How to Add Small Group Training to a Large Group Gym

Semi-private training is one of the most talked about revenue plays in the fitness industry, but there’s rarely a clear roadmap for adding it to an already packed group training schedule.

In this episode of “Run a Profitable Gym,” John Franklin sits down with Jamie Warren, CEO of Iron Tribe Fitness, who took his gyms from nearly 100% group training revenue to a 50/50 split with small group—without blowing up his schedule or losing his culture in the process.

Jamie explains how he made the change: identifying which coaches and clients to beta test with, protecting the schedule with a “do no harm” approach, and using client demand to decide which class slots to convert.

He also shares real stats, including how average revenue per member nearly doubled and why net margins ended up roughly twice as high even with a similarly-sized member base.

Tune in to learn how to build a semi-private, small group training program that adds real value for clients and for your business.

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How much revenue does your gym generate per session? Measure your RPS against the healthy $200 benchmark and find out what to change if you’re not there yet: https://twobrain.co/4wv2VDk

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0:00 - Why Iron Tribe added semi-private

4:15 - Building the beta test with existing coaches

9:40 - The webinar launch and first 100 members

16:20 - Protecting the schedule during the transition

22:05 - The revenue and margin results

28:30 - Advice for gym owners on the fence

Transcript

John 0:03

There's been a lot of talk in our industry about semi-private training, and that is for good reason. On average, those members pay more, they stay longer, and it creates opportunities for your coaches. But there really isn't a great roadmap for adding that to an existing group training gym. And that's why a lot of gym owners see the opportunity, but they get stuck in the planning phase or they try and add it, but it's a half-hearted attempt and it doesn't stick. That's why today we're going to be sitting down with Jamie Warren, the CEO of Iron Tribe, who was successfully able to add semi-private to not one but eight locations and built that revenue stream up to about a third of his revenue. Iron Tribe facilities run in about a 3,000 square foot footprint, so it's very similar to CrossFit affiliates. Jamie figured out the exact order of operations to get this up and running without disrupting his group classes. I'm John Franklin. I'm the CEO of Two Brain Business. We're the world's largest gym mentorship company, working with over 3,500 gym owners to help them take home six figures and profit because yes, it is possible. This is going to be a tactical one. Jamie's going to be breaking down every step of the journey, what worked, what didn't, and how you can add semi-private training to your gym without disrupting what you've already built. So let's get into it. Jamie Warren, thanks for doing this today. Um the reason I wanted to talk to you is because you're one of the only people I know who've gone from the primary uh source of revenue in your gym being group training to semi-private. And you've done it not once, but you've done it across eight locations, and now you are trying to implement the same systems in the other 26, 26 total? 20, yeah.

SPEAKER_00 1:35

So it'd be yeah, 16. Okay, eight that I own and plus the other 16 franchises.

John 1:40

You're gonna implement it in another 16 gym locations. So let's give a little context. What made you want to add semi-private into your locations?

SPEAKER_00 1:49

Sure. And a little background, you know, at the time, so I was a franchisee for 13 years before taking uh over the helm of the CEO, you know, at Iron Tribe Fitness. And so when we implemented these things, it really was as a franchisee needing to, you know, rely on the franchise or at the time to give us those systems. So what really motivated us to do this was a few things. We were coming out of the pandemic, and this was simply a trend in the market, and we already knew that we had good relational equity with the clients that we serve. And so this was a way that we could help them at a higher level, uh, hopefully serve them longer, meet a market need, but also really increase the opportunity for our team so that their careers could be longer, more lucrative. And, you know, if we can help people get further along and spend longer time with us, then it was just all win-win-win.

John 2:36

And you had a fully booked schedule, right? Like how many classes a day or was the average uh Iron Tribe location doing?

SPEAKER_00 2:43

Yeah. So this was, you know, in 2021 is when we rolled this out. But yeah, I mean, a typical schedule would have been eight to ten classes, you know, you know, so it was it was full. And at the time, a lot of people don't know this. You know, Iron Tribe had had started with a group functional fitness class, but at the time, some gyms were still even running our HIT program. So for about five years, we had more, you know, less uh lesser skilled movements, you know, a little bit more cardio focused. So the addition of semi-private was really there wasn't enough room in the schedule, right? So we had to make a choice who are we going to serve? And sunsetting that program while we added semi-private was uh a huge orchestrated move. And so for context, how big is the average iron tribe location? So in the eight that I owned, I mean, when you talk about you know size of that, it's about 181 active paying members. I'm talking like actual square footage. Oh, God, sorry. Um so the the footprint is around 3,000 square feet on average. Some a little bit more, some a little bit less.

John 3:42

Okay, so it's not this massive space. And you do not run semi-private uh at the same time as your group classes, correct?

SPEAKER_00 3:49

Correct. One program is on the floor at one time. No split, you know, there's not a separate room, there's no curtain down the middle.

John 3:57

So it's similar size to you know a typical like CrossFit affiliate. And and when you started, it was a typically packed schedule. Right. And so we've talked to a lot of affiliates who like would love to do the CrossFit methodology with like less clients, higher ARM. Right. Uh, but where do you add it?

SPEAKER_00 4:16

Right, right. And you know, and just for for technicality, Iron Tribe started in 2010 as a CrossFit affiliate, de-affiliated in 2012, because the founder wanted to really build his own brand and different things and kind of serve a little bit different client. But we've been functional fitness, you know, group, you know, for uh for doing that. So so how do you do that?

