2815: Mark Mastrov

17:52Wow. So we bought the debt out for 15. We put the capital in the ticket into bankruptcy. In the meantime, Ben Midgley, who worked for us at 2-4, I don't know if you guys remember him, but Ben ran corporate sales, phenomenal guy. And he came to me at some point and said, look, Mark, I want to move back to Kitty Bunkport, Maine, where I'm from. I want to raise my family there. I got three young children and I want to stay here, but I just, you know, there was no remote work in those days. And so he's like, I want to move back. No problem, Ben. Love you. Let's stay in touch. He goes back. Well, he ends up working for Planet Fitness and he spends a couple of years and eventually becomes president of Planet Fitness.

18:29And so he gives me a call right before I'm looking at this crunch opportunity and says, look, I'm leaving Planet. It's crazy here. These guys are nuts. I can't handle it. They're riding motorcycles in the office. They're feeding pizza for a minute. It's like, I do our people. And he's like, I got to get out of here. I go, what do you want to do? He goes, I don't know. I was thinking about maybe starting something similar. And I'm like, well, I'd be up for that. So I put him together with a kid that worked with me named Craig Pepin-Denna, who was my EVP of sales and marketing. Phenomenal guy. And the two of them started working on a concept like, hey, we're going to start a little franchise business.

19:01And then this crunch thing falls in our lap and I'm like, well, shit, why don't we talk to Craig and Ben about parking it inside this crunch brand? And so they're like, yeah, let's do it. So merge that into the crunch brand, gave them a bunch of equity. And then we started the franchise business. We took five of our best operators at two, four who had left were all free agents and backed them in a couple locations each to prove the model out and then let them grow their area. So a guy like Curtis Harmon eventually opened like 40 clubs and made a shit ton of money. And we started growing the franchise business.

19:33And that's how that all came together, long story short. But Ben led that with Craig. And then Jim stepped in full time and said, look, I want to be the CEO and grow this thing. I'm like, awesome. Let's do it. So Jim stepped in there and started cranking. And he's basically done a phenomenal job.

19:50Sal Di Stefano:When you look at Crunch and you see it's going under like that, what gave you the confidence that you could bankrupt it and come back? There had to been something you're looking at the books or the model or like, what do you, what do you see to take the, take that kind of risk? You guys know the business that'll make you laugh. They had a kid running the company who came out of the hotel industry. Okay. And his philosophy was no salespeople, no marketing. Very Carl Lieber, uh, Home Depot style. It'll be field of dreams. They will come. right and i was walking through the place there's like nobody there like look they'll see these beautiful clubs and they'll all join and just word of mouth they'll be amazing i'm like our industry doesn't quite work that way unfortunately it's nice but it doesn't work that way so i felt like if we turn the marketing machine on it it's a very cool brand i've always loved the name and the whole shtick behind it you know no judgments etc and if we put our systems in place our technology our sales systems will turn it and we turned it very fast wow one thing that one thing

20:49Adam Schafer:mark that I notice about you, um, that's often that you're often praised for is, uh, the relationships that you build and how loyal seem, people seem to be with you. You mentioned at least five or six names here that I know have been with you for decades. Talk about the value of that and how are you able to do that? Cause it's, it's, it's quite rare to see somebody who's where people are willing to follow them wherever they go. And so, and that's, that's one of the reasons why you're so successful, I would say. Talk about that a little bit. Yeah. So, I mean, I learned early on, I think my dad put it in my head is that, you know, replace yourself with people who are better.

21:27If you want to be successful in business, you can't do it all yourself. So my first gym, like your guys' first gym, you're doing everything. I'm doing payroll, marketing, operations, I'm doing everything. And I start replacing myself as we find more and more success. And then I like to share. And so I know there are some guys that build their companies, They don't share. They don't give stock. They keep everything for themselves. And they basically run it like a dictatorship. I believe in sharing and giving out as much as I can to everybody and making them true partners. And all these folks have done very well by being a part of what we've built.

22:00And so my job is to mentor, to fund, to back and develop people and allow them to live to their dream. And so I know Jim's super happy with the wealth he's created through the Crunch transaction and the wealth he will create in the next round, therefore, forth from there. Adam and others have done extremely well at UFC. Chris Smith up in Canada is doing phenomenal work up there, growing a really cool brand called Fitness World. And I can go on and on and on. But I think when you find people with talent and you get behind them and let them grow and just kind of keep them in the guardrails, let them kind of find their way, you get rewarded.

22:37And so I'm happy to share the pie and happy to reward people so they can make as much money as they dream to make. And we'll both win together.

22:46Adam Schafer:Talk about the guard whales because it's not just about that. There's lots of companies that you'll make a lot of money. You'll get shares. And they don't have the same loyalty. Talk about what you just mentioned with guard whales and working with people and allowing them to do their thing. Yeah, I mean, I believe in paying people extremely well, more than they deserve, and let them earn as much as they want. So I don't have a problem overcompensating people. I don't have a problem giving them lots of equity. And then I'm there for them. So I'm sure you've heard me say my view is that I'm in the upside down pyramid.

23:20I'm at the bottom and I work for you. You don't work for me. I'm here for you. Whatever you need, you call, I pick up. You need an email, I give you an answer. You text me, I'm answering you. I mean, my wife kicks me all the time under the table. We're at dinner, I'm on my phone. Give me five seconds here. I got to get back. I want people moving and I want to be there for them. So I feel like I've got a lot of loyalty to my team and my people, and I want to make them great and coach them up best I can.

23:47Sal Di Stefano:It says a lot, too, that your ability to distinguish that quick, right? So when we were scaling this, I operate from a similar philosophy. Relationships, I think, is a big reason why we had a lot of success and tend to give a lot. And I know I've made some mistakes even early on where we're growing a side or a department and I'm like, give someone so much that they end up not following through and living up to that because I come from that place also. What is it for you? Like, what do you see in that person? You go like, this is someone who I can give a percentage or give ownership. Like, what do you see?

24:23I mean, they've come up the ranks and so they've worked their way up from sometimes the bottom. I mean, Jim came in as an example. I talked to you a lot about Jim today, but Jim came in out of the Marines and his brother was working for us and he came in as a sales counselor. And then he worked his way all the way up to president at 24 hour within probably a decade where he ran half the company. And he's very, very talented. You could see it. what I used to do a lot is we have our conventions and I would have people that I thought were potentially leaders and I would cold call them to come up on the stage and speak and close out a session or talk about what they were doing.

25:02And that's when you see the people shine. And so I remember I took Jim out of the audience one day, I need you to come up, close this thing out. And he's like blew everybody's minds, did a phenomenal job. He's like, okay, this guy's got leadership skills. Same thing I've did with Adam or Brian, who's sitting behind us here, who Brian runs all the Crunch Gyms here in the Bay Area. He's a phenomenal operator. And so I just call him up. Hey, talk a little bit about yourself. Talk a little bit about this subject matter. That's a nice way to do it. Then, you know, the old test is get to meet their family, get to meet the people who are friends around them, who are they as a person, you know, and then spend time with them, break breads, travel, you know, hang out.

25:37We used to do events all the time at 2-4 where, you know, we'd have 500 people show up in Hawaii for four days and you'd get to know people. Oh, yeah. So you spend time and you'd break bread to eat together and you start to say, I really like this person. And we get along and I think we could work well together. And then give them a shot. Put them up into a higher position. If they perform, put them up again. And make sure that they earn some serious money so they're super happy and their family's got the opportunity to, you know, enjoy life a little bit.

26:04Adam Schafer:Mark, do you remember, probably it was 1998, you don't remember, it was 1998. 1998, you came into a club that I was working and had me give you a tour of, do you remember that? We talked about it. Okay. Okay. That was, that was, that was such an awesome, uh, moment. You're 19 at that time. I was 18 or 19 years old. And at the time I was selling just crazy numbers, personal training and memberships. And, and you showed up and he said, I want you to give me, I want this kid to give me a tour. They told me you're a badass. I'm like, Oh, I got to meet this guys. I gave you a tour and I was too young to understand like I'm the, the, the owner of the company's coming in to get it, you know, get a tour.

