we have physical therapists to use MELT so that people go home and do things on their own so that when they come back, they're better so that you're not just working on the same problem all of the time. So we really MELT is very known in the physical therapy world, massage therapy, acupuncture. But in fitness, which is where I started it, it's still something that people don't get

20:30 because we go to the gym apparently just to sweat and work it out. But if you have emotional issues, if you're unstable, then this is a missing piece is just quieting the body down. It it's incorporated into anything. And, again, you can use it in 1 on 1. You can use it in groups. Personal trainers use it, and then people can go home and perform it on their own with our tools that it is an at home self treatment technique that people can do. It's simple. It's easy. It takes about 10 minutes a day. So there's a lot of money right now since the beginning of the year being thrown in from HSA and FSA accounts. Mhmm. And there's for the people that aren't watching that are watching while I'm talking. Thank you. We accept it. They they We use that. That money now could be used towards fitness. Mhmm. So you get a letter of medical necessity. Maybe talk about how impactful that is or how you think that might open up. Yeah. I mean, we we we, enrolled in that as well. I mean, a lot of people use those funds, to purchase the products. And the great thing about the MELT tools is that you buy it once. It's not something that you have to keep buying into. You start to learn the the method, and it's simple to to use. So it's not very costly. You go to a personal trainer, chiropractor, and everything. That's expensive to always have to come back to that person.

21:48 But, again, for me, I was a manual therapist and getting people out of my office and back into active living was the philosophy that I had. I didn't want them to be in my office all the time. I don't wanna be somebody's mom and be like, oh, let me take care of you all the time. So giving them tools and techniques that that are easy to adopt as a lifestyle change is the thing that we need to do in all of health care is to empower people to be their own best health care provider. Self care is the best health care. So learning to engage in self care is critical. Now post COVID, a lot of the online and digital platforms, you know, saw a pretty traumatic decrease in in in usage. From your standpoint, since you're basically about stability and fascia and and more of, like, chronic management pain continuously. Right? Talk about how that's worked and talk about are you still personally teaching some of the live classes?

22:44 I do still teach. That's very nice. I love it. Found your You never did. Camera we like. Yes. So I I started Melt on Demand, which was a streaming platform before streaming platforms were a thing. So this is 2016 going on 2017. So I was already pretty well established in the online culture, and I already had online trainings where we where we were using the online world to prepare people for trainings. So when COVID happened and everybody sat around waiting for it to end, I locked myself in my studio and thought I'm just gonna move everything online and get people to keep moving while this pandemic is happening. They've gotta keep going. And I put 5 levels of instructor training online. I shot about 300 videos over the course of a year, and our platform grew from about 3,000 followers to 10,000 followers, and we've retained almost all of them. So we've had a really great run with, building a ecosystem and a lifestyle community where people are working together to thrive in their bodies, and we're very active. We talk to them. We have community members, and that's the one thing I would pass along to anybody who runs any business.

24:10 But if you really go at it where you really wanna transform lives, I think that's authentic. And I came from an authentic place, and I just love teaching people. And it just never gets old to transform somebody's life who thinks that they're never gonna get well and suddenly they're well again. Yep. That's great. And in closing, if there was one area of the community that you say a year from now, I definitely need to be here. This is where the biggest impact is. And I think about my parents, 55 and over community in Wellington, Florida. And there's no one like you, and there's no one talking about the MELT method, and they need to be. But what's an area? Is it that? Is it nursing homes? Is it No. That's just it is the the 50 50 and over is my wheelhouse. Yep.

24:53 There's more women who have pain than men. Chronic pain happens to women more than men, and that has everything to do with your hormone dysregulation. And what people need to know is that fascia, the stuff that MELT is working on, has a significant relationship to your immune function, your hormone balance, your gut regulation, and your basic metabolic state. So if I had to say who I would like to see MELT more are the 20 30 year olds because what I'm seeing in my studio are people in their twenties with hormonal dysregulation that shouldn't happen until your perimenopause or menopause, and that's not right. So something's happening in our culture because we're too sedentary. We're eating a lousy diet. We aren't interacting with people. I think there's a lot of emotional issues that are going on for people because community is what's cracking in our industry and and especially in the fitness world. So I think we need to come together and figure out how to get 20 30 year olds to engage in self care and let them know that they're the ones that are gonna transform the rest of the world. We just need to support them more. Awesome. Well, thanks for coming on today. It's been great to have you.