John 4:34

Well, I want to be clear, you know, I'm not saying Iron Tribe is CrossFit. I want to I want to point out that the footprint is very similar and the class schedule is very similar. So so what's interesting about this is the problems you face were almost identical to that, you know, correct a large group-based gym where 90 plus percent of their revenue comes from group training face. Right.

SPEAKER_00 4:54

Yeah. So I mean the reasons why we wanted to do that were we knew that if we could serve clients longer, serve clients at a higher level, you know, kind of all those win-win-win things, it would really change the the whole face of the business. And, you know, on top of all of this, you had meta algorithms changing, you know, uh all the things about how we generate customers, you know, that all that was becoming more and more challenging and the market just becomes more saturated. So this was so much uh of a differentiation move for the brand, especially coming out of the pandemic where the whole world was turned upside down. And and we were, you know, as a brand, I we were a little bit late to the semi-private party, you know, it had been established, but once we really got it going, you know, it it was it was a pretty rapid, you know, transformation. You know, we could do that, you know, really within about a year to 18 months, you know, kind of fully get to where we are today.

John 5:44

So to be clear, you were fairly reliant on paid ads to fill the group programs for a while. Yes. And then as that became less and less effective, we needed we needed to figure out something else to you know keep the revenue the same or higher on a smaller amount of leads.

SPEAKER_00 6:00

Exactly. And so the whole offer of okay, does semi-private make sense? And who's that for, right? I mean, it's it's you think about who are the clients that we could serve that we had great relationships with that that really would need the service, you know, who are those who want to work on specific things? Who are those who really maybe want more of a specialized thing that's not just a GPP program and group fitness? Maybe they want to have some real specific things around hypertrophy. Maybe they're are training for a certain thing, more of a specialized modality, you know, that kind of thing. So it really opened it up. And because the relationship of client to coach was so strong, it was like, hey, we're gonna roll this out. We'd love for you to be our guinea pig, you know, beta test to try that out and really make sure that um they're happy with it. But it also meant, too, that who we were starting to hire had to change. Because the coach who could deliver a great group fitness class, you know, month, you know, day in, day out, you know, uh, struggled without a certified personal training background. And so, like who we needed to hire started to needing, you know, we had to level that up because the perfect coach to deliver all that is someone who has some personal training experience, but also want you know, doesn't want to have their whole day be one client at a time. But then you need enough of that personal training uh methodology, kind of philosophy when you're gonna approach approach this in a small group. And that like that was the huge difference. And to be clear, what you're offering is is you do five to one? We do five to one. So that's five uh athletes or clients in the session with one coach. And everyone on their own program. Correct. Now, here's the thing uh nuance, but it's it's it's helpful. In our footprint, we actually do have the room to actually do what's called a double track. So you might have five clients with one coach, and then another five clients on the other end of the gym with another coach. And so double tracking that actually operationally, we have the room to do that, and it's taken a while to kind of knock all those kinks out, but that's a very good experience for athletes, and they keep coming back.

John 7:59

I've heard of gym owners who are operating seven tracks at in one space at a given time. You got to have a big, big gym floor to do that. You should just pivot to group. Have you heard of group training? Wow. All right, so you got the 10 classes on on the schedule. That's a packed day. Right. So how how do you start? You know, how how if I want to, I'm sold, you've given me the opportunity. I want to hire ARM, I want to provide more opportunity and potentially get better coaches or different, you know. Right. What do I do if I there's no real estate on the schedule to add this? First principles, right?

SPEAKER_00 8:34

The owner has to make a real commitment of we're going to really do this. So when we've seen, you know, those who struggled really have never done that. So it starts there. Okay, are we really gonna do this? Do we really feel like there's uh all the good reasons to do it? You know, so owner commitment. The second thing is you have to build the product and it it's it's gonna iterate, okay? It's gonna beta, but you can't expect someone that has zero CPT background, there's not even a philosophy in your ethos in the DNA of the gym to even deliver this higher level of service. You just can't call it semi-private and slap a template you find on the internet and expect a client to stick around or to get good results. So, like that has been like, do we have the people, build the product? And then, you know, for a for a gym that's got an established group book of business, right? A full schedule. What we were taught to do at the time was, hey, let's find those clients, let's start to train them, even if it's an off times, right? And have them be your guinea pigs, your beta test. Show show them good results, like be able to do that, document all that, get all those testimonials and everything so that when you're ready to make that commitment, you've got the proof, you've got it all on video, it looks great, and you've got some really happy clients that have said, Hey, I've trusted this coach for group for years. Now I can trust this coach to take me to an even higher level of service, to even extend my results and extend my time here at the gym because I already love them and trust them. Now they can serve me this high level. And that was that was the magic when we made the commitment to do that and then did the beta test and then got really serious. Like, we're gonna launch this, you know. But like the those who struggled are just kind of it's half-hearted, you know.

John 10:16

So conceptually, I understand, but let's get a little more tactical. Sure. So the first thing you did was hire somebody, or did you use your existing team?

