Retro Fitness Franchise Owner Mike Marinaccio Shares His Enthusiasm on The Joe Piscopo Show

Retro Fitness Franchise Owner Mike Marinaccio Shares His Enthusiasm on The Joe Piscopo Show

Watch Retro Fitness Franchise Owner Michael Marinaccio discuss:

  • The value and variety Retro Fitness offers
  • The diversity of members and how they inspire each other
  • How and why a Wall Street guy got into the gym industry

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Franchisee Warren DeStefano Tells AM-970 Why He Chose Retro Fitness

Franchisee Warren DeStefano Tells AM-970 Why He Chose Retro Fitness

Watch Retro Fitness Franchise Owner Warren DeStefano discuss:

  • How the former pressroom operator re-invented himself as a Retro Fitness owner
  • The process he used to research the brand
  • What sets Retro apart from its biggest competitor
  • His amazement at the impact his business has on people’s lives

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Retro Fitness Franchise Owner Stacy McCormack talks fitness with Joe Piscopo

Retro Fitness Franchise Owner Stacy McCormack talks fitness with Joe Piscopo

Stacy McCormack partnered with comedian and radio personality Joe Piscopo on a Retro Fitness in Flemington, New Jersey. Watch the pair discuss:

  • The variety of equipment and classes at Retro Fitness
  • Watching all types of members — older, younger, men and women — “get jacked”
  • Gift-giving etiquette for Valentine’s Day.

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The eBook includes details about financial performance, an analysis of the fitness industry and its competitive landscape, and how Retro Fitness is positioning franchisees for growth. One of our team members will be in touch to answer your questions.

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Restaurant owners eye new franchise opportunities in fitness amid labor challenges

Two young women use a touchscreen ot order from the menu at a fast food restaurant.

Touchscreen kiosks are one of several ways restaurant owners are trying to control labor expenses.

After 14 years building a multi-brand restaurant empire, Trey Jasenski is branching out.

He owns nearly two dozen Subway locations as well as multiple 16 Handles yogurt stores and Auntie Anne’s pretzel shops throughout the Albany, New York area. But a few years ago, he started to invest in gyms.

The reason was simple he said: math.

“In New York, the minimum wage is going up to $15 an hour, and that’s a bit of a shot for us,” he said. “In general, it’s not nice having to worry so much about your margins.”

Jasenski opened his first Retro Fitness location in 2016, his second in 2019 and is looking to expand further. Startup costs are higher than his small quick service restaurant outlets, he says, but once the equipment is purchased, variable expenses are much lower.

“At my restaurants, I have to staff up for the lunch rush so we can sell as much as possible in a narrow timeframe. I have to hire and train and pay all those extra workers, and then I have to hope that the weather’s not bad enough to keep my customers away,” he says. “There are a lot of ways for your margins to get pinched.”

By contrast, membership dues mean the gym provides predictable income. Without as many variable costs, as the membership rolls grow gyms can produce much higher EBITDA (earnings before interest, tax, depreciation and amortization) than the 15% typical for restaurant franchises.

A high-growth industry

Two men and a woman lift kettle bells in a Retro Fitness gym. The gym industry has enjoyed consistent growth — even during recessions. From 2008 to 2012, during the worst of the Great Recession, gym membership in the U.S. increased from 45.6 million to 52.2 million, according to the International Health, Racquet and Sportsclub Association (IHRSA). Revenue reached $32.3 billion in 2018, according to the IHRSA, and is expected to grow another 20% over the next five years.

Demographic trends also favor continued growth. According to the Physical Activity Council, nearly 64% of millennials and 71% of Gen Zers are regularly involved in high calorie-burning activities. That compares to 41.6% of baby boomers.

Retro Fitness owner Rhandi LoPiccolo

Rhandi LoPiccolo

Less worry, more time

Rhandi LoPiccolo spent 25 years in the restaurant industry. At one point, she owned a full-service restaurant plus four bagel shops, but she grew tired of working 70 to 80 hours a week and wanted to spend more time with her teenagers. She sold her businesses and took a job at a bank while waiting for her next opportunity. A bank customer, David Vargas, evolved into a new business partner. As they explored opportunities, they discovered Retro Fitness.

“We started looking at numbers from a few different Retros in the area, and it seemed almost too good to be true,” she said. “We were looking at the P&Ls and member counts, and I thought, ‘Wow, that is a good amount of money to make.’ And these were almost absentee ownership models.”

She loves that she no longer has to worry about food waste, mistakes on orders, food being sent back, refrigeration going out, whether snow will keep customers away, and whether the tomatoes she bought last week for $12 are going to cost $75 this week because of a swing in commodity prices.

LoPiccolo says the fundamentals of the two industries are the same: keeping everything clean, providing friendly greetings and caring about the customer experience. Hiring great people is still essential — but it’s easier to hire and keep employees in an environment where customers are happy, and where you can see the positive impact you are having on customers’ lives.

“I love it,” she says. “When I owned my restaurants and people found out what I did, they were mildly curious, but when they find out you own a gym, they perk up. It’s something that gets people excited.”

