Andrew Lachlan - Sauna House- A Modern Spin On Age-Old Wellness

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[00:02:23] Andrew, Laughlin, welcome to the Future of Fitness, my friend.

[00:02:26] Eric, thanks so much for having me on. I really appreciate it.

[00:02:28] Yeah, it's, you know, I always say this, like, every single time I wish I recorded stuff prior to actually recording, like the initial conversation we've had for the last 17 minutes, because it was really fun.

[00:02:39] And I'm, good vibe.

[00:02:41] We know a lot of mutual people.

[00:02:43] And I'm super curious about what you're doing at Sauna House.

[00:02:46] You know, there's a lot of questions that you ask me, like, well, what kind of questions do you want to ask?

[00:02:49] I'm like, dude, I got too many for an hour.

[00:02:52] So there's a lot of questions in my industry.

[00:02:55] Yeah.

[00:02:56] Well, let's, let's get into it.

[00:02:58] I mean, uh, so you, you started this in November of 2018, which is actually, it's been around longer than I thought.

[00:03:06] Um, maybe give us a little bit of the history, relevant backstory to how you got to that point.

[00:03:12] And then we'll take it off from there after the inception of Sauna House.

[00:03:16] Sure.

[00:03:16] So I've always loved small business.

[00:03:19] I mean, I was selling golf balls as a kid, making money to buy goldfish or a Swedish fish.

[00:03:25] Yeah.

[00:03:26] Swedish fish at the swim club.

[00:03:27] You know, I love business and I always have, and I, I've always been more on the creative and the idea side, marketing sales.

[00:03:35] That's kind of my side, ideation vision.

[00:03:38] You know, I, I grew up a competitive athlete too.

[00:03:40] So I've talked about this on some other stuff, but when my athletic career ended, I always say my drinking career really took off.

[00:03:51] And, you know, by age 22, I was pretty suicidal and really heavy.

[00:03:57] You know, I was drinking, you know, a seven 50 of, of liquor a day, sometimes more.

[00:04:05] And I, you know, at the time I was running a car washing company and I was managing an ice rink.

[00:04:13] I had failed out of college and I was like trying to keep all the balls in the air as well as my, my habit.

[00:04:22] And that was really difficult.

[00:04:24] And, and by 23, I was really kind of at the bottom.

[00:04:28] I had an accident that crushed the tips of some of my fingers off very early in the morning.

[00:04:33] I was still drunk and we were setting up a mobile car washing site.

[00:04:37] And, and I think I had like my first kind of like spiritual awakening of sorts during that time period.

[00:04:43] About two months after the accident, I sold my book of business and all my equipment and went backpacking in Europe for like half a year.

[00:04:51] And within two weeks of that trip, I just magically quit drinking.

[00:04:55] Then I started like, you know, reconnecting with what I would call my childhood self.

[00:05:00] And, you know, and then I launched another company and it was going really well.

[00:05:04] And about two years later, I was like, oh, I think like, you know, I'm older, I'm more mature.

[00:05:10] I can drink again like normal people.

[00:05:13] And I started drinking again and quickly realized I couldn't drink like normal people.

[00:05:19] And so I started trying to quit again.

[00:05:20] And I wasn't really successful for about 18 months.

[00:05:25] And, and, but after I was successful that time, now I've been sober for almost 12 years.

[00:05:31] And I feel super lucky.

[00:05:33] And that's like a whole story in its of itself and like all the things.

[00:05:37] But what was going on for me two years sober was I had a job.

[00:05:40] I was exercising.

[00:05:42] I was eating right.

[00:05:43] I was with my girlfriend, who's now my wife.

[00:05:47] On the outside, everything was good.

[00:05:49] But on the inside, like I still had tremendous anxiety and my family struggles with depression.

[00:05:58] And I was struggling with anxiety and depression.

[00:06:00] And a friend of mine introduced me to cold water therapy.

[00:06:05] And I mean, I did my first cold plunge and like I had done some in the past, like training for athletics.

[00:06:11] But when you're a little older and you've had a lot more bumps along the way, you like notice intuitively, like what's better for your body and so forth.

[00:06:20] And I felt great after one cold plunge.

[00:06:22] And then like, you know, he had told me to do it every day for 30 days to see how I felt.

[00:06:28] And I just, I kept, I slept better and I woke up feeling better, you know.

[00:06:33] And coincidentally, Tim Ferriss launches his pod, same exact time period basically.

[00:06:37] And I think like his 11th or 12th guest was Dr. Rhonda Patrick.

[00:06:41] And she tees off about the big study that now everybody quotes on the internet about the benefits of sauna and cardiovascular health,

[00:06:51] long-term all cause mortality, all those kinds of stats.

[00:06:55] And wow, that's interesting.

[00:06:57] And then I moved into a building and I found a sauna in the basement.

[00:07:00] And so all of a sudden I had like sauna and cold therapy in my life at the same time.

[00:07:05] And then I started trying out like the public bathing spaces like Kabuki in San Francisco and Banya and going up to Seattle and seeing Banya 5 and then going to Europe and trying some spaces over there in the summertime.

[00:07:19] And I just fell in love with the culture, right?

[00:07:21] Like as an athlete, I was taught to turn on and perform my whole life.

[00:07:25] I was never taught anything about turning off, mindfulness, breath work, recovery, you know, all that side of performance.

[00:07:33] Like back then it was literally just like, how do you get people to turn on it, right?

[00:07:37] Like there was no like, how do you get people to turn off portion?