SPEAKER_00 10:26

We used our existing team and really went to those who had that personal training background. Understood. All you know, who really had kind of even had a heart for that. And the other thing too is anybody that's owned a group training concept for a while, you know, especially in your coaching team, it can almost become like Groundhog Day. I mean, it's this you're doing the same workout, you know. And so for the coach, this was a really exciting way to grow. So, I can use my degree, I can use my certs, I can use my brain and really help kind of solve a next level problem for these clients. So our team was really excited about it. So it's so the beta tests, like the starting one, were the ones that had the most experience and the natural leaning that way. But when we started to hire after that, it's like, okay, once we knew this had legs, okay, so now we're hiring a different. It's not just you've got some group, you need some barbell experience, you know, kind of that, but like you need to have a CPT, you need to have done this. And the longer we've done it now, we actually hire people who have semi-private experience. And so we can plug them into this really mature model and they're like, oh, this is great. I get to be all granular with some of these clients some of the day. And then I can go do, you know, kind of be the guy on stage or the gal on stage and have fun in a big group class, big energy, and then kind of go back to dialing it in with my semi-private clients.

John 11:36

So you found the you found the person on your squad who, you know, would be a good fit for that. Yeah. And then, you know, you're running 10 classes a day. Did you just pick five people with flexible schedules like, hey, Jamie, you look like you could work out at 11 a.m. on a Tuesday and and invite a can you try this thing for me?

SPEAKER_00 11:55

Right. No, it was I wish it was that easy, right? So it was a lot, a lot of iteration and individual conversations. And so that was the real challenge in integrating a semi-private into the schedule was you're invariably going to change schedules. And it's often like day by day, you know, and then having to make operational decisions, because it's funny, you might have a group class that had 15 people in it, and then maybe five of those people, you know, say, hey, we're going to do semi-private now, and they're kind of mourning people, right? So where do they go? And then with kind of the other just flowings of the gym, maybe that class comes, you know, and now it's only like five people in group. Well, if those prime people, and especially there's more who want that slot, we actually killed some classes on the schedule. And, you know, obviously athletes didn't like that, especially those who'd been there in the wild for a long time and weren't interested in our semi-private at the time. So there was a little bit of athlete attrition in this process. So for the beta test, did you kill classes right off the get? Not well, only when we what we tried to find was with that beta, could we find a place where it was convenient for those athletes? Once we knew that we were really going to make a go at this, we had to take a hard look at the schedule on a day-by-day basis and say, could this, does this slot need to stay group? Could it become semi-private? And so it was literally going down and doing that to try to do the least amount of harm, but serve the most amount of clients who were interested in this new level of service.

John 13:18

So step one was not uh removing anything. Yeah, again, do no harm, right? It was addition, it was in addition. So you've got an 11th.

SPEAKER_00 13:26

Yes, yeah. And so how did you get people into that beta test? So it literally was the one-on-one conversation. John, you've been here for years. Uh we we talk about these things in our assessments. You need this, you need that. What what if I could give you a custom program? What if I could do custom nutrition guidance for you? Does that sound interesting? Yeah, of course. Like, and so it was literally that. Like, and then we were we kind of did that on the house for the first few. And then really just to see like, does this have legs? Is this gonna work?

John 13:54

So, you know, if you were instructing a gym owner who wanted to try this, they got they got a packed schedule. Yeah, your first piece of advice, you find five people who you think would benefit from the service, and then a coach who had you know uh high touch background that could that that could deliver this properly. The next piece would be, you know, give it to them at free or discounted, but included to just kind of try it out at a at a dead class slot.

SPEAKER_00 14:19

Right. Or yeah, uh maybe and even just for a time, say we're gonna give this a you know, 10 week or a six-week, whatever your time frame is. Can you pilot this thing? Can you pilot this for me, you know, at that inconvenient time for you know for a time?

John 14:31

Okay, yeah. And then with that, if they're having a good time, they're getting results, uh, they're enjoying it, you then uh I guess you could solidify that class slot, and that's when you start to look at the other ones like, hey, what okay. And so how do we feel the second one?

SPEAKER_00 14:47

Right. Yeah. And so at some point, the gym owner is gonna have to look at the schedule and say, the demand for the semi-private is so good, we're gonna have to shift some things around. But again, we always just try to do incremental clicks one at a time. It's funny, um, you know, Dave Ramsey, the financial expert, always talks about um, I love his analogy. He said, when you change a culture in a company, or if you're changing operationally things like this, it's like riding with a bunch of people in a convertible car through the mountains, windy mountain roads. If you go around a curve too fast, people are going to fall out of the car and off the cliff. So, in a similar way, we tried to say, this is the culture of our gym, this is what our clients want. Let's just try to make it tolerable, right? Just one click at a time and have it be work and still work. And they, if they're displaced by a schedule change, could they find somewhere else? Could they go, you know, Tuesday, Tuesday, Thursday, Saturday instead of Monday, Wednesday, Friday? One day we could they go go 45 minutes earlier, always just really trying to say, how can we meet the most athlete needs and preferences? And you know, I started as an athlete. I didn't study exercise science. I didn't, I didn't set out to become a coach. So I'm always looking at things through the lens of the customer. And that's that's always my bias, just kind of who I am. And so that I think served well when we were given the model from our franchise award at the time. You know, I looked at it through that way. And so I think we, I think we did our team did a really good job of thinking through all those details because you know, there are people, want to serve them.

John 16:12

Well, let's keep let's keep building through it, right? So you got your first one, you did your test, it goes well. What's the next thing? Are you gonna try and add a second one in the dead time? Or when when do we start looking at the schedule and saying, hey, we might need to change some stuff here? This thing's got legs.

