Tom Dowd - From Revamp to Rebrand: The F45 Renaissance

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[00:03:13] learn more at podcastcollective.io and feel free to book a 30-minute strategy session with yours truly. Traditional media is dying on the vine. Podcasts are rising quickly to fill the void. Do not miss the boat. That's podcastcollective.io. All right, we are live. Tom Dowd, welcome back to The Future of Fitness. Hey, this is great. Really excited to speak with you.

[00:03:37] You know, it's been over a year and a half, as we talked about earlier, and it's just crazy how much progress you've made and what a different tone and energy there is today rather than, you know, a year and a half, two years ago. Oh, it's night and day. It's absolutely night and day. And, you know, in preparation for this interview, I obviously talked to a couple people on your team, Luke Armstrong. We talked to some other people in the industry media and, you know, everything, all the reports are extremely positive.

[00:04:03] And, you know, I'll be one of the first to say, well done on turning this ship around. I think when you took it over, I'm sure you were golfing a lot more. You were enjoying life quite a bit, but you had to step in and, you know, be the CEO of a company and, you know, make some hard decisions and make some tough moves and, you know, get people updated. This is just from the Athletic article that I was just reading about last year. You guys had a record setting year.

[00:04:28] We saw 75 new studios open across three brands, 12.4% growth in global average unit volumes for F45 training, 23.9% for FS8 and 51.1% for Vora. Am I saying that right? Vora Pilates? Yep. Vora. Yeah. Renamed last year. Yeah. You guys now have, we're going to talk about the Fit House of Brands. So that's functionally inspired training. So that's kind of your overall entity that you're pulling these brands under.

[00:04:54] You guys had some really great partnerships, High Rocks, Spartan, Samsung, Dr. B and GLP1s. I'd love to dig into that. And I'd love to get your input on tariffs as well. So obviously there's a lot to talk about, Tom. Let's start with this. So yeah, we published our last interview in September of 2023. You know, people go back to that. It's great context for where we are now. Tell me about the last year and a half. What's been going on with your life at F45 and how did you get it to where it is now? Yeah. Yeah.

[00:05:24] So, you know, we really exceeded expectations. I mean, I was always optimistic. Obviously, I wouldn't have jumped in if I didn't absolutely love the brand. And, you know, again, I've been an investor for like six years now. So, you know, to come in and execute on all the things that I saw that were being poorly executed or not executed on was very rewarding for me. To come in and, you know, fix something and put something back on track is always a good move,

[00:05:54] you know, when you have a good product, right? So that's always a great starting place. So I don't want to take too much credit because the product was the star of the show always and just mismanagement was the problem. So coming in as the CEO from an investor to the CEO really helped cut through the clutter and cut out the middleman, if you will, and enabled me to just come in and do the things that, you know, I grew up doing running big organizations and investing in things and taking

[00:06:21] an operational and marketing position in many of these deals to help expedite on strategies. This was really, you know, one-on-one stuff in many regards, you know, but it was, it was a tough run because we had a lot of, you know, mistakes that were made in the past that were always correctable, right? In management, it's always about, you know, I have the mentality that everything can be fixed with smart people in the room. And so one of my first moves was, you know, making sure I had the best people around me.

[00:06:49] So now I'm very comfortable with the team that we have. Many of them have been here for years, so that's great. So they always had the energy and the talent, you know, they just needed the leadership and the guidance and support, you know, knowing that, you know, we're in this together, you know, we're all working hard towards the same goal. You know, I believe firmly that everybody always wants the best or always has the best intentions, right? So just giving them the support and guidance and pushing them to do better and execute on

[00:07:18] the things that they know will help us was really key. And of course, we made some changes and got rid of some folks that really, you know, either didn't have the skill set or didn't have the mentality to take the ride with us. But yeah, the folks you spoke to, I couldn't be more proud of and just excited about the level of execution and support that we have when it comes to first starting with our members. How do we make our membership continue to grow? Like you pointed out, our best ever average unit volume AUVs.

[00:07:48] So very proud of our marketing team for that. Very proud of our franchise system for helping create that atmosphere where people want to stay on longer and join up. So that's been great. So yeah, that's it. Because, you know, from a marketing standpoint, you know, we have to sell memberships and we have to sell franchises. And when you have great memberships and happy franchisees, you're always going to sell franchises. So my focus was always on making the product better and the franchisees happier and more

[00:08:17] profitable that will always take care of the franchise selling. At a granular level, how did you go about making the franchisees happier and inevitably making more money? Like what were some of the key points on that? Well, the first thing was giving them a voice, listening and getting involved with them. You know, this was just a sell and forget model for the most part. So we flipped that model into, you know, a support model.

