Posted:13-December-2021
Keeping fit will go a long way to helping TRIB3 fulfil its ambitious plans for the future
Kevin Yates, CEO and founder of fitness company,TRIB3, has grand ambitions. Helping/encouraging his customers stay fit for (a) purpose will go a long way to achieving those aims.
Described as a pioneer of the boutique fitness model in the UK (1Rebel) - prior to co-founding TRIB3, after decades of international experience in the health and leisure sector creating/nurturing disruptive, market- leading concepts - Kevin Yates has always been passionate about the fitness industry.
It stems from growing up loving sports and fitness - playing football for years - and his tendency to come up with ideas for business ventures. "I went into the military straight from education, enlisting in the infantry before going on to be a PTI (Physical Training Instructor)," he says.
In a career, the lion's share of which has been in the fitness sector, Kevin describes the privilege of having worked with some fantastic brands. "I was part of the original Fitness First, driving the rapid growth seen over the late 90s and early 2000s," he says, adding:" To be honest though I’ve always been very entrepreneurial in terms of my mindset, and I always have my eye on where there might be gaps in the market or an opportunity to do things differently."
One of the things that means the most to Kevin is being able to create employment and the opportunity to see people grow and flourish in a business - which is where TRIB3 is 'truly special', as he describes it.
"Not only have we got an industry-leading and fast-growing support team based out of our global headquarters, in Manchester - but we’re also creating the opportunity for people to own/operate their own fitness business, because of our focus on growth through franchising, so they in turn can create teams and communities.
"I started TRIB3 because I wanted to bring people together - and that’s integral still to our purpose and values," he notes.
TRIB3 refers to its business model as ‘volume boutique’. "In concepting TRIB3, it was about harnessing the most intrinsic and special part of the boutique fitness experience - community, loyalty, referrals - but making it really scalable and accessible for franchising," as Kevin puts it.
"We developed the business model based on 1,500–4,000sq ft of floorspace, where we could cater for 42–60 people at a time in the studio, and where we also had room for a Mixology protein bar, retail area and reception.
As it stands, TRIB3 has sold 58 locations worldwide and has eight franchise partners in the UK, alongside its network of corporately-owned stores. "Our franchise partner network actually spans eight countries across the world. Our franchise partners are so important to us, and we focus on ensuring we can offer world-class support and training.
"Our central team has over 150 years of combined experience specifically in the fitness industry, so people from all walks of life can have the confidence to step into what I consider one the most exciting and important industries out there," says Kevin.
He adds: "Yes, there are lots of operators out there, but I think what makes us different and special is our focus on community, results and focused innovation. We are committed to being the best in the world at what we do and how our workout experience is delivered, and I am really proud of how accessible our concept is."
The TRIB3 workout is programmed around effort level rather than fitness ability, to create broad consumer appeal and to ensure that while the workout is intensive it’s also one of the most inclusive HIIT (High Intensity Interval Training) workouts in the world.
For example, a custom heart rate system, which measures effort level and shows each result live in the studio (using integrated technology) is seen as a 'huge differentiator for TRIB3.'
"Our studios consistently receive NPS (net promoter scores) of +60 across the network demonstrating the levels of customer loyalty and advocacy; we really do have a global community and it’s such an exciting journey to be part of growing and cultivating it," says Kevin.
Having opened its first store in Sheffield in January 2016, TRIB3 expanded into several international territories quickly and started to look at key cities in Spain where it was felt the concept would really fly - a hypothesis that has subsequently proven correct as it has 10 locations trading or sold across Spain already.
"While I was in Spain looking at the opportunity, I met with Jonathan Fisher (CEO of Holmes Place) and sold him my dream: my goal from the outset was 1,000 TRIB3 stores in 36 countries," says Kevin, adding: "At that point, we had two stores in the UK, two in Finland, one in China and one in Barcelona. We needed capital to grow and fulfil that vision.
"Starting in 2018, we worked together with the Fisher family on two sites in Madrid to prove the model really worked. The full Series A investment then came in 2019, with Jonathan taking his place as chair of the TRIB3 board," Kevin notes.
In the long run TRIB3 expects to own around 10 per cent of all TRIB3 stores, with the rest being owned/operated by franchise partners. "We’ve embarked on fast expansion through franchising, despite the impact of Covid-19 in 2020." Such expansion includes development agreements in Glasgow, the Republic of Ireland and across the Benelux.
Expansion hasn't come without competition of course - yet as a brand TRIB3 indexes strongly with the younger, discerning consumer. "We recognise that millennials and the generations coming up below them place huge value in choice and experience," says Kevin.
"Over 60% of current TRIB3Rs, that’s what we call our customers, are members of other fitness facilities and we partner with major aggregator platforms to broaden our overall accessibility," he says, adding "While we know there are some cool concepts out there competing in the boutique and class-based sector, like Barry’s and F45, we believe new operators coming into markets where we are operating is good for growing the overall addressable market and that we are unique in what we do."
In terms of market share, TRIB3, by the end of 2022, will be the 2nd largest boutique in Europe and 2nd largest in the UK, according to Kevin.