SPEAKER_00 16:26

Well, once we knew it had legs, then uh we knew that the larger.

John 16:31

Well, when did you know it had legs?

SPEAKER_00 16:32

That's uh yeah. Okay, so uh the franchise office at the time rolled this out like in February of 2021. We watched them. We tried to take notes. We always tried to say, like, okay, take what they do, and how could we, you know, make it better?

unknown 16:47

You know.

SPEAKER_00 16:47

So we took a lot of notes on all that, and then we did our beta group in Q2. So then I basically had a month to prepare, and we actually set a date, a webinar, live webinar at night, like eight o'clock at night. Jamie's going live in front of the Nashville, you know, franchises. And so we had had all the testimonials and everything, and it was basically, hey, here's the future of our business, and no one knew what we were talking about. I mean, a lot of people tuned in because they just didn't know what I was gonna say, you know. But it was like, hey, here's where the market's going. Um, you know, we feel that we could really roll this out, and so we're gonna sunset our hit program, we're gonna replace it with this. Here's why. It's good for the team, and here's the six people that we've already been doing this. So don't listen to us, just listen to them. And then we rolled the video and we had the three-minute slot and we said, hey, we're rolling this out August one. We have a hundred slots. Try this. We're gonna give you like this great founder's rate just to you know, give us a shot and trust it with us. And so we signed up a hundred people after that webinar. Um, and so it was like this full once we knew it had legs, it wasn't just okay, let's just try to add it incrementally. You know, we were like, we're going all in. And and that's what the franchise or had done. And so we just kind of iterated and did our own version of it, and it was equally successful.

John 18:08

Okay. So you did the test and you're like, I'm gonna, I'm gonna do this. Yeah. And so you did a webinar, your members attended, you explained the opportunity, you sunset a program. So how many slots on the schedule did you remove or replace?

SPEAKER_00 18:23

Roughly that was, and and we didn't do it all at once, and I think that was the key, right? Not too many people falling out of the convertible at once. So, you know, as as that demand grew up to 100 people, you know, we started maybe with one like one couple of classes, you know, on Tuesdays and Thursdays. And then once that grew, it was like, okay, well, then let's extend that out to Monday, Wednesday, Friday. And so with each change, we tried to say, how is this the least disruptive? What if we um move this popular class time up 15 minutes? Pull all the people in that class. Could you could you do this if it was 15 minutes earlier in your day? Does that work in your life? If eight out of 10 said yes, okay, well, let's just do that. A couple of naysayers, you know, they were upset, you know, and it's like, we just tried to help as many people as we could, but we made that. So we could slide another one in here. So it was literally this Tetris game on the schedule that wasn't, you know, done one once and done. It took months, you know. But basically over the next 12 months, you know, our our schedule transformed into kind of what it looks like today, where half of the class schedule is semi-private and then the other half is is groove. But now, not today, John, like at our busiest gyms, 13 classes on the schedule. I mean, not 13 slots, you know, and they're all they're all filled. So it is wall to wall helping people. 13 slots.

John 19:35

So 13 you're you're 45 minutes. 45 minutes yes.

SPEAKER_00 19:38

But you you do gaps, right? So it's like 13 hours of the yeah. Well, yeah. I mean, so I mean, we have a gap usually one to three at most gyms. You know, maybe there's like a 10 30 to 1115, you know. But I mean, at our busiest gym, the number one gym of the brand, I mean, there's maybe a 15-minute break, like two 15-minute breaks between 5 a.m. and noon. Okay. I was saying gaps in between classes, but you you stack sessions. We stack sessions, yeah. Okay, yeah, okay. So it's it's like, hey, 3215, great, we'll see you next time. Hey, 1115, let's warm up. Okay.

John 20:08

And so it sounds like it was just so would you market it as, hey, we have these two slots, who wants them, or who wants who wants semi-private, and they tell you the times and then you try and tetrace from that. Like, how did you go about building the slots, right? Because if a gym owner is like, okay, like it's easy enough to understand, hey, I get five people to try this out and do it at a dead time slot. Right, right.

SPEAKER_00 20:30

And like that, that's probably the most conservative way, you know, but we let the demand drive it. I mean, so once we had the hundred people, we didn't like approach it with okay, I mean, we we backwards engineered it. I mean, like, this is how Steve Jobs thought, this is how Elon thinks, okay. Have the demand of what your customer needs, like and build everything around that. You know, even if they don't know it, right? So it that's what we did. Those hundred people, what they needed influenced the first moves in the schedule.

John 20:59

So they raised their hand, they said, Hey, I want this, but you didn't say these are the slots we have available. Right. Okay. We just sold the program. You sold it without having slots on the schedule?

SPEAKER_00 21:09

Yes. And then okay. Then we figured it out. We we let the demand of the customer.

John 21:14

This is my Would you recommend doing this if you were to do it again?

SPEAKER_00 21:17

I mean, here's the thing. I mean, I I think that I I think we were so convinced that this was the right move to go, and our clients trusted us to do that. And so we knew that if we could work all those details out, I mean, we there was some pre-planning about what we might do, but we really let the demands of what our customers needed drive how we how you know how the operations did, versus this is the way we've always done it, and we're just gonna force something onto the market that it's good for us and try to do it that way. So it this kind of clues you into kind of how my brain works and you know how I generally approach business decision making anyway. It's not ready fire aim, but the first principle is hey, whatever that is, whatever that customer needs or Wants like let's try to engineer the life and the schedule and the product and everything to what they want is what's gonna make them happy.