[00:08:42] So, you know, as simple as it sounds, we can't be successful unless the franchisees are successful because it's a franchise model. So yeah, so we started listening and we started forums and answering emails and getting direct responses. I mean, I spend hours a week engaging with franchisees, you know, so went from, you know, negative, negative, negative to thank you. We're on the right track. I have a small issue here. But again, thank you for everything you guys are doing.

[00:09:12] So it's very rewarding to see that flip in just the simple communications that we get constantly. And I'm, you know, in the weeds probably more than I am normally used to in this case, just because it enabled me to really understand things faster and move faster because we were at a critical state, right? So, you know, we needed to get things back on track. Luckily, we have great supporters with Kennedy Lewis, the big group that's invested in this with us.

[00:09:39] So that's been, you know, very rewarding to have folks who really love the business like we do, who believe in what we could have done. And we're, you know, I guess, frustrated not to use a polite term with what happened in the panel, you know, but, you know, every, you know, it was a blip in time, like most things. So it really created a much better opportunity for everybody because now, you know, we're really on the upswing here. It's creating more opportunity for people.

[00:10:04] You know, we jumped hard and pushed hard into the Pilates business, you know, with FS8, which is on fire. We're just selling them hand over fist. Tons of, tons of interested parties, really quality people wanting to come into the system now. And then Vora, you know, which is our big fancy gun, you know, big volume, you know, cost more to build out. It's just, you know, a beautiful, beautiful execution with the mirrors and the lights and the energy, you know.

[00:10:32] So we have two really strong Pilates concepts, very different concepts. So we're, we're catering to different, you know, demo profile, but both of them are banging away. You know, we, I just had dinner a few months ago with the folks who are, you know, in Singapore with, with Vora moving into Dubai now to really blow that market up with, with Vora. So very, very big opportunities for us worldwide with our different concepts. And then, you know, we're also, you know, as a CEO, you know, I believe that the main job

[00:11:02] of a CEO is to be very strategic and always have something, you know, that you're working towards without losing focus on the key things that make a big difference. You know, when I first came on, there was a lot of folks that told me just focus on F45. And, you know, I, I was fully dedicated to, I could do both. You know, I could definitely continue to drive F45 and grow that, which we are, by the way, which is amazing, you know, and then also focus on, you know, the, the two businesses

[00:11:29] that we had, they were just kind of sitting in a corner with nobody paying attention to them, but Pilates was on fire in the world, but we were just not paying attention to it because everybody was so focused on F45 and ignoring Pilates. So we went back, really challenged the workouts, you know, started there. And then once we, we got that figured out, we just really put our back into driving the Pilates business, you know, alongside of F45.

[00:11:56] And right now the big strategy move for us, which is working and very excited about is actually moving into more of a mid box, you know, studio business with multiple concepts together to complement each other. So envision F45 together with FSH or Avora and then recovery, which recovery is something else we're really getting involved in with Cold Plunge and sauna. We have a name locked down called IONS. IONS will be following, you know, that pretty soon, but that's also a great compliment to

[00:12:26] our business and our existing studios now can move forward with recovery with the F45 recovery business. So it's just an add on. If you have extra space, we can add, you know, a sauna, for example, or a Cold Plunge. But IONS is just another concept. It's a plugin for us. It's a compliment to what we have. But so moving from, call it 2,000 square feet to 4,500 square feet with having retail in the middle, recovery behind it, five on one side.

[00:12:53] So you have the high intensity interval training, and then you have the low intensity Pilates workout on the other side. So the energy that creates and the efficiencies that are created with this is a big move for us. And of course, most importantly, it's another way for our franchisees to now have another revenue stream driver. And then the crossover, the cross pollinating between the members is always a win for us.

[00:13:19] So, you know, even if 10, 15% crossover to the other modality, that's a big win for us. And then, of course, just from an operational standpoint, gives you better cost per square foot, gives you better, more horsepower with your landlord, gives you better visibility mostly, most of the time, rather than being stuffed into somewhere with a small footprint. Now you're expanding that. So now you're going to get better visibility within centers. It gives you more speaking points from a marketing standpoint.

[00:13:45] We think that that's a big, powerful move for us as a brand. Not only having these different modalities are all on trend, by the way, and doing very well, but combining them to create this powerhouse. And, you know, we don't want to be in a big box business. You know, the world needs another big box gym, like a hole in the head. So we don't want to be there. We want to keep our costs down, make it very easy for, you know, franchisees who are reasonably capitalized to get into the business and have multiple levers of revenue to pull that'll

[00:14:14] really generate, you know, some really top line growth. And again, we're not dragging any crazy modality through the mud, but everything we have is just hitting out all cylinders. So that's a good space for us to be in. Awesome. Awesome. There's a lot of things I want to dig into there. I want to ask one more question about the last 18 months, and then we'll talk about all these things. I have questions about like, how do you know when something's innovative or when it's a distraction, you know, from a strategic standpoint. But what do you think was one of the hardest things you had to do, Tom, over the last 18 months

