9Rounds Keeps Kicking - Shannon Hudson

Hey everybody, welcome to the Future of Fitness, where we talk with entrepreneurs, researchers, and practitioners in fitness, wellness, and the health sciences. I'd like to give a big thanks to our sponsors, Level Five Mentors, helping entrepreneurs achieve the highest levels of freedom in time, money, relationships, health, and purpose. Also, Certified Course Creation, helping entrepreneurs create accredited online certifications that are not only lucrative but highly scalable. Go to level5mentors.com or certifiedcoursecreation.com and learn more. I am your host, Eric Malzone. And once again, welcome to the future of fitness. We're live. Shannon Hudson, welcome to the show, my friend.

Hey, thanks for having me. Excited to be here.

Yeah, uh, I am really excited. I, you know, give some backstory. You know, I am familiar with the nine-round brand. I helped work with some franchise owners within your systems, just you know, on different marketing tactics and and or overall how to maintain their coaches. And so I'm I'm familiar with it. And I know there's a lot of great franchise models out there. I think yours is certainly stands out to be unique. I know you have a killer backstory, you know, being uh, I believe a kickbox, I'm not going to tell it, but I'll let you tell, you know, being a kickboxing champion. And, you know, you're, as we were talking before this recording about your passion for fitness, you know, and helping people. And I think when it comes down to brass tacks, most fitness professionals, whether they're, you know, the founder of a large franchise company like yours or they're, you know, the personal training just getting started, they always want to help people. And uh it's just uh it's something that keeps drawing me back to the fitness industry all the time. So thank you for coming on, Shannon. Um, the way I like to kick this off is maybe you could give us some of your backstory, how you got to be an entrepreneur, how you built this thing called nine rounds. Yeah, lay it on us, man. What do you got?

Okay, I can do that, right? First thing, uh, my name's Shannon Hudson. I am 40 years old and I feel 20, I'm telling you. It's nine rounds, man. It's the fountain of youth, right? It's exercise fountain of youth. But I grew up in the martial arts industry. My older brother, I love him to death. He's almost nine years older than me. And he started karate when I was born. And I remember as a kid so vividly going and watch my big brother do karate class, and I would sit on the side. And back then, this is the 80s, right? This is um the karate class he went to, it wasn't there were no kids in the class. Where today the martial arts industry is primarily children uh doing karate to have better grades and more discipline and all that. And there were no kids back then, and it it was extremely you know, it wasn't a real business, it was a hobby. A guy owned uh rented a spot and it was a hobby, but my brother really, really uh was great at it. You know, he was super athletic, very strong. He became a blackboat in the school and started doing karate tournaments, and so of course, me, I follow my big brother's footsteps and I want to do karate class. So I'm I'm eight years old and I just say, you know what, I want to do karate, and here I go. And you know, I've been a martial artist my entire life, right? I followed, I fell in love with the martial arts, with punching, kicking, uh, any type of martial arts. And my brother actually started kickboxing, and you know, when kickboxing was on, it was pretty popular back in the 80s. It got on ESPN and it got a little bit of traction. My brother wanted to be a world champion kickboxer. So, of course, what do I do? I, you know, I go and I train with my brother or wherever he goes, and we would drive and train with people and spar, and and I started amateur boxing, I started amateur kickboxing, and I did karate tournaments as a kid too. I got that competition bug. And my brother ended up winning two world titles as a professional kickboxer, very, very, you know, everyone knows him in the industry, and so uh I followed suit and I turned professional in 2003. As a professional kickboxer and boxer, I did both. Just loved it. Um, I got to fight on Chuck Norris's World Combat League. He started a team fight league back in 2003, and unfortunately, unfortunately, it didn't get much traction. UFC kind of got as when they got going at the same time. And uh I got to fight all over uh kickboxing, not just in the fight league, but I fought in Europe a couple times in France on the US kickboxing team and Switzerland. I and I had the opportunity in 2011 to fight for the IKF world title, and it was in London, Ontario, Canada, and went up there and uh won the bout and then became a world champion. My I joke, my brother won two world titles, and I was an underachiever and only won one world title. So so my parents have two world champions as kids, right? It's pretty cool. Um, and you know what? Um my brother ended up switching to business. My brother ended up buying the karate school we grew up in. So that was my first job working for my brother, teaching and teaching kids introductory lessons and teaching karate, teaching the forms and all that. And and that's where I learned sales. I I attribute to so much to that because I learned how to sell martial arts memberships very early. I could sell a product, I could sell a service, and I think that's a great skill. So many people have this passion for fitness or whatever the passion is, but when they go into the marketplace, they forget they're in a different game. They have to learn the game. And the game now is marketing and selling, right? So I I could I learned a lot of that very early, and we grew to two to two martial arts schools in South Carolina, then to three. And I realized quickly it was very hard to scale that type of business. A lot of reasons. The instructors had to be black belts. They it took years to become a black belt. Not only that, it had to be great with uh teaching and great with kids and uh be able to sell and be able to market. And it was just very hard to scale that that type of business. And so, what do you do? You look around and find a business that you like that's scaling really well, and you emulate that. And I saw one, it was a 30-minute circuit training, women-only brand, and everybody probably knows the name, it's Curves. And I said, Wow, you know, they had almost 10,000 locations, that's so impressive. What if I create? I told my wife Heather, what if I create a 30-minute kickboxing workout, and it comes out to a nine-round workout. That's where we got the name nine-round. And, you know, people can come anytime, no class time, it's a circuit, and there's an instructor there, you know, working the circuit the whole time. There's no class time because the bell's ringing every three minutes. So my wife, bless her heart, she didn't know what she was getting into, but she said yes. And we opened next to one of the karate schools. And my brother said, you know what, it's 2008, it's a recession. I don't really want to be a part, sign another lease. I don't want to do it. And I said, No problem, I'll do it. Me and my wife will do it. So my wife and I opened this 1,100 square foot studio right next to one of our martial arts schools, separate door. We maxed out the only credit card we had to build it out. We built it out super minimal. I mean, it's extremely, you know, nothing was cohesive. There was no color scheme, no schematic. That looked great. It was just the bags and nothing matched. And there was some photos of me on the wall of with Chuck Norris and and uh fighting in the ring, and it was me, right? So, but this circuit, I'll never forget. I had we were when we opened this business, no sign on the building. We couldn't even afford a sign. We had a banner, a hundred dollar banner hanging out there. And after 30 days, we had almost a hundred members, and I was like, wow, we've got something, we've got something here. This is great. And I'll never forget people were signing up, right? I was signing them up, and this one lady held her credit card up, and because I was so slow signing them up, she said, Are you gonna take my money or what? And I knew then I said, Man, this is great. What a good problem. I love this problem, you know. So uh of course I'm gonna sign you up. But uh, but and you know, here we are, we're in uh 19 countries. We have over 750 open locations operating. Not well, they're not all operating because of COVID right now. We have uh over 600 operating, so we're about 70, 75% back open. But bless, love what I do. I get up Sunday night, I'm more excited than Friday night, ready to go to work. So that's it. That's the down and dirty.

