Over the past several years we’ve heard a lot of stories about how our nation’s most recent recession has affected business and production. Our media has told many stories concerning the downfall of clubs and studios that just couldn’t make it through. However, as we persist we forget that our nation has pulled through recessions in its past — it was during an earlier recession in the 1980s that John and Kirk Galiani were graduating from college and attempting to find their fortune. It’s almost by chance that they found that fortune in an upside down economy, hidden away in a small fitness club.
It was the late 1980s and Kirk was in commercial real estate and John was in financial planning. “Kirk was training at an old-school, iron-pumping club at the time and the owner was being forced to move,” explained John. “To make a little money while the real estate market was soft, Kirk offered to be a tenant representative for the gym owner to find him a new location. After doing considerable research and finding what Kirk thought was a great location, the gym owner said, ‘I have never made any money in this business and am an accountant by trade. I am going to hang up the gym thing and get a job as an accountant.’ Kirk then called me and said, ‘what do you think about opening a gym? I think I found a great spot.’”
After much thought and research they agreed that if they could get the credibility of a strong brand behind them they would have the best chance of being successful. After obtaining the rights to Gold’s Gym in their territory they decided to proceed.
The two brothers said they sort of backed into owning their first gym. “We were lucky enough to meet a great operator and fellow Gold’s Gym owner in Rich Feickert who gave us enough of a foundation to start off on the right foot,” said Kirk. “Getting started, there were many obstacles to overcome like lease guarantees, financing and, of course, club operations.”
Like many people getting into the club business, they were continually told not to try. “It was a bad idea to open a club during a difficult recession,” said John. “Looking back, if we would have known what we know now we would have never done it. Maybe being naïve was a blessing. We were also lucky that over 20 years ago the industry was not as competitive as it is today, and you could survive more mistakes.”
The Galianis brothers. grew from their first small club in an historic schoolhouse to become one of the largest, most profitable franchise groups. In 1999 they teamed up with the private equity group Brockway Moran to purchase Gold’s Gym International. After making significant progress in growing and expanding the franchising, product licensing and corporate stores, they exited their ownership in mid-2004 through a lucrative sale. They later ventured on to develop their own brand, Onelife Fitness. It’s clear that navigating the fitness industry has drastically changed over the past 20 years, but what hasn’t changed has been the Galiani’s drive for success and their passion for developing great fitness clubs. Onelife Fitness is a six-location, full-service chain of clubs with a wide variety of amenities and fitness opportunities.
“When we started Onelife Fitness we were looking for a brand we could mold from its infancy, and we thought the name best represented the large sport boxes we were looking to build,” explained Kirk. Following the development of Onelife two and a half years ago, the brothers began looking at smaller club options to compliment the Onelife brand.
They began having conversations with New Evolution Ventures (NeV), operated by Mark Mastrov, Jim Rowley and Mike Feeney — owners of the Crunch franchise. “We have always been extremely impressed with what Mark has accomplished and have followed his success for over two decades,” said Kirk. “He has achieved so much in this and other industries that many people are not even aware of. He has operated well over 1,000 clubs during his tenure and created, proven and implemented many different fitness concepts throughout the world.” After discussions with Mastrov and his team, they discovered what they were looking for in Crunch Fitness.
“We became very interested in the Crunch brand,” said John. “It’s unique and has a lot of brand equity in amenities, such as dynamic group fitness and personal training, and its ‘no judgments’ philosophy welcomes people of all experience and fitness levels. The clubs are fitness-only facilities that complement what we offer at Onelife Fitness and enhance our ability to grow. Crunch gives us the ability to expand into smaller locations that may not be a good fit for our large, multi-purpose sport box, either due to real estate constraints or clientele that may be interested in a more unique fitness solution.
“After we began speaking with Mark a few years ago, we realized we had a similar vision for the future of the fitness business. We agreed with his opinion that you should offer a unique fitness experience with compelling reasons for a prospect to choose you over a more generic fitness solution.”
The brothers said they hadn’t really been looking for partners at the time, but things just seemed to fall into place too well. “After several conversations we began to feel that the opportunities and advantages of teaming with Mark and the NeV team and Vision Capital, a billion-dollar private equity firm, were too great to ignore,” said John.
Mastrov has an equal belief in the Galiani brothers. He said, “Kirk and John are just flat out two of the best operators within our industry worldwide. They are savvy and experienced operators who can speak to all facets of the business. The more we talked, the more apparent it became that if we worked together, not only would we have a lot of fun, we would have the chance to learn from each other and get better at what we do.
“They have already brought tremendous insight to NeV and its platforms, and we will continue to leverage their experience in the global markets, real estate development, finance and day-to-day operations to help continue to grow NeV successfully.”
