Youfit Health Clubs
Since the late 1970s, Rick Berks has simply felt comfortable in the gym environment. Berks, now the owner of Youfit Health Clubs, which continues to grow with almost 60 locations now, has become one comfortably successful individual in the fitness industry.
Berks’ new design for Youfit has followed his same commitment to branding that he has showcased since he opened his first club in Pompano Beach, Fla., in 1991. Beginning as a Gold’s Gym franchisee, Berks said he took all the money he had in the bank and purchased refurbished equipment after landing his location. Berks gave his new equipment the same dedication he had when designing the layout of his club. He made sure each piece ran flawlessly and looked perfect before it ever hit his floor. That same year, Berks won the Gold’s Gym interior design award for his work.
“Two Gold’s Gyms in the Memphis, Tenn., market went bankrupt and they had all of their equipment on a couple of semi trailers,” explained Berks. “I went up there and looked at it, bought it right on the trailers and they shipped it down to me. I disassembled it, had it repainted, refinished, reupholstered and put it all back together myself while we were building the club.”
At the time, Gold’s Gym wasn’t a franchise; Berks had simply purchased a license with the rights to use the name. He owned the facility for five years, but had started his own brand on the side — a little company he called Planet Fitness.
Berks had been dealing with a bodybuilding culture in his early Gold’s Gym. “I decided I didn’t want to deal with that crowd, so that’s when I opened the original Planet Fitness club in Sunrise, Fla., in 1993,” he recalled.
The Gold’s Gym in Pompano Beach had a license good for five years, so instead of an immediate change, Berks decided to simply leave the name for the full five years before he rebranded it as the second Planet Fitness in 1995. Berks continued to build Planet Fitness locations throughout the remainder of the 90s and on into the early 2000s, striving to move away from the bodybuilding culture and provide a fitness sanctuary for the rest of the fitness population.
Berks sold the Planet Fitness trademark to Mike Grondhal in 2002.
“At the time I sold them the trademark and they licensed South Florida back to me,” said Berks. “I was still operating Planet Fitness’ for several years after I sold them the trademark. Eventually, I converted those Planets into Youfit.”
The Youfit model follows the same eye-catching designs that Berks has instilled in each of his club brands over the years. The vibrant greens and purples that have been specifically designed into the equipment help to set the club apart from the competition.
The brand follows the same low-priced model as many other brands in the industry, but it still focuses on member service and providing results.
Berks explains his low-priced model as a necessity — not something he just decided on one day. He told a story about an LA Fitness moving in down the road from one of his largest Planet Fitness locations — a 30,000-square-foot facility.
“They spent the next year or two killing me,” said Berks. “That kind of started me in a different direction. I couldn’t compete with them tit-for-tat, we were basically the same price point, the same type of club. It was more of an evolving to a low-priced model — it wasn’t like one day I woke up and said ‘I think I’m going to do this.’
“At the time, we were offering $99 down, $35 a month,” he continued. “At that time, in 2000, their membership was $145 down, $35 a month. We were pretty much the same price point. I started offering memberships at $99 down, $25 a month. If they wanted unlimited Group X, including [indoor cycling], which was really big at the time, and childcare, it was $10 more a month.”
Berks continued on this model for about six months until he let the numbers decide what his members truly wanted.
“I found out that over 90 percent of the people, with the option, didn’t want to spend the extra $10 a month for the Group X or the childcare,” he said. “Given the cost to carry those programs was tremendous, and given that the people didn’t want to pay for it, that’s when I started eliminating those features. When we did that, we operated at a much lower price point. At the time, I just dropped down to $15 a month from the $25. It happened over a year — we didn’t just suddenly do it.”
Berks’ team started taking a closer look at the programs and features that his members weren’t utilizing, and started slowly removing them. “After we did that, with our price point we didn’t need as many sales people, and eventually we didn’t use any because giving the club we were offering people, $15 a month, it pretty much sold itself,” he said. “We had a huge aerobics room with a floating deck and a 3,000-square-foot childcare room with a Discovery Zone-type play maze in it. We were giving a lot for the money, but we weren’t getting the response, so when you see those numbers it was pretty convincing that we could eliminate a lot of overhead and still provide the things the majority of people want.”
As the model finally took on the $10-a-month plan, Berks continued this method in opening and transforming his Planet Fitness clubs into Youfit Health Clubs. “In our system, because it’s not fragmented by a lot of franchises who are operating with a franchise model, but also operating independently, our system has a lot of good, motivated people that we’ve collected,” said Berks. “We have constant meetings with our managers, our regional managers and we get a lot of input into our system from those people as to what’s going on in their clubs.”