[00:14:44] to get this thing in the direction it's going now? Yeah. You know, unfortunately we had a lot of accounting issues and just, you know, things that we had to fix, you know, that were mismanaged. So for us, that was just, you know, a lot of legal issues from just past things. But, you know, moving through all that and being able to focus at the same time, you know, was not, it was difficult, but not impossible, right? Obviously, because we stayed on track with, I didn't have the luxury of just focusing on

[00:15:11] getting our books refixed and working with Deloitte. You know, luckily I have, you know, a great CFO and Patrick, but, you know, so a lot of that, I guess you could say non-glamorous parts of the business had to be fixed first to make sure we're on solid ground before we really, you know, could go out there and be loud and proud about what we're doing. So I had to do both work on strategy, focus on, you know, the core business to continue to grow it, you know, fix our marketing, you know, that included everything from just

[00:15:40] our strategy and our messaging to our website, to our app, to a lot of the background stuff like mind body, working on a lot of those initiatives, which we did. And again, to the team's credit, we were able to do all these things together as we were growing the business and focusing on the things that we just needed to get fixed from past management. So, yeah, so that was, that was probably the hardest thing, you know, is it was more complicated than I thought when I said yes, you know, cause I used to actually say, you know, it's

[00:16:10] a franchise business. It shouldn't be this difficult on the sidelines. But then when I got in and saw the different poor decisions that were made that had to be fixed, it was just a lot of work. And, you know, by the way, rebuilding the trust with the franchise system was something I knew I could do by doing the right things and showing them that I'm here for the long haul and that I'm there working for them. You know, the message is always that, you know, I work for you. I work for my employees.

[00:16:36] I work for the franchisees and I work for the members, you know, and that's my mentality always in everything I do, even when I was at GNC, you know, I always worked for the customer. But, you know, so if they feel that that's true and then more importantly, because you say it, but then you show it by responding to emails and taking phone calls and working at all hours to talk like last night, you know, with South Korea, you know, till nine o'clock at night.

[00:17:01] You know, I mean, those things show people that you're just not some guy that's, you know, dropped in to try and make some money and then, you know, jump out again. You know, I'm here for the long ride. I'm here to do the right thing. And I'm here to showcase, you know, what this should have been all along, which for me, it's all about pride, you know, prideful moments, like winning, you know, I don't want to sound like Charlie Sheen, but winning is important. You know, you get into things not so much for the money anymore, luckily, but you get into

[00:17:30] it because you have people that invested, you know, their money, like our investment group. I have people that put in because of me, you know, so it really bothered me that people lost money and didn't get a return on their investment when they put real money into this because of me. So, you know, for me, it was like now at least, you know, I'm showcasing that I'm, you know, somebody that makes things happen and wants to do the right thing by everybody that's involved in this business.

[00:17:55] And, you know, and then when you get to know the people and the franchisees, you start to really take it personal. You know, again, I grew up in a family business, so I, to my detriment, a lot of times I take everything personal. So when you get to know the people, you learn their stories and now you really even work harder for them because there's employees here that put a lot of time and effort into this business and to have bad leadership, you know, waste their time and not be able to deliver for them is a shame.

[00:18:23] And then have franchisees that put their life savings in some cases into the business and have weak management and people that are just not respectable of capital is, to me, very bothersome and something that, you know, we fixed and we had to work hard to win back that trust. So, you know, a good example is I didn't even want to go to Australia until I could showcase that we're actually doing something that was meaningful. I didn't want to just go down there and be a talking head.

[00:18:49] I want to go down there with real things that we've done and be able to talk about things that we're absolutely doing in the future. And it was really encouraging to get down into a market that's more seasoned, if you will, who, you know, suffered during COVID more than most. You know, there was a real lockdown issue in Australia and their economy struggling. But to get down there and speak with people who actually appreciated the effort that we put into this business and trust you was really powerful for me. So, yeah, we continue to move through the hard things.

[00:19:18] And now we're focused on circling back to your questions. I'm sorry, but, you know, so that was a lot of hard stuff, winning back the trust, you know, dealing with all the BS stuff I like to call with the accounting stuff and things that, you know, we just had to go back and reshuffle everything. But, you know, now focusing, you know, even if it's 80% of the time on the go-go stuff, the good stuff, that for me is where I really hit my stride and really love to hit the gas and, you know, get going. You know, there's always problems. There's always things no matter how good your business is.