Yeah, that's great, man. Well, what do you think it was? I mean, when you in that first 30 days when you got 100 members, what what was it? Was it the uniqueness of the workout? Was it some sort of marketing that you just hit just right? What do you attribute that that fast growth right up front?

That's a great question. And you know, my wife and I reverse engineered and asked the ask ourselves that exact question, what is it that people like? And we narrowed it down to four things. Number one, it was no class time, you're not tied to a time. So whenever you get there, you know, you're never late if you hit traffic or you're working late or you know, whatever, you you just come in, we're gonna get you started. So number one, no class time. Number two, it was full body workout in just 30 minutes. People would leave and say, I haven't sweated this much when I go to a regular gym. I I don't understand what happened. And the and we are, and you as a fitness guy know it's the fitness, it's the circuit training, it's the high intensity, is it the heart rates going up and getting high and coming down and or hitting things and have some dumbbells and kettle, you know, it's all of that combined. The third thing was the workout change every single day, so you didn't do the same thing every day. You might hit the same bag on the same round, but the drill on that round's different. And then the fourth thing, which everybody loves, is having a person there, right? Having a human being there to say, keep your hands up, hey, you know, fix your foot like this, hey, you can do it, finish strong, you know. So those are the four things that we've we kind of thought about. And those are our four pillars of success today that's in a lot of our marketing material. You know, you're never late, trainer with you, 30 minutes. So those are the four themes.