26:41Adam Schafer:But I remember that. I always remember that. So, uh, I think that's part of, uh, your success is that you, you give people that feeling, which is why they tend to follow you whenever you make jumps. Now, looking back at 24, you left, uh, they're, they, they're, they're different now. So talk about like, because at At one point, that was the model. Like 24 Hour, they were the ones that created the model for a successful health club. They really were. Everybody else had to copy them at that point. But after you left, their image changed. It wasn't the same. Now when you're looking at it now, what are you looking at?

27:16Adam Schafer:What are you going to try and change or switch or what are you going to do differently? Great question. I mean, after I left, they probably went through five leadership groups and probably three different investors, maybe four. and they kind of went on a path that lost their way. I think they were performing pretty well at one point and then struggling at another point and they changed leadership. And then a group came in and put a lot of debt on it and didn't equitize it as much. So they had a heavy load of debt and then they started to struggle a little bit. And so they hit the pandemic and at that point just decided that, we're gonna have to file bankruptcy and reorganize.

27:50And then at that point, the equity guys are gone. They lose their investment and the debt holders have the right to kind of come in and own the company, which is the reason why we wanted to buy that debt at Crunch when we bought it from Goldman Sachs is because now we control the debt, we control the outcome of bankruptcy. So we're in first position. So they kind of came through there and they finally landed on a guy by the name of Carl Sanft to be the CEO, came out of Best Buy, was like a COO there, super sharp. and he righted the ship, reorganized it, leaned it out pretty heavily and didn't grow it all for the last four years because his hands had been tied behind his back by the guys that owned it.

28:29They didn't want to put any money into the business. They remodeled, they kept the clubs running well, but the company kind of lost its way a little bit. So as I step back in, I'm trying to take a look at where they sit right now and what I think we can do to kind of bring it back to where it was because we were on fire and doing everything right and had an amazing opportunity. And it kind of got fumbled by the leadership groups that came in behind. And it's hard for a guy like even Carl, who's the CEO, and all of a sudden I show up, right? The founder's back, you know, and he's an old fart now, but what the hell, what are we gonna do?

29:02Is he still there? Oh, Carl, this is a new Carl. Oh, okay. Yeah, Liebert's gone, of course, but Sam is running it. And, you know, he's done a great job. I'm like, look, let's learn. Let's see what you think. What do you see? And I've been pointing a lot of stuff out that, look, this is where I think we need to go. and if you want, bring it to the team. And if they like it, let's do it. And we're going to bring back nutrition because they kind of walked away from nutrition. We're going to bring back personal training because they kind of walked away from personal training. We're going to change the pricing structure, make it simpler and easier.

29:32We're not going to go down to 999 HVLP stuff. That's not where we're going to be. These boxes they have are 40, 50, 60 ,000 square feet with pools and courts. They're beautiful. We're going to bring in recovery and put a lot of capital to work. So we'll remodel about 60 clubs this year, give or take. We'll try and open six or eight. We'll try and buy eight or 10 because we got a lot of cash on the balance sheet to go kick some ass. But it's going to be a year or two to kind of resurrect and find out what the new future is for the company. And I'm excited to see what the team there decides to do.

30:05There's a lot of really talented people.

30:07Sal Di Stefano:Do you think we're in a kind of changing landscape? It felt like five, eight years ago, you know, you saw the F45s, the Orange Theories kind of explode. I kind of feel like they've peaked and they're kind of tipping back off. You seem it seems like this spa recovery, bigger kind of footprint, even places where you can do work. And it seems like it's going that direction. Like, what's your thought when you look at the entire landscape of the direction of the space? And is there any plans of melding some of those ideas in with the 24? Yeah, it's really interesting because if you look at the way I look at the business, so I kind of, if you remember, every five years, I try and take a project near my home and build what I call is the club of the future.

30:53I'll make some crazy brand name and I'll just go dabble with it and see. So I live in Vegas now. So I took some square footage there and I'm building what I think is the club of the future. And so what's inside that club, right? And so there's definitely Medispa. so we can start to do body scans. We can start to do GLP. We can do peptides, NAD, and get into IV therapy and really start to help people understand how to enhance their workout, enhance their recovery, enhance their bodies. So we want to get into that. We're going to equip it with the latest and greatest, craziest stuff out there. You see a lot of these clubs now that are very focused on the free weight side of the house going after the Gen Z market.

31:33I'd say 40 % of people joining gyms right now from the Gen Z. They're on fire. They love working out. They love training. They love training. Yeah. So that young crowd's really cool to watch. And then we've moved away from what I call group showers to private showers. So what I've started doing in the clubs, even the one that's here in the Bay, up the street here that Brian built, you know, we've got 10 private showers in there. Well-appointed, beautiful, full service. You go in, use it yourself come out, we clean in behind you and roll it to the next person. And we're moving towards that to make the clubs more unisex oriented, to eliminate some of those issues that come around with the they, them stuff.

32:14But at the same time, make it a little bit more higher end high scale. And then recovery starts to get bigger. There's beginning, intermediate, advanced recovery, right? So you can spend a hundred grand or 500 grand, depending on what you want to put inside your recovery room. If you want to do hyperbaric chambers, which is what we're going to start to do, you know, we're starting to hit the big stuff and people are going to go crazy for some of the treatments they've never tried that will present to them as a first time opportunity.

32:41Adam Schafer:I think that the opportunity to combine this exploding medical intervention that is going to continue to explode, the GLP-1s, the new generations, the peptides. I mean, this is huge. We've never seen anything like this when it comes to medical interventions to combine that with, which we believe this to be necessary to combine it with a good trainer, a good coach, strength training, diet, so you don't lose the muscle. That has to be the future. And I think that's such a great opportunity because I could see people using, we talk about this all the time, using GLP ones without strength training, without that kind of coach, it's not the best solution, but in combination, it's great, which leads us to personal training.

33:23Adam Schafer:You said you're bringing that back. Why do gyms generally move away from that? And why was that a mistake? So, I mean, the pandemic came and everybody had to work from home and the trainers started training people in their garages or in the parks or at their home of their client. And they built a little business up. And so a lot of them didn't come back to the fitness industry. They stayed out on their own independently. And then these little gyms would show up that you could rent space from and bring in your clients. And so they started using those, making a little bit more money. And the gyms struggled to replace people.

33:57As you know, a lot of people didn't want to work after the 2021 period. It's like, I don't need to work anymore. Just the government's sending me money. I'm good. So I think the flip side was that the training core kind of decreased a little bit. There's still a lot of success in places. There's still gyms doing big numbers, but they had to rebuild that culture. And at 2-4, they kind of fell in that trap where they, you know, I went into a gym, blow your mind. I went into a gym on the East Coast that's doing 3 ,500 workouts a day. I mean, it's like incredible, right? I tour the whole facility.

34:29I go, how's your personal training appointment? Oh, it's good. How is it? We did 13 ,000 last month. Oh my God. I'm like, well, how many trainers do you have? We just have one. I'm like, what? 3 ,500 workouts? Yeah. I mean, you guys should be doing 200 grand a month here. So they're like, okay, we're going to start hiring. Yeah, you need to hire and get back at it. But the opportunity's there. And to me, it's about helping the members achieve their goals. As you guys know, personal training is super important because everybody trains, but they don't watch their nutrition. They don't know how to lift properly.

35:00They aren't exercising properly. They aren't getting a lot functional in. And so the trainer plays this massive role in helping people get on the right path. Whether they want to stay with that trainer for a year or a month, a day, whatever, it's a big, big benefit. And so that's what we need to focus back on at 2-4 for sure is to rebuild that personal training.

35:17Sal Di Stefano:I 100 % agree with that. So what moved us in that direction? So we're now on like 18 months of that off air. We'll talk numbers in the business and what we've done and some of the ideas that we have. Well, it seems as there's going to be this massive divide of people that go the AI robot, no human connection. And then there's going to be another side that's going to be thirsty for that human connection. And we're doubling down on that. We really believe that, I mean, we were meant to be with each other. and there's so much that happens when you're actually with another human being that AI just can't replace.

35:56Sal Di Stefano:And I know there's gonna be a lot of people that will adopt it. I know it'll be low cost, but there's gonna be a ton of people, I think, that are gonna be thirsty for connection. And I think it's gonna make a huge boom. I think it's, do you think that? Do you think that's - Yeah, 100%. I think that AI is gonna play its role, but at the end of the day, I think we're in a great space because we want community, we want experience, we want to touch and feel. and we don't want to sit at home all day. And so I think ultimately the trainer is a great opportunity for people in career change. And the money that trainers make is ridiculous.