In the meantime, the philosophy behind becoming a franchise partner with TRIB3 is about partnership, support and empowerment from the start.
That means being connected with an industry-leading franchise support team and talked through all the key aspects of the business model from choosing a property through business planning, marketing and what support is available, ongoing, to drive the business.
"Once you’re signed up officially, we’ll give you over 150 hours of training along with full support to secure and fit out your dream location - at the same time our expert sales and marketing teams will be helping you deliver a next-level 12-week pre-sell plan to launch your store."
Would be franchise partners from a wide range of backgrounds are welcomed, just so long as they are passionate about people and providing exceptional experiences.
"Kindness is at the heart of our culture, so it’s important to find people who espouse that. I am fortunate to lead a highly experienced support team with decades of collective experience in the fitness sector, so I would always say don’t let a lack of industry knowledge deter you from getting started," notes Kevin.
"Likewise, starting your own business can seem daunting but resist talking yourself out of getting started. The failure rate of franchise businesses is less than 10% of that of standalone start-ups, so franchising with a concept you’re passionate about and a support team that you connect with, is a great way to shore up your move into business ownership," he further adds.
When it comes to core values, meanwhile, TRIB3 stresses inclusion and diversity, courage and greatness - "because creating truly great experiences mean taking some risks. We encourage our team, TRIB3Rs and franchise partners, to always stand up for what they believe in - and sweat and more sweat - this is in our DNA, we’re not afraid of hard work," says Kevin.
And with the objective of having 1,000 stores in 36 countries by 2026 hard work across the network could prove to be a winning formula.
Initial investment required to start a TRIB3 store is from £130k, although this will reduce with bank funding. Moreover, several banking and leasing partners are available to support the process.
Total cost to open meanwhile ranges anywhere from c. £270k - £430k depending on the size and specification of the store. A flexible model is offered so the partner can choose key elements, depending on the demographic of the area - "For example in hugely residential areas you don’t need large changing rooms as people are typically in and out and will change at home. The thing that always stays the same is our signature studio with the sweet spot being +40 spots available per session as this allows you to breakeven at a super achievable average class occupancy rate of less than 25%!" Kevin adds.
The occupancy rate metric of 25% is an important one, especially when viewed through the prism of the ongoing COVID-19 pandemic.
Indeed, even when stores were able to open, there was a limitation to about 50 per cent of normal capacity due to social distancing. " In fact, at some points we were giving customers a whole lane to themselves. But mostly we were capped at around 50 per cent. Of that 50 per cent, we were operating between 92 and 97 per cent occupancy. Thanks to our break-even point - less than 25 per cent of normal capacity - every store was EBITDA positive for every month we were open," says Kevin.
Unsurprisingly, the roll-out of new operations has been slowed by COVID, though three stores were still added during the immediate lockdown period: Edinburgh, Bristol and a further location in Madrid, which was cash-positive by month two.
A further three have since opened, despite restrictions continuing in Spain and lockdowns in the UK continuing into 2021. Overall, there’ll be more than 24 stores trading by April next year, which is a three-fold increase versus the end of 2020, according to Kevin.
But he cautions: "The impact of the pandemic on confidence levels will be long-term. History suggests it takes society around three years to forget the severity of a problem to the point they begin to return to old habits. People are going to want their own workout space for a long time to come; gyms and studios won’t be able to cram people in anymore, they’ll have to look at their space and their flow."
He adds: "We’re probably better placed than many operators, in that TRIB3Rs already have class packages they’ve bought and want to come back to use. When we re-opened in the UK, we had massive wait lists of people hoping to get a place in class - and our model has proven to be super-resilient to the measures that come with protecting communities against Covid.
"I know the fitness industry is going to boom and TRIB3’s dedicated product and experience team are always reviewing the market and what innovation is happening to make sure we stay at the forefront," he further notes.
While Kevin describes himself as 'fast-paced and direct', the crucial point is that his door is always open. "For me, leadership is about empowerment. I am really proud of our focus on having a diverse workforce - my CMO, Kirsty, is a Global Ambassador for the Women in Fitness Association (WIFA) and we offer grants to our franchise partners and female leaders to go through their programmes and training, so we can nurture future talent and create a platform for more female business owners."
Looking to the future (in terms of store rollouts) TRIB3's aim is to stay focused on its Legendary Us Goal: "which is aligned against our five-year business plan," as Kevin puts it.
"We’ve seen the kind of growth this goal espouses across a number of fitness franchise brands, so we know it’s ambitious but achievable! Getting to 1,000+ stores is all about the scale of the business model itself; by designing the studio to optimise peak usage loading and minimise the average occupancy needed to drive breakeven, we are able to create fast and high returns for our franchise partners," he adds.
Net revenues from TRIB3 stores can range from £350k to +£1m annually, depending on the location, associated yield and usage levels. Moreover, the team are always there to help franchise partners leverage and maximise those key drivers.
For would be franchisees, given that level of support, it may prove a sufficiently attractive enough proposition for those prepared to put in the hard yards.
Interested and want to know more about TRIB3?
The TRIB3 profile outlines all aspects of their franchise opportunity and allows you to contact them for further information or to ask a question.