Yeah, it's really interesting. So I wonder, I mean, have you noticed that I see up and down sides of that model, right? Is you got people can show up anytime, but then again, people can show up anytime. I was talking to my wife yesterday, and you know, my wife's busy. Uh, she's a director of operations for a company, and she keeps meaning to go get a blood test because we just significantly changed our diets to you know more plant-based. And um, we're just curious how our blood test came out. And she says she's like, uh, I'm like, well, have you done that yet? She's like, well, no, I but I can go anytime. She's like, but that's the problem, is I can go anytime. So I just keep putting it off. I'm wondering, like, for this particular thing, have you seen a challenge on the other side? I mean, it's unique in the market, right? So certainly people who crave that flexibility will come, you know, will find nine rounds valuable. But have you also seen on the opposite side of like maybe people keep putting it off, putting it off, or maybe you see this within the data of what time people show up? Like, what do you think about it? You think there's a flip side to that?

Absolutely. Um, you know, and it's funny, during the coronavirus, we had to completely shift to a scheduling platform. So I sit here and preach no class time, but now we're doing times, right? Yeah, you gotta. Right, because of the social distancing. You know, we get so many complaints every day because we have a service that uh that gets our net promoter score that goes out to every location. And every day I read complaints like, oh my gosh, I'm I'm ready to go back to no class. I hate having a schedule, it's cumbersome, it's this and that. But on the flip side, I see the value in a schedule. I'm very schedule based. I try to go to bed and get up at the same time every day. You know, I'm I understand that if you put it in the schedule, you're more likely to do it. So I hear you. I I still battle with that question a lot. Myself, even, you know. So I don't know if I have an answer for you, but it's a tricky one.

I mean, if if you're like us and you've been in the fitness industry a long time, there's certain corners that you get jaded on, and one of which is, you know, how much accountability do people need? Right. Right. Sometimes you feel like you're just an accountability, you know, guru and not, you know, a fitness professional. I think a lot of a lot of FitPros feel that. But yeah, actually, I I want to go back to your story before we dive into the model even more. Um, one of the things I was reading some articles and interviews that you're on, you bootstrapped your company, right? You never took investors early on. You built it quote unquote the old-fashioned way. Tell us about that journey. Like, when when did you know when you were growing your business? Like, okay, when do we reinvest? How much do we reinvest? I mean, one of the things I remember is I did the same thing with my first channel with Traebor and I. And it was this fun thing. It's like, okay, we caught up when we're finally covering all of our expenses, we're like, we got $267 left this month. What do we do with it? Right. How how did you what was your your mindset in approaching, you know, building this from you know a bootstrap method?

Yeah, so it's a fun question. I love the question. Just to clarify, it when we had around 40 locations, we did take on a partner and a minority partner, and I learned a lot from that. And the money they invested did not go into the business. It was for me and my wife to buy a house, right? So when you say take on money or raise capital, we didn't really raise capital for the business, but we did pick on a minority partner early, which I have mixed feelings about. But the point I see so many entrepreneurs do is they try to raise capital too early. They try, they think they need money too early. I think there's a real value in going out and selling something today, showing being disciplined with the money and growing that way. I think that's a much more prudent and responsible and grinding way to do it, where when you come out on the other side, you are a killer. I mean, like, I wouldn't take nothing for it. Those years of living lean and no sushi dinners and no date nights with my wife out at the fancy restaurant. I wouldn't take nothing for that because the hard times we went through to get where we are today, I'm telling you, we've become so strong. It's not, it's not, it's what it makes of you. See, that's what people don't get. If I won the lottery today, I would give it all away because it wouldn't make me anything. I didn't become a better person, a better human being by winning and getting lucky and winning the lottery. I would, I would all, I would just give it all away. But when you earn it, when you go out and sell something and you and you and you risk something and you risk it all, and you go sell again and you're nervous and you're scared and you fight through that, that's how you grow a strong company. That's how you grow a strong marriage. That's how you that's how you just develop some inner willpower that I think fighters have. And I'm a fighter, and I have that. And I'm proud to say we have no debt on the company today. We are debt-free. We can turn on a dime. I can make a decision tomorrow in Chile. We have about 50 people in the home office, and I don't have to report to anyone, but nothing wrong with reporting to people or having investors. But I I stress these young entrepreneurs trying to grow. I'm telling you, learn to sell something today. Yes.

And that's it's so interesting. And I I'm just gonna coin this as investment culture. I've never used that term, but why not? I think you know, I get the opportunity to talk to a lot of companies, work with a lot of companies, and so many times, you know, we'll approach our conversation will be started and say, Hey, what do you need help with? It's very rarely, well, you need we need a better sales system, or we need to tweak our marketing, or hey, I need to clean up my operations, or I need help here. It's almost 90% of the time, well, we're looking for investors. Like, well, okay, for what? Yeah. Because we're running out of money. Well, why?

