Things are looking different around 24 Hour Fitness these days as the company continues its recovery from COVID-19 that caused a Chapter 11 reorganization.
The biggest change may be the guy at the top of the organizational chart: Karl Sanft. Sanft was officially announced as CEO in June, but he had been serving as interim CEO since December 2021 after the departure of Tony Ueber. And prior to that, Sanft had been 24 Hour's COO for three years.
But his background wasn't in fitness—although he has been a member of 24 Hour Fitness since 1993. Instead, his background is in retail, having spent about 20 years at Best Buy.
“A solid foundation in leadership but a willingness to be influenced and a real curious ear to what’s different has helped me be successful,” Sanft told Club Industry in a video interview conducted in early June. (Watch the full video above.)
Some of the foundational aspects that he learned in retail are the same in the fitness business: the ability to engage, to inspire the internal team, and to ensure that the team works together within a culture that's inclusive and inspiring for all, he said. But the difference is the frequency and the intimacy of a membership model vs. a retail model. A club’s membership model requires a consistency in members’ experiences as well as emphasis on getting to know members, understanding what their goals are and then setting up experiences to help them achieve those goals.
Achieving goals is at the forefront of some of the other changes that Sanft has spearheaded at the company. In March, the company announced the return of 24/7 club operations for at least one third of its 300 clubs.
Sanft helped develop new concepts such as MODUS small group training and a HIIT+mindfulness program, P.A.S.E. Factor.
The company also has a partnership with 9Round in which kickboxing classes are offered within 24 Hour clubs and a partnership with iCRYO to offer cryotherapy. The cryotherapy partnership signals the company’s move more into the recovery space to help create a better overall wellness experience for members, Sanft said.
In addition, 24 Hour recently partnered with Special Strong in which Special Strong franchise owners can use 24 Hour locations, instead of opening their own clubs, to serve their clients, many of whom have mental, physical and cognitive challenges. 24 Hour also expanded its partnership with Nutrishop to add 50 Nutrishop franchised stores in clubs nationwide over the next four years.
And 24 Hour Fitness has a two-year relationship with Behavior Change for Good (BCFG), which is a behavioral science study focused on how to create healthy habits. As part of the initiative with the Wharton School and School of Arts and Sciences at the University of Pennsylvania, 24 Hour members could participate in a 28-day workout rewards program, StepUp, which tested 53 inexpensive, scalable, science-based strategies aimed at building exercise habits. The end result was that 45 percent of the strategies tested “significantly” increased gym visits during the program, according to 24 Hour Fitness.
Changes Ahead
But what is on the mind of many in the fitness industry is what changes are ahead for 24 Hour Fitness.
Moving out of the mid-tier model may not be on the horizon.
“I think we're more competitive than we've ever been,” Sanft said.
The company’s pricing is “aggressive” in the mid-tier, he said, offering more optionality than in the past.The company now has memberships that start with weights and cardio, one that expands to include group exercise and then one that expands to offer digital as well as a buddy pass.
Many of the offerings from partners require additional payment from members.
“As we achieve scale and as we achieve synergy in those partnerships, there will be a way to bundle those in a way that is advantageous for everybody involved—for our members, for our partners and for our brand,” he said.
Although the company has continued to open some new clubs, mostly filling in existing markets, expansion is not the priority at this time.
“What's important to us is that we continue to expand our reach and we continue to expand our membership base and we continue to be excellent in the experience that we're providing to our members,” Sanft said. “What we don't want to do is grow clubs, get out in front of our club count, and not deliver an experience.”
And when growth becomes a bigger focus, franchising may be an option.
“There's a lot to be said positive about franchising,” Sanft said when asked about the possibility. “It's not in our short-term plans to move to franchising. We are all corporate owned, but we certainly like a lot about what that offers.”