36:30There's folks making$150 ,000,$200 ,000 training in the gym, right? And they're loving it with full benefits. The club feeds them new prospects every day. They come in and enroll. I mean, Adam Sedlak is doing at UFC Gym two for 22. You get two personal training sessions for$22 as you join. Wow.

36:51Adam Schafer:And they convert that well? They convert well, but it gives people a chance to see what training is about, how it can enhance them. And a lot of people are like, shit, I want more of this. And then they go and buy training. But his philosophy is that everybody gets touched if they want to be. If they don't want it, no problem. But that's such a ridiculous price. We lose money on that. We don't make money. We pay the trainer more than that. Of course, yeah. But it's a way to let people know that personal training is super important. And we got your back. Do you think one of the biggest mistakes that gyms can make is forget that it's a people business and think it's more of a equipment and maybe analytics and, you know, we got the nicest looking whatever versus like it's about it's really about the people, isn't it?

37:31Adam Schafer:It always is. It's I call it the guru in the box. It's who the leader is, right? Who are you following? And if you have like you're 18, 19 years old, the whole gym's following you. You're the GM. You're in charge. They love you. You got charisma. They're like, oh my God, I'll follow this guy at the end of the earth. So you got to have that person in the location that kind of leads the charge and then builds a team around them that's awesome. And so from that standpoint, it's always about people. Everything in life is generally about people. But technology is moving fast. AI is moving fast. Holograms are starting to show up.

38:03We're going to have all this crazy shit. We'll see what everybody does. Maybe a robot is going to be teaching me how to work out. I don't know. But I do think at the end of the day, when you come into the gym, The change that's really interesting is that the gym is packed all day long because nobody's working. People have jobs now from home, and they can work from 5 to 8 and go work out from 8 to 10 and come back and finish up at home. Are busy hours changing in the gym? Is that changing a lot? Oh, interesting. I was in Hawaii, and I went into a 24-hour fitness gym at one o 'clock in the afternoon and there was over 550 people in it.

38:43Wow. I was like blown away. I'm like, does anybody work here? They just laugh. No, I mean, this club's busy all day. It's like, so the gym business is 24 hours a day now. It's not like, you know, morning, noon and night. Yeah, it used to be like that. It's all day long. People are in there. Different shifts of types of people come in throughout the day, which is really awesome for our industry and awesome for people to have that flexibility to come in and train in hours that normally were quiet that are now a little bit busier than ever before.

39:09Adam Schafer:Yeah, Gen Z, you'd mentioned them a bit, and I had read some statistic about the drop in alcohol sales. Yeah.

39:15Sal Di Stefano:They're just not interested in hanging out like that and looking for healthier options. Is that a demographic you're really trying to include hangout-wise? I know there's some gyms that actually are trying to create kind of like a lounge experience for them so they can extend their workouts to connect. Yeah, I've got this wacky theory where the baby boomers, call it the 60 to 80 crowd, got into fitness. In the 70s and 80s, they started exercising, and it's part of their life. And then their children underneath them kind of grew up with them at their gyms or country clubs, and they exercised as well.

39:49They're like, oh, this is pretty normal. Now the baby boomers are focused on longevity. I want to live forever. I'm going to take my peptides, my JLP worms. I'm going to exercise. I'm going to lift weights. I'm going to do all the stuff you see in social media. And then their children are seeing it. Now the grandkids, which are, I call the Gen Z folks, right, are looking up at my mom and dad work out, my grandma and grandpa work out, I work out. I played sports. I want to exercise. Hey, what's this peptide thing? What's this social media thing? And so we're starting to see that people are recognizing that to live longer and live healthier, you got to do some strength training, right?

40:24And if you want to do it in the park, God bless you. But if you want to come to the gym, we'll take care of you. But I think that there's a change in the scenery right now where everybody has recognized that gyms and fitness is the third place. It's not Starbucks. It's homework and gym. And that's where community is. And now they're getting into running events and Pilates is blown out like crazy and everybody's into exercise. It's kind of cool.

40:50Adam Schafer:It is really cool. It is. We saw a huge switch where women weren't strength training. Now they are. Now you're seeing a lot of kids working out. So is fitness having its biggest moment? I think it is. I think that's well said. I think it's having its moment right now. And a lot of people, like I did some interviews with some of the national media, and their whole thing is, why would you come back to 24 Hour Fitness? Like, you know, business is kind of gone now. What are you talking about? Fitness is on fire. You're missing it. Planet Fitness has 2 ,000 locations. Crunch is 600 and opening 100 this year.

41:2524 Hour has got a big business. LA Fitness has got a big business. EOS is killing it. Rich and those guys are awesome over EOS. They're doing great work. Everybody's on fire. What am I missing? You just don't know. I haven't been there.

41:37Sal Di Stefano:Well, I mean, you highlighted that when you talked about the gym. You said it was New York or East Coast at 3 ,500 workouts and only 15 grand in personal training. 13 grand and one trainer. One trainer. I'm like, I'm coming here. I want this guy to see what's in need. We were doing 100 grand in personal training a month out of Santa Teresa when we were getting 1 ,500 to 1 ,700 workouts. Crazy, right? So, I mean, you're talking about almost should be doing double that. Yeah. That's, I mean, so what a huge miss. It's just a big opportunity for people as they look at career change or coming back to the industry.

42:10You know, I'm seeing, I've got a gym that I'm working with because what I do is I tour around all the two floors. I pick a couple of gyms in each market that they're going to report into me every day. And I kind of manage them. So I get a feel for what's going on, how hard they're working, et cetera. but I had a gym I went to and I said look what what's what did you do last month they go we did like 38 I go that's pretty good what's your all-time record they go 116 back in the day they looked it up I said can we do 116 this month they go it's like the 12th of a month they go there's no way I said well can we give it a shot they did 108 I mean just like just because every day I'm like sell do service work the desk work the floor talk to members and you start working they go 108 and this month they're on pace to hit 120.

42:54It's not that hard.

42:55Adam Schafer:I was literally going to ask you that question, how big of a difference just the right team can make in the same club. I mean, you could switch out the team or change the attitude. Dramatically different in revenue and experience for the members. Totally different. I've been reading articles on the gym industry and how they're saying that the middle type of gym is disappearing and it's becoming either the expensive kind of country club experience and the super low, inexpensive, you know, entry type gyms. Is that, do you see that happening? Do you see there any room for the middle or? Yeah, I mean, that's what the word has been in the marketing and the media for the last couple of years is that the middle is gone.

43:38Like the 25th Hour Fitness at 40 bucks and LA Fitness at 40 bucks is gone. And then the HVLP is really 10 bucks. but the reality is that$10 is the lost leader when they come in the door. They're buying the next tier up. They want recovery. They want all club access. They want classes. So they're stepping up to$25 to$35. So they're approaching the middle. And then the other thing is the gym of today is like 75 bucks, right? So you see these guys are coming out with these huge freeway gyms with lots of cool lighting and they're charging$75. They're getting it all day long. So the middle is still there.

44:14You just have to decide, you know, how you want to market to it.

44:17Sal Di Stefano:I wonder if it's into your point of like leadership and people is did all the great people leave to the, like either if you were an old 24 hour guy that was a great GM or RVP or whatever, did you end up going and starting your own own theory of fitness? Or did you go and, you know, get into one of the spas because there was more money there and everybody just left that middle? Is that, could be that. I mean, that's what it sounds like. I mean, a lot of talent has left the industry during the pandemic and after, and some of the brands that went through difficult times. Gold's Gym's filed BK, 25-hour filed BK, New York Sports filed BK.

44:53Equinox got hit really hard. Ellie Fitness got hit really hard. So a lot of those guys struggle, and people left because they had to cut back on payroll and couldn't take care of them. So they spun out into other organizations. So groups like EOS, which Rich Leads, has picked up a lot of people on waivers. So they've got a lot of X24, X Crunch, X Lifetime people that have been able to help them grow their business. And so I think the talent still out there is just, like you said, spread out a little bit. And then a lot have gone out and opened up their own gym concepts and done really well, which is awesome to see.

