I am super excited to announce that we now have a formal partnership with the prospect wizard. And when I say wizard, I mean wizard. Obviously, you have a website. This allows you to convert your website traffic visitors directly into leads. It's not just another chatbot, and it's not AI, but it allows a visitor to call, text, or leave a voice mail, immediately goes to you, your sales team, or anyone else in the club
instantly. MIT shows a study that if you contact the lead within 10 minutes, chance of them converting goes up 9 times that of the average. We got the Atlanta Clubs on it, Vida Fitness, Gold's Gym, Mountainside, City Fitness Philly, College Park. Become one of the next halo companies to deploy the wizard. It's easy to use. Go to the prospectwizard.com. Get a free 30 day trial. Talk to my boy, Dave Gallon. He will get you all set up and let the leads flow based on the wizard. Go get them.
This is Pete Moore on Halo Talks NYC 2024. We are gonna talk about innovation. We're gonna talk about longevity, and we are bringing on Curtis Kristofferson from the great city of Vancouver, And we are going to talk about building a 25 year business at Innovative Fitness, and then we're gonna touch on a recommendation app that everybody should know about called workout. So Curtis, welcome to your first halo talks, and we are gonna be elevating wellness as our trademark
term. So good to see you. Yeah. Thanks for having me. Awesome. So let's first start with your bricks and mortar. How you started? I know you were one of the top or the top, trader in Canada. We know a lot of traders in Canada, so muzzle tough on that reward and and, status. But talk about how you methodically built your PT business, and let's talk about, like, what's around the corner.
Yeah. Awesome. So we've been in the game for the last 25 years. When we went to market, personal training was not as mainstream as it is today. It was, you know, for the affluent and, you know, I would say athlete or celebrity profile. We started at one location, and we built the brand of innovative fitness over the last 25 years, through some tough times. You know, the dotcom bubble, the financial crisis, and then obviously
recently through COVID. But we've focused on that 4000 to 5000 square foot high end boutique model, specializing in 1 on 1 and 1 on 2 personalized fitness and training. And, and our business model, 17 locations today, 10 of which are are franchise locations and, span from Vancouver to Vancouver to Toronto. So 2 major major markets in Canada and, and have have done a good job over the last 25 25 years of establishing community. And what's the size of the average studio? You know, how how does
that operate? Are you buying a membership like you're buying one to a health club? Are you doing, 12 month commitments? Obviously, people get very intense about training, and sometimes maybe that subsides when they come back. So how have you structured the location, and then how does the membership work? Yeah. Our average footprint is about 4000 to 5000 square feet. We have anywhere between 12
20 full time personal trainers that work, you know, under each roof. And then, how our our current model works, which is evolving, but our current model to date has been always prebooked and pre prepaid, training services or or personalized services, like nutrition as an example. So it is is not a membership based model, and it is either prepaid in in service packages, whether it's monthly, 3 months, 6 months in advance.
And are each one of those let's just use ProHealth Trainers as an example. Are they exclusive and they are full time to that actual location? Yeah. Correct. Yeah. We we try to provide full time employment. The training and the services are only, they only get paid for for what they do, but our job and responsibility is to to really have the demand and and bring in,
the supply of of trainers based on that demand. And so, you know, most of our trainers work between 25 and 40 hours a week, and, and, you know, obviously, scale up their their clientele the longer they are with us. Gotcha. And then from a standpoint of franchising the business, how did that happen? Was that methodical on your end to grow, or is that people from certain areas said, look, I love your model. I kind of don't want to do this myself and I want to be under your umbrella.