Within the Youfit management system, there is a function for new ideas to easily be spread around the company. “We have a pretty good line of communication with our management top to bottom,” said Berks. “I want their input. I never claim to have all the answers.”
Over the years, Berks has become very aware of the ever-changing personality of the fitness industry. However, it’s the continuous change that has kept him motivated over the years.
“It changes all the time, it’s very competitive and it’s challenging,” he explained. “I like the environment — it’s not the kind of job that I get up and hate to go to work every day. It’s the opposite. I still enjoy it almost 25 years later. I think that, more than anything, is the glue that keeps me involved.”
Berks opened the first Youfit on April 1, 2008. His plan was to develop a similar low-priced model that he had with Planet Fitness, but wasn’t looking to franchise. Additionally, he believes in providing members with the tools to be successful in the club, such as implementing a juice bar and personal training.
After the opening of the first location, he wasn’t actually looking to expand very rapidly, although that is hard to see as he closes in on 60 locations nationwide. Berks said the second location somewhat fell in his lap.
“At the time, I wasn’t in a hurry to run out and build another one, but the landlord we had in the original location came to us and said he had another location over in Largo, Fla., and said, ‘Would you consider going here?’”
Initially Berks said no, but a month or two passed and, as the reputation of Youfit spread throughout Florida, the landlord came back with the offer a second time.
“It wasn’t like a plan to build 100 of these — it just kind of evolved and we said, ‘Let’s see what happens,’” said Berks. “It really took off, but the biggest catalyst was, the recession had hit and it created a great deal of real estate opportunities. Prior to that, even though I had been in the business for quite a while, you could call different developers or landlords and they wouldn’t even talk. For the first 15 years you’d have to beg [landlords]. When the recession really hit the retail market hard, it created a different real estate opportunity for health clubs. We’ve done a complete 180 where they wouldn’t talk to us, but now they are seeking us because they want to draw a new clientele into their [locations].
“As time goes on, these big box retailers don’t need as much floor space to display, so they are shrinking their boxes and creating more space. Not only does it create a lot of real estate openings, but a lot more aggressive deals.”
Currently, Youfit has about 250,000 members paying between $9.99 and $19.99 for a membership. The $9.99 allows the member access to the one location. However, the $19.99 provides members with access to all locations nationwide, as well as discounts on certain products throughout the club.
“We were fortunate enough early on to have very good leaders that are passionate about the business,” said Berks. “That really furthered us along when you have that. I always tell our people, ‘You can learn to be good at a lot of things, but you’ll never be great at it unless you’re passionate about it.’ We’ve got quite a few people that are very passionate about what we do and how we do it in the business in general, and that’s fueled us as much as anything else.”
The vast majority of the clubs vary in size from 15,000 to 20,000 square feet. The growth plan, according to Berks, will have Youfit cresting the 100-club mark by the end of 2014. In five years he says they plan to have 200 clubs or more.
“We want to be where nobody else is, particularly as it relates to other low-priced players,” he said. “I’m literally across the street from LA Fitness and 24 Hour Fitness, and we do really well. There are certainly a large group of people, looking for the racquetball courts and swimming pools, that wouldn’t join our clubs even if we were across the street. And then, there are a lot of our members that probably wouldn’t join their clubs because the intimidation factor, or that they don’t need all those other things and don’t want to pay for them.”
According to Berks, the Youfit member isn’t a typical fitness member. “We focus a great deal on customer service, training our people and cleanliness — creating a non-intimidating environment that people can get comfortable with real quick, especially if they’re not seasoned gym users,” he said. “When we come into the market, we are almost 60 clubs strong and growing rapidly. Our competitor isn’t that franchisor — it’s that franchisee. If you are in a market and you have one or two or even five clubs, and we come in there and build 10 or 15, we’re a lot more powerful entity to compete against than a single franchisee. In the business sense, we have a tremendous advantage that way.”
In addition to the number of clubs, Youfit also puts a heavy focus on personal training that helps members get the most out of their membership, while also paying a similar price as they would at a franchise competitor. Berks said he believes personal training is the center point of any successful health club, and its purpose inside the club is to drive people to success.
With his engaged and passionate leaders, Berks thinks Youfit is a strong enough brand to withstand the test of time. It’s modern, unique and has an intense focus on its members. Additionally, Youfit doesn’t have any outside representation — each location is owned by Berks, and operated by his passionate staff. It’s because he solely owns the brand and its locations that he believes sets him apart from the rest of the clubs in the U.S.
By Tyler Montgomery