45:28Adam Schafer:Is the footprint of gyms – you mentioned free weights a few times. So I noticed this. So I work out in a couple of commercial gyms here and there. And I noticed that the footprints seem to be moving more towards strength training and away from – Back in the day, it was a big cardio. Now it looks like it's more strength training. Do you see that as continuing moving in that direction? Yeah, I think if you look at the Gen Z, the young audiences coming in, cardio has shrunk, right? Selectorized is still nice, but they really want to work out on unique equipment. So I don't know if you've seen Skellcore.

45:58No. Skellcore, phenomenal. Look them up, man. They're awesome. Out of Florida, run by a father and his sons and his wife out of South Africa. Okay. And Mark runs it, this guy, Mark Ackerman. This is strength training? It's strength training. I mean, they got plays. They got everything. They got dumbbells that have Geigers on them. So when you set them down, it brings it back. So the amount, like 20 pounds is center. First, you know, a lot of people put them upside down. Like my wife hates that. Like I want my dumbbells to stay. Oh, I see.

46:26Adam Schafer:So the weight, it always says the name. It's got a little spinning Geiger in the middle. So you always see the number on the top. Oh, that's cool. They do all kinds of cool stuff. That has to be aesthetics for sure. Yeah, they got weight plates that you can have polka dots on or do whatever the hell you want. Okay. And then they bend their steel really innovatively and very creatively. So they're doing really phenomenal work. And then, of course, you've got Panetta and Gym 80. Then you've got all the basics and the regular lines, Matrix and Life Fitness and Core, et cetera. But right now, the kids are coming in saying, I want to train on eight or ten different pieces for my pecs.

46:57I want to work on different shit. I want the same damn piece my dad was using. I want something cool. And so you've got to have a big-ass, call it, powerlifting area. and racks, you got to have 10 racks in a club. And what's really cool is you put these power racks and it's women working out. I was just going to say, it's nuts. I was just going to say,

47:17Adam Schafer:when these gyms are putting them together, they're now looking at, well, now women is 50 % of the people using this. So you're going to see more hip thrust. You're going to see more. And they love the barbell stuff is what I'm saying, which is really, really cool. They're deadlifting. They're cleaning and jerking. They're doing all kinds of shit. You're like, Jesus Christ, this is crazy. But that's, you know, kids today get after it. They really are training hard. And a lot of them came through sports programs, right? More kids are participating in sports. They're training hard through high school and college.

47:44They're coming out and they're finding the gym and they're pounding it. And it's fun to watch.

47:48Adam Schafer:One thing that I'm seeing just in our space in new media, because obviously this is what we work in, and you start to see trends kind of start in new media. And because SelectRise strength training equipment has been around for a while, strength training's been relatively popular for a while, you're starting to see people look for gems with equipment that you don't see so often anymore like there's that big hammer strength dinosaur uh leg press machine i forgot what it was called but like there were only 600 made because it took so much but now you got people looking for them like i want to use this this is like the best leg press ever viewed or the or the nautilus pullover machine which you just don't find it worth the chain it doesn't even have the belt it's got the dangerous chain you could lose your finger like people are now like i want to see this guy i can see value in bringing back some of these, you know, kind of vintage looking equipment.

48:31You're a hundred percent right. They want something nobody else has, right? They wanted something unique. They want to post it on social media. They want to show how vascular they've become or how big their quads have gotten or whatever it is. They do a little bit of everything and it's fun to watch. But, you know, the cool thing is, is that people are recognizing that strength training is really important towards life and longevity, right? The GLP-1 prescription, more often than not by doctors, you need to do some. You have to go join a gym or do some resistance training at home because you're going to deplete your fat and your muscle mass could eventually get hammered as well once you burn through your fat.

49:08And so you see that happen all the time. And then, like you said before, you know, peptides. I've been in rooms now, like who's doing peptides? Like two people raised their hand. Now it's starting to get to be eight to 10. And I assume it's going to be 10 out of 10. You know, so it's really interesting to watch what the young audience is pushing and what they're seeing as far as results.

49:27Sal Di Stefano:I just ran into Antoinette and she told me, she said, oh, you see, Mark, you have to ask him, what's the future of Group X? She's like, he's always hated Group X. Is he going to eliminate it? Is it going to go out? He was like, what's your take on that? Well, first he's wrong. I love Group X. I never hated it. We had so many classes. But a lot of people cup Group X because when you came out of the pandemic, breathing in a room with a lot of people, I can't do that. So you couldn't go to Orange Theory. You couldn't go to SoulCycle. You couldn't even do F45. It's like, no, no, that's bad, right?

50:01But then people started recognizing, wait a minute. We all got head faked there. It had nothing to do with spitting in the air and all that bullshit. So group fitness started making a comeback. And so certain classes are packed, body pumps packed because they want to press weight in fitness. Zumba has never gone away. So throw a Zumba class in any hour you want. we're going to start doing Zumba at two in the morning. It'll be packed. Everybody will show up. It won't change. And then Pilates has gone nuts, right? Pilates. If you don't have Pilates, it's like you're not in tune with the industry.

50:34So I think Group X will continue to grow and make a comeback. And it feels like a lot of successful gyms you walk into, you have to have a decent number of women in there working out. And Group X pulls a lot of women in.

50:46Adam Schafer:Still, yeah. Yeah. And just to point out to her that she's wrong. When we started Crunch, right? Planet was our competitor. They had no Group X. And we said, we're going to put Group X in Crunch.

50:57Sal Di Stefano:Yeah. And so Crunch, that's the differentiator Crunch has. It's got 2 ,000 and 3 ,000 square foot. And they got unique stuff too. They were the first ones to do like the hanging from the straps and do all kinds of cool stuff. I remember going to Crunch. They've been very innovative. We had Donna Cyrus who was at Crunch when we acquired it, was one of the big leaders in crazy stuff like, you know, stiletto, you know, workouts and, and other things that she kind of created, uh, that we, we took and put into our brand. Oh yeah. When you, uh, when you took over UFC, how long until you guys were really cranking, like how long did it take?

51:32Sal Di Stefano:What was that? What was the tipping point? Probably five years because we, we started a franchise and what you don't realize is we're in like 42 countries, like in crazy places. Really? All over the world. Adam flies all over. We're in the Middle East. We're growing like crazy in India. Wow. We just opened a couple more in China. We're in every country and it's growing from that standpoint because the brand is such a, you know, international brand. People love it. And so you get a lot of people there. So we've almost focused less domestically and more globally. Which is kind of a reverse of your typical strategy.

52:05Sal Di Stefano:I mean, you're the one who came out with like the cluster idea, right? Of like, You start with a gym here, then you go 15 miles at the road and go out versus going away. Is that because the UFC brand? Is that why? Because UFC is so big, that's why you can get away and do that? That, and it's a different kind of audience. It's a little bit bigger catchment area because of the mixed martial arts and the BJJ and the boxing. You bring people in, great instructors, and a lot of people come into that. And then we do kids programs, which is what's really cool. so call it you know four or five years old to 12 or 13 you can go take classes like your normal martial arts classes but these are mixed martial arts classes you learn to do bjj mui thai kick boxing whatever you want but the nice thing is you can train with mom and dad yeah they can all come into class together where in a regular traditional gym we would never let a five-year-old go into that's right right right so the ufc has a different audience in the bigger catchment area and they do a phenomenal work in the mixed martial arts communities.

53:03Sal Di Stefano:Does the Paramount deal affect you? The Paramount with UFC? I mean, I'm curious to like - We think it helps, of course, right? Because now you have a much bigger audience and catchment because anybody that subscribes to Paramount Plus for 12 and a half bucks a month is able to watch a UFC fight where before pay-per-view was 100,$150. So in talking to Dana and everybody, we think it's definitely going to be super helpful. Yeah, that's why I was wondering if you would start doing like more commercial. My wife and I were just talking about the fights this weekend and she's like, I don't understand why.

53:34Sal Di Stefano:I don't feel like they don't, UFC doesn't promote the fights any much. I said, well, that's because they went to Paramount and they just gained all that audience. They don't need to do that to promote for it anymore.

53:43Adam Schafer:Speaking of promoting and marketing, because the space seems to, the marketing in general seems to be changing. You know, social media got big. Now AI is making ads. I feel like people want something authentic. How is marketing, has it changed since you've been doing this where you're really trying to get people in through, like, what does it look like now? Yeah, it's a great question. I mean, it's all about social media and the algorithms through the digital channel, right? So you could be hot as hell on Facebook one week and nothing the next. You got to kind of crack the code. The genius behind that sitting behind me, Brian Calgary, he's like phenomenal.