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Fitness franchises stepping in to generate foot traffic at retail centers

Commercial landlords are increasingly seeking out fitness clubs as part of their tenant mix, according to the International Council of Shopping Centers (ICSC).

The ICSC took a close look at fitness clubs and their growing impact on retail centers in its report “The Dawn of the Age of Omni-Fitness.”

Exterior of a Retro Fitness location. The gyms are typically 15,000 to 17,000 square feet.

According to the ICSC, retail shopping center operators have been attracted by:

  • The industry’s strong growth ($33.4 billion in 2018, according to the International Health, Racquet and Sportsclub Association).
  • The ability of larger gyms to generate foot traffic.
  • The opportunity to lease 15,000-square-foot and larger spaces to a single tenant.

Fitness clubs are also prized for their ability to deliver unique customer experiences that cannot easily be replicated online, The Wall Street Journal recently reported. The influx of health-and-wellness-driven consumers also attracts nearby tenants that provide healthy foods and athleisure wear.

With online competition forcing the closure of many traditional retailers, the ICSC report notes that “fitness centers, when carefully leased, can function in much the same way that former anchors once did — i.e., as locations that draw a consistently high volume of people.”

It’s nice to be sought after

Trey Jasenski has a lot of experience opening new retail locations. He owns 23 Subway locations, as well as several locations of Auntie Anne’s Pretzels and 16 Handles frozen yogurt shops. He has also worked alongside his father, Larry Jasenski, an area developer who has overseen the growth and development of hundreds of Subway franchises.

Trey Jasenski opened his first Retro Fitness gym in 2016 in order to diversify his business holdings and tap into the industry’s growth, and the profit potential and steady cash flow of a membership-driven business model.

An additional benefit: He says he’s been in a much stronger position when negotiating for prime locations. He opened his second Retro Fitness last year.

“When good space comes available, it’s a lot harder for people to compete against you for it,” he says.

“With 1,500- to 2,000-square-foot spaces, almost anybody can move in there. There is a ton of competition from fast-casual restaurants, nail salons, everybody,” Jasenski says. “20,000 square feet is a lot harder to lease out unless you’re willing to subdivide it, but then you have to deal with tenant turnover and collecting rent from 10 different people. So if you can fill that space with a single tenant — especially one with a strong track record and the ability to bring extra people consistently to your shopping center, that’s very attractive.”

New challenges on the horizon

A woman lifts weights on a bench press.

Of course, there are plenty of fitness concepts that are eager to occupy those 1,500-square-foot spaces, and they’ve been transforming the look of American retail.

“A visit to an upscale suburban mall or a city shopping district used to be marked by stops at Gap, Sharper Image and Barnes & Noble, ending in a pile of shopping bags,” New York Times reporter Katherine Rosman wrote in June. “Now it’s about taking a $36 Pilates class, maybe followed by a $36 indoor cycling session if you’re really committed, then hitting the organic market to slam a $10 coconut water before making a quick stop for $40 cryotherapy.”

The businesses often form health-and-wellness lifestyle clusters to attract enthusiasts eager to look and feel their best. The fitness industry’s success has been driven by social and demographic changes. America’s obesity epidemic has driven a greater commitment toward health and wellness — especially among people under the age of 40. According to the Physical Activity Council, nearly 64% of millennials and 71% of Gen Zers are regularly involved in high calorie-burning activities. That compares to 41.6% of baby boomers.

The industry’s growth has been driven largely by two categories of business: high value-low price (HVLP) gyms like Planet Fitness and Retro Fitness, and smaller boutique exercise clubs like Orangetheory, Pure Barre, Club Pilates, and 9Round.

HVLP clubs typically require 15,000 to 20,000 square feet and function as 24-hour gyms, with access to a lot of workout equipment as well as amenities.

Boutique clubs typically focus on one particular type of exercise — such as cycling, yoga, or high-intensity interval training (HIIT). Customers work out in a classroom environment and pay for individual classes or the right to attend a certain number of classes per month. When class is over, they clear out to make room for the next wave of customers.

Boutique customers currently outspend gym members — $66 a month vs $35 a month, according to a 2018 report by Piper Jaffray. But the same report says “53% of boutique members note they would leave their boutique if a similar class were offered at a gym for a lower price.”

Kristen Geil, editor-in-chief of millennial-focused health and wellness media company ASweatLife, recently told CNBC she thinks boutiques will be hit hardest when the next recession arrives because of the price premium they charge.

“Consumers are going to be dropping (higher priced boutiques) from their budget. It’s the easiest thing to cut, but gyms will try to up their experience to make people stay with the trainers they know and love,” she added.

Retro Fitness CEO Andrew Alfano said the company has upped its game to compete for boutique customers.

“Smart gyms owners will offer group fitness classes as part of their membership models,” says Alfano. “There’s no reason a person should need to go to three different clubs just because they want to go to spin, or yoga, or HIIT with their friends.”