John 22:06

Okay. So I think I understand it now. I'm gonna tell it back to you. Let me know that if I got this. You do the webinar, we're doing this program, we're gonna give you a good rate. Do you want to buy it? 100 people say yes. And so now you got a hundred customers, but you don't know when you're gonna offer these class slots.

SPEAKER_00 22:26

Okay, that's not that's not completely true. Okay. We had a few, we had a few placehold in the schedule. Thank you for clarifying. Few placeholders in the schedule are when we were gonna be able to deliver this. Okay. So we knew, okay, but that wasn't that wasn't the leading information in the pitch. We were selling the destination, not necessarily the logistics of when class was going to be.

John 22:47

But when they bought, they knew, hey, I could do one of these classes at this class slot.

SPEAKER_00 22:50

We knew, yeah. We knew that we we have a few of those kind of placeholders in there, but then all of where the final schedule is today was all like client driven without without you know upsetting the rest of the gym.

John 23:01

But it was after these like the initial slots and the launch were filled up. And then people asked and then you added, and then people asked and then you added.

SPEAKER_00 23:08

Yeah, we we we had the confidence when we had the demand. I mean, you know, the demand was this great problem to solve.

John 23:14

I'm gonna go out on a limb here and guess that you didn't become a gym owner because you love doing math problems all day. And we're about to do some math problems. We put together a simple calculator that'll help you run through these exercises. You can get it by scanning the QR code here or clicking the link below so you don't have to do this alone. And so with the pitch, how many slots did you have available? 100.

SPEAKER_00 23:36

Oh, so I'm sorry. It's like a schedule. Class slots. Yeah, we so we had um so you know we were selling a hundred people generally at a three times a week frequency. Okay.

John 23:47

A hundred people at a three times a week frequency, five per class slot. Right. Right. So five, that would be twenty class slots three times a week. Six and change? Yeah. So you had to get rid of you had to get rid of six classes. We had to get create, you know, six.

SPEAKER_00 24:05

So we didn't that was that wasn't all getting rid of. Yeah, it wouldn't have been six classes. You had to create six slots. Slots, right. So the slots, so and that was a combination of let's move this up a little bit to create a 45-minute hold where we could do it. Some of it was let's, you know, enough of these folks have some interest and they've got some flexibility of this like lesser popular time. And then kind of the other part was we got to kill a group class to to do this. Okay.

John 24:28

And so that those six slots, that's per week, right? Correct. Okay. So it would be the equivalent of like killing one group class time. Yeah, but you know the course of a six day, yeah, six days. But you tetra you you had a couple slots here, a couple slots there. It wasn't just like I'm gonna get rid of my 5 p.m. class, and that's probably No, yeah.

SPEAKER_00 24:47

Again, do no harm. Yeah, first principle, do no harm.

John 24:49

It would be like we got, you know, 4 30 on Tuesday, 4 30 on Thursday, 9 30 on Tuesday, 9 30 on Thursday, like those are like basically you would just take pieces away rather than like nuking a whole class time. Keep people inside the convertible driving through the mountains. Okay. So if you were that person who could only work out at that class time, like it's like, okay, you can't come on Tuesday and Thursday anymore, but you can come Monday, Wednesday, Friday. Right. And since you committed to this, like obviously you had pushback. So did you you you signed up a hundred, congratulations, fantastic. How many did you lose? Because I'm sure this did not I'm sure everyone was like, oh, this new service that costs money. Like yeah, I I yeah great job, Jamie.

SPEAKER_00 25:30

Like you definitely lost some people, right? Yeah. So we knew that, you know, from a revenue, we wanted to be able to help as many people as we could. But you know, if you if you kind of look at the natural attrition of what was there, you know, it was and we'd run about a 3%, you know, monthly attrition, you know, in the R Job model. So yeah, I mean, at one point, I mean it it doubled, you know, it might have you know shot up to to six for a time. You can kind of look at the historical and some of those things. As you're making the change. As you're making the change, you know. So because you know, there's a little bit of a domino effect, right? We were we were sunsetting a hit program at the same time. Some people just wanted to do HIT. They weren't interested in in the new, you know, semi-product at all, you know. So there's some of that going. Naturally, there's some team attrition too. Hey, I'm just uh I don't want to do group, I don't want to do all this other stuff, or I don't want to, you know, so there's some of that as well. And you know, we know that team attrition leads to client attrition, you know, some with some of that too. So again, I knew there was some pain that I was gonna have to walk through to get to the better reality, you know, uh at the end of the road.

John 26:29

Okay, that's important because you were making it sound very easy, and I know for a fact it is not.

SPEAKER_00 26:33

No, no, I mean no, it was I I I knew it was going to be it was the short-term pain to get to the, and we can talk about those numbers and why it was worth it, you know, in that. But so again, we will. Yeah. Well, I think the other thing too is like, you know, anybody listening to this, you really have to kind of clearly understand where you are as a gym and what you're willing, kind of kind of how much short-term pain you're willing to do to get to the destination that you want to go. And that's gonna look different for anybody, you know. And so maybe the first move is just do the beta test and put it in an off slot, you know, and then have it grow from there organically, right? We just chose to go very aggressive once we've proved proven that concept and we said we're gonna, we're just gonna figure it out.

