FC: Rande, from your perspective, what's the state of supply and demand for express gyms in the U.S.?
RL: It's been saturated. The women's franchise clubs have saturated the country. They're now stepping on their own toes. One major women's franchise even lowered their restrictions down to 2 miles.
Now, instead of one woman's club being in a town of 20,000 people, having 400 - 500 members and doing quite well with very little overhead, you now have clubs that are 2.5 miles apart.
Often the same franchise is competing for the same market. They each now only have 200 members and they're struggling.
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LaDue feels the woman-only hydraulic circuit clubs have crested, but the next wave will be kids fitness using hydraulic circuit machines.
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So, for the women's franchise market, the market is totally saturated and the wave has crested.
FC: O.k. , that's the dismal news, any positive trends?
RL: Yes, I do see co-ed clubs opening in the U.S., men's clubs opening. However, they won't be nearly as successful as the women's only club phenomenon. Because the majority of women who join those clubs won't work out with men.
For the adult program I see 3 markets: co-ed express clubs opening, men's express clubs opening, and I also see the larger chains buying hydraulic circuits to compete against all the other clubs.
We live in a very time conscience society and we're creatures of convenience. The 7-11 stores are popular because its' easier than parking in a big shopping center parking lot and go into a cavernous super market. The big health clubs are the same way.
An express club that is close to residential areas are going to be one of the fastest growing trends in the fitness industry as far as new clubs opening. Some larger chains like 24 Hour Fitness in northern California are experimenting with this idea and doing well. Quiznos has opened their chain of co-ed health clubs called 1-2-3 Fit.
Basically, they're the 7-11 of health clubs, they have cardio equipment, they have hydraulic equipment, weight stack machines and people are in and out quickly.
FC: It's interesting about co-ed express clubs, don't deconditioned women typically not want to be seen by men?
RL: I see the clientele obviously not being the twenty-something hard bodies, the express gym members are the seniors and the out of shape. If you go to a Weight Watchers meeting, you'll see an overweight couple there.
These people are not in competition with each other - they're old married people. These co-ed express gyms are ideal because most people don't have the time. The men don't need an 18" bicep, but their doctor tells them lower their blood pressure and their cholesterol.
They're being driven by their doctors to exercise for the first time in their lives, or at least 30 years. It's more fun to do with your spouse or people that you know. It's convenient, fast and social.
FC: So, the drivers are no longer the ripped bodies, but wellness?
RL: Yes. It's preventative maintenance. It's maintaining active living instead of just ego.
Co-ed gyms will attract those couples I mentioned and also the individuals that need to drop 20 lbs. or more. They'll also attract the busy executives that don't have 1.5 - 2 hours a day to spend on exercise, or don't want to wait in line for the next machine.
Sign-up sheets generally don't exist in express gyms because people are in and out.
But the real growth in the U.S. will be with the kids.
FC: Oh, so you see the kids market as a growth market for hydraulic machines?
RL: Yes, the growth in kids fitness programs will be incredible. Kids are going to be the next women-only growth phenomenon.
We re-launched our Kids PACE program last year. We originally launched it 12 years ago back, but at that time is was premature. At that time the market was going after the aging boomers. So, we put it on the shelf.
Now there's a heightened awareness on childhood obesity. We're still on the cutting edge and the explosion is just happening now.
What's surprising are the number of free standing kids facilities being launched. I originally expected to sell our Kids PE program into the larger multi-purpose clubs like Gold's and the Y's.
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LaDue feels there will be a market for stand alone kids fitness centers using hydraulic circuit machines. But they need an instructor prompting and lots of kids activities between the circuit sets. Notice the climbing wall.
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FC: Kids are not just small people, they have short attention spans and are playful, are there special programs to have kids be successful?
RL: The 2 main factors when we developed the program, was safety had to be number 1. You don't want to have to worry about little fingers and weight stacks.
Fun was equally as important. If they're not having fun, they'll get bored and not do the program.
I brought in exercise physiologist but also brought in program directors for kids recreation programs. We developed some choreographed programs that is basically fitness musical chairs.
Instead of the standard recovery stations for adults, we use Hoppy Balls and Hula Hoops, there's a lot of room for the instructor to interject their own personality.
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The kids programs don't have CD cues telling them to switch stations or to take their heart rate. They just don't have the attention span. The instructor is the one that prompts them what to do next. The kids have no idea what's next and that keeps them interested.
We worked with NESTA and some educational professionals to develop the programs that is awesome.
FC: What's the age range?
RL: Our target age is from 5- 11. It's not a matter of size, any size kid can fit, it's a factor of attention and motivation. The kids over 12 will start to think the program is too juvenile for them.
FC: What do you see happening on the international scene?
RL: That's the next trend. Curves has taken off throughout Europe. Because of their success, we get calls and inquiries every week from outside the U.S. We hear from Mexico, Spain, Portugal, Turkey, Ireland, Australia, Indonesia, everywhere.
That will be the next wave for hydraulics at least with adult machines. The rest of the world follows the U.S. trend 3 years later.
FC: One of the drives in the U.S. is the rampant obesity problem, does the rest of the world share that driver?
RL: We've Americanized the rest of the world. Our fast food can be found all theses other countries. Obesity is a big problem overseas as well, for example the UK and Australia. So, we've exported our negative things was well.
FC: Can you talk to our Readers about the design and feature sets of the PACE equipment.
RL: Our equipment is the original. There are at least a dozen companies selling hydraulic equipment that didn't exist 2 years ago. We have the longest track record, our equipment is made at the same factory for the last 16 years. Some of the problems our competitors are having are problems that we overcame 10 years ago.
Many of our competitors are companies that jumped on the women's franchise bandwagon because of the success of Curves.
In our case, we have 6 levels of resistance settings. We have the longest track record. We've sold to thousands of clubs, nursing homes, hospitals, rehab centers, professional football teams, colleges, you name it.
When you go to select a company, you look for longevity, and that's us.
FC: Sounds great, Rande, thank you for all of your insight.
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