54:16If you want to talk marketing, he could talk to you for hours. But reality is less direct mail, less TV, less radio, a lot of social, and then a lot of in-store, a lot of referral stuff. So we can get things in front of our members to reward them for recommending our facility to their friends or family. And that's where you kind of hit the ground. And then just some outreach. You got to have some hustle. So as you know, you got to get out in the community and create awareness because five blocks away, somebody may never know you have a gym there because they don't drive that way. So a lot of it's just hand-to-hand too.

54:46But digital is probably the most important, and you got to come to the social channels. You might find that Snapchat's crushing it this week for some reason. Then you slide over and YouTube is crazy. So you just have to kind of see what the up and flow is.

55:03Sal Di Stefano:Any thoughts of collaborating similar to what you did back in the days with like a Magic Johnson gym? Like what's to stop you from collaborating with one of the largest health and fitness podcasts or one of the largest? We could do it. Let's do it. I mean, seriously, I have no idea how successful that strategy was back in the days where you partner with a big name in sports like that and their names on it and it's a collab, but the 24 Hour Fitness is gym, but it's a Magic Johnson or whatever. I mean, it seems like today's day and age, celebrities are less the movie stars and the athletes and more YouTube stars, podcasts and social media stars.

55:46Sal Di Stefano:What's to stop you from doing something like that? Nothing. I mean, it's definitely on the list. I mean, I didn't come into 2-4 with a new team saying, hey, let's get back to you. They told me we were getting a lot of phone calls from people who want to know if we could do something with you. And so it's something for us to think about. I know that Mark Wahlberg, as an example, is doing a cross-promotion with EOS. He's going to open up a couple of municipal gyms with them, which I'm excited to see. And happy for Mark, too. Great guy. I think we'll probably do some things in time and be open-minded to what may be presented to us.

56:19We'll see what comes.

56:21Sal Di Stefano:How did his run with F45 do? Because I know he did some with F45 too. Do you know if that was very successful or not? I think that they were on fire for a bit of time and then they went public and they got in some trouble because their accounting ended up not being what was reported and their stock got pounded. And so they've been delisted. And I know Mark's no longer involved at all with that. And I think they're trying to come out of kind of a delisting to kind of resurrect the brand. but I haven't heard who's going to get it, who's going to do it.

56:51Adam Schafer:Going back to 24, I mean, obviously you love what you do because you're always doing it. You do a great job. But going back to 24, is there like a different fire where you're like, oh, yeah, this is my kid. Let's make this happen. Yeah, it's kind of like the bones are there. So you get back and you meet people like, how long have you been here? I've been here 25 years. I've been here 18 years. We were in El Cerrito this morning, and the kid there says, I've been here 16 years Tuesday. I'm like, damn, that's awesome. So there's a lot of people that have been loyal and stuck around a long time, which is really cool.

57:22The clubs are very familiar to me. I walk in and it's the same build out. Because back in the day when we were building, Mike Finney and I would sit and I'd say, look, I want to build these clubs bulletproof where they can last a test of time because I don't want to come back and have to spend money again. And so I'm walking in these clubs and they're stood the test of time. The locker rooms look great. The flooring is maintained. We put metal on the walls, if you remember. I remember that. All that sheet metal is still there. I'm like, the desk looks good. And I go, holy shit, this thing worked.

57:49It sure looks tired. We need to remodel. And so we're in the middle. And I was able to get Mike Feeney to come back. And so he's come back to help again. And David Roth has led the initiatives down there at 2-4 right now. So the two of them are all over these remodels and new locations. So it'll be a lot of fun to spend a lot of money and see how the clubs react to all that we did.

58:11Adam Schafer:How about the careers in fitness? going into fitness and making it your career? I mean, some of my best memories are working in the gyms. But even today, if you talk, I don't know if a lot of people even realize, like, I can have a career in the gym industry. Like, talk to that a little bit and maybe the opportunities for people. Yeah, that's great. I mean, great question. So, you know, like you, I love being in the gym. So, I mean, that's kind of like, I don't like being in the office. So I'm a field person. I'm always out talking to everybody, hanging out, trying to get things done. If I walk in the club, what do you need?

58:43I'll make sure you get taken care of. But I love being in the field. And I think that the industry is so rewarding because you're kind of like part of the community. You meet all your neighbors, everybody that works nearby, all the families, you get to know everybody. And then it can earn a lot of a really, really good income, you know, depending on what position you're in, whether you get into personal training or sales or management, your upper mobility to start making north of six figures, mid six figures is pretty, pretty cool. And so it's a great business. It's a people business. I know that a lot of times when you talk to people now, they say kids don't have people skills anymore.

59:17They can't look in the eye. They're down on the phone. They aren't doing the things they do. This is a business that breaks you away from all that. So like, if you met my kids, all my kids are looking in the eye. They can talk to you. They can hang out with you. You'll spend time with them. And there's a lot of their friends are the same. So I think this industry is going to start to attract a lot of these younger kids, and they're going to find their home and they're going to find success and they're going to spin out and open their own companies or they're going to ride along with guys like us to teach them the way and have a shit ton of fun.

59:48Adam Schafer:We were just talking about that because it's such a unique environment. Unless you've worked in a gym, it's really hard to kind of understand. Like you've got people showing up voluntarily to better themselves. So they're kind of already in this mental state of like I'm in this growth mindset. But then people that work in gyms tend to love fitness. They tend to have better energy. You got music in the background. I can't think of a more fun kind of positive. You know, there's always, you know, places that may be not so great. But generally speaking, it's one of the best. My niece, I just got her over at UFC Gym by Oak Ridge over there.

1:00:24Adam Schafer:Dawn's running that club. And, you know, me and Dawn go way back. And she just got a job at the front desk. And she's only 18. and I'm telling them like, this is the best environment for you to just be in. It's such a great, but a lot of people don't realize that. They just have no idea. It's a great place to work. Well, I mean, we're doing something positive. It's healthy, right? And so it's not a negative this is where a lot of people are in trying to sell something that they really don't need. But I'll tell you a story while we're here just to give you an idea of what the gym business can be like on a day.

1:00:53So when I was in my very first gym, back in the day, receptions buzzed my office because you used to buzz the office and pick up the phone. So I pick up the phone. She goes, there's a guy up here who wants to see you. I'm like, okay, send him back. So the door opens up and in walks this guy and it's Sonny Barger. Sonny Barger's the head of the Hells Angels. He's got two big boys with him. And at that time he'd come out and he had to use the microphone on your throat to talk. So he comes into my office, sits down. He goes, I don't want to imitate his voice. He's like, I've been watching you. I like what you're doing here.

1:01:26I want to send my people in here to train. and I want a great rate. I'm like, oh, yes, sir. What do you want? So we cut a deal. I think it was 300 bucks a year. And he says, they're going to bring cash and you're going to take care of them. I said, yes, sir. And so out the door he goes. I started getting six to eight people a day. 300 bucks. I'm here to see Mark. Sonny sent me in. And, you know, could be bikers, could be girls, could be everybody. And that went on for a decade. No way. Every manager in behind me, like Vinnie Farrell called me up. Sonny Barker's in the gym. What am I doing? Like, take care of them.

1:01:58300 bucks, that's it. And so I built this relationship with him where he would come in maybe every six months and check in. How's it going? How's your business? You're making money, doing well. And it was like crazy. So I have thousands of stories like that where you meet some of the most amazing people when you're sitting in your gym because everybody touches you at some point in the community.

1:02:17Adam Schafer:You're the perfect person to ask this, Mark. What makes a good general manager? You're running a club. What are the characteristics of somebody who's going to run a successful club? Yeah, I mean, the great GMs have charisma, right? People want to follow them and they have attention to detail and they care, right? They want their club to be clean. They want it to be well-maintained. They care about their people. You know, they got their back and they want to support them. And then they're driven, right? Generally, they're really driven. They want to make a good living and they want to grow and they want to excel.