John 27:14

And yeah, I'm gonna keep grilling you on the process, but we're gonna go back and highlight well, we're gonna paint the destination now. We're gonna sell the vacation before we go into the in into the paint. So how much of your revenue now comes from semi-private training?

SPEAKER_00 27:31

Yeah. So if you take out non-training revenue, like you know, point of sale things, your merchandise, protein, that kind of thing, you know, and you just look at training revenue, almost half comes from our semi-private program. Okay.

John 27:42

And so that has so it's 50-50. And is it something where you know your group training revenue shrunk, or was that just like every dollar of semi-private was incremental?

SPEAKER_00 27:55

So it didn't, it wasn't all incremental. You know, some folks would leave. So natural attrition, you know, if we replaced a group member with a new semi-private member, that's kind of double the revenue, you know, just price point-wise. But uh it wasn't just that linear, or it was really kind of muddy in that whole process. So, but we knew some folks didn't want to have that, and so they would leave, you know, kind of move on to other things because they just wanted to, you know, especially the more price-sensitive, you know, clients. There was also too kind of this un unspoken thing like, oh, hey, well, this is what iron job's already always been. You've always been this large group thing, this is new, uh, you know, and so a few athletes felt like a little bit their gym was changing, and so there was some of that. So it wasn't a it wasn't a um a true one-for-one, like this was all incremental. You know, you still had natural attrition going on, and so it it it dipped a little bit as we were building the machine.

John 28:48

But I'm talking if we're looking at you know, 2021, 90% of your revenue is group training, or like I'm just assuming like the overwhelming majority. Yes. And then we go to today, it's 50-50. But is the total top line number how much did that increase by adding this program? See, interestingly enough, it didn't.

unknown 29:06

Okay.

SPEAKER_00 29:07

We actually have um it's like flat or even just a little bit dipped from where we were at the height of all the group, but we're far more profitable.

John 29:16

Okay. So it's like if this gym was doing $800,000 a year and 2021 is doing $800,000 a year now, but your margins are way better.

SPEAKER_00 29:26

Exactly. It's kind of like weighing the same on the in-body. If the body comp is different, you can weigh the same, but look and feel completely different.

John 29:32

And then what does it mean from a, you know, you don't have to give us the exact numbers, but maybe percentage-wise, like profit percentage from the group only versus the 50-50 split now.

SPEAKER_00 29:44

I mean, yeah. I mean, I'll I'll just say this. I mean, it it's basically double the net margin for the gym at at maturity, where we are now versus where we were when we rolled this out. You know, you look at an apples apples comparison, the gym is twice as profitable as it was then with either the same amount of members or slightly less.

John 30:01

So if you had a gym owner doing 500,000 with 100,000 in profit, what you were saying is five years down the road it would be 500,000 with 200,000 in profit. We won't say those are the exact numbers, but like we can't claim that.

SPEAKER_00 30:14

But even even if it's just like a little bit of a bump, like it's a 550, you know. But if if the profit is double, if if you if you were at you can go to five an additional 50,000 top line, but double the bottom line, like I want to figure out how I can do that. Okay. That is that is worth the pain.

John 30:28

So it isn't something where it's gonna, you know, it's gonna your revenue is gonna explode, you're just gonna wake up five years down the road and you're gonna be a lot more profitable than you were uh like you were well compensated for that pain, is what I'm hearing. Absolutely.

SPEAKER_00 30:40

I feel like it was worth it. And and also, too, it just you know, we serve semi-private you know, clients longer. You mean they just there's it's it's an you're unlocking another phase of the relationship. And so not only is the arm uh higher, but the leg extends. And when the leg extends and the arm is higher, then the LTV, you know, gets even better. And so it's just and which creates the margin. So you can bonus your coaches more, like they want to stay, they stay longer, you know. So it just it's a win-win-win for everybody. Team, the business, and the client.

John 31:11

And it sounds like you like throughout the process, you churned out maybe some of the more challenging clients and then replaced them with really good ones or ascended your best ones into a service that you could provide like more high touch. Absolutely. And the same thing happened with our team. Really? Same thing happened with our team.

SPEAKER_00 31:27

Okay, so then it just basically elevated the entire business. Yeah, yeah, it really, really did. I mean, it was it was one of the best moves that the founder of our brand made. You know, I I can look back over the last 10 years of being a franchisee and it in in his wisdom, you know, to do all of that. And so it's great.

John 31:43

So then why don't we go back to the pain then? So you you make this transition, it's very hard. You see, yeah, you know, we're not it's five years ago. I don't remember what I had for breakfast today, but you you're saying at the hype, maybe churn doubled. And so revenues actually going down, member counts actually going down. How long did it take to uh like kind of get out of the pain cave and be like, oh, this is working? Yeah.

SPEAKER_00 32:09

About 12 months. Yeah.

John 32:11

So it's a while, it's a while.

SPEAKER_00 32:13

It's a while, yeah. And and not only that, John, but like the the product, we we actually had to kind of QA the product a little bit because the first, you know, the first hundred people, you know, we had so like not all those renewed, right? And so it was like, why isn't this thing growing? So we actually had to get in there and say, well, are we really delivering this product? Is it differentiated enough from group? Are we really delivering on what we've sold and promised? You know, so we had to, we had to really kind of get better about that. And that was part of some of the people moves, you know. It was, hey, if you know, you can't just phone this in. This is semi-private personal training. I mean, this is custom programming. It has to be scalable and you got to be able to take care of everyone, uh, but also have it be custom enough to where it's exactly what they want and give them a good experience. So we learned some hard lessons there too.