[00:07:41] At least maybe at the high, high levels, but it hadn't trickled down yet.

[00:07:45] And now it's like everywhere.

[00:07:46] And that's everybody talks about is like sleep quality and your whoop recovery score, right?

[00:07:51] Like back then that wasn't, that wasn't a thing.

[00:07:54] So yeah, I fell in love with it.

[00:07:55] And when my wife and I decided to move from San Francisco, we were either going to go to Bend, Oregon, or we're going to go to Asheville, North Carolina, because her family lives in the Carolinas.

[00:08:04] And I had been working on the business model for about a year.

[00:08:08] I wanted to bring something to the American people that was like approachable and accessible.

[00:08:12] Because what I noticed in all these different communal bathing spaces is that like, they're very strongly tied to those cultures, which is like extraordinarily beautiful.

[00:08:23] But it's also like really hard for Americans to understand what the heck is going on in those, some of those spaces.

[00:08:30] So I built a place where I wanted to go hang out and sauna and cold plunge with my friends.

[00:08:36] And it turned out like people really liked it.

[00:08:38] And then the pandemic happened and that banged us up for a while.

[00:08:41] And then we, then we started growing.

[00:08:43] So that's, that's kind of the story.

[00:08:46] Yeah.

[00:08:47] There's a lot to go back and unpack there, right?

[00:08:50] I mean, it's, it's interesting to me, like of all the health benefits and I think similar to you, the reason I don't have a cold plunge, but telling I'm in Montana.

[00:08:57] So I have a cold shower, which is pretty, pretty darn good.

[00:09:00] Oh yeah.

[00:09:01] Cause it's cold, right?

[00:09:02] It's really cold.

[00:09:02] Oh yeah.

[00:09:03] And, uh, the reason I do it every morning is because of anxiety and depression.

[00:09:08] Like that runs in my family as well.

[00:09:10] And I feel like that stuff, like, you know, a lot of people talk about, I just feel good afterwards, but man, it's stronger than any pill.

[00:09:17] Right.

[00:09:17] Like it's, it's like just getting out of bed and getting into that shower, into that plunge is probably very challenging mentally.

[00:09:23] Once you do it, you know, the reward is so great.

[00:09:25] Just cool and calm and can focus again.

[00:09:28] The clarity and the inflammation, you know, uh, along with, you know, dopamine or epinephrine and all those things.

[00:09:36] But I'm really convinced like in the science is so early, right.

[00:09:40] But I, I'm personally very convinced that, you know, when you expose yourself to cold water therapy on a regular basis, you are tuning the pituitary gland and your neuro brain chemistry to take care of itself.

[00:09:53] Like it's never done before.

[00:09:55] Uh, I I'm convinced of that.

[00:09:57] Yeah.

[00:09:58] Super.

[00:09:58] Okay.

[00:09:58] So, um, for 2018, what was, what was the founding of it?

[00:10:05] Was it the first location opening?

[00:10:06] Like, uh, give us, walk us back to that year.

[00:10:08] Yeah.

[00:10:10] So we went from traveling for a year and getting married, visiting bath houses, coming back to Asheville, buying a house, leasing the commercial building and getting started on construction.

[00:10:24] I had never renovated a historical adaptive reuse building in the industry.

[00:10:30] It's called a cold dark shell, which means, uh, no power, no water, no age vac, just basically a shell.

[00:10:39] And so I started working on that by myself and my wife was helping me a little bit at the time, but she was pregnant with our first daughter.

[00:10:46] And so she kind of become less helpful along the way because she had a tough pregnancy and she was very sick and, and yeah, I mean, that was a tough year.

[00:10:57] We took all of our life savings.

[00:10:59] We, I sold my wife's 401k from her nursing career.

[00:11:02] I pushed in all the cash savings I had and construction was going pretty well.

[00:11:08] But of course, as construction does, it went longer and over as things do.

[00:11:14] And then we had our daughter and hired our first employee, Jen.

[00:11:19] And I got super lucky with Jen.

[00:11:20] She became my co-founder now and an equity holder in the brand and just an incredible young woman who can learn and lead from the heart.

[00:11:31] And just, yeah, I feel so lucky to have met Jen.

[00:11:34] And yeah, that first year I started having panic attacks in the middle of the night because we were running out of money and the kit, like our daughter wasn't doing well inside my wife's stomach.

[00:11:43] And there was like, it was really, really challenging time for me.

[00:11:47] I wasn't sleeping much at all.

[00:11:49] I just put on the Sam Harris app and basically listened to meditations and dharmas and pass out and wake up and pass out and wake up and it'd still be playing.

[00:12:03] It was a really hard time.

[00:12:06] Yeah.

[00:12:06] But getting open was amazing.

[00:12:08] Like customers immediately showed up.

[00:12:10] People really started talking about the experience.

[00:12:14] And then I started realizing how impact what, like the whole last year, like you're not helping anybody, right?

[00:12:21] Like you're just in the weeds on construction.

[00:12:23] And once you see someone do a few rounds of sauna and cold therapy that's like came in suffering and is going out feeling really good, then you start to realize like what I'm doing here really matters.

[00:12:36] And I, and I love serving customers and I love building community and bringing people together around like what I call social wellness.

[00:12:44] You know, it's like, that's, what's great about what we do.

[00:12:48] It's, it's passive and restorative.

[00:12:51] You see mothers and daughters there.

[00:12:53] You see fathers and sons there.