Like, it just seems it's almost not fixed the root of the problem. I agree.

Like, hey, how about how about you go out and maybe I'll coach you through whoever it is, right? Go get some help, have become profitable, then build some equity in your company, and then leverage some investors at the right time. But it's the first thing. And so it's I don't know if it's a a generational thing too, but you know, people who tend to be under the age of 35 will start with a concept, get investment. And it's it seems to be, well, at least prior to COVID, I guess it's I've never raised investment. I guess it's not that hard to get a million or two, which is incredible to me. And then they have they develop a product with zero monetization plan. And then when it gets to the point of like, hey, well, our investors need, you know, they need to see something. Well, I guess we need to learn how to monetize. And that that to me is is it's so maybe I'm old-fashioned, Shannon it sounds like you probably agree. I just don't get it. I just No, you're right.

You're you're 100% right. I mean, sh learn to crawl before you walk, learn to create value in the marketplace, be valuable, and sell something and show that you can manage money and be disciplined with it. And then when you go to raise money, that you know, a good investor is gonna be like, oh wow, you you have these skills. This is a skill set that's needed, and they're more likely to invest. I mean, I I've never raised capital either. I don't know if it's easy or hard. I mean, and one day I might need to to move to another level because I like to think big. But I when I do it, I will, you know, whoever invests in me, you know, hey, I can sell, I can create something from nothing, I can create value in the marketplace, I can build a team. Then they're investing in me, right? So I I'm with you 100%. Me and you are old old school fashion, right?

Yeah, yeah, I guess so. I watch a lot of Shark Tank too. I do too. That's like the only show I watch. Well, that's that's really interesting, man. I uh so you know let's let's dig into the nine-round model. So you how how many locations do you have globally now?

752.

752, and you said 19 countries, right?

Yes, sir. I'm proud of that. You know, fitness translates, the movement space translates well internationally. You know, it's the uh it's the international language of the world. I I don't have to know Japanese, but when they see me do a squat or a push-out, they know what I'm doing, right? So um it works well.

What markets have surprised you? What markets have you picked up growth and you're like, wow, I didn't see that coming?

Saudi Arabia, the Middle East. I mean, they're women, I mean, men-only locations, and now they're opening some women-only locations, and to see that I got to go over there about four years ago, it'll it's a trip I'll it's burned in my brain. I will never forget it. It's such a unique culture, but at the end of the day, they love to work out, they love nine round, and we're all the same. I'm like, oh my gosh, you know, we're just all the same, and no matter what we wear or what religion we are, we're all made of the same stuff. So it's just so surprising to see the brand do so well. And they have locations where there were 600 members, and it's just like, I mean, the US, we don't have any sort of 600 members in U in the US. We've got a couple with 500, but I mean, that's incredible. It's just incredible to see.

Interesting. And and what's been one of the more challenging markets for you?

Uh, Japan has been a challenge. You know, in the Middle East, most people speak English as well. They're uh, you know, they grow up in school and learn English, and luckily it's the business language of the world, so I can find, you know, develop nine round in these countries with masters that speak English. But in in Japan, they most people don't speak English. It's all Japanese. And and the culture is really slow and super respectful and super conservative. So the development of opening locations has been slower than I've liked. But again, I you know, I have to be mindful of their culture and their pace and and just keep that and be respectful of that. So it's an awesome place. I I my wife and I went over there a couple years ago, and I love it over there, super clean, super respectful. But it's it's been a challenge getting the brand up and running. I think when you go in any new market, especially a new country, it's extra hard. You know, it's a US brand, people are like, What is this? You know, and no class time, what does that mean? You know, so we battle that everywhere, but in a new country it's hard.

Yeah, interesting. And who who do you guys butt up against the most? I mean, um, I would imagine F-45, Orange Theory naturally. But is there is there any ones that you consider kind of your core competition?

Yeah, those are worthy rivals right there, as Simon Sinek calls it for, you know, F-45 growing extremely fast. Orange Theory, super solid brand, great leadership at the top. I mean, uh, primary competitors for us are to me, a primary competitor is someone who punches and kicks for fitness. Okay. So, so I would say Orange Theory F-45 are really secondary competitors. They're very worthy rivals. I watch them like a hawk, you know. But, you know, we have other kickboxing brands, you know, Mayweather is new coming out on the scene, got a big name, Mayweather Boxing. You got title boxing to a couple hundred locations. I love kickboxing, a couple hundred locations, CKO, about 80 locations. So those are, you know, primary competitors. Uh Beach Body, there's an there's one that they come, they're trying to come out with a 10-round at-home workout. So I watch them all, you know. Um, I learn from them all. So those are primary secondary competitors or the other boutique, and then the real competitor though, that I like to say is the couch, right? And the Netflix, the Netflix and the beers, right?