26:03 Thank you. And, check her check her out. So so I wanna say it again. Anatomical gangster. It is badass. And you can find it on YouTube, anatomical gangster. If you guys would follow it, I'd love for everybody to follow this. I just launched it, and I just talked to really brilliant people who can break complicated stuff down into simple terms so that people can live a better life. So I hope you guys follow it. You're kidding me. Thank you. Awesome. Cut to commercial.

26:49 Welcome to experiential. We've reimagined the age old treadmill into a novel simulator, Blending hardware, software, and AI, we deliver movement experiences that are immersive and fun. We've replaced buttons with gestures, which empower and free the user to move naturally. From youth to seniors, beginner to advanced, our adventurous scenes, proprietary games and virtual race courses offer a wide content library suitable for all.

27:53 Now if you do what most people do when you have these symptoms, you pop a pill to mask your symptoms, you're setting yourself up for more problems down the road. If you think of your brain's pain response as the smoke detector going off when your toaster's on fire, taking a pain reliever is kinda like walking over to the smoke detector and pulling the batteries out to stop the alarm, but the toaster's still on fire. If you think of the fluid in fascia like a river, repetitive postures and movements of daily living create sediment that alters the river's natural flow causing excessive tension compression and friction on the system which on a global level alters joint stability and mobility. It's also the origin of many symptoms like prolonged muscle soreness, poor balance and flexibility, and low grade inflammation which causes your joints to ache all the time.

29:46 Welcome to experiential. We've reimagined the age old treadmill into a novel simulator. Blending hardware, software, and AI, we deliver movement experiences that are immersive and fun. We've replaced buttons with gestures, which empower and free the user to move naturally. From youth to seniors, beginner to advanced, our adventurous scenes, proprietary games, and virtual race courses offer a wide content library suitable for all.

30:46 Now if you do what most people do when you have these symptoms, you pop a pill to mask your symptoms, you're setting yourself up for more problems down the road. If you think of your brain's pain response as the smoke detector going off when your toaster's on fire, taking a pain reliever is kinda like walking over to the smoke detector and pulling the batteries out to stop the alarm, but the toaster's still on fire. If you think of the fluid in fascia like a river, repetitive postures and movements of daily living create sediment that alters the river's natural flow causing excessive tension, compression, and friction on the system which on a global level alters joint stability and mobility. It's also the origin of many symptoms like prolonged muscle soreness, poor balance and flexibility, and low grade inflammation which causes your joints to ache all the time.

31:47 Welcome to experiential. We've reimagined the age old treadmill into a novel simulator, blending hardware, software, and AI, we deliver movement experiences that are immersive and fun. We've replaced buttons with gestures, which empower and free the user to move naturally. From youth to seniors, beginner to advanced, our adventurous scenes, proprietary games, and virtual race courses offer a wide content library suitable for all. This is Pete Moore. Welcome back to Halo Talks. We are at Sids Gym experiential. I am staring at one of these awesome virtual reality treadmills as well as staring at my good friend, Roger Harvey. Thanks for coming in today. Alright. Well, in the second half of the show, I have the pleasure of having a friend that I've known since 2000. One of your original members, I think, of your 13th Street, Jim. Sure. You had my credit card then. Hopefully, you don't have it now. Welcome to the show, Doug LaVine.