[00:12:55] You can do this together.

[00:12:57] It's social, but it's also hard.

[00:13:00] And I love the quote, like bonds are forged in adversity.

[00:13:03] So you're like, you're bonding with strangers and you're bonding with the people you came with in a new way.

[00:13:09] Yeah.

[00:13:10] And so once that started happening, like I started coming like back to life and like sleeping a little bit better.

[00:13:15] And then, and then we got pregnant with our second daughter and then we closed for COVID two weeks later.

[00:13:21] And, uh, so it was like kind of right back into war zone, like right as the fog was lifting, like we had three months of like absolutely crushing the business, very profitable.

[00:13:32] And like, we're like me and Jen were so hype.

[00:13:35] And I was already looking at new stores in Durham and Charlotte and like, yeah.

[00:13:41] And then we just closed.

[00:13:43] And fortunately the government programs were, were pretty good.

[00:13:46] And when we did reopen, the customers came back and yeah, but 2020 was, I mean, hard for everybody, but differently, you know, and life's that way too.

[00:13:55] Right.

[00:13:56] It's it's everybody suffers.

[00:13:57] It's just differently.

[00:13:58] And when, and, uh, yeah, coming out of COVID customers.

[00:14:02] And then we started looking at expanding and the franchise model seemed to be a good opportunity at the time.

[00:14:09] And we're really enjoying that process as well as launching corporate stores.

[00:14:13] And now we have two corporate stores really close to opening, uh, first franchisees close to opening.

[00:14:22] And then we have four stores coming right behind that.

[00:14:25] And then four more stores coming right behind that wave.

[00:14:29] So right now we're, we're kind of in construction development of Q4 of next year.

[00:14:34] We could do like maybe two or three more stores next year, but really we're starting to think about 2026 and in much bigger picture stuff now.

[00:14:43] Yeah.

[00:14:44] Yeah.

[00:14:44] It's interesting.

[00:14:45] Uh, the franchise model choice.

[00:14:47] I had, uh, Robbie bent on this.

[00:14:50] Yeah.

[00:14:51] Podcast not too long ago.

[00:14:52] And, you know, other ship is very, very cool concept too.

[00:14:55] Right.

[00:14:55] Very, you know, different, more, it's more experiential in the way that it's led.

[00:14:59] It's like a class environment and have, you know, they're really leaning into the, the guided.

[00:15:04] Side of things.

[00:15:05] Uh, and I asked him, you know, what would you ever consider franchise?

[00:15:07] And he said, no, they're going to do corporate.

[00:15:10] Not, not, not, not net at least.

[00:15:12] Yeah.

[00:15:12] But he said, it's a difficult one.

[00:15:15] To franchise due to the scale and a lot of factors, right?

[00:15:20] Just, yeah.

[00:15:20] Matt, we talked about this, like the permitting or the sanitation, uh, the size, the build outs, like.

[00:15:27] Everything that goes into, into doing this as a franchise model.

[00:15:30] So maybe walk us through that decision, like why a franchise and then, you know, I'm sure

[00:15:34] there's, there's always trade offs to each particular model.

[00:15:36] So how'd you get to that choice?

[00:15:38] Yeah.

[00:15:39] Well, first off love Robbie bent and his team.

[00:15:41] Great concept.

[00:15:43] Othership is a fun experience.

[00:15:45] I think it's, it's awesome.

[00:15:47] They chose a growth path that was different than the path I wanted to choose.

[00:15:51] So they, they went VC route with funding.

[00:15:54] And so they're going corporate and that's, that's awesome.

[00:15:57] Um, what I looked at a lot of options early on for funding and it was like, you know,

[00:16:04] you give up a lot of control and a lot of the optionality of the future.

[00:16:09] I'm also a founder who's not interested in, in really an exit.

[00:16:13] I'd like to be in this industry for a really, really long time.

[00:16:17] And so I was trying to be really patient with my capital.

[00:16:21] And so I decided to leverage, you know, other people's capital as a way to expand early to

[00:16:29] get, you know, and a way to, I love local owners too.

[00:16:32] Right.

[00:16:33] So having a local entrepreneur run a store is a great way to grow.

[00:16:38] So now we'll see how blended we are.

[00:16:41] You know, like some franchisors are like three corporate stores and 200 franchisees.

[00:16:47] Uh, that's not going to be us.

[00:16:48] We're going to have a lot of corporate stores and a lot of franchisees as well.

[00:16:54] But it was a tough decision, but it was mostly driven by the fact that like, if I raised capital

[00:16:59] in that environment that I was in, you know, I would be selling a huge portion of the company

[00:17:04] and giving up almost all governance in order to grow because our build outs do cost two

[00:17:09] and a half to $5 million a store.

[00:17:12] And that's super capital intensive.

[00:17:15] So, you know, we're not, we're not trying to sell 50 franchises in a year, like some other

[00:17:20] concepts because our build outs are really capital intensive.

[00:17:24] They have water demands that are unique power demands that are unique humidity floor systems.

[00:17:33] Like there's a lot of details and they don't look that complicated.

[00:17:38] And when I tell people like, Oh yeah, they always say, Oh, I could build that for, you know, 500 K bro.

[00:17:46] And I'm like, enjoy the ride.

[00:17:49] Uh, because you can't, you know, you really can't, if you're going to build pools and permit them correctly,

[00:17:56] and you're going to build a high quality sauna bathing facility, uh, you can't, you can do other stuff,

[00:18:03] you know, and there's smaller concepts that are infrared or different things.