Yeah, yeah. Two of my favorite things, actually. There you go. Um I I mean from what I've seen with nine round franchises, then one of the nice things too is you don't need a big footprint either, right? Like what's the average size? Well, what's what's some of the dimensions that you're looking for?

Yeah, 12 to 1,500 square feet is our sweet spot. That's nice. We won't turn down up 1700, but you know, 12 to we just like to keep the room controllable by one by one employee. And it what that does, it limits it keeps it keeps it intimate, you know, that we know everyone's name that walks in. And then our overhead is obviously lower because we don't have thousands of square foot like a Gold's gym, you know, and you know, and the the operating costs are just lower.

Yeah, yeah, interesting. So yeah, so what it how what is an hour like an operating cost? You don't have to go like numbers-wise, but you know, obviously, rent there's a certain uh equipment package that I've seen looks quite nice. But it does strike me as something that's fairly low overhead because you don't have a lot of trainers, right?

You're right. I mean, uh a location may have you know six, seven trainers total, a good location, but most of them are part-time. May maybe there's a manager and someone's semi-absentee, meaning they have another career, but they own this too. And the manager's full the face of the business. Maybe that's full-time, but everyone else is part-time. That's the beauty of it. The biggest expense in our business, number one, is like labor. Um, number two is the rent, right? So if we keep those down, I mean, and can if we get those best we can, then we're good. And we we love to go in A locations, and A would be like next to an anchor grocery store. I love to go near Orange Theory. I know they do a great job in real estate site selection. So when I see there that they are there, I know the market's right. So we try to go near them. A similar strategy to say Burger King at McDonald's. Burger King will find where McDonald's went and say, okay, let's go there. So, but yeah, rent and labor is your number one, two is your rent costs, number three is usually your advertising promotional costs. So uh expenses can be very low. Our break-even is usually between 100 and 150 memberships, and we try to get that before we open with a pre-sale campaign. Our record, our company record, a store in Texas did 350 before they opened. I mean, just really killed it. Um, our average pre-sale amount right now is in the 90 number. Um, and that was prior to COVID. It's a little bit less now because of the coronavirus. But uh, so we're most stores I can say on average have 90 members before they open the doors, which is exciting. You know, if break even is between 100 and 150, we're almost, we're we're almost there. So that's the beauty of the model.

Yeah, nice. I see some parallels too, because you know, CrossFit was not a franchise, still isn't and probably will never be. But there are certain challenges. And I I look at, and here's where where I put the relation is that when onboarding new clients and CrossFit, it took a little bit of time. It was hard, like, because you know, trying to even snatching a PVC pipe, right, takes some coaching. Um, and I imagine too, like, you know, if I was gonna walk an iron, I have to learn how to punch or something, right? Because otherwise I'm gonna hurt something.

Yeah, absolutely.

How do you how do you guys how do you guys put people through on ramping so they can get to the workouts? How do you guys uh approach that bridge?

Well, that's a great question. First off, it's about getting the trainers correct, right? And and how do you scale that across over 4,000 trainers, which is a system? It's and we created an online training system with tests behind them. It's over six hours of training modules to get your trainers certified in the brand standards, nine rounds certified in our brand standards. And it's how to a lot of that is how to punch, how to kick, how to teach how to punch, how to kick, you know, how to run the thour, how to how to regress and make challenge people, um, how to hold the hand pads. I know we're not doing hand pads right now for the virus or staying farther away, but so it starts right there. It starts with getting the instructors that we call them trainers, fully certified and burst in how the anatomy of a punch and a kick. We've also taken our kickboxing, a kickboxing program and put it in a course and got it registered with all the big we got it accredited with all the fitness organizations, ACE, NASM, AFA, uh, CanFit Pro. And now people that have a certification, maybe personal training, or what they can get continued at credits by taking our course. And we caught that course is called kickboxology. So it's all about educating the trainers to get the members up to speed correctly and quickly. It's about educating the trainers on how to do it. So that's one of the biggest things we've done. The other thing we do is when people come into the location is they do an introductory workout. They don't do the workout of the day, the workout changes every day, but they do an introductory workout, which teaches them, you know, if they're right-handed, they're going to stand with their left foot in front. If they're a southpaw, their right foot's in front. You know, what's the jab? What uh the front kick. How do you kick the bag when it's swinging back to you? You know, how do you jump arope? You know, so it's an introductory workout. They'll still get a great workout and it's a great start. And it teaches them, hey, I can do it, and this program's for me. So those are the steps we're doing to ensure that people don't get injured and they enjoy the program.

