What pushes a successful gym owner to walk away?
What’s up Gym World?
Small towns always have that one family that everyone seems to know.
Here in Tequesta, FL, it’s the Frezzas:
They run FitTown Jupiter, a profitable gym that generates $95k a month. It also sits on close to $10M of real estate, which they also own.
Despite the success, Andrew Frezza, the face of the business, chose to walk away from the fitness industry.
He pulled a Derek Zoolander and realized there’s more to the gym world than being really, really, really, ridiculously profitable.
Here’s his story:
Building FitTown Jupiter
Andrew discovered CrossFit in 2011 while working a sales job. Shortly after, he got his brother and his Dad hooked as well.
Andrew’s Dad has a background in real estate. He offered to buy a building if Andrew and his brother operated a gym out of it.
And that’s exactly what happened.
Buying the real estate
After the 2008 Global Financial Crisis, Florida real estate was decimated and there were plenty of bargains to be found for the ensuing decade.
In 2012, Andrew’s Dad bought a parcel with two buildings.
The plan was to operate in one and rent the other. But they had trouble finding a good tenant, and their business expanded quickly, so they ended up using both.
They chose a great time to open a CrossFit. FitTown rode the trend and managed to get 500 members without doing any marketing.
Their biggest issue: members couldn’t find a spot to park during peak class time. So what did Dad do?
He bought the entire back plaza:
Both brothers thought it was a stupid idea, but it ended up being one of the best real estate investments he has ever made.
💡 Back then, those plazas probably cost around $3M altogether. Today, they’re definitely worth north of $10M. Not too shabby.
Leaving the industry
Business boomed until COVID hit, and Andrew lost 200 members.
Despite gaining 100 back post-COVID, Andrew found it hard to maintain 400 members—even with more aggressive marketing.
A lot success in business can be attributed to luck and timing. The same team, with the same skills, can produce completely different outcomes at different moments in time.
Despite the lower member count, the gym still did well because they built a robust personal training business and did a few price increases.
At this point, Andrew had been running the gym for over 10 years, and he felt his skillset had outgrown the role he was in.
Being a gym owner felt different than it did pre-COVID. Additionally, his kids started taking up more of his time.
đź’ˇ As a father of two young kids, I grossly underestimated how much having kids changes your priorities.
Andrew feels that CrossFit gyms make a terrible passive investment.
💡 My initial gut reaction was, “YOU’RE WRONG.” But I couldn’t come up with a single example of a CrossFit gym owner that’s been running 5+ locations profitably for a long period of time.
Moreover, the people he admired most changed paths or left the industry altogether.
So he decided to sell his shares and move on.
💡 Frezza’s not alone. In the last few years, Two-Brain Business has seen a surge of gym owners inquiring about selling or shutting down their gym.
Takeaway for gym owners
Almost every gym owner hits a point where they think about selling their gym.
This industry isn’t easy. You have to love it.
If you’re feeling like Andrew, it might be time to reflect with some tough questions:
- Can you fix the underlying problem that makes you want to sell?
- Has your skillset outgrown the role?
- If so, what’s the opportunity cost of staying in your current role?
- Are there gym owners 5-10 years ahead of you that you’d like to be like?
If you want to hear more about Andrew’s experience, watch or listen to the latest Gym World.
Until next week,
j