[00:18:08] And, you know, that's, that's that model.

[00:18:11] But sauna house is trying to build really iconic five to 10,000 square foot stores that, you know, are everywhere and accessible and approachable to, uh, a really large audience.

[00:18:25] And I, and I think that like, I love this space.

[00:18:28] Right. And like, there's going to be Japanese onsens and there's going to be more Russian banya style places, and there's going to be more sweat houses and more other ships.

[00:18:36] And we're really at the beginning of, of what I call the sauna bathing or bathhouse culture emerging into the U S market.

[00:18:47] And you're going to see a lot of shapes and sizes.

[00:18:49] And I think it'll be very interesting to see what the value proposition is for the customer and what the enduring models look like.

[00:18:57] Yeah. I don't know, but I think mine has staying power, but we'll, we'll see.

[00:19:03] I, I, I think you got a really good shot, man.

[00:19:05] And, you know, I, and one of the things I want to ask you is, as we were talking about pre-recording is, uh, now over the past few years, I was introduced really to like sound of culture by my neighbor who is from Michigan, but lived in like a Finnish area.

[00:19:16] Yeah. And he built a, he's very handy. He built his own really beautiful sauna.

[00:19:21] And he invited us over for, you know, the first time, like four or five years ago.

[00:19:25] And, uh, it was like a thing, man. It was like a couple hours. We had appetizers. We had a couple of beers, right?

[00:19:30] It was like, you know, now shower and it was, it was just a thing you do. And it was really nice and good conversation.

[00:19:36] I'm like, this is pretty cool. And sort of just looking into more. So now whenever I travel, uh, I try to stop in at some sort of bath house or and see how it is.

[00:19:44] And this year it was really interesting. I was in the central Asia and went to one in Uzbekistan and then one in Istanbul, ancient, ancient ones. Right.

[00:19:51] Those are really cool.

[00:19:53] Really cool. Like, wow. Like they let my wife in. I mean, this is going to sound bad, but, uh, this is just the culture and you know, uh, they let my wife in and she was, they gave it letter, take some photos of me doing all this stuff in the inside stone. And it was just amazing. Just think about how many years behind this. So what I'm getting to is here when you, I know you've done this at a much bigger scale. You've really investigated different concepts. Where do you find the inspiration for what you have at Sonaha?

[00:20:19] Yeah, that's a good question. I think I'm really inspired by simplicity of the Nordic cultures. You know, the stuff you went and saw in Istanbul is unbelievable. And, you know, to build that today, you know, a hundred million, 200 million type, type facilities over there. And they're the most reminiscent of Roman bathing culture, actually, in my opinion. Well, my inspiration, yeah, it's definitely from the Nordics and the simplicity. I just wanted a place that was simple and intuitive.

[00:20:48] I didn't want, like when you get to some of the really big facilities, like you're sitting there going like, where am I going to go next? Or what should I do next? And like, I think with like the modern era of questions, like, oh, I just got a text. Should I respond? Oh, I just got an email. I need to do this. Or, oh, I got to go grab my kit. Like you're asking yourself and checking all the time with like, what should I be doing? When should I be doing it? What, you know, I wanted a place where like, you don't ask yourself questions.

[00:21:17] Right. So you're wandering through the space and it's intuitively designed. And, you know, to do that well, I think you just have to really reduce the amount of things you do, which is why like at Sauna House, the first thing we do is we check in, then we take our shoes off.

[00:21:35] Then we require everyone to shower using soap and water, which is traditional bathing culture is that like you're pre-cleansing the body before the next cleansing experience. And yeah, so you'll shower and change into your bathing suit. We're co-genders. Bathing suits required all the time. You know, this is America. I don't think I could stay in business if we were all nude. It's not mass market. Let's just put it that way.

[00:22:01] Yeah. And then you sauna and rinse before going into the pools and that helps keep the pools clean. And then you rest and rehydrate. We partnered with a company called Glanter and Jones to provide cast stone concrete furniture exclusive to the Sauna House brand, which is really exciting.

[00:22:20] And we do tea service and we do tea service and stuff. So you rest, rehydrate, socialize, and then repeat. We have two circuits at each store. So you'll have two different Sauna's, two different cold pool temperatures and two different relaxing areas.

[00:22:34] And some of the stores also have warm pools, which is part of the relaxing area. So yeah, I'm really excited to bring what I believe is like celebrates ancient bathing culture in a really simplistic way, but is also like approachable and teachable to the U.S. market.

[00:22:52] I want to like, if it's your first sauna bathing experience, like I want you to come use sauna house and then feel like really empowered to go use a Japanese onsen or Russian banya or whatever.

[00:23:04] But starting with us is going to be a great introduction to, you know, a communal bathing space, which has such a bad rap and scares everybody. So we've got quite a bit of education to do there.

[00:23:16] Yeah. Well, I was talking to Robbie about this other ship is like, you know, if you've been around at least as long as I have, like when you think of bathhouse, there's a certain connotation to what that, what may go on in a place like that.

[00:23:28] So it takes a little bit of re-education, but I think that's also starting just generationally, generationally starting to kind of wash itself out as like, I don't think like my nieces and nephews in their twenties think of a bathhouse the way that I thought of it, you know, when I was their age.

[00:23:41] So it was definitely, uh, it seems to be happening. I got no science behind that. The walk us through, like if I'm a new member, right? Like from discovery of what you guys do to the sales and, and indoctrination process, the first couple, like how do you take people, bring them in to the culture?