Yeah, yeah, it's so critical. So, COVID, man, today's August 4th of our recording. So, you know, we're a good, you know, what, five months into this thing, if not more. What are you doing? How are you adjusting? How are you coping?

Yeah, it's it's been a challenge, that's for sure. That's an understatement of the year, right? A challenge. Yeah. But I'm telling you, it's brought the franchise system closer together because in crisis, you know, you could you become you get closer. You know, you remember when 9-11 happened. I mean, everybody on the street, if you didn't know them, you're still hugging them and helping them, right? So same with this. Um, it's brought us closer together. It has forced us, it's absolutely forced us to think about the three different types of customers in the marketplace. Number one customer, the customer that likes the brick and mortar store, like me, old-fashioned. I want to go to a gym. The other customer that only wants to work out at home. Oh, no, no, we didn't appeal to that customer before, but now we have to. And then number three type of customer is the hybrid customer. They want a little bit of both. They want to be able to go to a studio when they want, and they want to be able to work out at home whenever they want. So now we have to shift our business model to add these other elements because those are the three types of avatars out there now. And we had to shift to an online workout uh program in within a week. And I'm so proud of my team because we did. We we created full 30-minute follow-along workouts inside the member portal that people can access. And we today we have over 140 of those filmed. And we're so proud. And now we're building a new studio just for this, for filming. On our, we're gonna call it our on-demand program, Nine Round Now. And I'm so proud of this. It it's we're gonna be on every app there is iOS, Android, Roku, you name it. We're gonna get, we're gonna be have this program on every app out there. And now we can appeal to all those types of customers, and that's what it's forced us to do. And I'm thinking, I, you know, we dabbled our toe prior into online stuff. We, you know, we watch Beach Body, we watch Peloton, but I never pulled the trigger. And I'm a pull the trigger kind of guy. It's unlike me. But when this hit, I'm like, here we go, we're doing it. You know, forget profit this year. It doesn't matter. Let's get more people punching and kicking. Let's get into their home. Let's do it, right? Let's create the franchise owner where they can sign up a member where they get home workouts as well. Or they could downsell and say, oh, you're canceling. Oh no, well, let's move you down to this online only program. You know, so creating upsells, down sells, creating more revenue for the franchisees, and helping all three types of customers.

Yeah. Yeah, it's it's it's a good move. And one of the things I think is as entrepreneurs is, you know, we, if you're looking at it right, when the market shifts, like this, something unknown comes in, a black swan, if you will, the consumer needs change. You know, the consumers are there. They're still, they haven't gone anywhere. They haven't gone on within like a puff of dust, right? So the the challenge is who can meet the consumer needs the quickest and the most effectively? And that creates great opportunity, right? I'd be curious, Shan, because I the big challenge right now is is accessing home equipment, right? Are you guys looking at any solutions of how people may be able to get home equipment, you know, punching bags and things like that? I mean, there was a great kettlebell shortage, you know, back in June, right? What are you what are you thinking on that end? That's a great question.

Well, first off, there there may be a shortage in kettlebells, but not in boxing gloves. So I'm good there. And we are in the process, I've got so many ideas. We're we're testing right now our own workout bag for home. And it's super unique, super different, unlike anything out there. So that that's a custom, custom piece that I want to develop and make and get the customer can do the home workouts with nothing. They don't need any equipment. Or they can buy this package and get this bag, or they can buy this pack and get the leather glove with it and and and move up like that. So, yes, you're right. Home, you know, workout equipment was assorted, the supply chain is disrupted, uh, obviously, but the supply chain for my equipment that I need isn't disrupted very much at all, which is a good thing for me.

Yeah, yeah, that's a really good thing for you. It's not, I mean, try to find a barbell and some bumper weights nowadays, and good luck.

Yeah.

Yeah.