32:51 So, Doug, everyone loves the Crunch brand. I don't think there's anyone that says, hey. I can make that better. So tell us how when you started, how did you come up with that brand, and were there any cease and desist letters that followed the Crunch brand? There were no cease and desist letters. The idea behind Crunch was that gyms were sort of rote, and they were only about, hey, look better. You wanna look better? Come here. We sort of had this philosophy, we're gonna make you feel better. We're gonna make you part of a community. And we sought out to do that and that's exactly, what we did. Crunch is a sit up, and a a Domino Crunch. We came up with a name. We did get a trademark issue, at one time with Nestle's Crunch out of France. Okay. Okay. But that kinda went away.

33:46 Gotcha. You know, as you thought about the the Crunch brand standing for, you know, no judgments and and trying to pull in other parts of the population. You you really start with a membership model. So it was kind of a new concept that you're laying out in addition to a new brand. So how was that from from the beginning? And We originally started as a as an aerobic studio, akin to Jeff Martin and Molly Fox, and evolved ultimately to a membership model as we move locations into bigger facilities. And initially, you could largely take it as a 5, 10, 20 class punch thing. Then it sort of became a paid in full model. And sort of 2 or 3 years into it, we look to raise money, and everybody was interested. They said it's not bankable. It needs to be recurring revenue. And so the game plan was over a 2 to 3 year period to sell less paid in full memberships and to convert it to a monthly membership, which is akin to what most people are doing today. So when you started the company, I think it was a much higher risk venture than people maybe, you know, could appreciate looking back. Sure. You know, whether it's signing leases, whether it's, you know, putting all the legal. When did you start to hire people around you? When did you bring Roger in? When did you bring some of the other, you know, guys over there for 30 years? Roger was my, best tire, one of

35:19 my earliest tires, and really helped shape Crunch from almost inception into, company it is today and helped us grow from nothing to a major force, and was instrumental in sort of institutionalizing it, but not as a traditional business. Institutionalizing it in a unique mold breaking way that that was crunch. My perception of you has always been you might look at some data, but you're gonna trust your gut and you're gonna trust your creativity and intuition. Back in the day, there weren't many KPIs, you know. Hey. Let's look at the key key performance indicators. What what did you look at, and what still kinda guide your view of what you know is is working? Maybe not just looking at some metrics. Well, we were always on on the marketing side, we were very creative. I'll never forget, we had this gym, in the West Village. It was tiny.

36:25 And we got I got a call one day from Time Warner. They were only selling, at the time, MTV, VH 1, USA, all of the cable networks were only selling national ads. And they, for the first time, were gonna sell New York City ads separately from national ads. So if the commercial break I'm making up was 2 minutes, a minute and a half would be national ads, and 30 seconds would be local ads. And nobody you know, the the Time Warner guy says, we'll produce an ad for you. You'll commit to spending $10,000. We'll produce the ad for free.

37:10 And I thought about it and I said, let's do it. And I went back to the gym and I told everybody in the West Village, hey, we're gonna have a TV ad. And everybody goes, are you an idiot? I said, no. What what do you mean? They said, you you know, 2 thirds of your customers work in advertising. And they're bored out of their mind with working on Pond's cold cream or Johnson, baby oil, and they would love to do this in their off hours for free. And I said, no way. And so we there were people live early days of Crunch and subsequent all through the years fighting to do Crunch ads for free. Wow. And they would go I remember going to Ogilvy and Mather at 11 o'clock at night when, you know, nobody that was working there was working on a paid client, and we would produce ads until 4, 5, 6 the next morning that you got to know, and we won all kinds of Adi awards and so on and so forth. So we gotta talk about the bunny the penguin, which are probably the best content, and I'm assuming they never ask for a raise because you probably put somebody back into each one of those suits. And to for people that don't know, those bunnies used to run around the city. They used to run around the subway, and they used to run around Union Square, which at the time used to have chains around it when it got dark. It was unsafe.