And they convinced you to, allow them to to to be underneath you. You know, I think it was a little bit of a little bit of both. In 2003, we expanded our footprint into Seattle and Bellevue. And what we knew is at the time, the further out that we got, the harder it was to control, and there was always a face of the brand. And, you know, really having someone that had a vested interest, that was, you know, boots on the ground, that could create the community that we were
looking for. So when we did that, I think we were young too, and we weren't as sophisticated or systemized as we are today. And so what we did is we took a step back and said, you know what? We have a we have a pipeline of of eager and hungry people that wanna expand the brand anyways, which was our employees and the people that work for us. And we also had a clientele base that were affluent enough that loved what they experienced from a service perspective. And so what happened was naturally,
we wanted a vested interest on the ground to build a community. We had a pipeline of of aspiring entrepreneurs, which is our trainers and our employees. And uniquely enough, our customers, because of the customer experience and service that they were provided, they wanted to invest in the brand. And so a lot of times what happened was that franchisees were born out of, people that moved within our system, and then they ended up partnering with the clientele that actually had the,
you know, had the positive impact. And so those clientele fueled their their franchise, funding. Yeah. It's it's interesting because there are many, trainers that have start up studios or start up their own business. And sometimes they come and they say to us, you know, where should I find this capital? I'm like, why don't you find the capital from someone you saved their life training? Yeah. And and to them, it's
almost like, a thank you. And then there are studio operators that don't wanna talk to their members because they think it's like an uncomfortable conversation. I think it's a very comfortable conversation because, you know, a a studio is a community. It's a cult. If you do it right, it's a cult. And the cult tested to to make money, and the the members of the
cult should fund that. So I'm glad that happened and it evolved that way, and that and that relationship going forward, obviously, is very strong and and, you know, almost like, you know, unbreakable. When you set up the franchise business and you've operated multiunit before, you you end up doing that, What are some of the things that you put in for and if there are entrepreneurs that are listening here? Because a lot of people's franchise they franchise before they're ready to franchise.
They don't realize that your client is the franchisee. And I have to change my perspective on what I'm doing just with consumers, but now I'm kind of responsible for somebody else's p and l. And that's a big, daunting responsibility. So what are some of the things that you did to say, look, I'm not giving you a location until, you know, you got a relationship on the billing side. You've got ops manual training. Give us a little pepper us with, like, what you did in order to say,
okay. I'm cool with with doing this. Yeah. I I mean, I think it starts with your brand and your name. I think so many people, they they build a a brand around themselves. So Peet Fitness, Curtis Fitness, you name it. It's like, first off, you know, we didn't we made the brand not about ourselves, but about, you know, a a greater, you know, brand. And so that enabled us to to franchise it more effectively. So Innovative Fitness is not, you know, named after, you know, Matt, Jeff,
Curtis, whoever. And that's number 1. Number 2, we needed to operationalize a a cuss a personal service. And so everything from the scripts of how you answer the phone all the way to, you know, all the operational efficiencies that had to be documented. So our operational manual is, you know, 300 pages deep, and we needed to make sure that that was locked and loaded and and really, enabled the franchisee to follow but also scale our current
model outwardly. So that's number you know, probably the second thing. A part of that is, you know, giving them the tools to, you know, hire the right people. So how do you recruit, hire, onboard, and then, you know, essentially empower them to scale the service? It's a personal service. So if our if our potential franchisees or our current franchisees didn't have those tools, I think that was imperative as well. Brand partners. So who are we
partners with? Like, whether it's insurance all the way to equipment. How do we provide additional value to the potential franchisee around brand partnerships that we could leverage and give them either, a, good rates, or just seamlessly, you know, attach them and and connect them with the the partners that we had that create an efficiency in in opening up a location. So those are the types of things that we looked at. And then obviously on top of that was the training.
So when we recruited or had an applicant that was interested in a franchisee, what process did we go through? And once we qualified that that candidate, how do we actually work with them to ensure that they are ready to actually open up and and
successfully deliver on our brand promises? Gotcha. Now one thing that's going on right now in the US is that there is a, a movement and actually a, a law that just got passed to eliminate noncompete clauses, because each one of these states wanna have, like, a free market. In franchising, like, I I I hope to build that membership base. Like, that's
my brand. You know, so have you had any situations where an instructor kinda goes rogue and tries to open up and basically pull their client base and you have to enforce the franchise agreement? Or have you been, you know, lucky or so selective that, you know, that trust factor and that that has never happened, if you could disclose that? Yeah. Well, I mean, we've had 25 years of people coming into our system, learning the system, building up the clientele, and then trying to compete with
us. In fact, the Vancouver market, if you look at all of our competition today, most of them are are ex innovative fitness, employees before we had the franchise solution created. And that's another reason what motivated us. It's like, now you can grow and go. If you wanna grow within the system and open your own, you can do that under the the brand that you already know. So that's number 1. Number 2, yeah, we've had franchisees, you know, over the years. 2 of them
tried to do that. They were, you know, unsuccessful not because we came after them, but because they think it's easy to do. You know? And they think it's easy to establish a brand, you know, create their own moat, and it's not. And so, you know, for us, we've had those challenges, but we've we've been able to over overcome them just based on, you know, the strength of our brand and experience we have.