[00:19:46] But I'm also somebody, a lot of leaders just like to focus on the good stuff. I, I'm very good at focusing on both, but, you know, I love to focus on the growth stuff. Well, let's, let's talk about that. One of the things I've noticed during my time engaging with F45, because, you know, I was able to work with Luke Armstrong years and years ago on different consulting projects, but there was always a sense of innovation within F45, whether it was like new types of

[00:20:14] hardware for the gym or getting into cruise ships or getting into onto, you know, campuses and things like that. And now, you know, you're talking about some really, some really interesting stuff that you guys are working with on like the recovery section. And then, you know, uh, the GLP one programs in the line with Dr. B and these really cool Pilates. At what point do you think to yourself? And I think every business owner from, you know, an independent gym to, you know, 2000 locations, right?

[00:20:40] They always struggle with, is this innovation and progress, or is this a distraction from our core business? So when you, when you look at all these different things, like how do you, is there a cipher in your mind that you go through when you, when you look at, okay, I don't want to chase squirrels. This is substantial. I want to focus on this and grow. Like, how do you pick those things to focus on? Yeah. Well, you know, growing up at general nutrition, GNC taught me a lot of things. And one of the things that I've learned, especially being a CMO running all the brands

[00:21:10] was to, it's much easier to ride something that's hot and working than try and create something. So being a reactionary leader and a reactionary retailer was really part of my strength. So here we're trying, we're not trying to create something and create a market for it. We see a market that's growing and hot. And then how do we come out with a product that's not just another me too product? How do we create something that's hot and make it bigger by having a better product?

[00:21:39] So with Pilates, for example, with FSA, we said, all right, we have a good product. We're doing well with it, but we're not spending marketing. We don't have brand equity or brand recognition. And then the answer from the team, when I said, do we have an amazing workout that like will really take out the competition at the knees when we drop it into a market? The answer was, well, yeah, you know, we think so. And it's pretty good. It's good. And I said, well, come back to me, whatever it takes with something that you are telling me is great.

[00:22:09] Like it's a daisy cutter bomb that goes into a market that's something that's just not a me too product. And within a month, the team came back and made changes. So instead of moving from the reformer to a mat in the back of the room now, we combined it. They worked on the entire athletics, you know, execution. So they came back and said, here are 10 things we did to make it from good to great. I like the book. And already we've tested it and the members love it. So that's the other element.

[00:22:38] So, you know, you could believe what you believe, but without testing it in the actual market, you know, you're never going to, you know, you're always going to make better decisions when you test it in the market. So a lot of organizations and leaders, you know, think they have all the answers. I am always somebody that says, what are the members telling us? What are the consumers telling us? You know, I think it's great, but I could be wrong. And I've been wrong a lot. You know, fortunately having that back check of always pressure testing things is something that we do very well here.

[00:23:08] And Ryan Mays, our COO has done a great job with the team, you know, going out and testing things. The athletic team has been amazing. So I'm very happy with their attention to the membership and listening and testing things and really having no ego. That's another thing. You know, you have to take ego out of everything. So you have a great idea you think is great and it gets blown apart. You have to say, thank you. I love that. I'm glad I'm wrong. And I'm glad I didn't push it down everybody's throat and, you know, have a problem. Yeah.

[00:23:38] So innovations, it's so important in our business because if you're not innovative and moving forward constantly, you're going to get run over. So we're very focused on innovation and having studios in our headquarters is great. Having the filming, you know, the other thing about F45 and FS8 is the constant filming. So we have a tremendous amount of content there. So the team is always working with the studios. The team is always working on, you know, the content element of it. So we're constantly getting feedback on what's happening.

[00:24:07] So that's just incredible for us rather than just a trainer in a studio that isn't really tangible enough to get feedback. So we have tangible video. We have feedback. We have an app. We have at-home workouts. We're in hotels. And then we have the power of mass. So we have over 1,700 and growing studios that give us constant feedback. And again, listening, keeping your ear to the ground as far as what's going on. I mean, we're on Reddit, we're on reading social media. We have open lines of communication.

[00:24:35] So we're always listening and tweaking and paying real attention to what our members are telling us. The, uh, that's all. And I've, one of the things you notice if people get into F45 is the tremendous media assets that you guys are constantly producing. I mean, it's, it's, it's impressive. Like even just visiting a headquarters in LA years ago, I was like, okay, they're devoted to creating great content and media. And I think that's really understated for what you guys do.

[00:25:01] So what I want to talk about specifically is the, uh, well, two things, the, the fit house of brands. When you guys have kind of reworked that overall thing. Yeah. Yeah. On your shirt right there. Why? Like why, why was that important strategic move for you? Today's episode of the future of fitness is proudly brought to you by eGym, a vertically integrated market leader in the fitness and health industry with an incredible vision, transforming healthcare from repair to prevention.

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[00:26:28] That is E-G-Y-M.com. Yeah, that was easy. I mean, from almost week one, I envisioned changing the name to better represent when I decided that we needed to have more revenue streams for our franchisees or in saturated markets and give them more ways to sell. You know, so having that sitting in front of me was great.