“Having more minds openly sharing their experiences and thoughts helps in coming up with the best solution,” said Kirk. “I think NeV will benefit from having another set of eyes and ears with experience running an international gym franchise and product licensing company. NeV will help us in countless ways — without sharing company information, one place we have already benefited tremendously is leveraging the NeV expertise on the personal training and nutrition side.” The Galiani’s are developing two Crunch formats — one that is similar to original corporate Crunch locations in New York and San Francisco, and their new franchise model that’s a smaller, low-cost version, explained John.
Crunch, as a brand, has been growing and spreading since it became a franchise. “It’s growing in many markets besides just what we are doing,” said Kirk. “We believe this will be a brand that will add value to many operators looking for a competitive advantage in their market. We will continue to grow Onelife Fitness clubs as well as the other brands.” The brothers have showed interest in some of the other NeV branded clubs, and they say every club within NeV has a position in one market or another. “We think Mark Mastrov, Jim Rowley, Mike Feeney and Brent Leffel are performing very well with many cutting-edge brands, including Energy Fitness, YogaWorks, UFC Gym and Hard Candy — all are very intriguing and fit well into our vision of the future of fitness,” said Kirk.
The Galiani brothers often reflect on their early days and their original passion. “We loved the experience of working in the club,” explained John. “We gained a great deal of perspective by handling everything from membership sales, to personal training, to front desks, to maintenance and cleaning. It was arguably our most enjoyable time in the business, as we were the closest to our members and their families and really got to share in their enjoyment as they improved their lives through fitness.”
In a way, success has allowed them to pick and choose their roles within the clubs. It’s first and foremost their position to grow and perpetuate their brands, but they still find time to interact within their gyms. “It was enjoyable running a club that was the social hub of the community,” said Kirk. “In a way, it was like being the mayor of the town.”
“As we grew, we were fortunate enough to be surrounded by some very talented individuals that helped build an unbeatable company,” said John. “Many are now successful, multiple location owners, like Jeff Skeen, Dal Clayton and Aaron Liebermann, who went on to start Titan Fitness, and Bruce Ebel, one of the largest Gold’s Gym franchisees, and other multiple-club, Gold’s Gym franchisees like John Link, Will Bowen, John Custard, Mike Krongaard, Jack Pozo-Olano, Doug Berlin and the late Eddie Dail,” said John. “It is very rewarding to see how successful many of the people we’ve worked with have become.”
Although the industry landscape has changed, many clubs have not moved with the times. “The fitness industry has become extremely competitive,” explained Kirk. “I think our biggest opportunity is to continue to develop clubs while being selective with our site selection, don’t force development, continue to differentiate our clubs from the competition, explore strategic acquisitions and, as we have done since the beginning, continue to focus first and foremost on the member experience and helping them achieve their fitness goals.”
In their opinion the industry hasn’t been executing some things well. “It is our feeling that our industry has always done a great job of enrolling members,” said Kirk. “The industry has not done as good a job with the members after they enroll. We believe most clubs do not make the necessary investment to launch new members correctly and help them develop a basic fitness and nutrition program, which allows them to get the results they want.”
With rapid growth within the industry, learning how to launch members correctly will be the life and death of many clubs. “The pace of change in the industry has accelerated in recent years,” said John. “We believe, at the end of the day there will most likely be three types of clubs — large multipurpose destination clubs, low-cost high-volume clubs and boutique clubs that specialize in various types of exercise, such as Group X, cycling, yoga, personal training/CrossFit and martial arts/boxing. The top operators and chains will get bigger and stronger, and the weak ones will disappear.”
This is the major reasoning behind the development of Onelife Fitness, a large box club design that appeals to members on many fitness levels, and the expansion of the Crunch brand that appeals to the customer that prefers to focus on unique group fitness classes, cutting edge personal training and a fun, upbeat atmosphere. “I can’t think of anything more rewarding than to positively improve the lives of more people by helping them reach their health and fitness goals,” said John. “This business is never easy, but after running clubs for 20 years and visiting well over 1,000 during that time, we have learned a lot. With what we have learned we have been able to open up better facilities than ever before. There are new challenges every day, but working with great people makes it easier. We have learned that this industry is always evolving, and if you don’t evolve with it you will find yourself falling behind. As we previously said, we truly enjoy being part of an industry that has such a positive impact on the lives of so many people.”
By partnering with NeV, the Galiani brothers will have a positive impact on the lives of people all around the world. In essence, they are given the key to the city — being allowed to use their talents and knowledge of the industry to build and grow fitness in many different markets and engage every type of demographic. “I believe we’ve assembled a great team partnering with NeV and Vision Capital,” said Kirk. “We’re excited about the future and what we’ll be able to achieve together.” Given this new partnership, they now have the ability to create a multitude of locations and brands that can focus on amenities and features that truly benefit people all around the world.
By Tyler Montgomery