This is Pete Moore. I wanna let you in on a little secret. There's this company called Promotion Vault, and what they do is they give out rewards from retailers that allow you to incentivize your members without having to do 0 down and 1 month free or giving away shakes or giving away T shirts. What you wanna do is build a rewards program that lasts, that people value, and that doesn't discount your own products and services.
So here's the deal. There's something called rewards vault. The rewards vault is going to allow a member to set up their own profile. They are going to answer questions. You are gonna get those answers. You're gonna be able to target those members, and you're gonna reward them inside your club, inside your spa, and outside of the club and outside of the spa to get them to become loyal, to get them to pay their monthly dues, and to be rewarded properly for
the actions. A lot of companies are cutting back on rewards. You shouldn't be. Promotion Vault's your answer. Trust me. This is real. You know, a question related to how you set up the franchise. I did read your franchise disclosure document before, we got on here, but, do you look at it as a percentage of revenue, or are you on a fixed fee, per month per location? Yeah. Percentage of revenue. So 6% of gross revenue plus
1% contribution to ad fund. Gotcha. Yeah. We we we went over the CrossFit case in our Halo Academy, and we were, you know, educating our our students, which are all, you know, it's like an executive boot camp that, you know, if the franchisor or licensor is not at a percentage of revenue, they're really not aligned or motivated to help you grow them because they're just getting their their fixed
fee per month. And, also, Crossroads doesn't have any exclusivity, so somebody can open up right across the street, which is which is troubling. So what kind of territories have you sold, and are you looking to continue to grow the franchise side, or are you looking to grow the corporate side or both? Yes. We have we we have 10 franchise partners in in that span from Vancouver to Toronto, and we're continuing to grow. In fact, post COVID, we've actually opened up, 4 locations in
in the Toronto region, through a lot of franchise expansion. And and we're gonna continue to grow the Ontario market, and we're actually, you know, getting ready to to expand in the US market. So specifically down in the West Coast first, but we are, you know, getting ready for that. Gotcha. And when you go into the US, what do you how are you going in there? Are you selling area development agreements? Were you selling territories and multisite, or are you doing one off locations?
Yeah. We'll start with, corporate expansion. So we'll see the market with, corporately run locations in certain regions, and then we'll we'll like, a hub and spoke model. So we'll set up corporate locations, establish the brand, establish the system, establish the experience, and then what we'll do is we'll either, a combination of, selling one off locations also to multiunit, franchisees. Got
it. And then let's talk in, you know, about who your partners are on the operation side or on the billing side, of the franchise, and how important is that to basically leverage what they're doing. So who does your billing and and and, membership management system? Yeah. That's just recently changed, actually. So we just combined
forces with, ABC Trainerize and Glofox. And so we we operate, you know, with with ABC in mind, and and they have a, you know, obviously, a a wide platform with, multiple options now now that they've been unified over under the ABC
umbrella. Gotcha. And and talk about what you built now on on the software side with Workout, which, for those of you who wanna Google it while we're on here, it's Workout without the, without the first o, and how that platform evolved and why you spent time doing it, and then some of the things that have evolved since then,
which we'll we'll key it on. Yeah. Over the last 25 years, we've realized that there's a level of prescriptive influence that happens between the service provider and the customer, trainers being the service provider. And they they have a level of influence on around prescription, whether it's, you know, what someone eats all the way to what they buy, to what equipment they use, to the supplements they, you know, they they get
encouraged to to consume. And what happens, you know, so many times is that either the trainer, you know, points to Amazon or points to local supplement store or, you know, directs them around buying a certain pair of shoes. And what we found is that that trust, has been built with, you know, over time. Like, what I always say is that trust doesn't scale fast, and it's built based on, you know, repetitive,
communication or or nurturing. And and so, in today's world, the only people that get rewarded for a level of influence is usually social influencers. It's not the influence that's on the grassroot level. And so what we did is we built a recommendation platform, and that recommendation platform enables, you know, all wellness professionals to prescribe and recommend products and earn rewards. In that platform, we partner with over a 120 brands. We have over 2,000 SKUs, everything from