[00:23:59] Yeah. We, we call it like a welcome flow. We are, we're not too much of a membership model. I think it's a little counter. We have some members, we keep some members, but we're mostly like walk-in and series passes.

[00:24:17] Memberships are kind of an exclusive thing and we really want to maintain a high quality third place kind of vibe. Like, could you imagine going into a coffee shop that was a membership model?

[00:24:30] Like, and you came in and you're like, I'm not a member, but other people are a member. This is like, you know, so we don't want to go too far down the membership model, but a first time customer comes in and they get like a welcome introduction to the brand.

[00:24:44] And, you know, we walk them through the circuit that I walked you through about moving through space. And then they get a, a little tour of the space actually, if it's their first time so that they just feel more comfortable in the space.

[00:24:59] Like a lot of new people, again, speaking to the bathing environment, right? They don't know what they're doing. It feels a little scary. A lot less now than when we first started. But I mean, literally when we first started and I worked at the front desk, people would walk through the front door and you could just see fear on their face.

[00:25:18] It's like these beautiful front doors with plants hanging over them and it's like white and like smells good. And yeah, fear like that. That was the, that was the look on people's face.

[00:25:30] And so we really wanted to get good at welcoming people in and taking away that those feelings and transitioning their vibe into our vibe. And, um, yeah, we kind of do that.

[00:25:43] Like, is it just intimidation?

[00:25:45] Like what?

[00:25:46] Yeah. I think they're just intimidated of the unknown. Like, what am I going to be doing here? Is it nude? Like what? Yeah. Yeah. Not as much quite now. Cause it's become really mainstream in the last three years. Like kind of from 21 on it, it started picking up like a lot of momentum.

[00:26:07] Um, and you know, Hooverman and you know, everybody's, you know, my mother-in-law's, you know, 70 year old Catholic priest is talking about taking cold showers on stage. That's how, you know, it's hit mainstream, right? Like if the priests are telling the congregation and like it's on NBC and like who, you know, Hooverman's talking about it, you know, every fourth podcast, right? Like it's, it's full blown having its moment.

[00:26:33] And I'm very curious to see like, how long does this moment stay? Right. And what is the enduring lasting movement that we're all part of right now? And I just feel really lucky to be a part of it. I love the industry. I love all my colleagues in the industry and everybody's building some really beautiful spaces to create connection and healing. And that at the end of the day, like people are suffering.

[00:26:58] And if we could live in a society that reduces suffering a little more effectively, I think that that would be really exciting society to be part of. And so I enjoy building it.

[00:27:09] Yeah. It's, it's interesting to see, like, I always relate to my personal experience with CrossFit where it was like, it came on hot, man. Everybody talked about it. It was, you know, it was seemed to be a conversation that was always happening. It just grew so fast. And then, you know, eventually plateaued and then kind of settled in.

[00:27:27] And then, you know, when I think about like, I kind of see it in the same way as like the sauna culture, the contrast therapies, all that stuff. It's super hot. Everybody talks about like, what's the old joke? Like, how do you know someone cold plunges? Like, oh, don't worry. They'll tell you. Right.

[00:27:40] Yeah.

[00:27:40] It's like, it's just true. That's the same thing with CrossFit. It's the same exact joke. And, uh, but like trying to articulate this question well, is this something where, is it an either or like, are the fitness and health and wellness consumers?

[00:27:55] Like, I think people think like, oh, is someone going to pay for the health club and pay for a sauna house? Right. Like, or is this going to be something that's going to be a brand new category where it's like, no, people are just going to commit to this long-term. And you know, what do you, if you had to bet your money now, two questions, this is what this is. Two questions. Long-term, how do you think the winners will survive in this particular category? And is it going to be a category of its own or is it going to get blended into like fitness and health?

[00:28:18] Good two-part question. Thank you.

[00:28:20] I'm going to answer your second question first.

[00:28:23] Cool.

[00:28:23] I do think it will get blended in, right? Like lifetime fitness is, you know, renovating spaces and going to be adding cold water therapy and the big box gyms are going to bring stuff in for sure. And I think that that will be part of the industry. No doubt about it because the convenience, right? And the velocity of society, I don't think is going to be slowing down.

[00:28:46] So if it's really convenient, people will most likely use it. Now, traditionally, gym saunas have had a, like, you know, people going in their clothes and like their shoes and then like they're leaving the, like there's not real intentional sauna bathing etiquette.

[00:29:04] And so we'll see if they get good at hospitality. Typically, gyms are not good at hospitality or things like that. So setting the vibe, I think, is really important. And so I think that the enduring models are going to be more experiential and have a way better vibe.

[00:29:23] And, and like, I'm not trying to take a lifetime customer to make it a full-time sauna house customer. I'm borrowing them like four times a month, five times a month. And, you know, you, you do CrossFit five days a week. Great. You sauna house once a week, maybe, or twice a month, you know?

[00:29:41] And, and then there are sauna bathing, bathing enthusiasts, right? And they don't, they haven't, they don't have gym memberships. They don't go to the gym. They, they might walk regularly, hike, but they're not fitness people.

[00:29:58] But they want to feel good. And they know what feeling good feels like. And when you sauna and cold plunge, you feel good. And so it actually is much more of their primary thing on top of, you know, walking and hiking and things like that.

