How to make the Right Moves in the Fitness Industry with Ty Menzies | Industry Change Episode 23

Welcome back to Industry Change. I am Richard Turtungi, and today I've got a very special guest on the show, like always, but today is extra special. I've got the CEO of Lift Brands, Ty Mendes. Welcome, Ty.

Thanks, Richard. Cheers, lovely to be here.

Now, if you haven't heard of Lift Brands, you've probably heard of Snap Fitness, which is part of the Lift Brands companies. Welcome to the show.

Thanks, mate.

Now, Ty, I think we've known each other for a while, you know, seeing what you've done on the sidelines here. And it's interesting because I love journeys of people and you've gone on a very interesting journey. And I think very rightfully now the CEO of Lift Brands. because you've had a lot of experience and that's what I love. And that's why I wanted to come on the show because I want to understand from your perspective, you know, where's the industry going in your world? Because you've come from a background of independent owning clubs, owning franchises, now the CEO of managing over 300 locations. Talk about that journey from you. 'Cause it's been a, like, I think, you know, people say, hey, that happened overnight, but I don't think it's been overnight for you, has it?

No, it definitely hasn't been overnight. Look, from my perspective, interestingly, I started in the industry as a personal trainer. Yep. Back, sort of left school, done some study in that space and got into personal training and really enjoyed that space. Understood though that I really wanted to be a business owner, understood that I wanted to step into ownership of clubs and knew that personal training was a great space and understanding that space was important, but I needed to step into sort of more of a sales and club management space. And so I did that. I stepped into to a sales space and very soon after stepped into club management. It

just flowed? You just went and gravitated?

Yeah, look, 100%. I took some good advice from the right people at that point in time and listened to them. And look, I've really looked up to a couple of particular mentors at that time that are actually still in the industry. And they gave me some great advice about those steps that I needed to take. And look, I probably got a bit of a break, but also put myself in the right space. And look, at the end of the day, it comes from delivering results and you kind of get seen and whatnot. Look, first club that I got to manage was a very large Gold's Gym over in London, in South— sorry, Northwest London in Harrow. And that was a great experience, learned a huge amount. Actually, interestingly, the man that hired me for that was the founder of The Gym Group, if you know The Gym Group over in the UK. Yeah. Guy by the name of John Trahan. And John's taken that business from nothing to, I think it's now 60-odd locations, and I think they're now a public listed company. So I learned a huge amount from him.

So you had good mentorships in those early days?

100%. And you've got to ask the right questions, right? You've got to be involved with the right people, put yourself out there, have the conversations and ask that bit of advice. And then look, I came back from the UK. Fortunately for me, I was one of those guys that came back from the UK with a little bit of money in my pocket.

Not like the other half, eh? They come back with no money.

Yeah, with no money or plenty of debt, which was at the time my partner. Came back, I went around and had a look at a few different options. Wanted to start my own thing. Went to the bank and tried to borrow some money and no one was really very interested in that. And I came across a franchise, a little franchise called EFM Health Clubs.

Still around today? Still going well?

Yeah, still around today. And a lot of people don't know who they are or how they operate, but EFM is an interesting model, kind of a joint partnership with either schools, large businesses, or local hospitals.

Hospitals, yeah. We've got a few EFM, shout out to EFM guys in our program. as well. And yeah, it's all into different businesses. So that's why I think maybe the people aren't seeing it maybe as visually as a Snap.

100%. So similar to what I always say to people, it's like an F45 style of training, that very boutique feel, small. But before any of that was even popular.

Even a thing. Yeah.

Now it's a thing. 100%. 100%. So I was fortunate, I was able to buy my first EFM in that franchise space at sort of the age of 21, 22. And Ended up with 3 of those locations down in Melbourne. Whilst I had those, I ended up buying an independent club. That was an independent club, reasonable size, sort of mid-size.

So tell me about, you had 3 EFM franchises and then you go and buy yourself an independent. Yeah. Can you, like, where's the thinking behind that?