Our factories overseas that do our boxing gloves, and they did slow, they did lay off people and close down for a certain period of time. But uh most countries have done better with coronavirus than we have, so they're back up and operating, thank goodness. So a knock on wood, we're okay. I'm not saying it we couldn't have a disruption in supply chain. We we very well could. And I know Peloton, I listened to their earnings call recently, massive disruption in their supply chain, big problems, backed up with bikes because everybody's wanting them, the bike and the tread, and they can't get them to them fast enough, you know. So it's a I guess a good problem, but it could be a problem. I'm not gonna say it's not a problem forever for me, but right now it's not.

Yeah. So here's the billion, if not trillion dollar question. When this thing starts to smooth out and we get to whatever the new normal is, how do you think the fitness industry is gonna be different permanently?

Yeah, that's wow, that's a great question. I wish I had a crystal ball.

I think that's why I asked the question. I'm hoping somebody else does.

I think a lot of them are going are gonna not not gonna make it. I would estimate if I had to guesstimate 20 to 25% will not reopen. I mean, we're seeing some of that with our chain, with our system. We've lost some locations. I'm not gonna lie to you. It's you know, if landlords don't help and uh they can't get their uh PPP loan or our our help, you know, then it's it's hard. So number one, we're gonna lose uh we're gonna lose some players out there, and the strong ones will stay, right? Which which thins the herd a little bit. I mean, it needed fitness was getting too saturated anyway. It was it was getting silly out there. I mean, I saw all kind of crazy stuff, you know, people trying to do this, you know, mixing, uh, I mean, just weird stuff out there. Surf fitness and palaxing. I mean, what are we doing? Well, it's getting silly. I mean, so I think it needed to be um thinned out a little bit. And the next thing is the offering to the consumer is gonna be different. Like I spoke about the three avatars earlier. Yep. The offering just has to be different now, you know. You know, you may you have may have an offering where you can come to the club twice a week, but you can have access to Zoom workouts, private Facebook groups, and work like that. So the offerings, you know, customers are gonna be some are gonna be scared uh to come into a gym at all. I mean, some are gonna not care. And uh, you know, so you have to appeal to all of those. So the number one, so the two things we're gonna thin the herd, and then number two, and the strong ones with strong players will be stronger. And number two, the offering needs to shift.

Yeah, I think that's uh I mean that's that's a pretty pretty safe bet for the most part. I mean, we're definitely gonna see a thinning of the herd. Uh it's already happened. I mean, a lot of you know, privately owned boutiques and you know, running on 10% margins or less. It's just it's tough to make it. And uh, you know, that's just the way things are. You get punched in the jaw, right? And uh that's part of it. So, I mean, I don't have to tell you that. You're a pro fighter. So I you know, as Yeah, you were okay, got it, got it. So as you've as you've grown, it sounds like kind of almost an accidental entrepreneur, right? You just want to help some people, you came up with an idea, then all of a sudden this thing grew. And, you know, you you grew with it. You've you've obviously figured it out as you've gone. But entrepreneurship comes with difficult and unique personal challenges, especially being at the top. You know, it can be lonely up there. What's been some of the what's been one of the biggest personal challenges you face as an entrepreneur?

That's a great one. You don't have many, you know, when you say lonely at the top, it's so true. There's not many people that you get that I can hang around that think like I think, that that are wired the way I'm wired. And not everybody could be an entrepreneur, not everyone can be a a founder or or even a CEO. You know, I think that's two different positions there, a founder and CEO, two different things. Yep. And I'm trying to blend both, right? So I think those are the challenges. I'm extremely visionary, I'm extremely big thinker, and I'm extremely fast mover. And that can be extremely frustrating for my team. Because I don't, you know, I just want to throw it out there. Whether it's I I always throw it out, I always the the saying in my head is uh speed is more important than perfect execution. But sometimes that's not, you know, for my team, that's a terrible slogan. My team's like, oh no, no, no, no, don't do that, you know, because I create a mess and they have to kind of go behind me and clean it up, right? So so my patience is my big patience number one, communication skills number two. I think communications are the God-given talent that everyone needs. If you develop that, you can accomplish anything. Whenever I've messed up in my life, whether it's professional in my career or relationship-wise, it's been cause of my communication. Either I did it at the wrong timing, maybe the tact wasn't right, the tone wasn't right. So, challenges for me is communication and uh the speed I like to do things and blending founder with CEO and learning how to be a CEO. It's it's different than the founder. It's super organized, it's super great communicator. It's it's a little different position. And that's why I see all the time when companies get bought by say private equity, they will replace the founder with a CEO, with a seasoned CEO, right? And that's my worst fear. Oh my God, I don't want to do that. You know, I I gotta learn this, I gotta learn the CEO job, right? I gotta learn how to do this. So that's the challenge.