High Price, TRX, Thorne Supplements, Momentous. You name it, we we typically have it, and it enables, all these wellness professionals and fitness professionals to now finally get either rewarded or provide a discount to their customer, you know, and and make it easy for them to, point them
in the right direction. And so it's it's essentially a digital digital dispensary, and we are now launching a studio product that now studios, just like Innovative Fitness, no longer have to carry inventory, no longer have to have, you know, significant retail space, and they can sell a wide range of products and holistically impact the customer, the, the consumer, effectively by not pointing them anywhere else but
themselves. Gotcha. 2 follow-up items on that. 1 is we're investing in a company called Higher Dose, which is a infrared workout recovery and beauty products company in the US. We have distribution in Canada, so it's infrared sauna blankets, PMF mats, face masks, and a litany of other products and services, mostly geared towards towards the women's market. So we should definitely connect you with them to expand their their
distribution and your presence. Second is we work with a company called Promotion Vault, which, started in the gift card business to have clubs not be doing, you know, zero down and, you know, 1st month free type of nonsense. And they've set up a employee engagement and reward system. It's kinda like a private label Venmo. So that might be another opportunity. They've got 35 100 studios and clubs that they work with currently.
So infusing your, you know, recommendation platform behind that might actually be a nice way to instantly push, you know, what they're trying to incent into a into a purchase. So that that's that's great. So you've got a partnership with ABC. And for people who don't know ABC, he's probably dropped from the podcast now. No. Just kidding. Stay on the podcast. 1 of the largest billing
companies, and member management systems, in the industry. You know, we're very close with Bill Davis and and love what they've done and Paul Scheller from back in the day. And, Curtis, you'll like this. We had Paul Scheller on, and, we said, tell tell us what ABC is. He's like, ABC
is a 34 year overnight success. So they they were they were, you know, hands on the ground, boots on the ground, you know, picking up 1 club at a time and and convincing people to, you know, allow them to collect all their money, for them out of, you know, Little Rock, Arkansas, which, you know, a lot of clubs said, like, I don't wanna let anybody else touch these credit cards or bank accounts. So kudos
to them. Now the question is, ABC is owned by Toba Bravo, which is one of the largest, you know, tech software growth equity firms in the world. They make acquisitions of Trainerize, of gym sales, and of several and was the one in, in the one in the UK, and and Blue Lofotox. Lofotox. Thank you. Thank you, Curtis. They can obviously build what you have. It might take them years to do it. So when you enter in a conversation like that as an
entrepreneur, obviously, you own 17 clubs. You've been around studios. You've been around for 25 years. But you gotta have a lot of bravado and say, like, look. I can build this. It's already done. Like, don't take your time. Let's do partnership, and don't try to reverse engineer what I have. So can you give us a little bit of insight into that? And if I'm overstepping my bounds, I apologize, and I apologize after it launches. Yeah. I mean, Bill Bill Davis will tell you. I mean, he has 3
philosophies. It's either you build it, you partner, or you buy. And usually, most companies would partner. They're they're gonna try it before they buy it, and so they're gonna partner before they acquire it. And so for us, you know, we were doing something different than they weren't doing. They didn't want to get in the business of of working with, you know, brands and partners
and and ecom. But they found that, you know, our feature would provide a ton of opportunity for, you know, their Trainerize users, which are a bunch of independent users, and then eventually, Glofox users, which are studios. And so it unlocks a huge opportunity for them to assess and evaluate. And currently right now where they're at in their life cycle, you know, we believed it was, you know, a win
win for everybody because their road map is deep. They have, you know, 5 or 6 platforms that they're trying to consolidate right now, and focusing on a new tool or feature around ecom wasn't really in the road map. And so, you know, and and, you know, what's unique that we've found so far, we've already launched with Trainerize. We have thousands of users that are are are trying our our product. And what's unique is that the average trainer, average order earns a trainer $8 per
order. And what's a Trainerize subscription fee for t z pay? $7. So think about that. Every time a Trainerize user gets an order, it pays for their subscription. So why would a free user not not uplevel to a to a a a paid version of their app? And and, you know, same with GloFox. We launched a pilot product. Just one transaction. That's one transaction. Yeah. You know, it's interesting. We just got off another podcast without naming names.