Well, it was interesting, right? It was an opportunity that got thrown in front of me. Opportunities. Yeah, yeah. Look, it was one of my close mates at the time was selling gym equipment and he knew that the The current owner of the facility was in a bit of trouble and they hadn't been paid their payments for a little while. And he, look, he just came to me and said, it's worth having a look at. I had a look at it, had a conversation with the landlord, put something on paper, it was agreed to. And a few weeks later I had an independent club. Mind you, it was an independent club in a really terrible place. Right, okay. It took a lot of heartache, a lot of money and effort to turn that thing around. I think at the time we had about 80-odd members and maybe a quarter of a million, $300,000 later, we'd got to break even. Yes. That was a stressful period for probably 2 years of my time there. And I think you're correct when people talk about small businesses failing because they don't have enough capital to keep them going. We certainly would've been in that space had I not been in a position. Right. So luckily I started selling my EFMs at that time and sold them one by one until the point where I only had that left and made the decision to make a bit of a change in life and shifted up to Queensland. Got a bit of a tap on the shoulder. I won't talk about how or why, but a tap on the shoulder from the previous master franchisors of what at the time was Snap Fitness particularly. And they were looking for someone to come on board and drive the franchise development piece of the business. So I did that. I spent about 6 or 7 months in the franchise development piece. We sold about 35-odd franchises across the 2 brands being Snap Fitness and NineRound during that period. I got another tap on the shoulder to say, hey, look, our CEO's moving on. We would like you to put your hand up for that. And went through the recruitment process and obviously came out on top for that. And yeah, look, it's progressed from there.

So you guys have got Snap, correct me if I'm wrong, Snap Fitness On Demand, is that correct?

Yeah. So we've got Snap Fitness, which is our convenience model. 9Round, which is more boutique. So 30-minute kickboxing fitness. And then we've got Fitness On Demand, which is our virtual training.

So you're really taking care of all those elements there in those 3 brands.

Yeah, yeah. So across the board, it's interesting. So, you know, they all have their own intricacies that we need to deal with, but it looked great from our perspective where we're across each of those kind of environments.

Yeah, you're in, and so it's Asia Pacific. Correct. So just to let you know, where is each? You got some in Asia as well? Yeah. New Zealand, Australia, is that correct?

Yep, so Australia, we're 215-odd snaps, about 15 9-rounds at the moment. New Zealand, we're the strongest clubs over there, Just shy of 60 Snap locations and about 12—

I was over there. You've got a very strong presence in New Zealand there. Yeah. Good audiences down there. Good trainers down there too.

100%. Yeah. No, New Zealand, we've been very strong. We got a good start in New Zealand and really pushed hard into New Zealand early days and still growing there quite well. And then Fitness On Demand across a range of locations. And then when we talk about Asia, really Snap's our main focus into Asia. So we've now got clubs in In the Philippines, Indonesia, Hong Kong, Taiwan. We're just about to open our first clubs in Japan, doing a bit of work on Singapore, Vietnam, Cambodia, and Thailand.

So really spreading it to a lot of major countries.

Yeah. Look, for us, Asia's a huge piece, huge rising middle class. Fitness has become such a popular piece over there. So for us, that's definitely the market play. And look, certainly still focusing heavily on Australia and New Zealand, but there's definitely a huge opportunity over there for us.

Very interesting opportunities and timing. We were just talking about that before we had a bit of a chat. And timing's in regards to, I said it's people come on and it's like, wow, where'd you come from? But you've had that journey. But then you see timing in Asia at the moment. You said timing's in your independent club. Can you let me know a bit more about opportunities and timings and the right time to make the moves? Obviously you've made—

Sure.

Hopefully the more good moves, maybe you've made bad moves, but what's about timing? Tell me about

that. Hey, look, It was interesting actually. I was listening to a little video that our founder, Peter Taunton, did just recently. And he was talking about the fact that if you haven't failed in business, you haven't had a go, right? And trust me, I've definitely had my share of failures and lost money in different bits and pieces and actually walked away from a couple of things along the journey as well. I think if you're not having a go and not failing, you're certainly not experiencing things and growing. So from my perspective, it's really important that when you look at that, if you're going to fail, you fail fast and you make the decision to step out really quickly. Great. And some people hold on too long and losing a small amount of money, but stepping out, learning from it, moving on. You look at it from a learning opportunity more than anything. I mean, how much do people spend on a university degree, right? And you've still got that debt sitting there. Well, what's the difference between going into a business, losing 30 grand, stepping out of it and going, you know what? I learned a hell of a lot. I'm not going to do that again.

Failing fast. I like that. 100%. Failing fast. Cut the losses straight away. Having that gut instinct.