38:41 So were there any incidences with the bunny and the penguin? And how did they come about? It's a great question, Pete. Somebody produced a movie that they submitted for the Long Island Film Festival. I can't remember his name. Showed his movie at the Long Island Film Festival. The movie didn't do particularly well. A friend of ours said, can we cut and edit this movie into Crunch ads by putting a voice over over it? He said, please, I'd love it to live on. And that's the story of how the bunny became the mascot for Crunch. And then in subsequent years, we needed him to interact with somebody, so we we introduced the Penguin. Gotcha.

39:28 And and when when did it ever get cost prohibitive to do the TV ads? Or is that something you did until, you know, the sale to to Valley? That's a great question. So we had nobody knows this, but we had a a Time Warner didn't like running people's ads, local ads. Local ads, when they introduced it into New York, were largely Midas muffler shops, Jiffy Loops. They were franchises that had ads produced by corporate and they could afford ads. But our deal with Time Warner was that we would get because they love the creativity of Crunch's ad, we would get almost all of their unsold inventory. Okay. So, basically, we would spend $10,000 a month and get a half a $1,000,000 worth of ads, or or whatever their unsold inventory was for many, many years.

40:27 Wow. And then in 20,021,000 and one, there was the dotcom boom, ultimately, the dotcom bust. Every little Internet startup company had a huge ad budget. And Time Warner said, hey, there's no excess inventory. Everybody's paying full rate, and we sort of had to pivot. Gotcha. One of the things you did do with the pivot, if I recall properly correctly is I went to Las Vegas one time and I saw a Las Vegas magazine that they had like the Mirage. And I was flipping through it and I've had like a full page Crunch ad. And I said I called Roger. I said, hey. Crunch is nowhere near here. Like, what is Doug's, like, marketing what what's going on with the Maestro that he thinks, like, advertising in this magazine is somehow gonna do something to help 19 clubs? Listen.

41:16 The the idea we did in our heyday sell, men's apparel at Foot Locker, Nordstrom's, Macy's, Bloomingdale's, Dick's Sporting Goods For us, Sports Authority, the same thing with women's apparel. We license bags. We license hats. There was a whole series of crunch apparel and related products that we sold, you know, throughout the world. So the the brand was bigger than 19 health clubs, and that was a big part of the thinking. You know, when when you think about today and what you could have done if you were at the helm right now and social media was where it was at its inception, you know, what kind of crazy things do you think you would be doing right now?

42:04 Or, you know, how quickly would it be you you be to get to market that that would excite you to say, hey. Let me test this. Let me test this. I think that that some of the stuff that we did, some of the avant garde classes, a lot of, you know, putting classes online so people could take them in all throughout the world would be something we do. I think that the brand would have, you know, big far reaching, breath, which it does today. And I think we'd have a lot of fun with, with new trends and and and new types of of program.

42:44 So a lot of people here are from New York, so they were, indoctrinated into interesting new group exercise programs back in the day. Sure. Whether from the activity or from the name of it. I believe there was a, you know, drag queen classes, there were stripper pole classes, aerial yoga, you know, maybe without all the the waivers and the consents. Zumba obviously got started through Donna in, in Crunch. Sure. What are some of the things that you kinda latched on to and said this is on brand, this is off brand, this isn't racy or or trendy enough? How do you think about that? Obviously, we're going back, you know, into a different paradigm of what political correctness and, you know, pronouns are, but go from there.

43:30 We love to foster creativity. We love to be known as an innovative company. We were very receptive to new trends. And so the idea was we wanted everybody to to to come with us to come to us with new ideas. And Donna was instrumental in sort of creating programming out of these new creative ideas, and it was very effective for Crunch. It was a very effective part of our marketing strategy, which was, you know, back then, very PR driven. So people would find out about the brand through Elle, The New York Times, Vogue, so on and so forth. So this was sort of the lifeblood of of of PR in those days, which was a big part of the engine for the brand. You know, it definitely allowed you to have something new and exciting that didn't necessarily have a capital expenditure next to it. I feel like a lot of clubs today have their set of classes, but don't use the class as, like, the new as a hook. So how do you see that happening with all the different boutiques that are out there? You know, some of them you probably look at like I do and say this doesn't have a chance, you know, then there's something interesting and innovative that has, you know, the right equipment, the right, you know, modality at the right time with the right instructor.