1:02:50um obviously all the other things that you normally point to that they're bright and intuitive you know um they've got street smarts and all that stuff but generally you can teach a lot of things to people but at the end of the day i was to say that charisma plays a pretty big role because the person who leads the environment is the one you want to follow

1:03:09Adam Schafer:um an observation that i've had just because i've been in now the industry now over 20 something years. And some of the best salespeople I've ever met in my entire life started selling gym memberships. And now these people went on to sell homes or cars or get into loans or entrepreneurs and whatever field they go into, they're the best at what they do. But they learned how to sell with gym memberships. Now, my theory is that, because I see this all the time. I'm like, okay, this is probably why. It's a fast sales cycle. So you're practicing constantly and you're selling an idea. You're not selling some product.

1:03:47Adam Schafer:So somebody's got to walk out with this idea. So you've got to get good and you've got to practice a lot. That's my theory. What do you think? Yeah, I tell everybody that when they used to come to work for us, I used to always say, look, you know, one thing we're going to teach you to do is how to sell. Because you sell yourself every day in some way and we're going to teach you how to sell yourself and be yourself. And that was always the way that we did the sales training. Reality is that, as we could talk forever, I run into so many people all over the place that had once touched us and worked for us.

1:04:18There's a GM for an NFL team that I was having a meeting with. And when I left the room, he says, by the way, I want to thank you. I'm like, oh, you're welcome. No, no, I want to thank you because I put myself through college working for you as a personal trainer. And then I got a job as an intern here. And now I'm the GM running this NFL team. And so you get stuff like that. But selling is super important, I think, for life. And it's a skill you need to learn. And And if you're great at it, you always follow the best salespeople, right? They're just so charismatic. And they're the person that seems to have a Pied Piper ability to get people to go wherever they go.

1:04:51Sal Di Stefano:It'd be such a cool exercise. We do this sometimes. We reminisce of all the friends that we built working at 24 underneath you. And I mean, just between the three of us, we could probably count 20 people that are all like multi-millionaires that have gone on. Chillers. It would be such a fun exercise to see how many of those people that are at attached to you. You know, you're like the Kevin Bacon of fitness, you know? Yeah, I appreciate that. I'll be food losing. No, it really, it feels like that. You know, I was telling a story to the staff. So we're, we're, we're 11 years we've been doing this now and 10 years in a row, we've been able to grow and out-compete the prior year every single year.

1:05:34Sal Di Stefano:Last year was the first difficult year we had. And we're looking at numbers from the prior year and I'm with the, all the department heads and talking to them. And it's like, oh, this is going to be such a tough month. And I shared the story of what you did for the Hawaii month. You took a time of the year that was the worst time and flipped it on its head. It ended up being, for I don't know how many decades, it continued to be the biggest. When you think of, at least the crunch UFC in 24, what are some of the most proudest business strategies that you've implemented when you look back? And that has to, I would think, would be one of them.

1:06:11Sal Di Stefano:And that's so impressive to me. No, I think ancillary, like bringing in retail, personal training supplements. I mean, Neil Spruce, and he did Apex on Fit. So he's phenomenal. So you get Neil attached to you. He helps the trainers become educated on how to help people understand how to fuel their body when they exercise. It's really important. So I think the ancillary was really important. And then I think attention to detail inside the facility, right, from all components. The way you equip it, the way you design it. Mike Feeney played a huge role in all that. He did a phenomenal job for us. And we'd sit there for hours in meetings to figure out that piece.

1:06:46And then the amenities you wanted. Do you want a pool? Do you want a basketball court? Do you want a racquetball? Do you want squash? Do you want a big group X room? How do you design your facility so it meets the community that you serve? And how big do you need to be? And all the nuances that come in. I mean, how big is your damn parking lot? Because the parking lot often controlled the success of your business. If you had 100 car parks, you were not going to be a high-volume club. But if you had 400, you could be a very high-volume club and do 2 ,500 to 3 ,000 workouts a day.

1:07:15Adam Schafer:When did you guys figure out that people would rather watch people working out than TV while doing cardio? Because that's like a big deal. No, you're right. When did you guys figure that? How did you piece that? Is it because you're in the gym all the time? You're like, wait a minute. People like to do a lot. Well, I mean, you're in the gym. You kind of figure it out. But we did this study, and the most successful clubs that we had had mezzanines. Oh. And I was like, holy shit. So we started building all our clubs with mezzanines. I'm like, you're going to build mezzanines. And then everybody's like, yeah, I love sitting up and watching everybody work out.

1:07:44And I got TVs. And that was the thing. And so even today, I'm walking in a lot of clubs telling guys, you know why we built that mezzanine? No, why'd you do that? And I walk them through because we did this focus group survey and study that our best successful clubs had mezzanines. And so that's how we started doing more of that, kind of a two-tier. Even clubs that didn't have mezzanines, like our San Ramon club, I put like a catwalk in it. So I elevated up, put a catwalk all the way across like 60 ,000 square foot facility, and then built a little cardio area at the back. So you could look out, walk around.

1:08:14And that club was number one in the company for years and years and years. If you've ever been in San Ramon, the corporate office, they had that catwalk in the middle.

1:08:21Adam Schafer:I mean, that's just a big sense. Again, people don't realize that that's a big deal, but gyms back in the day, cardio didn't look at anything. It was TVs. And then that switch made a really, really big difference. Are there anything else that you could think of? Like, okay, here's another one gyms back in the day used to have rooms free weight room machine room cardio room now it's like keep it all open what made you guys figure that out was it just well in the early days you know you compartmentalize because people were intimidated it's kind of like the ufc when we first started people walk in like i don't want to go there because i'm gonna get my face beat out like no we don't do any fighting train and then they go oh this is amazing they bring their friends and family but in the early days you had a wall around the freeways because women wouldn't want to go in there.

1:09:02They'd look and go, oh, no, I don't want to go with those big bodybuilder guys. And then the women wanted their own little section and everything was kind of boxed. And then you started to recognize that, wait a minute, women are now moving around. They're going to every area. Let's just open it up. And then it was a lot easier to reconfigure your club because you can pick up and move it. If you want to move your free weights to one area and select rise, you could do that. When you compartmentalize, it was a little bit tougher to do it. And then mirrors played a big role, right? So where do you put the mirrors as you do your dumbbells and as you do your squat racks, et cetera, and how you do the placement of that was a big part of it too because when we compartmentalize, we had a lot of mirrors around the walls.

1:09:39When we opened it up, everything faced the outside of the building. And then you had to run mirrors in the middle if you wanted people to be able to see themselves. Oh, wow.

1:09:46Sal Di Stefano:How long have you been doing, what'd you call the test gym that's by your house? How long have you been doing that for? Most of my career, I've been able to just pick something up. Yeah, like we did the UFC in Concord. The first one was right by my home. I lived in Lafayette at the time. I'm like, we're going to open up right by the house. And Jim lived there too. Mike was close by. So that was our beta. And we basically tested that out forever and ever.

1:10:08Adam Schafer:I didn't realize you do that. One thing that I noticed, Mark, and you're the guy, again, the guy to ask is, you know, there's gyms that feel so dark and then there's gyms that have natural light. And for me, it makes a big difference to feel like there's natural light coming in. Is that something now that is being paid attention to? I think it's super important. I mean, I like a lot of glass, skylights, if I can get it. I think it's super important. Some of the clubs today are a lot of lighting, if you've noticed. They're putting in all kinds of disco lighting and crazy equipment, a lot of mirrors, a lot of shiny stuff.

1:10:38I think that the Gen Z crowd may like that. Not for me. I mean, I don't want to come in and feel like I'm in Vegas, you know, hanging out in my gym, but maybe once in a while. But, yeah, I think that light is really important. Natural light is really important. It's why we didn't do a lot of basement space, get offered basement all the time. We'll put you in a basement. I'm not going there because you're going into a dungeon and people don't want to work out in a dungeon. They might grind. You might get that lifter to go in there, but the female audience isn't going to drop down into that dungeon.

1:11:06It's not going to happen.

1:11:08Adam Schafer:Why, Mark, why haven't you retired? Why do you keep doing this? You got all the money you want. You're successful. You could totally drop out and be like, whatever. Why not? I get that asked a bunch of times. I mean, when I left Crunch and I said, okay, I mean, maybe I'm just going to take a time out. I got a bunch of stuff all over the world that I'm still owning and operating in multiple countries. I told my wife I said I got this opportunity with 24 and she's like you should do it she got excited I'm like what? really? she goes yeah get that back I love 24 so she was behind me I was like wow okay this is dangerous now she's been the most happy like you're out of the house get the hell out of here go do work get back see you in a few days and let me do my thing but yeah she's been super supportive and then I've got four kids between 17 and 24 and they were all young when I left the company and they watched me build crunch and they're all doing different things.