And look, I think the other piece that I've really noticed is you can overanalyze things and opportunities come and go. There's opportunities there all the time. It's a matter of whether you're going to grab it and run with it and have a go at it. I remember my old man used to say to me, I love it. It's a great saying is that, you know what, take a huge bite and bloody chew hard. And you have to. If you're going to go into any business, you've got to put a hell of a lot of time and energy into it. You can't expect to go into something and it just do it itself. Love

it. Very good piece of advice. Let me take some tactical questions. I've got a question around the 24 Club and 24 was a big thing, was a big thing. It still is a big thing. Where do you see the future of 24? Is it the thing that you have to have now? Just is it standard now? Is it like, you buy a burger and you need cheese with it, or is it like an extra that you have to have if you open up an independent or a franchise? What are your thoughts on 24/7? Or is it past its use-by date? With all respect to the 24/7 brands.

Yeah, great question, mate. And I acknowledge that that's definitely a question that's happening out there in the marketplace at the moment. I think these days it's so easy to get that 24/7 piece and not, look, not every location can gain it. I mean, you've obviously got to go through a process to To get your DA approvals and so on. But I think it is definitely an important piece for the consumer because we don't live into a 9 to 5 world and people train at 6 and 5 anymore, right? Yeah. So whilst our facilities, certainly we see 80% of them attending at those typical sort of times, we certainly see a significant chunk turning up during those outside hours and especially in different areas, different demographics, and different cultural backgrounds, diversity use the gym in different times. Typically we'll see members of some of our areas, especially down here in Sydney, using the gym up to 11, 12 PM at night. And versus regional Queensland, you won't see one person between sort of 8 PM and 5 or 6 AM. So it's just different from that perspective. So definitely important. I think it's definitely something that clubs should, and easy enough to get. Easy enough to get. Is it the be-all and end-all? No, I think the be-all and end-all is changing a little bit in terms of what's important. For me, convenience is still very important, and I put convenience 24/7 under that convenience space, as with multiple locations, ease of access, and so on. But I think the other piece really now that the consumer is driving is a real sense of community within their club and results. Okay. I think those 2 items really got lost through the start of the 24/7 boom. And convenience became just low cost, lots of locations, just the basics and not the extras that really make the difference.

It's interesting you say that because now obviously there's more locations coming aboard. Every suburb has, you know, 3 or 4 gyms there. So what we're seeing here then is you're saying, okay, everybody's got that standard now. We've got the 24, we've raised the bar, we've got convenience, we've got nice equipment. Where to next? You are saying where to next is that personal connection. And is that results and that community piece? Is that what you are hearing?

100%. Yeah. Look, it's the major piece that we drive within our network now. Look, at the end of the day, someone will join your facility and it doesn't matter what it is, whether it's a 24/7 club or a boutique club, someone will join your facility majority of the time for convenience because it's easy for them. Whether it be really close to work, home, whatever it might be. Yes, they might travel that little bit further because their friend goes there, they really love the style of training or whatever else it might be. But the other piece to that is that now in each suburb, most people have got multiple locations within that convenient space. It's only 3 minutes to probably 5 or 6 other facilities. So now it's very much around, okay, well you've got to have a great facility to start with. You've got to have a great product and offering, but people wanted, From that perspective, it's then, okay, well, someone will join for that reason. Someone will join because they can see that community piece. Yep. But I guess the longevity is that they're enjoying being there and that they're seeing their results. And so that's where we've really started to focus a lot of our attention. What are we doing within our stores, both instructor-led, so new programs, offerings, et cetera, as well as technology-based and technology connectivity piece as well? Yeah, both of those have been— Very interesting.

When I was in New Zealand, I saw your trainers and I saw the passion they have. And I've been to a lot of gyms and a lot of 24s, a lot of franchises, but there was something about what you provide. And we talked before around the education piece where you're open for education, where some people may not be open for education. They keep that education in a very branded way. Tell me about your belief on education to grow a brand of Snap and Lift Brands? Sure. Lift Brands.