44:54 You know, you've got HIIT workouts that have that have gone well and then kinda tailed off. SoulCycle obviously did great. You know, now you've got solid core and some of these other modalities that are that are trending. Do you see where would you invest or where would you say here's the best opportunities that that you'd be excited about today if you looked at the different categories? It's big broad trends, okay, is how I view the fitness industry. But within it, you know, people are fickle. So, you know, Sue Hitsman was talking about Jazzercise. Okay, and and step that she taught and so on and so forth. Those things don't exist today. You couldn't get a spin bike for many, many years. Now the people move on. So the industry is such that people are always looking for new and different things. You just can't be different for the sake of being different. There has to be a reason that your programming is bringing a new fresh approach, you know, to the market. So when when Valley made the approach, and I'm sure they approached you every year sequentially for years to to try and buy Crunch to to basically help them jump start their business, can you talk about emotionally as an entrepreneur to say, I'm gonna give my brand regardless of the dollar amount? Like, this is kind of an asset, but it's also your baby. Yeah. It's it's you're very conflicted because this was started, you know, at my kitchen

46:28 table, the the whole genesis of the brand, everything about it. And it was it is it was very emotional politically say that. And then and then subsequently, there was a sale of Crunch Yes. That was done that that we worked on to Integra Square with Angelo Gordon. I know you had a little bit of an angle in there. Is that something you can disclose and, you know, what maybe kinda brought you back to say, hey. Maybe I wanna take a second bite here. You know, I was friendly with the Angelo Gordon guys. We looked at doing a joint venture with, in China. So we went to China together.

47:15 The, to do crunch in China. The issue there, what when we looked, which was probably, I don't know, 15 years ago, really only expats were working out at in in China. And so the model, they were building these giant, 25, 30 story apartment buildings with beautiful gyms in them, and they wanted us to sort of take them over. But the only you really couldn't get customers beyond the little expat enclave, that lived in those buildings. So it wasn't really a sustainable business, so we passed.

47:56 And, you know, I've looked at, I've looked at different fitness concepts, subsequently and just not really, gotten back in that. Yeah. If you take a look at what concepts you think have have the staying power or brands that you say, hey, I could get behind these brands because they're they're an authority. They're saying something to me. What what brands and maybe just outside of fitness, but what brands kinda engender your kind of loyalty? You know, we fulfill the need. We basically said you don't have to look like Barbie and Ken. You can be comfortable coming to Crunch. You can be yourself coming to Crunch. We we will take you if you're old, you're young, you're fit, you're not fit. You can become part of this community. The world was beginning this exercise adventure when we started, and we took a different approach. Our approach was, you don't have to be perfect. We're not gonna judge you, and we are gonna create this diverse environment that everybody's gonna feel welcome. And that was the ethos of our brand. Okay? Today, you would say, what's happening in the world? Okay. Where can you apply that?

49:24 World the population is aging. Okay. How are people gonna retire? Where are they gonna live? What lifestyle are they looking for? Who's gonna differentiate themselves within that? You know, there's a a million things that need to be done better, that need to be thought of, in a in a way that makes sense for big broad pause people are traveling. The world wants to travel. Mhmm. Okay? I, you know, spent a lot of time traveling in the in the last people are traveling from all of Asia. I mean, you go to the Acropolis, you go to the Louvre in Paris, the number of of of visitors are amazing. I grew up in New York City. When I went to the Metropolitan Museum as a kid, there were 20 people in the Metropolitan Museum, this giant museum. Now you go, it's a rock. It's like a rock concert.

