Dave Reiseman, Chief Growth Officer at EOS Fitness

Guest: Dave Reiseman, Chief Growth Officer, EOS Fitness

Host: Chris Hatch

Listen on Spotify

Summary

Chris Hatch talks with Dave Reiseman, chief growth officer at EOS Fitness, the "high value, low price" gym brand with 1.3 million members across 114 corporate-owned locations in six states (Georgia is next). Dave explains how EOS combines the size and amenities of a mid-tier club with boutique-style offerings, starting at $9.99 a month, and how it averages about 12,500 members per gym. He covers the 40,000-square-foot prototype, the shift from pools to hot/cold plunges, a predictive site model, why landlords now see gyms as traffic drivers, pre-sales that open clubs with 8,000 to 10,000 members, and why passion and relationships matter most in commercial real estate.

Key Takeaways

• EOS's model pairs mid-tier size with boutique-style amenities (strength training, recovery, cryo and hot/cold plunges) at $9.99 to $29.99 a month.

• Gyms drive center traffic: 95% of EOS members shop within two hours of a workout, and visits now spread throughout the day, not just 5 PM and 8 AM peaks.

• EOS uses a member-data model that projects member counts within about 13%. It's one data point; EOS won't approve or kill a site on the model alone.

• In the field, EOS looks for a trade area of roughly 100,000 people, plus visibility, traffic and easy access. Nearby competition is usually a good sign for EOS.

• Deals are about 50/50 ground-up and second-generation. Target growth areas include high-growth underserved suburbs and mature, dense markets with outdated product.

• At scale, cleanliness, friendliness and working equipment are table stakes. EOS trains and compensates staff on customer satisfaction.

• Advice for newcomers: be passionate about the business you're in, and build real relationships. Some ICSC conversations take years to turn into deals.

Transcript

Editor's note: Some names and tools are spelled from the audio and are shown in brackets for confirmation.

[01:45] Chris Hatch: We'd like to welcome our guest, Dave Reiseman, Chief Growth Officer with EOS Fitness to the podcast. Welcome to the pod, Dave.

[02:00] Dave Reiseman: Chris, I got to tell you too man, you're looking good. You been hitting the gym? You're looking swell, brother.

[02:04] Chris Hatch: You know, here's the deal. I got a real dad bod situation going right now. I will tell you in the last year of my life, or maybe like two years, it's really the kids, the youngest, I guess. So as my youngest got into full-time school, then I was able to kind of work out a morning routine that was a little bit better without like disturbing the entire household's morning routine. And then we added a driver in about a year ago, and that was a game changer in my household. It was just epic.

[02:38] Dave Reiseman: The toughest thing is trying to work it into your routine. It's so funny, same thing. I've got two young kids and in a lot of ways they are their own hit workout, chasing them around. But you're right. I mean, look, that is the thing. And even just figuring out a way to squeeze in for 10 and 15 minutes, it's a game changer. So good for you, man. I see the guns coming in, so something's working.

[03:04] Chris Hatch: That's funny. You know, one of the things that's been the most inspiring to me was like three years ago, the CEO for EOS is Rich [Strenchberg]. And just like randomly, like in the middle of the week, I got an Apple fitness sharing request from Rich. And I was like, well, this is kind of curious. It's kind of interesting. And so through the Apple fitness program, like I can see every day if Rich has worked out and then he can see if I worked out and. What was hilarious is like multiple days after that, he'd like text me and be like, Hey, you haven't really moved today.

[03:39] Dave Reiseman: That's the motivation. A little friendly nudge, little friendly trash talk.

[03:45] Chris Hatch: Yeah, it was good. It was really helpful. He held me accountable. He was great. So that's what really caused me to implement it.

[03:51] Dave Reiseman: Rich is incredible. You know, he has not missed a workout in I think it's now four years and I'm sure we'll talk about this, but I mean, we're on the road all the time. Rich is traveling a lot. We tour at least 250 sites a year. And so look, there's every opportunity to miss a workout, right? Planes are running behind, you're traveling, you're eating, you're just grinding or you're just flat out exhausted. I admittedly will tap out sometimes after a long day on the road on these tours. Rich is a beast. He'll either figure it out in the morning or in the evening. Then yes, and then you get the added benefit if he gets to kind of nudge you a little bit if you haven't.