[00:30:11] Yeah. So I think the enduring models are like, truthfully, like the ones that are best at building in the high density urban environments, you know, the, they're going to do really well if they build community well and they stay on top of cleanliness and maintenance, right? Like public bathing spaces that aren't kept clean are really unpleasant to visit.

[00:30:37] And so cleanliness is extraordinarily important, but it's actually extremely hard at scale too. Like we clean for three hours every day before opening and then the shutdown closing is a couple of hours as well. So there's like a lot of maintenance, cleanliness going on and pool chemistry balancing. And, you know, so to, to do that,

[00:31:07] that at scale, I think is, is hard. So the enduring models also will be outdoor, like, you know, the hot springs type facilities are really beautiful. And I think that those will be an enduring model because obviously people love to travel and they love to do things like this while they travel.

[00:31:25] And so again, like the more experiential. And so again, like the more experiential it is in the outdoor spaces, it's going to be an enduring model and then high density urban environment. It's going to be a, it's going to be an, you know, it's going to be like CrossFit and all the micro gyms, right? Like it's a, it's very ultra competitive, you know, there you've got CrossFit, you've got metabolic, you've got big box gyms, you've got Barry's bootcamp, you've got a missing one.

[00:31:54] One of my favorite F45. You've got, you've got a bunch, right? So they all seem to have a lot of space too. Like there's, there's so many of those and those all survive. And so the density of how many sauna, cold plunge, contrast therapy studios versus like, is it a big bathing space versus, is it a giant bathing space? Like we'll see what the density ends up being.

[00:32:22] But like right now it's like, no one has a single clue how many of these per capita will be sustainable. And so, yeah, it'll be very interesting to see the next five years unravel because the, the bigger concepts are typically nicer. Right. And I think that they're going to do better, but the contrast therapy studios, like, you know, infrared with a cold plunge or something like that. Like you can open one of those in a weekend and there's not that much work, you know, put into the space.

[00:32:52] And so all the other brands that take a little time and cost a lot more money, you know, we're lagging behind the market a little bit, but we're coming to market and the value proposition is pretty good. So I think it's going to be really interesting to see what the customer likes and, and what the density looks like.

[00:33:11] Like there's only one way to find out. Right. Yeah. And, uh, yeah, let's do it. And I, uh, I kind of, I'm sorry as the more I talk about this, the more I think about this particular category that's emerging is like, I believe it's more in like the massage therapy stretch lab. And by the way, shout out to Lou for DeFrancisco for Connectius. Uh, you know, I, that I'm starting to see more in that category, you know, kind of taking from that market share, if anything like that, that pocketbook.

[00:33:41] Uh, I don't know. Like what do you, what do you think about that idea?

[00:33:45] Yeah, I think it, I think it's more in the spa world, right? Like I think, I think it, yeah, like, and, and our category has no name, right? So that's the other fun part about trying to talk about this.

[00:33:57] No one defines our category the same. Like if you're in Europe, my business is a Nordic spa. That's what it would be called. Yeah. Most, most European countries, I should say, or a sauna house. Some countries would call it, but in the U S like we don't like to be a spa, like cause of spa mentality, which is like, you deserve it. It's luxury. It's once a year. It's all of that. Treat yourself.

[00:34:25] Like that's not what I'm going for here. This is like lifestyle wellness, like self care, regular routine recovery. So you, I think you're going to be taking out of both pockets, to be honest. Like, I think some people are going to, you, you know, I think it could take from gyms.

[00:34:45] And I think it could take from spas as well. So I think, I think it's part of both industries. That's, that's actually kind of part of a lot of conversations we've had internally and watching other competitors is like, that's a gym. That's a gym concept. That's a spa. That's a spa concept. What the hell are we guys?

[00:35:07] It's like social wellness experiences, like something like that. Yeah. You need to, you need to, you need to frame that. Yeah. Yeah. I need to get with Robbie Bent, create a category name for, for these sauna bathing facilities. Cause there's, there's really no industry like standard. There's no data. Like it's fun. We're creating a new kind of category, I guess you'd call it.

[00:35:28] I want to get into kind of the unit, more of the unit economics, the site selection, market selection. How, okay. How many square feet is this thing that you have generally?

[00:35:39] Our stores are five to 10,000 square feet. Okay. Most are right around six to eight right now.

[00:35:46] And what type of markets to, I guess, and here's another two part question. What type of markets are you looking for? And then what type of franchisee are you looking for?

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[00:37:14] Yeah, we're looking for high density urban environments and suburban markets like the suburbs of Philadelphia is a great market for instance.

[00:37:24] That's where I grew up, Philly.

[00:37:26] And we'd love to get a store in there.

[00:37:28] A lot of it has to do with the real estate, you know, because real estate prices are really high right now.

[00:37:33] And it feels like it's a bit over...

[00:37:38] We'll see.

[00:37:39] Seems like it's at the end of a cycle a little bit.

[00:37:41] Prices are coming down.

[00:37:42] The market's pretty soft.

[00:37:44] You know, the pricing got run up so high in commercial real estate that, you know, things feel a little frothy.

[00:37:52] So we're looking for deals too, you know.

[00:37:55] Commercial real estate, like if you haven't gotten into commercial real estate, it couldn't be more opposite than residential, right?

[00:38:02] Like you have no idea who owns the building, whether they own it outright or they have way too much leverage or they have partners who want to sell it or they have, you know, like every single building has a unique story.

[00:38:14] And so, like, we are just constantly hunting buildings that work for our concept.

[00:38:22] And, you know, again, power, water, sewer, parking, right?