And I said, like, how much does does does the counterparty make on this? Like, is it material? Yeah. You know? So having those kind of metrics to say, you know, how how many transactions I don't know. If you could do 20 transactions, you know, it's basically, like, you know, 2:2 to 4 hours of of work that you didn't have to do. Yeah. Right? Awesome. And then let's talk about, you know, why we got time left here. You've got these these PT studios. You know where the industry is
going. You know, it used to be a lot of equipment. Now it's, you know, more free weights and, you know, and functional training. You've got a lot of workout recovery that, you know, we've been preaching to to clubs and studios that, like, that's your member. Every time somebody posts up in your studio, in your strip center, or post up inside somewhere that that your members are parking, they're basically there because they're poaching your
members. And they're typically charging for workout recovery and wellness modalities more than what you're charging for your monthly membership. So the reason why you need to get in there is because you if you're an authority on workouts, you have to be an authority on workout recovery
because it's a holistic approach and it's it's 360. So talk for a minute about how you guys view that and what role you wanna play in that, and do you wanna become the authority and and devote part of that 4,000 square feet to say, look, we're gonna take care of everything you need, and I'm gonna repurpose this as I need to. Yeah. I mean, me and you both have seen the the, evolution of the industry, and you said it, like, first was machines, second was, you know, functional
fitness, and and where are things going right now? Well, there's massive massive tailwinds around, you know, longevity, antiaging, metabolic health. And I think the reason why is because baby boomers are are, you know, getting older. They're at a tipping point right now. You know, they wanna live longer. We have access to data like we've never had before with thanks to wearables. And, at the same time, you know, if you look post pandemic, I think people looked down the gun barrel and
looked at their life a little bit differently, more holistically, and said, hey. I wanna live longer, and I wanna, you know, age, I guess, beautifully. And so, you know, for for us, we believe that the the future of of fitness is more holistic than ever, and it is actually the consumer is finally ready to actually assess and evaluate and look at, you know, antiaging and metabolic health, you know, services. And so how we look at it is, you know, to your point,
it's not just about, you know, movement anymore. It's about movement, nutrition, sleep, and then a bunch of other layers, like hormone health as an example, metabolic health. And so how we're positioning our 17 locations and future expansion plans is around, you know, that
longevity. And and speaking to the consumer, we're not gonna be everything to everyone, but what we are gonna do is we're gonna really dial in the accountability around movement, nutrition, sleep, and some, you know, metabolic health biomarkers, like, you know, v o two max is another one. And how can we actually, you know, provide not only the the data collection and the health assessments, but how can we actually, provide the accountability that you can't
get in most places? Because as much as big boxes are diving into this, they don't got the high touch experience that really provide the accountability to see the results that people are looking for. This is Pete Moore. Here's the last tip for you of the podcast. We are partnered up with a company called Higher Dose. Higherdose.com. They are the leader in workout recovery products, infrared technology, LED light masks, neck enhancers, and other products such as PMF
mats and sauna blankets. If you have not gotten on the workout recovery train yet, your time and your stop is now. You gotta get these products in there before these workout recovery and spas end up saturating your market, having your members walk out of the club and going into one of their locations for $200 per month where they're paid 39 to you. Let's become an expert in workout recovery if we are already an authority in workouts.
Higher dose, check it out. There's a wholesale code, and we look forward to helping you augment your products and services to meet the demands of your members. And, hey, let's get people happy, healthy, and sweating, and the recovery should be just as good as the workout. We seem very methodical about how you think about the the unit economics and and the support related to it. It reminds me of a there was a a a really strong club operator, and I said, well, you gotta
look out for this. You gotta look out for that. I was like, look. We're researching it. Okay? They basically had somebody that would look at all the different studios that were opening up in their area. And they said, we're not gonna repurpose any space until I know that what they have is real and and it provides results, you know, such as, like, you know, CrossFit or high intensity training. Like, we're gonna get to that.