[04:31] Chris Hatch: Yeah, that is seriously an admirable trait in life to be able to do that. Four years straight, that's amazing. A lot of the people, I think, still to this day, and obviously our brokerage office here in Utah has helped you guys with your rollout here. I still hear people, I think most of the local customers have finally gotten used to the name. But as we first started working with the brand, we would tell them, we're working with EOS Fitness. And they'd be like, is that the EOS Fitness people? Yeah. Where did the name come from?

[05:03] Dave Reiseman: Haha. So the name actually is the name of the Greek goddess of the dawn and it is meant to kind of signify a new dawn in fitness. It also has become an acronym which stands for energy optimum value and serious fitness, which you know for reasons that we'll get into is our value prop here at EOS. So yes, we get it all the time. Is it EOS? Is it EOS? But yes, the correct pronunciation is EOS.

[05:37] Chris Hatch: So the very first market tour, our brokers here don't often invite me into the car anymore. I mostly run our development team. So unfortunately, I don't get to do as many site rides as I'd like to. They're fun. And I thought this would be so funny. So the night before, we rented a 12-passenger van. And I went to Big 5, and I bought a whole bunch of 10-pound dumbbells. And I put the 10 pound dumbbells like scattered throughout the van. And then I got a couple of jars of protein, a bunch of brand new shakers, right. And protein shakers. And so literally as everybody got in the car, I'm like, look, like there's no days off.

Like everybody's got to get a pump in like in between sites. Dave, I'm not even kidding you. Nobody laughed. It was the most awkward intro to a tour that I have ever done to date.

[06:20] Dave Reiseman: You got to grind. I am shocked by the I think that's good material. Maybe they were still waking up and getting caffeinated, I'm not sure, but I think that's pretty good.

[06:36] Chris Hatch: We even had Mike Kennedy in the car, right? Who's one of your more unruly humans, right? That is really a force to be reckoned with.

[06:45] Dave Reiseman: Look, it should have been 150-pound dumbbells. I think you came out of the gate strong on that one.

[06:53] Chris Hatch: I don't know if they knew how to take us. Think they just met us and we were new. Anyways, it was pretty funny. It was pretty funny, but I didn't know much about the brand. And when I rode around that first day, it was really fascinating to hear to me the story. Really everybody I met had already been in the fitness industry for a long time.

[07:14] Dave Reiseman: Yeah, yeah. So look, it's one of the things I think that sets us apart. So everyone, we've got one management team here at EOS, one team, and all of us have grown up in fitness. This is all we've ever done. And so we've spent our entire careers in fitness and on top of that have spent our entire careers together, working together. So whether it was at Gold's Gym, where some of us came from, or 24 Hour Fitness or Equinox or any of these players. And I think part of why that matters is look, there's a chemistry, there's a camaraderie in terms of what we're doing.

But then also like, look, we know how to operate clubs. We've learned from the lessons of the past and ultimately, all of that has come through in the DNA of what is now EOS, right? And what is now the value prop that I think is setting us apart.

[08:11] Chris Hatch: So, tell me for a minute, what's going on in the gym space, right? It seems like you've got folks like yourself, folks like Planet Fitness that are just growing faster than fast. It just seems like there's a lot of gyms opening. And at the same time, we have watched 24-hour fitness, it's gone, right? A thing of the past. And we're watching other gyms contract. What is happening? What's the movement?

[08:14] Dave Reiseman: Yeah. Yeah. Yeah. Yep. So look, I think to understand what's happening in the space and even to a certain extent to understand EOS, you almost have to kind of understand the history of the industry, right? Because for the longest time, our industry was the same. You had a handful of players that essentially offered the same thing at the same price, right? So what we would now call your mid-tier players, your LA Fitnesses, your 24s, your Golds, 40,000 square feet. You got group exercise, strength training, personal training, and again, all for like that $40 price point. And so it went for the longest time. Then you started to have disruption on a few fronts.

You had number one, the rise of what we call the HVLP. So the high volume, low price. And you know, that was predominantly driven by Planet Fitness. And so again, you didn't necessarily get a ton, but for 9.99, you got the basics. You've got cardio, you've got some strength training, no group exercise and personal training.

[09:32] Chris Hatch: And when is this? About what year is this?