[00:38:28] Like HVAC, like all those things play a huge role in site selection and the costs to construct.

[00:38:33] Cold dark shell, warm white shell, institutional landlord, mom and pop landlord.

[00:38:38] So we're very passionate right now in the Southeast, like most of our deals are happening in the Southeast.

[00:38:45] But we have some stores going on in Austin and Denver, which is really exciting for us.

[00:38:50] Those are both really long lead time markets.

[00:38:53] Some markets, you know, pools are regulated by the health department in almost every state in the country.

[00:38:58] And each state has different pool code.

[00:39:03] And that's a big part of the complexity of these projects and the lead time of these projects is making sure the health department has approved your plans before construction or you're back in the permitting office.

[00:39:16] And then, you know, going around and around for six months without building, but burning cash and rent coming due sooner.

[00:39:26] Yeah.

[00:39:26] So we're looking for really adaptive reuse historical buildings that have great character that I can do something cool with.

[00:39:32] I love the design build side of things.

[00:39:34] So we employ a full-time architect and a full-time civil engineer.

[00:39:38] And they're my real estate and construction team.

[00:39:41] And I work with them very closely on all of our franchisees projects and all of our corporate projects.

[00:39:49] So I travel a lot and love buildings.

[00:39:51] My dad's a historical project restoration guy.

[00:39:54] So he helps me a little bit from time to time.

[00:39:59] And yeah.

[00:40:00] And then who are we looking for for franchisees?

[00:40:02] I mean, because of the lending environment and how big of our projects are, you need at least a million liquid to qualify really to be a sauna house franchisee.

[00:40:14] Banks need probably 30 to 35% down to do a project right now in our landscape and a lot of post-closing liquidity.

[00:40:25] So pretty high net worth franchisees.

[00:40:28] That's who we're looking for.

[00:40:30] And once we have more data out of more stores, multi-store operators will be coming around and bigger people.

[00:40:38] Right now we're still in the startup phase.

[00:40:39] So everybody wants to see more data and blah, blah, blah.

[00:40:42] But we have a bunch of passionate franchisees right now who are really wonderful that all love the sauna bathing third place kind of industry.

[00:40:52] None of them have owned a different franchise.

[00:40:55] So one thing we've learned is the early adopters are true believers in this franchise space.

[00:41:04] And now more traditional institutional franchisees will be coming in.

[00:41:08] But again, we're very limited in our selection.

[00:41:14] We can't construct too many stores all at one time, right?

[00:41:18] Then the amount of risk that goes in for the franchisees, that's why we employ two full-time people to ride along with everybody's projects to make sure we're getting really competent architects and engineers and pool engineers involved.

[00:41:34] And so we are there start to finish on construction all up in that project to make sure it's getting done right and the franchisees aren't getting themselves into too much trouble.

[00:41:46] Yeah.

[00:41:46] Interesting.

[00:41:46] It reminds me of, I'm sure because you looked at Ben, but like McMenamins.

[00:41:50] Are you familiar with that?

[00:41:51] Yeah, McMenamins.

[00:41:51] Cool concept.

[00:41:52] Yeah.

[00:41:52] Yeah.

[00:41:53] I mean, obviously it's a little different.

[00:41:54] It's pubs.

[00:41:55] Yeah.

[00:41:55] But they take old historical places.

[00:41:58] And I really enjoy whenever I go in that region of Washington and Oregon and stopping by these things.

[00:42:02] And they're really fun.

[00:42:04] And it's just, it's a cool experience.

[00:42:06] Like you're like, okay, there's an old building.

[00:42:08] Like those have like secret trap doors and secret rooms.

[00:42:11] So you're like wandering around in bathhouses and basements and stuff like that.

[00:42:15] So it's just a really cool, unique experience.

[00:42:17] They've got a fun thing going on.

[00:42:19] Big shout out to McMenamins.

[00:42:21] Yeah.

[00:42:22] My first experience was like maybe 2012 in the Bend, Oregon store.

[00:42:28] Yeah.

[00:42:28] Yeah.

[00:42:28] Yeah.

[00:42:28] The theater there that you go to the theater and you can watch movie and get food.

[00:42:32] And it's just this whole, it's just, yeah.

[00:42:34] And they have, I believe an actual bathhouse down like a Russian bathhouse type thing in the bottom, right?

[00:42:39] Yeah, they do.

[00:42:40] Yeah.

[00:42:40] Yeah.

[00:42:41] They got food and the movie theater and the bathhouse and like they, they were bringing things together way before this was ever a movement.

[00:42:50] So.

[00:42:50] Yeah.

[00:42:51] You know, I know it's still early for you guys in the, in the franchise and model, but what's like, what's the path to ROI for, for generally for one of these locations?

[00:42:58] Yeah.

[00:42:59] You know, that's, that's how you get in trouble with the franchise attorneys.

[00:43:02] I can, I can only speak.

[00:43:06] I'm not, I'm not meant to speculate or forecast and I'm not doing that here, but you know, our Asheville store is very profitable.

[00:43:15] And I think that it all depends on how you capitalize your project too, right?

[00:43:20] Like, are you doing all equity or you have debt?

[00:43:22] Are you buying a building?

[00:43:23] Are you leasing a building?

[00:43:25] Do you get a big TI check or no TI check?

[00:43:27] All of those things really impact pro forma.

[00:43:29] And we were, we have a couple of team members and advisors now in our brand that, you know, we craft pro formas to every store and every building.