1:12:02None of them are in the fitness industry, so to speak. I got one in college, one in high school. My oldest son Mason's selling real estate in Dubai of all places. Wow. Oh, interesting. Really cool for him. And my daughter's doing what most girls these days, you know, go to do social media and modeling. She's been, if you look at Nike, she's all over Nike. They've been hiring her like crazy. So she's been doing a lot of modeling and she's finished playing basketball at Cal and she's kind of said, it's on my bucket list. I'm still young. I'm 22. I want to do a little bit of modeling. But long story short is now for them to maybe eventually get involved in the business and have a chance in their 20s like I do when I started to learn a little bit about fitness and see if it's something that some of them want to do.

1:12:42Sal Di Stefano:I feel like that would be the dream. The dream would be a dad and be able to find a way to build something to where you guys can all stay connected and work together. That's awesome. When you were scaling and growing like that and they were young, Were you able, because I feel like you've also been a very present father, at least from afar, what it looks like. It looks like you get to go to a lot of games and you don't miss a lot. So the fact that you've been able to build these things and still be able to do that, how did you do that? Did you make a rule yourself, hey, when they get to a certain age, I'm going to do only this much?

1:13:11Sal Di Stefano:How did you structure that? Yeah, no, great question. I mean, when we sold in 05 and I kind of stepped out for a little bit before we built the other brands, the kids were young and we had a couple more after that. And so I love being with my kids. And so I made it important as part of my DNA is that I'm going to be there for them first. And so I would work as hard as I could and then get home and be there for their games and take them places. So my son, my daughter, they played club sports. I took them all over the country. I would work on the phone, work on my computer in breaks, and I would talk to people.

1:13:45But I was always there with them and traveling and hanging out and going to their games, making sure I didn't miss anything. is important.

1:13:52Adam Schafer:I think this plays, I was asking you about loyalty earlier. I think this might be one of the factors because people have said about you that you value their families. Whereas sometimes you work with people that are really driven and it's like, you got to sacrifice your time with your kids. Whereas what I've heard from people is like, oh no, he cares. He wants you to be with your family. Yeah. I mean, I'm a big family guy. So I'm constantly asking how are your kids? How's your wife? How's your family? What's going on in life? How are your parents? And if somebody says, look, my boy's playing a soccer game on Friday, it's a state game.

1:14:20You're not working. Get the hell out of here. Go do what you need to do. And I think it's important that family is super important. You want to be good at work. You want to be great at home, right? And you want to be as good as you possibly can be in your community. So I'm always preaching that. Be great at home. That's super important. Because if you're balanced at home, you're kicking ass at work.

1:14:39Sal Di Stefano:You're greed. If you're a mess at home, you're not kicking ass at work. You're a waste at work. I'm not going to work.

1:14:43Adam Schafer:Do you have a nemesis? Do you have somebody you're like, oh, yeah, I want to crush that company. I want to just out-compete them. Yeah, I mean, good question. I've had them over the years, and I felt like I did collect them, so I'm happy about that. But right now I'm friendly with everybody. I was on the phone with Jim Rowley yesterday, and he probably hates me saying this, but Jim's a little bit uptight that I left Crunch and ran over and bought 24. He's like, why the fuck did you do that? Oh, shit, man. It's my baby. Why can't I have it back? It's not fair to say why did I do it. but he said a lot of the, a lot of the crunch guys are, are like, how could Mark do that to you?

1:15:24How could he run over to 24? And Jim's like, well, you don't know Mark. Like I know Mark. Right. And I said to him, I said, well, just let them know that we're not going to be nine 99. We're going to hopefully be a little bit higher pricing. They're going to look at us not as a direct competitor, but let them all know that they pissed me off. And he started laughing. I know, I know. So don't think they're going to open up next door to me. And I'm not going to counter. We're going to build something right next to you and put them out of fucking business. So be nice in the sandbox. Play nice and we'll play nice.

1:15:56Sal Di Stefano:Have you had, okay, have you had, again, have you come off so calm, cool? Have you done anything after a win, a conquer, a squash or someone? Like what's, have you done something, send a nice letter, bouquet of flowers? Like, have you done something to somebody who's done you like that? And then in business, you got your, like, have you done something like that? I had a group call me three days, four days ago, just an example. And they have some clubs in Texas that said, hey, there's a site that's 100 feet from one of your locations that the landlord says he can put us into. And we're thinking of going in there.

1:16:31And I just want to call you first out of courtesy to see what you would do if I did that. And I said, well, first, you'd be my mortal enemy. Second, I would take my club in a remodel before you even started construction. I'd lower my price to the ridiculous. And I'd fucking hammer you and put you out of business. He's like, okay, I'm not going there. But it's a fun competitive business. You're kind of competing against your brothers and sisters out there. And there's plenty of room for everybody. You just have to differentiate your product a little bit. And I think 24 has a very differentiated product from Crunch and Planet for sure.

1:17:08LA Fitness is starting to sell a lot of their boxes right now. They're slowing down a little bit. He's moved towards a club studio concept, which is around group exercise. high-end$200 a month type product. So I think that we can all kind of differentiate and survive and do well. But I don't like when people fuck with me. I just have a tendency to love to compete. I've been competing my whole life in everything that I do, whether it's through my kids, whether it's through business. So once you fire me up, I mean, I will not stop sleeping, thinking about it, and basically just get after it. Which kids most like you?

1:17:43Oh, great question. I think they're all pretty similar. My oldest son is a badass. He's like he was a 6 '5", 245-pound kid, just a big, big monster, played football in college. My daughter's uber competitive. I mean, she's cracking me up. She's like, hey, Dad, I was in New York modeling. I was doing some Fashion Week stuff, and I went down to Solid Core, and I got next to this gal who was in great shape, and we competed in the whole class. My third son's a big lifter. You'd love him. He's probably, you know, 6 '1", 230-pound kid, massive, lean. And my last guy is probably the craziest of them all.

1:18:19He's in high school still, but he's a great athlete, very competitive. But I think they're all like me. They all have a fire. They've all competed in sports because I came through the sports channel like you guys did. I think that's how you learn how to compete. You learn how to win, how to lose, how to deal with difficult people, how to overcome the odds, how putting in the time, energy, and effort shows you success. And it's the same thing in life and in business. You got to put the effort in to get there. And I think that that's part of what my kids have gone through. They've all been competing at very high levels as I pushed and pushed and coached and coached and tried to be there for them.

1:18:55And see that engine run, I think, is part of what makes this country so great.

1:19:00Sal Di Stefano:Which one's most likely to have the business acumen? I mean, they all do. My daughter's very entrepreneurial. My oldest son's very entrepreneurial. my third guy's a brainiac super smart i mean the 4.4 valedictorian type kid great athlete and my youngest guy's the he's an assassin he's just you know because you're the fourth kid you don't have to have a curfew anymore well this son had a 10 8 10 p.m curfew this guy can go out to two no more my wife doesn't care um and he's um 6 3 190 pound athlete good looking kid that whatever he wants to do. He somehow seems to make it work. As an example, he befriends Adam Sandler.

1:19:43And during the pandemic, we spent a lot of time with the Sandlers. Adam's awesome. And he golfed with Adam every day because he's a really good golfer. And one day Adam's like, hey, do you think your kid would want to be in a movie? I'm like, well, I don't know. You can ask him. He goes, well, ask him because I got this role for him. And I'm like, okay. And so I asked him and Merrick, our youngest, is like, yeah, I'd be up for that. And so Adam's like, well, you got to audition for Netflix. I can't get you the job, but I can get you in the door. So he auditions and they hire him and he makes a movie for Adam Sandler.

1:20:14He's just that kid that something always seems to happen for him. So when you say which one, I know, sometimes I think it might be him because he's the last one, but he just kind of, whatever he steps into, it just always seems to work.

1:20:26Sal Di Stefano:They all have the potential though, it sounds like. Yeah. When you look back, we're all fathers. what would you say you and your wife did really? I mean, to have four kids that really turn out like that, that's really rare, especially for having a father who has built something as big as you have. It's really tough to juggle that much business success or also that much family success. Like when you look back, what did you and your wife do really right? Well, I give her all the credit and she takes it. and she was present at all times with the kids and she's she's a Colorado girl she's all over she's a great athlete phenomenal shape and she just focused on the kids and gave them everything she had every day and kept them you know again in the guardrails never got too far off the right or the left and made sure that they were really well balanced and my job was to mentor train and develop right which is what I do at work and what I do at home I mean I'm constantly with them I'm not their best friend, but I'm going to push them, shove them.

