Rick takes us through the Alloy Personal Training Brand story from humble beginnings over 30 years ago to licensing over 2000 clubs worldwide and now franchising. The Alloy Personal Training Franchise continues to grow, with more locations coming up across the country.
Source: Delight’s Digital Café Podcast
Rick had to go through challenging times to get where Alloy is today. He credits hard work and trusting relationships as what saw him through.
We cover a wide range of topics such as:
- The story behind the Alloy Brand
- Dunbar’s Number and Trust as a strategy (“TAAS”)
- The state of the fitness industry
- Why fitness tech must deliver better human interactions
Alloy Brand Story
Alloy started the original fitness facility in 1992. Then, after Rick provided consulting to other fitness facilities, business approached them to license Alloy. They had about 2,300 licensees before they started Alloy Personal Training Franchise. While licensing is similar to franchising, the major difference between a franchise and a license is the amount of support you can expect to receive. A franchised system will provide you with support in site selection, training, marketing and much more, whereas a licensing agreement provides you with little to none of that.
Businesses, like Alloy, usually start franchising once their business models have been perfected and proven to make money and their brands have at least some regional recognition. So, not only do you get to leverage the brand’s name, but you also get access to all its support systems in exchange for a fee. The Alloy business success is based on a target market where there is a gap in businesses servicing that market.
At the other end of the spectrum is the licensing model, where you pay for the use of the intellectual property, but you are free to run your business however you like. The brand that gives you the license may specify the purpose their intellectual property is to be used, but they won’t provide you with any support like site selection, training, marketing or any of the other support systems you enjoy when you are part of a franchise system.
When you look at fitness, there’s many types of fitness business reaching different target markets. There’s the low-cost model at one end of the spectrum, which in the United States would be like a Planet Fitness, where you just pay $10 a month. The other end of the spectrum of fitness is what’s typically referred to as boutique fitness. Boutiques target specific fitness business focuses like boot camps, cycling, yoga, pilates, cross fitness, personal training, etc. Historically, personal training was servicing clients on a one-to-one basis – like a coach to one client setting.
Alloy came about because we figured out how to make personal training more scalable. We can train up to six people with one coach and have the systems and technology to communicate on each client’s progress in each session. This allows us to bring the price point down and deliver a substantial value proposition to people that are interested in personal training. It also makes personal training more fun by offering some group dynamic, but still keeps the brand promise of personal training. So if you have an injury or very specific goal that you want to work on that’s not available in a large group based class setting, then we’re we’re the perfect option for you.
The Alloy name came about after we hired a firm out of San Francisco. When they first presented Alloy, Rick wasn’t convinced until he read the definition that “alloy” makes something better or stronger. So we took that name, and we took it to a branding firm, where they designed the logo, which is two pillars leaning on each other and the tag line “Stronger Together”, which is our fitness trademark.
We entered franchising a couple of years ago, which wasn’t a great time to enter the franchise industry before COVID. But as you can see, our actual business model fared really well, mainly due to two reasons. One is because we’re Personal Training, we are a smaller number of people training in a facility. The second reason is technology.
There’s a British scientist named Dunbar who did studies that went back thousands of years. The question he was trying to answer was basically, what is the right size for a community? Outside of really close friends and family? What size community can someone manage the people in their life and still make it feel very intimate. That number ended up being 150. So it’s often referred to as Dunbar’s number or “The Rule of 150”. So when you look at the Alloy model, we don’t get above 150 total members. The reason is that everyone can know each other, you can know everyone’s name, and you can know everyone’s family members. Specifically, you can know them from a health perspective, what their goals are, what the injuries are, and what makes them motivated or unmotivated. When you have a small number like that, there is a lot of trust involved. This business model drives a higher level of trust. This manifests in our business success as we didn’t see a lot of churn in our clients or revenue in any of our clubs that are open.
The second reason we succeed is because of our technology. We already had an app that we were using to send workouts to people for part of the weekly workouts, or vacation, or other events.It ended up being the perfect tool for COVID. Because we knew everyone’s goals, we simply had to find out what type of equipment that they had at home and base the workout on their own goals, instead of just streaming a zoom class, which is what a lot of fitness brands did. So it is like taking personal training and making it digital as opposed to streaming a live class. We use the app to drive the programs and the client accountability, but there is still a coach on the other end that knows their name and keeps them accountable.
Based on those two factors with the small number of clients creating a high level of trust, and add the digital assets we were we fared really well.
In reality, how we came up with the Alloy model was just like out of a leadership book. Alloy came about through challenging situation to become more profitable. We had had a hiccup in our business in the late 90s and, as a result, we built it back in a way that was very systematic. We had all the systems and processes already, so we built a system that is replicable. Everything from how we say hello to clients, the client first time in the gym, to the client programs. What started out as necessity just to protect our business ended up creating a really interesting model resulting in one of the highest revenue per square foot facilities in the country. Then that put us on the radar for speaking engagements and consulting.
We were asked – can you give me your sales system? Can you give us your training protocols? Can you write the workouts for our gym? So that is how we started the licensing platform, then the franchising model.
In the last few years, fitness has been very technology driven. Technology isn’t really in increasing human social connections, but currently it is more a silo technology. Wearable technology has been becoming more popular, whether it be Fitbit or the Apple Watch and while people are using them, it hasn’t driven more human interaction. The future needs to move from the silo fitness technology to technology that can drive meaningful conversations and human interaction. After the pandemic pointed showed how important it is for all of us. Technology needs to drive better human interaction.
Rick also shares that he is a big fan of stoicism. The premise of all stoicism is essentially you control the things you can and let go of the things that you can’t. You can’t control everything, you can’t control your genetics, or your parents, or the environment you grew up in,. What you can do is you could get up and take a walk, or you could spend five minutes reading a book, that would teach you something or give you some skill set that you need. Entrepreneurship is basically like self-growth.
Most entrepreneurs struggle with squirrel brain, and that squirrel brain ends up manifesting itself in their business, which is a big mistake. You really have to be disciplined after you build the machine to let the machine run and continue to make this thing better.
Tune in to this episode and get to know more about Rick and the Alloy Brand.
- What makes Alloy different from other fitness brands (03:24)
- The story behind the Alloy brand (07:46)
- The one thing that must change in the fitness industry (22:52)
- The role of fitness tech in delivering better human interaction (23:47)
- How stoicism can help entrepreneurs (32:19)
- How to qualify for an Alloy Franchise (47:24)
- The most important aspects of an entrepreneur (49:19)
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