[00:26:54] So, you know, I was dreaming of the day when we could make the change because we were a real business, again, growing with different modalities that were working. So, for me to go from F45 Training Inc. to Fit House of Brands, you know, Fit was a big move because it better represents and creates this umbrella of brands now for us to acquire other brands to, you know, really encompass all of the things that are working for us with Vora and FSA, like we talked about, and even Ion. So, we just needed a better name.

[00:27:23] And for me, it was about telling the world, hey, you know, we're not just F45 anymore. We absolutely love that business and that's continuing to grow and do well and that's never going to go away. But also, we have these other businesses that are extremely popular and growing. And now the name better represents our growth strategy around, you know, embracing everything we do a thousand percent and not just kind of a, you know, a lot of things when you test

[00:27:48] it or take on or acquire something kind of gets treated, you know, not as well as the core business. So, for me, we have to do everything equally. So, everything has to be equally enthusiastic about everything we do with these different brands. So, changing the name influenced that and sends a message that, excuse me, that everything we do is going to be treated equally. It's not just F45 anymore. It's FSA, it's Vora, it's Ion, it's whoever we acquire.

[00:28:17] It's whatever another test we come up with that works that we launch next year and we're working on some really cool stuff. So, the name just represents that and tells the world that, hey, we're in the business of being a total solution headquarters for health and wellness. Yeah. Yeah. Fantastic. The Vora Pilates brand. I don't know a lot about it. I'm sure that means like a lot of people in the marketplace don't know a ton about it yet. Like, why is that one different? What's the differentiator for that?

[00:28:43] It's an athletic reformer workout that's just crazy high energy with the lights. It's a dark studio with neon lights and amazing music like our other modalities. It's mirrors on the ceiling. It's mirrors on the walls. It's just that really, it's just an experience that people just come out of it with their mind blow. Like, wow. And the workout's great. You know, so it's also, you know, so the workout's great. The environment's great. You know, it's more she-she. You go in, you know, we put more money into the bathrooms and the waiting room and everything

[00:29:13] else. So it's more of an experience. It's more of a build-out commitment. But the ROI is great because the volume's better. You know, we have studios doing, you know, over a million dollars and growing, you know, over a million for them growing. So the business is great. But for the average person to spend, you know, whatever, you know, call it 700 to a million to for build-out is a smaller market. You know, it's just, it's not the workhorse of the Pilates brand for us. So for FS8, for example, that's more of a workhorse.

[00:29:40] So that you can get into a cheaper, you know, that fits in Kansas City, whereas a Bora is more of a Miami vibe, maybe. But Bora's got a lot of legs and Bora could be in every single market on the planet, really, because there is a demo that really wants that high-end experience and they're looking for it and they're longing for it. So it's just one of those things that, you know, it's just, it's so great. And it's a different workout. So FS8 is the toning and the yoga elements of it as well with the Reformer Pilates.

[00:30:09] So this is just, Bora is just a pure Pilates, hardcore athletic workout on the Reformer. So it's different in that regard. So we're, and the nice thing about FS8 is, you know, we're not trying to be all things to all people. You know, those workout elements within FS8 are really complementing each other and creating a great workout for our members. So it's really a different experience.

[00:30:34] And we have franchisees now, I can't really say where, but it's New York City, who are looking at doing FS8, Bora, and F45 together in one big place. So we're very excited about that because it's going to really showcase how even the two Pilates businesses with F45 will all work together. But he's even talking about maybe putting, squeezing in, if he can afford it from a space standpoint, the recovery.

[00:31:02] Because NYC is a real estate's crusher as far as your rent factor. But yeah, so it'll be great. And you know what? When they first said they want to put FS8 and Bora together, you know, separate but together, I was like, oh, you know, I was, you know. But within 10 minutes of listening to the thought process, I was all in. Like, wow, that makes perfect sense. So that's how even those two concepts can work together. So I'm excited to see how that works.

[00:31:28] But when you look at the demand for the category, we really have, you know, the tiger by the tail here. So, you know, and again, you have to measure that and not get too caught up in the moment. But really now measuring and managing our growth is just as hard as managing a downturn in something. So we're very focused on, you know, continuing to build our operations team, continuing to support supply and demand when it comes to our equipment, people supporting the grand openings and supporting the opening.

[00:31:57] So we're very focused on measuring where we even allow franchisees to open. Being very involved and hands-on. Again, we'd rather have less franchisees with more profitable studios than more locations that are less profitable. So we're very focused on proper growth and managing that properly. The ION recovery, is that a potentially standalone concept or is that a plug-in for the most part? Like, how are you envisioning that?