Look, I think education is the number one key component to winning in any sort of space, right? When we talk franchising, there's so many different thought processes on franchising. I've been in it for a long time and I have my very distinct way of operating a franchise business. And so franchising is all about the more flexibility you give the less control you have and the less brand sometimes you have. So if you lose that control, you're basically losing your brand. And so it's really important for us to balance that because people love flexibility. And in franchising, there's that saying, if you're in business on your own but not by yourself, right? Sure. Or for yourself, not by yourself, I should say. And so when I look at that, I go, okay, well, we want these guys to have their own flavour to a business. Yes. So we're going to definitely educate them. We've got to give them all the tools and resources they can. So we run a huge amount of education for everyone within our network. We do quite a significant amount for our PTs, a huge amount for our club managers, and specific stuff for our franchisees. And that's both face-to-face and online. And so there's got to be that element of education within for us to ensure that we're winning and driving forward. But it's important for these guys to get different thought process, different ideas that they can bring them into our network. Because, you know, if we keep things enclosed, we're not thinking outside the square or the circle, right? We're not thinking, okay, what are those guys doing? How are they doing it? You know, listening to something from Colm or from anyone else out there in the marketplace, well, what's working for them? How do we then bring that into our network and standardize it? So if these guys aren't attending external Education. I mean, they're not getting that. We're not getting that as an organisation. So, you know, whether it be our club managers, our franchisees, or our personal trainers, that's one element. But we even send our head office team to quite a lot of education out there from the industry as well. So

yeah, great, great, great perspective and fresh perspective. Tell me about the, you know, let's talk about somebody who's about to join, like they're ready to invest in something. Okay. And they don't know where to put their money or what to do at this point. And what sort of, I guess, roadmap would you give somebody in that situation? They might've been a PT and they want to get to a gym or they want to buy a studio. I mean, there's so many options out there. How would you give advice to somebody that may be in your shoes and doesn't know which way to go, which way to turn? What should they be looking for if they're going down the franchise road? Or the bigger question, should they go independent? Like who's, Is everybody suited for a franchise and what kind of do you need to have as a checklist to go through that process?

Yes and no. I think, so good question. From a perspective of independent versus franchise, yes, there's definitely differences and significant differences. If you are someone that's very entrepreneurial and you're really keen to give it a go and design your own thing, you've got a great idea, go independent, do your thing, make it happen.

I love that you say that, very entrepreneur independent. Do your own thing, that creativeness.

Yep, absolutely. And let that flow, right? Because that will flow into your clients and it'll work. We see it all the time, people with that coming to a franchise because sometimes it's their first go, they don't back themselves, whatever it might be. And franchise can be a great place to start because entrepreneurial people don't necessarily— they've got great ideas and they can see a vision, but they don't necessarily have all the tools to bring it together. And so we still can work with someone that's in that entrepreneurial space. It's just sometimes that little bit more difficult, not always for us, but quite often for them.

For them, yes.

Right? To settle into the franchising kind of world.

Yes. I think I'd be one of those people. You know what I mean? I think I'd be a bad franchisee.

Well, I wouldn't call it a bad franchisee. It's just they're indifferent, right? And we need to work with them. Sure. Look, for us, we have every type of franchisee out there, different ages, different backgrounds, different business experience. And franchising can meet a lot of people's requirements. I think the biggest piece for a lot of people is, and the great thing about franchising, which I love, right, is that when you're opening a store, especially your first store, when you're opening a store, you can get distracted by so many things.

Sure.

And if you're starting something completely fresh and new, you're getting distracted by all those other things that a franchise just delivers. Even simple things like your membership fees. I

mean, when you say simple thing, that could take like a whole week to design if you don't have that.

I mean, if you— to meet legislative requirements and everything you need to do in that space with your lawyers and so on, yes, it takes time, probably more than that. And so what you want to be focused on is just building a club and selling memberships, right? So that you open your store with a great number and that you're profitable as soon as possible.

So then if they go down that road, let's say, okay, I've decided on a franchise, how do you choose by the endless options? out there in the marketplace today? Is it like something that you feel that that's the place to go? How do you make choices on this?