50:20 You you've gotta get tickets. It's a whole thing. So these are big, broad trends. And how are people gonna, you know, treat people that are as they as they age? And and what are the housing, the activities, the health care, so on and so forth. How is that done? Same thing is true that people wanna travel more. Big trend now is that people can't afford housing. Right? Homes are and apartments are ridiculously expensive. How is that gonna how is that gonna work out? Is it is it gonna be some is it gonna be living at home in a different way? Is it gonna be 4 or 5 people in a in an apartment that's shared? Is it gonna be you know, how are we gonna solve these problems? And we did that for Crunch, you know, in the late eighties when the world was was, sort of discovering fitness and was very engaged in their jobs from day 1. It was not you know, with the advent of of of computers, people had real responsibility at work, not after year 2 or 3, but sort of right, you know, in the beginning of 19 nineties. We were very, very driven. People needed an outlet to to to unwind and to to get rid of stress. We provided that outlet for a whole host of different kinds of people. But when you saw when you see people today

51:50 wearing the Crunch shirt, what does that what does that evoke to you? It brings back wonderful memories, you know, of a brand that was, you know, very cool, very exciting, that was edgy, that were was in a lot of different markets, and with an amazing staff, people like Donna, Roger, Sue, people that, that worked incredibly hard, were incredibly driven, amazing diverse customer grant, base. I mean, Anthony truly is here. We had a whole host of of people, and it was a very cool brand. But we had this sort of mantra that you could we had a drag queen named Hetaletis who worked at at Hetaletis. Hetaletis, who had, like, 14 inch platform heels that worked at our front desk.

52:54 And and I thought it was wonderful, but the the instructions were, you speak to our members in a universal language, not in slang. So people love that we're diverse, They love that they're all different kinds of people working out here and working here, but nobody's to feel old because they don't know contemporary slang. And that is how we created a very special, place to work out and a very special place to work. And if you look today at where people are that worked at Crunch in the early days in terms of marketing jobs or owning, fitness brands or wellness brands, I mean, I'm that's the thing I'm most proud of. I mean, people have succeeded, and people came to Crunch in the early days very, very young. And we asked them to do things that nobody else was doing. And so they got amazing experience, probably 10 years before they would of anywhere else in their work life. Mhmm. And I'm extremely proud of that. Yeah.

54:02 The the list of, of executives that used to work for you that now run other changes, start other changes kind of like, I think the Cleveland Browns or like Bella Chick and Parcells and, you know, like, the a laundry list of of some of the best coaches Sure. You know, came out of there. So came out of crunch. You know, a question for you related to the word results. You know, a lot of people tether onto that to say we help people get results. Planet Fitness doesn't really say that because they're basically giving you access for you for yourself to get results. But they still use the no judgments in in a particular way that maybe, you know, should be allowed. However, you know, as you take a look at the personal training that you guys used to do, which was which was pretty, you know, a pretty big portion of your of your your your business. A large about a about a 3rd. Yeah. And and I felt like there was, like, a DNA of, like, you're not just coming in here, do your own thing, do do all of our cool classes. We want you to actually get results, and that was part of the culture. You know, is that hard harder to do now to get people that care? Or do you find those people that care and then get them into whatever business that you're that you're running? It's a it's a it's a great question. And, you know, as Crunch is franchised and become sort of a a a 10 or $20 a month model, plus or minus, there's been a lot of pros and cons. A great pro is it's accessible to a huge number of people.

55:31 Another pro, I went to a Crunch, 2, 3 months ago in Tampa at 11 in the morning, and there were people there from all walks of life. The gym was packed at 11 o'clock in the and there was a sense of community. It was clean. It was terrific. Was it performance driven and high results driven? I think it was more self directed when the gym is at that price point. We were company owned. The the price point was a higher. It was, as you said, Pete, a a large portion of our people trained, and I think it was more results driven and more more self driven today and more, directed driven back in the day.

56:19 Gotcha. So so in closing here, any, any any funny stories that you could share with us maybe you've, gotten past, you know, statutes of limitations or, you know, getting getting permitting in New York City or, you know, having to open up and maybe it's like a prohibition club back in the day? Or Look. We were aggressive in our build outs. We built clubs sometimes without finalized permits. And, and, and, at the end of the day, it all worked out. And I'm I'm I'm it was it was a wonderful experience. Yeah. Let's take a quick commercial break here, and we'll, we'll finish up with Doug and the rest of the Halo talks from Sige. Jim, thank you. Welcome to experiential.