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How my Internship Led Me to Become Managing Partner

How my Internship Led Me to Become Managing Partner

Scott Gardner Shares Importance of Community Relations and Member Engagement

You went to school in Delaware for fitness management and exercise science. What is it about fitness that drew you in to pursue it long-term?

I always considered myself a healthy kid but in college, my health took a turn. I was playing Division I football and found out I had a digestive disease and had to stop playing. I saw how quickly a healthy person’s life could change after surgery or an unexpected diagnosis. My stomach surgery had me in the hospital for a month. It took a long time to come back from that downtime. I know how much the gym can have an impact on your life and getting someone back to feeling like themselves after a major life event.

At Retro Fitness, hearing the countless testimonials and stories from the people you help in the gym is what keeps me going. I genuinely like seeing people prioritize the gym, especially those in training because I know the difference it will have on their life.

What attracted you to work at Retro Fitness?

Finishing my degree, I needed a 300-hour internship as my final semester project. My sister was a member at the Delaware Retro Fitness and got me the application. I was doing everything from working the front desk, making smoothies, conducting gym tours, to handling customer service and sales. From there, I worked within a variety of Retro Fitness locations the franchisee owned until I worked my way up to manager. Then, I relocated here to Pennsylvania and helped open two more Retro Fitness locations in this area. I am currently the General Manager and Managing Partner for the Retro Fitness in Kenhorst, PA..

What kept my interest was the brand’s evolution and ability to keep up with consumer demands. The gym I started at in 2009 was one of the legacy gyms. When I first started, it was all about personal training and the $19 membership. Retro Fitness today is more advanced and has multiple workout experiences to cater to every fitness need at every price point. We have something for everyone, from our weight lifters to our 90-year-old women in our Silver Sneaker Senior class that meet three days a week, and everyone else in between.

The gym has a comfortable, friendly environment with a wide range of members from ages 10 to 90 and a healthy mix of both male and female. There is no need to harp on being ‘judgement free,’ as some other companies do; employees just treat people right and our members know and learn it for themselves.

How was it introducing one of the first OST (One, Strong, Team) locations in Pennsylvania?

The Retro Fitness in Kenhorst is the only Retro location within an hour’s drive. While the gym was one of the first to introduce the OST look and offerings, there was a bit of an adjustment needed as brand awareness was less dominate here than the other Retro Fitness locations I was used to. However, we opened in August 2016 and embrace the fact we were the only Retro Fitness in the county. We had to market well, and corporate helped tremendously with billboards and making sure people knew who we were and what we were about. It got easier after we built up our membership base. We have a great reputation as the community-focused gym.

I am at events every single weekend, including 5Ks, homecomings, tailgates and more. Our reputation is growing and people are talking about us. We make up for our lack of brand presence by being active in the community.

What tools does Retro Fitness have to keep members engaged?

Our MYZONE heart rate monitoring technology, which displays real time heart rates, calories and effort data is a great motivator for our members. This technology gamifies the workout experience, encouraging members to perform to the best of their abilities and push themselves to new limits. It also creates a social platform through the app. People are eager to share their results and it is free advertisement for the gym every time they do. It is also a retention tool because other workout facilities don’t offer the heart rate monitors.
We also use the InBody composition-scanning machine to track more long-term progress, especially for training. When members are investing in small-group training, they want to know what they are getting out of it—their ROI. With monthly follow-ups, we can show our members how far they have come and remind them they are reaching their goals. Whether it is gaining muscle or losing body weight, whatever their goal is, our technology allows us to monitor results and leverage the impact our training programs have on the body. At Retro Fitness, we have confidence our trainers will deliver results that have people staying with us longer and telling their friends and family about it.

Members are competitive, and I am proud to say I have a wall full of testimonials and everyone wants their story and progress mounted on that wall. We also have our Retro Fitness app where members are able to redeem their check-in points for free smoothies, personal training, a free month at the gym and can reserve spots in group classes. Members can even set goals or join challenges within the app. When I sign members up, I immediately highlight the app and its benefits.

Why is community outreach important to your club?

It is important because it is working. I know other gyms do not do it because the likeliness of getting someone to sign up on-site at a sponsored event are slim. The logistics behind getting people signed up immediately are difficult, but the exposure in the community speaks volumes. In turn, I see it have a huge impact over the next 3-4 weeks after an event. People gradually come in to check out the gym with the free passes I gave out. I do a fishbowl where I get their information by giving away one gift card for a free year membership. Then, I have my member-experience associate reach out to them and set them up with a free trial. Every time we put ourselves out there, I have seen multiple people come in and eventually join the gym. It also gives me more facetime with existing members when I see them out and hand them free smoothie coupons.
We have done everything from wellness fairs, to making our own float in the Halloween parade, a member BBQ tailgate cookout and even set-up a 5K sponsorship water station at the finish line with every water including a Retro Fitness pass. We have also attended homecomings and set up fitness activities. Anyone who participated in the challenge got a free month at the gym. If you want to be known as the gym that cares about the community it serves, you better be out there walking the walk.

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