[00:32:26] Yeah, it's definitely going to be a standalone. We're filing the FTDs now. So it'll be a standalone. So ideally, it'll be, you know, maybe it's a pass-through with the studio with the, you can go access it through the front or the back as well, but it'll have separate sign, separate experience. And if you don't belong to one studio like an F45, you can still belong to ION and never work out. Ideally, though, it's a great draw because you get somebody in and go, what's that? What's going on over there?

[00:32:54] You know, I want to do that or vice versa. You know, I want to do a cold plunger or sauna after a workout. So it's a really great complementing business. But, you know, it could also be a mile away. It could be, you know, totally separate. So that's the beauty part of it. But, you know, we're treading lightly. That's not a big lift for us as far as, you know, effort to build it out. You know, it doesn't have the trainers and athletics and content filming and everything else. So for us, coming from where we're coming from, this is kind of an easy lift for us.

[00:33:24] You know, we have good partners with Chili Goat. So we're really happy with, you know, where we're going with that business. And again, it's a great complement to our core businesses. What are the modalities for that? I mean, you mentioned cold plunge and sauna. Is there any other ones that you're going to throw in there? Yeah, percussion, you know, so the recovery with, you know, so that's a big part of it. And then red light therapy is a big part. I think red light therapy is continuing to build because of the science and just people are looking for it.

[00:33:53] So, yeah, so it'll all be encompassed there, you know, because recovery is hot. Recovery is something that's going to continue, especially with the aging population. And again, creating this hub of everything health and wellness and being the solution headquarters with content, which is a big win for us because we have more content than anybody else right now on the planet because of our core business is filming content because it's on the TVs. It's on the screen. So we have a real leg up when it comes to pride content.

[00:34:21] And that's a big win because, you know, being the authority in health and wellness through content is always a big win. So we are really strong there. So just taking advantage of that's key. But yeah, so we're really confident about, you know, our ability to grow and become more powerful in the industry as we continue to add more locations and create more of these, like I said, bigger locations with more going on.

[00:34:46] And again, this time next year, we should follow up because we'll have another concept which will revolve more around, I guess I could say, hot workouts. So in a heated environment, not hot, hot, but hot as well from a trend standpoint, but from a heated element. So we're running down a path of yoga and Pilates in a heated environment. And how do we contrast that with contrast recovery?

[00:35:14] So we think the complement of the two with the hot and that would be amazing. So still fine tuning and getting the team, you know, testing and looking at where we should be and how do we come out with something that's meaningful, you know, and come out really with something that we know will be powerful right out of the gate. It's something why it's going to take us another six, eight, seven months to get that nailed down.

[00:35:37] Speaking of hot trends, Tom, GLP-1 medications, I don't know if you've heard of them, but they're making quite the impact in the market. So you guys have a partnership with Dr. B, which is a telehealth, right? So maybe give us some details on that. How did you guys select that partner specifically? I mean, there's a lot of people who do GLP-1s. And then what does that look like as far as an integration into fit in the house of brands as a partnership?

[00:36:01] Yeah, we did a lot of vetting to get the right folks because, you know, you have to have something that you're ingesting, injecting, had to be proven and something that we'd always be proud of our partnership with that. So Dr. B is proven they have the right mentality from a partnership standpoint. But it's very controversial for us because, you know, right out of the gate, as predicted, a lot of folks were like, oh, you know, we don't want to be encouraging people taking GLP-1. But our position came right out of the gate was always, we're not encouraging it.

[00:36:31] We know 9% of the population are taking it now. We know that there's a muscle loss issue and we want to be there for them to help create muscle mass by working out with us. You know, and by the way, a lot of, you know, roughly 9% of your members, probably less than for our environment, you know, call it 5% are already on GLP-1.

[00:36:52] And we also want the people that have lost the weight and have never been to a gym or haven't been to a gym in 20, 30 years to now have the courage to want to come and work out with us. So we wanted to be out there from a marketing standpoint saying, hey, we're the solution headquarters for you. Congratulations. You feel better about yourself. You have more energy. You want to come work out. Make it us. Come to us. And by the way, if you're taking GLP-1s now, which you are because you lost the weight,

[00:37:17] we need to train you and teach you about why building lean muscle mass is critical and so important to your longevity and quality of life. So we want to be a part of that more so than selling anything. We don't really care about the selling part of it. It gave us a marketing tool to go speak to those folks. It gave us a reason to, you know, be an important part of that whole ecosystem of taking GLP-1 and not having somebody that's embracing that with them and not being judgmental.