57:17 We've reimagined the age old treadmill into a novel simulator. Blending hardware, software, and AI, we deliver movement experiences that are immersive and fun. We've replaced buttons with gestures, which empower and free the user to move naturally. From youth to seniors, beginner to advanced, our adventurous scenes, proprietary games, and virtual race courses offer a wide content library suitable for all. Welcome to experiential. We've reimagined the age old treadmill into a novel simulator. Blending hardware, software and AI, we deliver movement experiences that are immersive and fun. We've replaced buttons with gestures, which empower and free the user to move naturally. From youth to seniors, beginner to advanced, our adventurous scenes, proprietary games, and virtual race courses offer a wide content library suitable for all.

58:56 Now if you do what most people do when you have these symptoms, you pop a pill to mask your symptoms, you're setting yourself up for more problems down the road. If you think of your brain's pain response as the smoke going off when your toaster's on fire, taking a pain reliever is kinda like walking over to the smoke detector and pulling the batteries out to stop the alarm, but the toaster's still on fire. If you think of the fluid in fascia like a river, repetitive postures and movements of daily living create sediment that alters the river's natural flow causing excessive tension compression and friction on the system which on a global level alters joint stability and mobility. It's also the origin of many symptoms like prolonged muscle soreness, poor balance and flexibility, and low grade inflammation, which causes your joints to ache all the time.

1:00:54 Welcome to experiential. We've reimagined the age old treadmill into a novel simulator. Blending hardware, software, and AI, we deliver movement experiences that are immersive and fun. We've replaced buttons with gestures, which empower and free the user to move naturally. From youth to seniors, beginner to advanced, our adventurous scenes, proprietary games, and virtual race courses offer a wide content library suitable for all.

1:02:34 If you think of the fluid in fascia like a river, repetitive postures and movements of daily living create sediment that alters the river's natural flow causing excessive tension, compression, and friction on the system, which on a global level alters joint stability and mobility. It's also the origin of many symptoms like prolonged muscle soreness, poor balance and flexibility, and low grade inflammation which causes your joints to ache all the time. We are back at SIDS gym experiential virtual reality. I have a pleasure of still having Doug LaVine next to me as we close out this podcast live. We're gonna focus on a couple more questions related to franchising versus corporate owned stores. Sure. Obviously, a lot of entrepreneurs come in. They say, hey. I got this awesome box. I'd like 500 people to pay me to run it. And then they actually run into some problems with actually continuing to modify the the play and modify the special sauce. So talk about how you didn't do franchising and why, and then we can go from there.

1:03:50 Well, franchising wasn't a big thing when we were doing crunch, a. B, the federal government in, you know, had a program early on that subsidized home mortgages for people. It was a big thing, in the 1990s about owning homes. And and they created, ultimately, the housing bubble. But, ultimately, a lot of people owned homes. It was fantastic. The same federal government had this idea that everybody should own a business. And they the SBA was very aggressive and, to this day, is very aggressive in, in lending people money to own franchises.

1:04:37 So that wasn't available in the 19 nineties, as it is were it's wasn't as prevalent as as it is today, a. B, you know, franchising comes with peril. You have a dedicated group of people that ate, slept, and breathe crunch from every aspect of it, from the programming, the design, the marketing, the personal training, every aspect of it, to a high standard and a high level of creativity. And when you franchise, it's very difficult to deliver that, in a geographic area where you're not, from an owner that's not part of that culture. And so there are pros and cons.