Yeah. And that's a big challenge. I mean, oftentimes who or whatever it was that got you there isn't the one that's gonna get you to the next level. And you know, a CEO job is way different, man. Founder's visionary. I think you know, ultimately what you're looking for is a good combination of a founder and a CEO, right? Uh the visionary and the implementer. And that's uh that's generally where you see a lot of you know great success too. So when you're looking for now, Shannon, and and the needs you have within your business and to to continue to be successful at the the rate that you want to be. What's what's one of the biggest needs you have as a business right now?

Yeah, you know, and really quick on the implementer and the visionary. You know, my wife is my wife is the CO of Chief Operating Officer. Oh, great. Yeah. And so she's learning to blend founder, because she's a founder. She's a co-founder with me. Even though it's my brainchild idea, she started the first store with me, and we started this company together, but she's learning to blend those the chief operating officer role with this. So that's the challenge for her as well. And she's she's so good and so smart. I'm so lucky to have her as the CEO. I would not want another CEO. She's it actually cut out to be that type of job. She's super detailed, super organized. Me, I'm just flying stuff trying this, you know. So, but what am I looking for now? Is your question. So surrounding myself with super, super talented executives. We are in the search. You know, we we brought on recently, two years ago, we brought on a great CFO, super knowledgeable, come from a big company. We swiped him away. We got very lucky. We recently swiped a great general counsel attorney from a massive brand, from Denny's. I'll go ahead and say from Denny's. Um, and then now I'm looking to hire a VP of ops to uh help Heather and the ops team. So my my focus for 2020, the focus is to prop tee it up, is to build the rocket so 2021 we can launch like crazy. That's my goal.

Right on, ma'am. That sounds good. Sounds like a good plan. And it's it's a weird blessing, right? That in some way this this pandemic came through and it's made everybody kind of really stop, evaluate what they're doing as a business, lean out, right? Look at the most effective things, cut the fat. You know, and unfortunately, sometimes that term, and I I don't like that I actually use it of cutting the fat is personnel, right? Um, so it's it's it could be a very good thing. I think overall, like you mentioned, the fitness industry has been bloated for the past few years. Um, you know, just even coming from the market I was in, which was, you know, Central South California and and the coastal cities is man, like I saw so many boutiques and and even large gyms come and go so quickly, so rapidly. And it's it's just hopefully this this really helps also make it a more professional atmosphere. You know, having showing people that, hey, you know, you can actually, now that it's a little bit thinned out, you can actually, those who are still committed to it can uh can make a career out of it and make a living and you know, can really raise the profession up to a higher level. So that's that's my wishful thinking, man. I think uh ultimately there's always you know silver linings. I think it's Winston Churchill, right? Never let a good crisis go to waste. That's uh it's true. It's it's cliche because it's true. So yeah. Well, Shannon, any other last thoughts or anything you like to bestow upon the audience?

Well, I last thing is I know this can be very stressful for a lot of people, you know, whether it's uh the you know the the virus or financial. And the only thing I can say is go move. Move your body, change your state, as Tony Robbins says. Change your state physically, whether you do nine-round, Zumba, crossfit, whatever it is, just go move. I'm telling you, you'll feel better, you'll perform better, you'll be a better parent, be a better husband, you'll be better at work. So just go move. I hope you try nine round, but if not, no problem. Just go move.

I love it. And Shannon, where do people get a hold of you? What's the best place that you send them to?

Yeah, um, you know, I'm on I'm on all the social media platforms. You know, the um Shannon the Cannon is my finder name. So you can search that Facebook, Instagram, LinkedIn. I'm there, of course, nineround.com. You can uh reach any, reach our company through there as well. So um, those are the platforms, and I I love spreading the gospel of of fitness and health.

Right on. Well, Shannon, I I know you're super busy. I appreciate your time, man. It's been uh it's been an interesting interview hearing your backstory and how the whole nine-round thing evolved. And uh yeah, man, very grateful for having you on. I appreciate it.

I appreciate it. It's been a pleasure. Hey, thank you so much.

Yeah, ladies and gentlemen, Shannon Hats. Hey, it's your host, Eric Malzone. Thank you so much for listening to another episode of the Future of Fitness. If you enjoyed it, please do me a huge favor by going to the website and signing up for our newsletter. The website is futureoffitness.do. Again, that's futurofitness.do. We've got some big, big announcements coming down the pipe, and we want you to make sure that you are on top of it. Thank you again. Signing off