Yeah, it's a good question. Look, you've got to resonate with a brand to start with, right? So I think when we look at it, one of the key things that we talk about is our flexibility in franchising. So when we talk to a franchisee or a potential franchisee, I should say, they're always looking at other options. You're not going to go and invest half a million dollars in something without looking at who else is out there. And so majority of the guys that are buying into our franchise are in that space that they've got the entrepreneurial spirit, but they know they don't want to waste all their time over here, but they want to bring some of their own flavour to it. So for us, even down to the look and feel of a location, the layout of the floor plan, we don't say to you, okay, we are going to design it for you and that's the way it's going to be. That design majority of the time happens between you as a franchisee and our design team, which are an external party that you work with quite collaboratively. You build a club or you design a club and then it comes to us. We might tweak a couple of little things just because we know how it works better, but we like our franchisees to have that involvement and that ability to make some decisions around what's specific for not just their location, Yep. the demographics in the area and the cultural diversity in the area, but for them as an individual. You know, we get a lot of franchisees that Just want to run the plate. They just want to run exactly what a Snap Fitness should look like and how it's set up. But then there's others out there that come from significant PT background, and you know what, they want to build a bigger functional training space and have more in that space to be able to deliver really strong in that. So we've got that flexibility, and that's a big piece to a lot of the guys coming on board.

I like that a lot because it does take care of a few needs, especially when you're putting your half a million dollars, whatever that figure is you do want that sense of ownership. I created this and this is my flavour. I'm assuming that's very important for somebody doing it.

100%. For us, things have changed a little bit in what we look for in our franchisees. Don't get me wrong, certainly this is a space where investors is a really good opportunity, but we want people to be— we're looking for more franchisees, not less. And what I mean by that, I would rather have a franchisee or 3 franchisees across 6 clubs than 1. Because I know that those franchisees are gonna have more connectivity to their businesses and spend more time with their club managers driving, growing, and doing the things that need to happen. And so that's generally pretty important. And I think when we give that ownership to people, they're the sort of people that are coming in in that space. They want to be more hands-on with their business, which is super important for us at the moment.

I love it. I'll get you one more question. I know you've gotta go. You're flying in and out everywhere, so I'll I've got one more question for you. Tell me about, you're very big in, when I say communal industry, you know, you're always at industry events, you're supporting the industry. Is that important for you personally and Lift Brands? What's your thoughts on that?

Hugely important. Yeah, look, I think the fitness industry has exploded and it's exploded in all sorts of different directions. And the diversity of it is huge. For us being involved, and not just myself, but our team members being involved in a range of different events and understanding what's going on in all of those different elements is really important for me personally and for Lift Brands to have involvement in where the industry is going. Again, very important to be involved with industry bodies like Fitness Australia and driving some of the decision-making that's coming out of those spaces is— Yep. Is a big part of where we are trying to move ourselves as well for the betterment of the health of Australia in general, more than anything else. For us, one of the huge pieces has been mental health and mental awareness. And we are doing a lot in that space with our franchisees. In a couple of weeks' time, we're opening all of our stores up across Australia and New Zealand for the full week for anyone in the local community to come and use our facilities, no questions asked. We're doing what we call Walk for Awareness, which is a walk that last year we raised about $140,000 for mental health. And so industry events, yes, heavily involved in that, but also doing a lot just generally in the community as well to be more involved in our local communities also.

Love it. Very interesting, very important, interesting piece, especially that we know that not everybody's in gym. So we've got to get those people off the couches. And people that aren't involved in that to a different place. Last question for you. If somebody was in your situation at 21 and they didn't know what to do with their career and they're in the fitness space, what advice would you give them?

Yeah, that's a good question. Ask, ask as many questions. Before you even ask questions, attend as many events as you possibly can afford to do. Right. And there's a lot of stuff out there that doesn't cost you anything.

Sure.

So get involved in as many things as you can, then speak to as many people as you can. The more connections you can make, the more opportunity you've got to get an opportunity. All right? And if you are front of mind for someone, you've shown the energy, the enthusiasm, and the ability, opportunities come. They'll be presented and you'll see them. You've just got to have the, call it the balls to go and have a go.

Great. Guys, for those who are interested in this kind of space, say reach out to Ty, you're very open. Where can they connect? Lift Brands?

Yeah, probably the best base is, I mean, through LinkedIn is probably a really good spot. LinkedIn's a good spot, yeah. Lift Brands Asia Pacific is a really good one, or Snap Fitness Asia Pacific is a good space to catch us, and that usually gets responded to really fast.

Sounds good. Thanks for your insights today, Ty.

Thanks, mate.

And thanks for being part of the industry and pushing it forward.

Yeah, no dramas at all.

Pleasure. Guys, thanks so much for watching Industry Change. If you like this episode, you can see more, um, or you can listen to this on a podcast channel. Just go check it out and make sure you subscribe. Bye for now.