1:05:31 And so I don't look at it today where Crunch is largely a franchise model. Mhmm. I think it's fantastic, and I think there are many pros like we talked about before the break. It's a lower price point model. People love it. There are people there from all different walks of life. And I and I when I was in the 1 2 2 months ago, I was very proud that I created it, but it's a different experience. You You know, you obviously have the systems, you've got pricing, you've got SEO, so there's definitely a lot of benefits. The franchising, someone said to me once, you live and die by your first 10 franchisees. They either get the program and they're bought in and they actually run the play or you're basically probably in lawsuits and this thing's never gonna turn into what it should be. Have you seen concepts without naming names that, you know, it looks like they've got a good business. It's something that they should get paid for someone to run their playbook, yet they just way outgrew their skis. Someone to run their playbook, yet they just way outgrew their skis on where they should be focused on. Absolutely. It's very, very, very difficult skill to start a brand from scratch.

1:06:41 Most people are left brained or right brained. Right. To be able to come up with a concept that makes sense and to execute on all the different aspects from branding, naming it, creating the concept, the pricing model, the whole brand as the real estate decisions, the HR decisions, the back office, the maintenance, the construction. There are very few individuals that can come and do the whole gamut on a start up basis with limited funds. When somebody has sort of cracked that code and creates you know, if you know, if the the people that are franchising the brands are of the same mindset, and don't and really buy into it. And if it if it is tightly controlled and the people that are running the company look at it from both points of view, what's in it for the franchisee, what's it's in it for the franchise or and everybody's on the same page.

1:08:00 You know, it's interesting. You know, some companies at the franchisor level will parachute people in from corporate, you know, to basically live at the club. You know, Roger has been working with us. We did a New York Sports Club turnaround, and now he's been inside of a couple of Crunch locations helping out and basically trying to bring that DNA from where you guys were back in the day and kind of infuse it. So, like, this is how we ran the playbook. So, like, bringing people back and mentoring could be a really interesting way for a lot of brands to do it. Roger was front and center. Roger was a huge part of Crunch. So now that he's consulting for for Crunch franchise is very I mean, there couldn't be a better resource, period. I mean, he he was in Saturday meetings when the whole team was there working on Crunch, and he was running a large part of it. So Yeah. We've we've had Donna come in and do some, group exercise programming with us inside and outside, the clubs as well, and and Terry Blachik, one of your other, you know, underlings.

1:09:02 Let's pivot over to one more subject that a lot of people are talking about. I'm not sure if it's really there there in the industry, but everyone talks about artificial intelligence. I like to say that you can't have artificial intelligence until you have intelligence. So let's get information on the member, and then you can actually have somebody analytically figure out what might be the next move or what you should be doing or what kind of interactions you should have. So how do you feel about when someone talks about AI? Is that meaningful to you? Is that like, okay. Great idea, but you really don't have the the machinations of it? You know, do I think that things that are that people do online, I think the data will be much quicker to AI where people are going to a gym and, you know, you can track if they're taking classes or doing free weights, but your data is very sort of limited at this point in time. It's hard for AI to create a program as it is today. Right. Ultimately, that will change and become very, very useful. But right now, I think that the early adapters where it's gonna be useful is in, you know, where you're searching, what's your passions are, that sort of thing. Gotcha. Well, it's been great having you on. I'm glad we had this opportunity. It's a lovely couch and chair. I love it, Pete. We gotta do we gotta do it again next year. We'll just turn it off. Let's hang out here. Thank you.

1:10:29 What The experiential is a place for you to enjoy exercise. Adventures in nature, gaming, and virtual races are all available now. We call this excitainment.

1:11:18 Now if you do what most people do when you have these symptoms, you pop a pill to mask your symptoms, you're setting yourself up for more problems down the road. If you think of your brain's pain response is the smoke detector going off when your toaster's on fire, taking a pain reliever is kinda like walking over to the smoke detector and pulling the batteries out to stop the alarm, but the toaster's still on fire. If you think of the fluid in fascia like a river, repetitive postures and movements of daily living create sediment that alters the river's natural flow causing excessive tension compression and friction on the system which on a global level alters joint stability and mobility. It's also the origin of many symptoms like poor muscle soreness, poor balance, flexibility, and low grade inflammation, which causes your joints to ache all the time.