[00:37:46] Saying, great, you're taking it. You know, obviously, you know, there's a lot of positive news and scientific data around GLP-1. So, you know, the school of thought of, oh, you know, that's cheating or whatever. Like, okay, great. You know, you're not going to beat back that mentality necessarily. But listen, we want to embrace the people that are making those healthy lifestyle changes and are moving in a positive direction. And we want to be a part of that journey with them. So for me, that's where it all started. And if the franchisees can create another revenue stream and take advantage of that,

[00:38:16] and give them a good solution, great. You know, because we also have Dietitian Live, which we're very proud of. So we have the dietary services. So combining all this with the exercise element is exactly what you should be doing. You know, diet with the GLP-1 and the workout itself. You know, that's a one, two, three punch combination. It's spot on trend for what we want to be. You know, we're not judgmental. Just like, you know, we don't have the mirrors in the studios. You know, for F45, you know, it's non-judgment zone.

[00:38:46] You could, anybody can come work out with us. You know, you could be a total beginner who hasn't never, who's never been in the gym and come work out. You know, you might see the energy and the music and people high-fiving and loving it. And think, oh, you know, this and that. But when you really look at our demo profile, we have an amazing demo profile mix from 80-plus-year-old people working out to, you know, obviously the 15-, 16-year-old person working out in the studio. So the GLP-1 for me was important.

[00:39:15] And, you know, and I knew people would be out there, oh, you know, we don't want to be in that business. Well, we're not in that business. But like it or not, they're predicting 15-plus percent in the next, you know, 18 months will be on GLP-1. Yeah, and we want to be a part of that health and wellness journey. You know, I ask a lot of executives this question. Have you seen data or inclination? A lot of it, people have said anecdotally, yes.

[00:39:41] But have you seen any signs that people taking GLP-1s who previously wouldn't have engaged in a gym or a fitness routine, is that driving them actually to be more active in the gym? Like what are you seeing? Yes. So, yeah. So we saw the data about people now that have, you know, a lot of, you know, a lot of great studies around the importance of like leg strength, for example, for balance as you get older.

[00:40:04] You know, the tragic statistics about if you break a hip when you're over a certain age, over 60, and your mortality rate after that, it's been incredible. All right, Tom. So the last question I have for you, and this is very timely as of today's recording, tariffs. Like you come from the consumer products, right, world. You understand how this can affect the marketplace.

[00:40:25] But, you know, just day people were recording this in early April of 2025, big announcements over the week of what Trump is doing with tariffs and essentially a tariff war and what that could be going, could be doing for the economy and our industry. So what do you have your eye on right now, Tom? How are you approaching this time of uncertainty? Yeah, it's a struggle. I mean, you know, not knowing the uncertainty is always something the market doesn't like. It's what business people don't like.

[00:40:51] You know, we're worried about consumer goods and the supply chain. You know, luckily, we have a lot of our kits, the world packs, already pre-bought. But obviously, when you import things, you're still paying the tariffs. But yeah, I mean, it's been a tragic week for the stock market. It's been a really tough three months for the stock market. Yesterday was 1,600 point drop. Today is way down. I saw the opening but haven't followed up.

[00:41:17] But yeah, so listen, an economic downturn, especially a worldwide one, which is what they're predicting, because, you know, the U.S. affects all these different countries. It's not good for a business like the gym business, you know. But, you know, selfishly, I'm invested in a lot of different deals from tequila to protein powders. And people just don't understand how many different elements there are involved in even building American-made cars. A third of products come from other countries.

[00:41:42] Even Teslas have contracts with 300 Chinese factories to get parts. So this is going to be a very complicated and tough time period for a lot of people as we try to figure out, like, what the hell is happening to us here? Why did this, you know, again, you know, self-inflicted wounds off a growing economy get so sidetracked in what's the real benefit? And can we really stand up and fight this back to get back on track to a growing economy?

[00:42:12] And, by the way, you know, if you read the book, which I love the Toyota way, I mean, there's real benefits to being a worldwide economy. So we've embraced that. We've flourished with the worldwide economy. I'm so very happy, you know, with what's been going on up until recently because we've now tried to take a worldwide economy and dismantle it and selfishly try and pretend that having everything made in America is a good thing for us.

[00:42:38] When in reality, you know, we were under 4% unemployment, you know, just four months ago, it's growing. I think it's at 4.3 already with the layoffs. Competition is good, which the Toyota way talks a lot about. And when we gave money to the executives in Detroit, the car industry, they just basically gave themselves huge bonuses and never, you know, invested in the employees and technology and the things that Toyota has done.

[00:43:02] And then culturally, you know, you know, when you stop the assembly line in America, when you're building a car, you were chastised. And they say, what are you doing? Why did you stop the line? Well, they were missing a bolt. You know, don't do it again, basically. You know, in Japan, they cheered you. They actually cheered you for stopping line because you caught something wrong. So that, for me, is why I really used to love the book because I love the cultural elements and how that was so much different.