John 32:57

Now, in terms of selling it, if I come to an iron tribe location, I want to buy a membership, are you uh how how do you identify which program is right for me? And do you do you do both? Like do you have uh athletes who are doing some semi-in, some group? We do, yeah.

SPEAKER_00 33:12

So, you know, that's we call that hybrid, you know, where you maybe you want to do group uh three days a week and then you add two days of semi-private on top of that, you know. So a lot of people do that, you know, too. But you know, now I mean it's so we're sitting down. I mean, this what people are buying with our tribe is coaching. They want, we're not an access gym, you know, we're not single modality, like you want to be coached and do that in a community, and over a long period of time, we're we're a great fit. So that's what they're signing up for. So it's a very much a prescriptive sale. And what do you need? And what are you trying to do? And how long has it not worked? And you know, what's that worth it to you? And all those things. And so generally, recommending semi private usually is is the prescription, you know, that fits for a lot of people. Now, if someone, you know, has a lot of group experience and they kind of know about semi-private and they don't want to do that, then they go straight into group. But even folks that are new, maybe they're in a new phase, you know, they're coming off of an injury, they're coming off a couch. Semiprivate is a great way to even just spend the first month learning the movements, making sure we've got good, you know, mobility and flexibility and good movement patterns and all that. Do correctors on any of those things. But then if they're ready to go to group, they can. But a lot of people try that, intending to start with group and stay in semi-private because they like the smaller setting. It's less intimidating. They like having you know slower, a little bit slower paced, you know, instead of a frenetic group class that's really high energy.

John 34:32

And so it just allows you to capture more at sale, right? You get to help people, but you're also uh you can do more with less leads. Right. Right. Like what what has happened from a lead stand? You know, I I remember when I was uh running ads back in the golden days, right? You know, I could get a hundred leads for maybe two hundred dollars. And those days are are long gone. Yeah. And so, you know, in terms of like leads, are you just is is the player just able to do more with less?

SPEAKER_00 35:02

Yeah, you can. And the other thing too is, you know, we we really kind of went from a hundred, you know, up to about, you know, 250 or 300, really uh largely through referral and through paid ads. But that was 2022. That was the year after we kind of did that, you know. So, so now, you know, 2026, a little bit harder to generate. You know, it's just hard, you can still do it, but you really have to run all four funnels.

John 35:23

Yeah.

SPEAKER_00 35:24

Referrals, content, social, and paid ads, you know, to really have all those compound on each other. So, so generally, I mean, you you still have to have a great product for people to refer. But if you do have a lead that comes in and we've targeted the right, you know, we're sending the right signal, right, to who who we really want. And and we feel that we can serve both. And, you know, when folks are kind of done with group, we have a place for them to go. So they can they can actually transcend programs and stay with Iron Tribe a long, long time. I mean, our our leg is, you know, and in the eighth that I own is over 56 months. I mean, it's really long. And some of that is great loyal group members that have been in our gyms for a long, long time. But the other thing that kind of makes that good is is the amount of semi-private we have. And what did it do to your arm? So think low 200s, you know, maybe 230. I mean, you know, some of the best gyms, 250. Well, now, you know, the the arm kind of the recent stats on the eight that I own is like close to $400. I think $383, you know, so a significant jump.

John 36:23

So almost doubling ARM on a similar size member base. Right. That's wild. Yes. Okay. So that on a smaller member, did the member base get smaller?

SPEAKER_00 36:33

So yeah, either either either the same amount, you know, if you look at our number one gym, they had about 300 members, okay. They have a better top line and a much healthier bottom line now with 235 members than they did at 300. Got it. And that math was so compelling. And so we just really counted the cost and said, hey, if we're gonna do this, there's gonna be the short-term pain. Are we willing to deal with short-term attrition, maybe some team turnover and that kind of thing to get to this reality? And so four years later now, I mean, no regrets, 100%. But yeah, it was painful. But I'm in it for the long game, and we wanted to be able to the the operating principle was how can we continue to serve who we have and serve who we want to serve longer and have that competitive moat around what we do? And it was making those, you know, it was a lot of scary decisions at the time, you know, killing what was a very popular HIT program and having people leave like having entire classes of gyms saying, like, I'm just gonna go to another hit, you know, boot camp because I don't want to go back to our group class, I don't want to touch a barbell again, you know, you know, and so that was hard. Um, but I feel it was it was good leadership, you know, from the brand at the time to say this is who we're gonna serve and why. If you're um your gyms never did personal training, right? So we did have an experiment back in 2017 where we tried one-on-one and we did that for a select group of clients, um, select gyms, never at scale.

John 37:56

If you were advising a gym owner who has like, you know, uh a very large group program and maybe some one-off eat personal training and wants to try this, would you advise getting rid of personal training altogether? Or would you advise um, you know, adding a third service in addition? Right.