[09:35] Dave Reiseman: Probably 2009, 2010 is when you really started to see the rise of Planet Fitness. And of course there were other offshoots of that, but predominantly franchise, you're looking at 10 to 15,000 square feet. And that started to take off and then kind of on the other side of the spectrum, you started to see around the same time, the rise of the boutique. So, on the higher end, again, predominantly franchise, maybe 10 to 15,000 square feet, but much more coach-led, personal training led, with boutique offerings. So all of these things combined to put tremendous pressure on the middle. Now this is the world that we grew up in, right?

And so we had a front row seat to this. And in 2015, the whole thesis behind EOS was, look, what if you could create the best of all worlds where you could offer the size and amenity of the mid tier and you could offer a lot of the premium coach led boutique offerings of the studios, but deliver it for an entry price point of 9.99. And hence not only was EOS born, but this new category of what we now call and you'll now hear HVLP 2.0. We call it high value, low price. And look, the model has I mean, as you know, Chris, look today, we have 1.3 million members across 114 locations.

We average 12 and a half thousand members per location. We do two to 3000 workouts a day. And I think to your broader point about the industry demand for fitness is going up. In the fitness industry last year, there were over 73 million people working out. That's the highest it's ever been. That's a 6% increase from the year before that way exceeds where we were pre-pandemic. So I think you do have more demand than we've ever seen in fitness. I just think what you're starting to see is just some separation between, in what value prop people are offering for what price point. That $40 price point is very tough to offer with some of the competition.

And you're also starting to see some separation in terms of operators, but look, we're very fortunate. We're excited. I think I told you, I feel like we're probably in the second inning of our growth. Our goal now is, is to keep it up. Yeah, sure.

[13:08] Chris Hatch: So Dave, walk us through a typical offering in a gym that you're offering these members as an HVLP model.

[13:21] Dave Reiseman: Yeah, absolutely. And I think this is part of our secret sauce. So our whole value prop is we offer a premium experience at an affordable price. So again, our proto is 40,000 square feet. Again, second gen, we can go a little bit lower or a little bit higher, but number one, you'll find more strength training and cardio than anybody. So more platforms, more turf, more dumbbells. And I say that not because it's just part of our DNA, but literally that is the most popular amenity today in fitness. More people than ever are getting into strength training. So we can't keep enough of it in there.

You'll find group exercise, you'll find personal training, but above and beyond that, you'll find amenities that you would typically find at a much higher price point. So you'll find things like we have the Tank, which has compression pants in it and percussion guns. You'll find recovery, like hydra massage. You'll find we just rolled out about a year and a half ago, something called the Cryo Lounge. In the Cryo Lounge, you go in and there are beds that are made by Hydra Massage where you lay back and it actually drops your back down to 30 degrees so you get the benefits of hot cold treatment and cryo.

We've got a cardio cinema, which is a movie theater inside of the gym. Which has surround sound, you go inside, it really feels like you're in a movie theater, makes the time go by. We've got 2,500 square feet of outdoor training space. People love to train in the elements, whether it's out in the winter in Utah or whether it's in the summers in Texas. And then we have wet areas as well. So we're really leaning into the hot/cold plunge. And all of this, so our entry price point is $9.99. The most you'll pay our highest price point, we have a three tiered pricing system, the highest you'll pay is 29.99.

So if you think about it, everything that I just mentioned, the cold plunge, the cryo lounge, the compression pants, all of those things fall under the 29.99 price point. And so look, this is something like we obsess over value engineering. We're always looking at innovating inside the box and offering new amenities, and that's part of where we put a stake in the ground is we want people to feel like they are getting a premium experience at an affordable price.

[15:52] Chris Hatch: It kind of blows my mind to think about the concept, let's just take your mean price of $19.99 a month. And it just blows my mind to think how you could ever offer that price to members and actually make money. Just given all, I mean, all the costs to build these things out, all the costs to run them, the staff. I mean, all this stuff has just ratcheted up over the last few years with inflation. And, it just seems like your pricing hasn't really moved.

[16:19] Dave Reiseman: No, it hasn't. And look, we've had some of our competitors who have raised their price points. You know, we have held firm on the 9.99 as an entry price point. Look, the majority of our members are actually in one of the higher two tiered price points. And I think because the value that we try to provide at that is just really attractive. But look, there's a lot of ways that we're able to make it work. Right, to make the model work. So one is, is on the real estate side. I mean, we've been very disciplined about not just getting the right real estate, but getting the right rents, the right economics, which are critical to making a pro forma hum.