1:21:28I'm going to make sure they've got their grades right. They're doing their homework. I'm all top of all that stuff and engage with them on a daily basis. And then you just have to make sure that they have the right people around them. Yeah. Because sometimes they bring a friend into the friend group. It's like, nah, it's not a good choice. You might want to rethink that particular. We were just talking about that before you walked in today.

1:21:47Sal Di Stefano:That's something that I've been dealing with quite a bit lately, but I'm curious to hear how you deal with that. And my wife's like, they can't come to the house. You can't go to their house. They're not part of your friend group. Sorry. Not going to happen. And she's done that a bunch of times. And I'm like, I like that kid. No, this, this, this, this. Oh, I didn't know that. Okay. Okay. That's, that's, I got it. And so there's some of that, but you know, the, the kids also see how hard you work, right. Which is another reason why I'm still working. And it's like, I want them to know that I'm never going to retire.

1:22:14I'm going to bust my ass and, and you need to do the same. So they see me working hard and they're, they're proud to, to see their dad working hard. And then, you know, I've always got their back, whatever they need, whatever they want to do. No problem. We'll take care of it. We'll make it happen.

1:22:28Sal Di Stefano:Did you and your wife naturally fall into those roles or did you guys actually have like a sit down conversation? I mean, how'd that unfold? Yeah, good question. I mean, my, my wife's a dominant personality, so I pretty much fall in line behind her. You know, she's the smartest person in the household. So whatever she says goes, we'll have our spats here and there, but generally she's been really, really good at fueling the kids, feeding them well, keeping them healthy, not getting them into the shit, crap, candy, all that. She's really, really healthy, feeding them as best she can and fueling them for success and then staying on top of them.

1:23:00But I think the two of us kind of figured out after a period of time where we needed to balance it out. I was about education and sports and she was about everything else. The way that they groom, take care of their room, the way they dress, the attire, how they talk to people. I remember a great story. We got invited to a dinner at George Clooney's house, the actor. And we came over. George, of course, at that time was not going to have kids, never get married, is what his thing was, and knew him a little bit. Nice guy. So we come to the house. Each one of my kids comes in the door because we brought all four of the kids.

1:23:38They're like, nice to meet you, Mr. Clooney. My name's Mason. My name's Mia. My name's Maddox. My name's Merrick. They all introduced themselves. So Merrick's probably like four years old at the time. And they all go through. And then we had a dinner tonight with about 20 people. And George says, I just want to say that I had an observation tonight that the four master of kids walked in. They all looked me in the eye. They shook my hand. They said their name. They said my name. That's how I was raised. If I could have four kids like that, I would have kids. That's great. That was badass. And I was like, you know, that's a pretty cool observation.

1:24:09And then they spent time talking to him. And one of the things he told them is that one of the keys to success that you're going to find in his life is to be a good storyteller. If you can tell a good story, that's going to bode well for you. And if you get my four kids, they all tell pretty good stories. They don't tell me all the good ones, but they do have some. But yeah, so things like that in life where opportunity presents itself and your kids can be around you and they can experience things. It rounds them and it makes them hungry for more.

1:24:37Adam Schafer:Yeah, that's all. I have a speculation I'd love just your opinion on. And when we're looking at the landscape with tech, and there's all these speculations with AI and what it's doing. And one of them, I heard Elon Musk say, it's going to be a future of universal high income. And so you're going to have incredible efficiency, and you're going to have machines and robots and AI doing all this work for us, which means you have a lot of people who will have, I guess, resources, but not go to work. For me, I feel like that's going to make fitness explode. It's going to make fitness so big because you have all these people with all this time.

1:25:15Adam Schafer:And where are you going to spend your time? You're going to want to go to the gym to become more fit, to meet with people, to work with people. So I feel like the potential there is massive. I agree 100%. I think that fitness is becoming more social, right? So it's like a social club. It's not just a gym. It's a place where I can hang out, talk to people, meet people, do business, right? And at the same time, look and feel better. So we've been doing that our entire life. but people are starting to recognize that you guys are doing good work. And this is something that's going to continue to bode well as we come through this whole AI period, whatever that ends up being.

1:25:49You know, there's some people think that 30 % of the workforce is going to lose their jobs, have to change career paths. And maybe that'll happen. But I think our industry is going to just excel. So I think we're in a good place. And I'm feeling pretty good for all the folks that are getting after it.

1:26:04Sal Di Stefano:The last question I have for you related to the 24 acquisition. will the financial side of it be public? Will we know like exactly what you acquire it for and all that? Will that be public? No, I mean, it's a private transaction. If we decide to go public one day, it might be, but for now it's just, you know, myself and one partner and we own it. We'll crush it. They're letting me run hard and I'm kind of in charge and it's all good. Got a great team there. Carl Stam's awesome. He's got great people around him. We just have to give them the tools for success and let them fly and then let them make a shit ton more money.

1:26:42So they're all happy. Your favorite location? Favorite 24 Fitness location? Ooh. Yeah. Good question. I mean, if I go back to the old days, Sunnyvale was probably my favorite location with all that wood in there. That baby was a badass club. We did well there. And I can remember some of the staff and we had a lot of fun. Lost a few people that are not with us anymore that used to work there. I ran that club.

1:27:06Adam Schafer:Jon Stewart worked for me. I was going to say, John passed from Cronin's disease. But the human volcano, we used to call him. If you remember right. But that club was probably my favorite in the old days. In the modern era, I mean, it'd probably be between San Ramon and we opened a big box 100 ,000 square footer down in LA. That was pretty damn cool.

1:27:28Sal Di Stefano:Is that the one with the escalators that went up to it? Is that that one? No, that was Point Loma. Oh, Point Loma. That's what that was. That's the one we used to get a lot of laughter from because they're escalator going into the gym. There were stairs the other side. They needed to narrow the picture, like, look at this. It used to go viral all the time. We're going to kick out of it. It's now a UFC gym, actually. That's right.

1:27:46Adam Schafer:Well, recently we heard the White House say they're going to release the potential aliens that are real or whatever. Oh, you can bring back that ad? Yeah, do you still think they're going to eat the fat ones first? Please bring it through. it'll make you laugh because um i kept all my shit from 24 hour like in boxes and my wife like every year can you get rid of this stuff in the garage i'm like no i'm keeping it and i kept it kept it kept it and so 20 years later all of a sudden 24 hour falls back in my lap i'm like see so i started opening stuff up and i had the alien shirts no you don't i got a bunch of the originals so i took it to the company i gave it to carl so they made a new shirt and it's basically the whole alien thing but it says we're back oh yeah and we're gonna wear those so oh that's cool right now that's awesome oh that's pretty cool but yeah i have a bunch of the old ones and ton of stuff that we broke out all all kinds of retail i have a box in my garage with all my 24-hour awards awesome like a huge box my very first one my name is misspelled never fails no well this was awesome yeah i really appreciate you coming on and uh you know We're excited to watch it, man.

1:28:55Adam Schafer:You guys are doing great work. Happy for you. Keep it rolling. If we can be helpful in any way, you let us know. We will. But kick ass. Thank you, Mark. Thank you for listening to Mind Pump. If your goal is to build and shape your body, dramatically improve your health and energy, and maximize your overall performance, check out our discounted RGB Super Bundle at mindpumpmedia.com. The RGB Super Bundle includes MAPS Anabolic, MAPS Performance, and MAPS Aesthetic, Nine months of phased expert exercise programming designed by Sal, Adam, and Justin to systematically transform the way your body looks, feels, and performs.

1:29:34Adam Schafer:With detailed workout blueprints and over 200 videos, the RGB Super Bundle is like having Sal, Adam, and Justin as your own personal trainers, but at a fraction of the price. The RGB Super Bundle has a full 30-day money-back guarantee, and you can get it now plus other valuable free resources at mindpumpmedia.com. If you enjoy this show, please share the love by leaving us a five-star rating and review on iTunes and by introducing Mind Pump to your friends and family. We thank you for your support, and until next time, this is Mind Pump.

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