SPEAKER_00 38:14

Well, the philosophical answer is, you know, it's up to that gym owner with what they want to do. What do they want to do for their life? What are their goals? I mean, kind of all those things. If that is kind of handled, right, and they want to if their goal is and ambition is to kind of do more like what the Iron Tribe model is, then I would my first thing would be to go to these one-on-one clients and really kind of understand like why they value that, what about the experience, and could you deliver that and have them still be happy, satisfied, and getting good results in groups? And I would probably try to take all my one-on-ones and see if you could transition that and maybe you do it a little bit at a time. Maybe you go one to two and then two to three, and see if you could work up to a four to six, you know, client ratio and still have happy clients and doing that. And I think if you can pull that off and your clients want that, then I think you've got, you know, some room to try to add semi-private, you know, to do that. Um, I would never want to, you know, unless, unless a business owner is is dedicated to kind of go through the short-term pain and rip the band-aid off and say, hey, as of X date, we're doing away with this program, you know. But we've always tried to just say, hey, how can we help as many people without moving their cheese too much?

John 39:22

But isn't that exactly what you did?

SPEAKER_00 39:24

Yes, but I think we did it, uh, we did it so incrementally um that we minimized attrition, we minimized the business, you know, things to the business, we the business um, the downside to the business, and we were prepared to manage that, but we didn't lose a third of the gym in the process. We didn't lose half of our clients in the process. You know, there wasn't an exodus from our gyms because we did it slowly and we we constantly had customer feedback loops about what they liked about it, you know. And that's not really a thing I've I've talked a lot about, but we really never was one-way communication. It was always hearing what was valuable about this to you, what can we do? And so how it looks today is a hundred points, you know, different than kind of what it was on paper.

John 40:06

So what I'm hearing is if you're a gym owner, you need to mentally commit to doing it and emotionally commit to it. This is this is the plan. Yes. I am going to create this much of my revenue from semi-private, and I'm gonna give myself a year to do it. Yeah, right. So you have to like that is when you say you have to be fully committed. That is what you mean. Count the cost. And then in terms of once you have that commitment in terms of implementation, you're saying just don't go like boil the frog, is what I'm hearing. Yes. With the clear first step being just get one group together, get some good results, right, and turn it into two, then turn it into three, and then you know, you can make some decisions based off of that because now you actually have some momentum, some case studies, and and you validated the demand of this model.

SPEAKER_00 40:51

Especially for a single unit owner, right? I mean, I knew if we were going to do this, you know, I had four gyms, actually five gyms at the time, right? So I knew that if we pulled that off, the leverage that we would have from that move would really be we I'd probably speed up the the the time to where it actually showed up on our PL. And so that was the that was the risk I took with doing it the way that I did it.

John 41:10

So we talked about how you have eight gyms and you're sitting pretty, you know, they're they're successful, they're doing well. There are another 16 within the Iron Tribe franchise, and it sounds like they're at varying phases of developing this program and varying phases of buy-in. Right. To the people um who own franchises who are maybe you know dragging their heels or or don't see the vision, how do you talk to them, right? How would you address a gym owner who you know maybe understands the opportunity but is sitting on the fence?

SPEAKER_00 41:43

Yeah. Well, I think that, you know, one, we have to take owner responsibility, right? And and I think that's just kind of business 101. I mean, is to have the vision and you know, you you are what your gym tolerates and what your level of expectations and all that. So, you know, like run your business, you know, make make the hard decisions, be a leader and and chart for where you need to go. So I I think the second thing is don't go it alone. And I tell you know, everybody in the R Tribe brand, I mean, like, tribe is in our name for a reason, right? We are out there together and like so have mentors and you know, be in tinker and you know, get in rooms with people, you know, that are already figuring these things out that are gonna sharpen you and to help help you think through the decisions and to be able to do that. But I think you know, for for those who are even thinking about this, it's like there's always going to be sprints and seasons, you know, as as a business owner and in the gym business where there's things that we can control and things that we can't. So, you know, change is always gonna be constant, and one of our core values is that we embrace change, and that is never gonna go away. So I think you know, develop the internal, emotional, and mental muscles to be don't fight that, like be agile with that. But take just take the first step. If you if you have you know committed to a course, if you know that, hey, if our gym just had these metrics, if we if this was our reality, then and you've counted the cost and you're ready to do it, then surround yourself with people who are gonna hold your feet to the fire when it gets tough, because it will, but also who are gonna celebrate you at the mountain when you've done this, right? I mean that that's the whole thing. I mean, like we do this to be in relationship with each other. That's what gems are for, is to cure loneliness and help be the brightest part in people's day. And all of these tactical decisions to like improve the reality of arm and leg and all those metrics is just so that you can do that for more people. But as owners, we have to also have surround ourselves with those who are gonna encourage us to do it. So I think that's my word, like take you know, count the cost, even if it's a if you want to do this, dip your toe. At least try try this, you know, have have a good college try effort to try to really get it going. And if you have that beta group and you can do it, then take the next step to change your reality because uh when you do that, it there's no reason why as gym owners we shouldn't be able to have what we do and the people that we help, you know, be the way that that ultimately that that gets us what we need. So I would end with this if you've studied any sales, you know, content over the last 50 years, you know the name Zig Ziggler. And Zig is famous for saying, you'll get everything that you want out of life if you can just help enough other people get what they want. And I think if that's our guiding principle as gym owners, as we make decisions around what we're gonna offer and who we're gonna serve, then everybody's gonna be fine.

John 44:35

Jamie, thank you so much. This is gonna encourage a bunch of people. Um, you had the courage to make this transition go through that pain because you were able to see someone else who had who had done it. And one of the reasons that I felt so strongly about bringing you here to the summit and platforming you is so you can be that example for the next generation of gym. So thank you. Thank you. It's been a great blessed.