[00:43:29] So for me, just culturally learning about business stuff, which, you know, all those books behind me are all business books, sadly enough. But, you know, I just want that part of it. But now it really amplifies how important it is to have competition and why, you know, we don't have to have cars leaking oil on our driveways anymore or have to lift the door to shut it because the hinges are wobbly. You know, so and then, by the way, the cost of labor in the States. Again, there's a reason why our cost of labor is high because we have a higher standard of living.

[00:43:58] You know, there are other countries like Bangladesh where they can, you know, they're working for a lot less. Their overhead's less. Their cost of living is a lot less. So there's a reason why it's worked and complemented each other. There's going to be a lot of people that are going to understand pretty fast all the different nuances and how it affects us and why having a worldwide economy is important and beneficial to us. Because when you have under 4%, you know, even if it's, you know, around 4 is still a good number.

[00:44:27] And all of a sudden pretending that we're going to have all these factories, you know, that take years and years to build. And we're going to have all these resources to man the factories and it's just really a problem. But selfishly for F45 and FSA and Fithouse of Brands, Evora, Ion, people have to have disposable income and feel good about. The good news for us, just like the alcohol businesses, people will spend when things are bad and good. So people need to work out more when they're stressed.

[00:44:54] So we want to, again, be that solution headquarters for people that are feeling the pain, who will find the money to spend it on their health. Because sadly, people are probably going to have to work longer now. So they have to be healthy for that. They have to have energy for that. So that's where we will position ourselves as the go-to solution for people that are struggling and feeling the pain. And why investing in your health is a great investment. You know, unlike the booze business, which, you know, they're drinking when they're happy and they're drinking when they're sad.

[00:45:22] You know, we're the opposite. You know, we want you to work out when you're happy because it's the right thing to do. And when you're struggling and you're feeling, you know, because, by the way, even depression, working out is a magic, you know, solution for people with depression and who are struggling. So we want to, you know, this will give us a better opportunity to position ourselves properly, again, to get people to come and work out with us for all the right reasons.

[00:45:47] Yeah, it's, you know, I opened my first gym in 08, which, as you remember, Tom, was not the best time. And I did a little bit of research and like, am I crazy for doing this right now? And same thing back then is, you know, people will spend money on their health and they'll spend money on booze. And, you know, that's the end. You know, we didn't we didn't skip a beat. No one came in and said, hey, I'm not joining because I can't afford it right now. People are spending less money on travel, spending less money on other things.

[00:46:13] But when it came to their health and fitness and local recreation, I could say, through booze and then then it will. Well, even our sports nutrition business performance inspired nutrition during COVID. We double digit up over a double digit year before people are now having smoothies and taking better care of themselves. So even on that end of the spectrum and some of my other investments in the health and wellness space, you know, took off. So, again, it's all in how you position it.

[00:46:39] But people will naturally turn to wanting to be healthier and just beat back the stress by burning off the negative energy. And, you know, I'm a person that, you know, never likes to drink or do anything that distracts when I'm under stress. For me, I've just naturally always want to be clear minded, work out more, burn off the energy. So just anecdotally, you know, I live it myself. You know, so seeing that, you know, unfortunately. I don't want to see the country.

[00:47:07] He'll go through that economic downturn and I don't want to see people struggling and worried about their future and everything else. But, you know, we seem to be on that path. Hopefully everybody will, you know, catch their breath and things will work out faster rather than later. Because, again, we're still going to do well either way. Because, you know, again, the nice thing about where we are, you know, health, wellness is never going to go away. Quality of life improvements never going to stop. People always want to, you know, not only live longer, but have better quality of life.

[00:47:37] And all the scientific data around the benefits of lean muscle mass and working out, you know, continue to support all of our investment in time and money into these categories. So we're just really, you know, we can't lose at this point. And just everything we're doing is working because everything we're doing is pressure tested and, you know, mindful and, you know, built around supporting our franchise system and our members. So that's always a good place to be. Love it. Love it.

[00:48:07] Well, Tom, thank you for spending some of your Friday morning with me. I'm so happy that compared to a year and a half ago, we're singing a very different tune. And it's, you know, I've been a fan of F45 brand for a long time. So good to see it. Job well done. And let's catch up again in a year and see where things have come. Thank you, Eric. I appreciate it. This was fun. Ladies and gentlemen, Tom Dowd. Thank you. Hey, wait, don't leave yet. This is your host, Eric Malzone.

[00:48:35] And I hope you enjoyed this episode of Future of Fitness. If you did, I'm going to ask you to do three simple things. It takes under five minutes and it goes such a long way. We really appreciate it. Number one, please subscribe to our show wherever you listen to it. iTunes, Spotify, CastBox, whatever it may be. Number two, please leave us a favorable review. Number three, share. Put it on social media, talk about it to your friends, send it in a text message, whatever it may be.

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