Club industry Exchange


John Gennaro isn't a stranger to the fitness industry. He's spent much of his career marketing fitness, health and beauty-related products. Several years ago, he created and distributed an abdominal exercise item. However, owning a health club and a franchise is a new venture for him, but a venture he's jumped into feet first. Just last year, Gennaro started the first Cuts Fitness for Men. Now, the company has 16 clubs and 81 more sold and committed to being open in the next four months. Gennaro has big plans for expansion, hoping to reach 2,000 clubs in the next two to three years with the help of some strategic partnerships.

Gennaro's clubs follow the successful model that Curves established for women — offer members a 30-minute circuit training session with no frills, no mirrors and no members of the opposite sex. However, while Curves set out to capture women who had never exercised, Cuts has set out to capture men who are too busy for an hour-long workout. Along the way, the club has also captured the deconditioned male and the attention of the industry.

Ci: Why did you open a circuit-training-based health club for men?

For the last several years I've watched this circuit training phenomena growing, primarily for women — the Curves of the world. They went after a specific market that no one had gone after. I kept wondering when someone was going to do something like this for men. I finally decided that I'd go after that market.

Ci: So who is your market — men who haven't worked out before or busy men?

Our audience is a combination of both, but more the person who doesn't have the time. We've done surveys in the clubs and the key feature is that it's 30 minutes, which gives you a combination of cardio and strength training. Eighty percent of our customers are between 30 years old and 60 years old. At the beginning, I thought it would be older than that, but it's not. It's the fact that men don't have the time.

Ci: How many members do your clubs have and what is your retention rate?

Our facility, which is the oldest, has 320 members. All the other franchises are only a few months old. After about a year, we are looking for a facility to have 300 to 500 members.

The retention rate is within the industry norm — 15 percent to 20 percent. We try to make it as easy as possible. It's fairly inexpensive, just $39 per month, and it's quick.

Ci: Some people say the deconditioned members will move on from circuit training to a club that offers more options once they've become more fit or tire of circuit training. Do you think your members will stay with circuit training and your clubs?

I think we will be able to keep our members longer than the others because the machines we use are different. They are adjustable so you can't max out. We are able to change between stations to make it new and exciting. Will we lose some people? Absolutely. The fact that we took them to a new level — that's tremendous. There's always a market for us. Maybe down the road we'll decide to go after that next generation, but we're not concerned about that right now because a lot of things we are doing will keep the client here.

Ci: What are your clubs focusing on to retain members?

Our facilities are all about relationships. The staffs make sure to greet people. They know the members' backgrounds. We're homier. We don't have mirrors. We're not intimidating. We're not just selling memberships. We're dealing one on one with people. We are in the health and caring business.

Ci: What kind of people are you attracting as your franchisees?

Male and female. We are getting a lot of professional people that decided to get out of the corporate world. We're getting a lot of interest because of the success of the women's businesses.

Ci: How much support and freedom do franchisees have?

When franchisees start up, we train them in all aspects of business and running a gym. There's marketing and PR support on our end.

There are certain restrictions. As a franchise, the set up of the facility is restricted to certain colors to keep it consistent. The minimum space required is 1,500 square feet to 2,000 square feet. We'd like them located in strip centers in neighborhoods where they drive no more than 10 minutes from their home.

Ci: Are you targeting certain types of communities?

We go where the franchisee thinks there's a need. If we could rub the magic genie and wish for something, it'd be ideal for us to have our men's facility next to a women's facility. We have that at one facility in Clark, N.J. We do joint promotions with them.

Ci: Are there a lot of nondues revenue options open for franchisees?

In reference to supplements and water, we are open as a club. As long as we view first what they want to get into, we'll approve it most of the time. We haven't introduced our own line of supplements yet. We will be introducing our own line of private label water. We recommend that the facility has massage therapy, which is an added cash fall. Tanning beds I'm not so sure about. It's just not our market.

Ci: What sort of training and certification is required of your staff?

They are trained by us and certified by us with a Body Cuts certification. We are open 63 Ω hours each week. The way we train the clients, you need a body and a half to two bodies to run the facility each week. Early on, you train the member and educate them. Then, they can come in, start at any place and any time.

Ci: Where do you see your company being in five years?

We are projecting in the next two to three years to be in more than 2,000 locations. We are going to set up some strategic alliances with some major players. We are targeting government entities, industry associations, nutrition centers, healthy foods, hospitals, weight management centers, sports entities. We will select two to three entities from these groups to partner with. We need to take advantage of infrastructure that exists from companies that are experienced and doing things from a strategic perspective.

Ci: Some of the women-only facilities faced legal battles over their one-gender status. Do you expect court battles over being a men-only facility?

Legally, the position is that we don't have a problem. It's membership only. That protects that it's male only. But if a female would want to join, I'd have no problem. The only problem is that the machines aren't geared for women. Also, we just have one bathroom and one changing room.

Ci: Do you see more men-only facilities opening? Is it a growing trend?

We're on the radar screen so everyone is watching what we are doing. I'm sure there will be knock offs. However, when they talk about circuit training, they talk about Curves for women and Cuts for men.

I've heard about some of the larger facilities incorporating circuit training inside their facilities and that gives us even more credibility. But those circuit-training areas in the larger facilities often are empty because while they accommodated one part in that they put a circuit in, members are still intimidated. We feel we have the right ingredient. We just feel we need exposure.

Ci: Is the industry doing enough to get out the word to the general public about the importance of exercise?

My first reaction is no. The number one killer in the country is obesity. We are spending more on health care and fitness-related diseases now than ever before. So there's something wrong.

Ci: What do you think is causing the obesity crisis?

It's a combination of the way we eat, eating more food, and the lack of education for children on what to eat and not eat. We need to put more things on the Internet since that's where they seem to spend more time. Maybe we need to educate the parents, who will educate the child.

Ci: Are you doing anything specific to address this crisis?

We offer Summertime Kids Cuts where we change the hydraulic resistance on the machines. We network with the local schools. We have a father/son special where the father can bring in his son for half price. We are working with school teams who are finding the circuit training challenging.

Ci: Do you think the health club industry will make inroads into the deconditioned market?

I'm optimistic. I think we are smart enough as an industry to react to it. I think the ladies' facilities started that trend. They took a big market of women who had no options and gave them an option. We are going to do that for men.

Ci: What other issues do you see the industry facing?

One of my concerns is that some clubs are simply in the receivables business — they aren't one on one with the member. Over the years I must have joined more than a dozen facilities. I never stayed for a lot of reasons. I never felt I was wanted or educated. So education is one of my biggest concerns.

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