Okay? And and but I'm not gonna wait until, like, the market like, let them spend the money on evangelizing it and getting people to talk about it. Once they do it, I'll I'll I'll I'll I'll take it from there. You know? So I I really love that. That that's how I think that I feel like that's how you think about it. Like, it's not ready yet. It's cool. I'll I'll get to it, but I don't need to be a first mover in it. Let people figure it out, and I'll I'll I'll I'll figure how to do it right.
January of 2020, I had a 27 page deck that that I pitched to all my stakeholders, franchise partners, managers, and it was about how we had to shift our brand into longevity and antiaging. And I I swear to god, people looked at me going, there is no way. What are what is he talking about? Fast forward 4 years later, thanks to guys like Andrew Huberman, Mark Hyman, Peter Attia, you know, all these thought leaders talking about metabolic health and longevity, the consumer
is ready. And I think the consumer is I think everybody is trying to chase it right now, and are are quickly shifting their model without the thought process and and, you know, just really being methodical about it. And I think we we have a platform to really jump into this and be leaders at it. So Yep. That's great. And just to kind of, like, point out some of my personal mistakes, I started an Internet company in in, April of 2000. There was no
Wi Fi. There was no broadband. There were no smartphones. But I knew that it was gonna be a big deal. And, basically, I spent pretty much all my savings and and leveraged up credit cards, because I'm like, the 1st mover wins. And not the 1st mover always wins. The 1st mover proves the market, educates people, and then the people that have capital, you know, actually affect it.
And I kinda ran out of capital because I spent it all on educating people, and then I could survive, you know, the next the next run when actually technology caught up with the distribution, of it. So I feel like being a franchisee of yours is like, hey. Look. These guys aren't gonna make mistakes. They're gonna roll things out when they know that there's demand
and Yeah. Figure out the economics because they have their own locations as well. So they're not gonna put something in unless they know it's gonna make money for them and make money for me. So I didn't know about you before, so it's awesome that we finally met. So thank you, Eric, from Swerve for introducing us.
And, you know, just in closing here, as you built out the franchisor, could you give us a little bit of insight into how you thought about what types of people you needed to support the franchisees and maybe just a, a heads up to people that wanna franchise their business. Like, you have to do it a certain way and you have to spend a certain amount of money on overhead or you're in a lot of trouble.
Yeah. Yeah. I I I think at the end of the day, like, you you need definitely someone that is gonna recruit, onboard, and train, the franchisees. You need support around, you know, when you do a site selection and building it out. Like, these, you know, new franchisees don't know how to do that, so you need someone that's actually hands on and and can assist and and, you know, really, help save them costs instead of making mistakes when you build out their locations. Marketing is a big one.
Right? Like, at the end of the day, if you don't provide they're buying into our brand, and you gotta help them bring that brand to life in new regions. And so marketing support is significantly, you know, important
on on supporting franchisees. And then operations, you know, they as much as you can, you know, develop a 300 page manual, at the end of the day, how do they execute and implement and and, apply what's in that manual day to day, and how can you be there and their support operationally so when they're running into snags or troubles or they have an employee leave and and, you know, is is impactful to the
business, how can you be there to support them during the tough times? So all of those things, everything from the front end to the back end, all the way from, you know, leading up to opening up the location to while they're operating, you need the support, you know, for the franchisees to ensure that they're successful. And to your point, Pete, if if the incentive is aligned, I e, if the royalties are there, then that means that
we only win when they win. And, you know, the last thing we wanna do is shut down a location. And so for for us, you know, not only is our incentive aligned, but, but at the same time, you know, we're there to support them, you know, all the way through. Awesome. Well, great to have you on Halo Talks. Feel free to use the acronym as much as you like. It's royalty free. And, love what you're doing. We should definitely meet. I'm out in California and and, love going up to Vancouver. I've been
there several times. And as you come into the US, please, you know, hit us up for, you know, relationships of where to to to go and who to talk to, because I think a lot of people are gonna resonate, you know, with this model. And, you know, congrats on methodically building a a real business. So good to meet you. Awesome. Thanks, Pete.