[00:43:42] And we openly talk through that with our partners to make sure that they understand what we're getting into because they are so unique.

[00:43:49] I mean, if it doesn't have, you know, if it doesn't have some core infrastructure, that's a million dollars more.

[00:43:57] Like that's going to change, you know, a lot of things in your pro forma, but our FDD is out there and we're getting registered in all the registration states.

[00:44:06] So you can check out our item 19 and, and run your, your, your numbers on our, our franchise.

[00:44:12] Yeah.

[00:44:13] All the fun stuff.

[00:44:14] Last question I always ask here, Andrew is like, uh, as an industry, you know, fitness, health and wellness and people listening, like what do you need to help with?

[00:44:21] And, you know, if, uh, people are reaching out, what would you like to hear from them about?

[00:44:27] Wait, can you say that question again?

[00:44:28] Sorry.

[00:44:29] Yeah.

[00:44:29] As an industry, how can we help you?

[00:44:31] Oh yeah.

[00:44:31] What do you need help with?

[00:44:32] I, yeah, I, I mean, I need, always looking for great buildings.

[00:44:37] Of course I need an unlimited amount of capital.

[00:44:45] I'm getting closer every day, but no, uh, yeah, no, we're very fortunate recently.

[00:44:52] We, we, we have an amazing org chart, like most young franchise brands, like they run super lean on an org chart, you know, they sell.

[00:45:03] And until they get like a bunch of stores open and recurring revenue, like they don't, they don't beef up their org chart.

[00:45:09] Like we have a beefy org chart for a franchise as young as we are, but we want to be an exceptional brand.

[00:45:17] And, um, so we are, I, what I would say we are gold standard partners in the franchise space.

[00:45:26] And so to help us, like, if you're curious about it, you know, just reach out and, you know, talk to lane, our franchise sales guy.

[00:45:35] We do all of our sales internal.

[00:45:37] You'll work with lane and then Jen and me directly really early on, because again, we're not trying to, we're not trying to just sell, sell, sell, sell, sell franchises.

[00:45:48] Uh, we have really no interest in doing that.

[00:45:52] We want high quality partners who fully understand what they're getting themselves into, who want to help us build a really special vision for our brand.

[00:45:59] And I think that takes the right people.

[00:46:02] And yeah.

[00:46:03] So if you like, you know, hearing me and our message and our brand, and you want to come check it out and hang out, please reach out and come see us.

[00:46:10] So, but other than that, I feel very lucky.

[00:46:13] I, I have everything I need really now.

[00:46:15] I, now I just need to go develop more stores, but there's, there's so many in the pipe right now where we're quite busy in construction land.

[00:46:24] Awesome.

[00:46:25] Yeah.

[00:46:25] I love it.

[00:46:25] I mean, I want to see this whole category be very successful.

[00:46:28] I think it's just really beneficial for communities, for people's wellness and health.

[00:46:33] And it's just untapped in the United States.

[00:46:35] It's been around forever and I enjoy it.

[00:46:36] So yeah, I'm, I'm, I'm cheering you guys on.

[00:46:38] People, Andrew, want to get ahold of you personally.

[00:46:40] Is there a way you direct them to?

[00:46:43] Yeah.

[00:46:43] If you want to get ahold of me, my, my Instagram is Andrew Lachlan.

[00:46:47] You can go on our franchise page and hit the franchise, my email.

[00:46:51] You know, I have an EA in there because now I can't keep up anymore.

[00:46:54] So I don't want to give out my, my email address really, but hit up the franchise sales channel.

[00:47:00] And, and if you're a serious file, you get to me there and on social media, I'm becoming a little more active.

[00:47:06] You know, everybody loves a founder story and I'm not, I'm not a big press person, but I'm getting better.

[00:47:12] And I'm, uh, I wanting to put the voice out there for the brand and represent the brand as best as possible.

[00:47:19] But yeah, I always say like me personally, I have zero interest in being famous at all.

[00:47:23] I, I just like building, I like, I like hanging out with great team members, building cool things in the world.

[00:47:30] But yeah, you know, me as an individual, I always say I'm another bozo on the bus, which is like, you know, what they told me when I came into AA, uh, 12 years ago.

[00:47:41] And I, I hope to come across as, as humble person.

[00:47:45] Who's just really focused on, on building a, an incredible brand with an incredible team and, and franchise partners alongside us.

[00:47:53] So, and now most recently we just closed an investment round for the first time at the parent company with a great partner, JDS.

[00:48:00] So shout out to them.

[00:48:02] They gave us our first seed check and I'm glad I waited as long as I did.

[00:48:06] And I'm glad that I partnered with the people I did for, for the next stage of our growth.

[00:48:12] So yeah, you can find me there and keep digging in.

[00:48:16] Awesome, man.

[00:48:17] Well, great job.

[00:48:18] Well spoken.

[00:48:19] You answered the questions really well.

[00:48:20] And yeah, man, it was, it was really fun getting to know you here.

[00:48:22] So ladies and gentlemen, Andrew Lachlan, Eric, thank you so much for having me on today, man.

[00:48:27] And sharing the message for sauna house.

[00:48:29] Yeah, my pleasure.

[00:48:31] Hey, wait, don't leave yet.

[00:48:33] This is your host, Eric Malzone.

[00:48:35] And I hope you enjoyed this episode of future of fitness.

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[00:49:24] This is Eric Malzone and this is the future of fitness.

[00:49:26] Have a great day.