We have found ways to value engineer the build out. So again, we've got guys, this is all they've ever done. So whether it is getting favorable pricing on, the equipment, the FF&E, or our head of construction, who does an incredible job of finding finishes that feel premium, but that might just cost a little bit less. It's all part of it. And then look, we average, as I mentioned, 12 and a half thousand members per location. We do a good portion of our business is personal training. That's a high margin business for us. And it also comes down to just look really operating the clubs well.

I mean, there's a, there's an art and a science to this in terms of like, look, how you sell, how you sell personal training, how you operate the clubs efficiently, how you keep them clean, friendly, and well-maintained. And we could talk about that for a good period of time. So look, we are fortunate that the model is doing great. The model's killing it, but how do we now do this at scale at 110, 150, 200, and 250 gyms and still make every gym feel like the only gym?

[18:31] Chris Hatch: Yeah, that's it. I mean, I would say that's such a common sentiment with so many brands, right? Especially as they start moving into different states. How many states are you operating in right now?

[18:42] Dave Reiseman: So we're in six and then we just announced that we're going into Georgia. Georgia will be the seventh and we'll probably open up there in 2027.

[18:49] Chris Hatch: So are you typically moving managers into new states as you go in to kind of get things accustomed and do it the EOS way and to house people there temporarily or permanently or how do you do that?

[19:04] Dave Reiseman: Yeah, so it's a combination. If we go into a new market and we're expanding, like for instance, we expanded from Dallas and Houston into San Antonio and Austin, we will start to look at above club managers that we can pull from successful regions and have them be the tip of the spear. And then look, and then you're just always finding good talent, right? I mean, part of our secret sauce, I think is the people. I mean, look, The gym is an inanimate object. Yes, you have to have all of these things, these amenities, but ultimately it's the people who are delivering the experience. And I can tell you, building the culture, getting the right people on the bus, and then putting the mechanisms in place for them to be successful, to help deliver an outstanding experience to the members.

Those are the things that create energy inside of the club, that really create kind of a point of differentiation. So, the people side of this business really is everything.

[20:15] Chris Hatch: Yeah, let's flip back to the build out for just a moment. I would imagine one of the bigger sticking points in your transaction with the landlord is talking to them like, hey, look, you've got a beautiful concrete slab here. We're going to go ahead and just cut that up and put a pool in here. How much time and energy does that take in a deal?

[20:38] Dave Reiseman: Yeah. You mean just the pool, or the general conversations with the landlord?

[20:43] Chris Hatch: Just the pool. I mean, the pool just seems like a component that's not used by any other use that would ever go into this like traditional mid box space, right?

[20:52] Dave Reiseman: Yeah. Well, it's interesting you say that. And so this actually goes back to like innovation here at EOS and also like looking at trends, looking at usage and how much people are using things. So we're actually pivoting away from pools as part of our typical build-out. Now we'll still have them as part of like a hub and spoke model, but what's happened is we are pivoting to a hot/cold plunge. And look, first and foremost, the reason that we're doing it is because that's what people want. If you look at like what is hot today in fitness. It is recovery and hot and cold plunge and the benefits that you get from that.

And then there's also the benefit that, it costs less on the build out and it's going to get used more. So as we look at, again, we're going to open up 28 locations this year and we start to look at what amenities will go where, we'll still have pools in the trade area and do classes and things like that. But we are evolving the footprint really to lead more into the hot/cold plunge.

[21:52] Chris Hatch: Wild. 28 locations with 114 total gyms open today, right? Yeah. You know, that's one every other week. That's pretty good growth.

[22:03] Dave Reiseman: Yeah, it's a good pace and velocity for us. I mean, we opened 21 locations, then 28. I think for us right now as a corporate-owned concept, because again, we're all corporate-owned, 20 to 25 is the right number, right? Where we can execute, we can manage the pipeline, but also deliver an excellent experience, an outstanding experience. So look, part of the discipline now as we hit this phase of growth is just that, is being disciplined about it. I look, we get asked a lot of times, you guys want to come to Seattle, you guys want to come to New York or Chicago. And I think the model would do really well there.

But there's also a huge importance now of, look, we've got to grow the right way. First off, there's... Tons of opportunity to infill the markets that we're in. But then also concurrently, we want to make sure, back to my point about making sure that every gym feels like the only gym. How do we do that at scale? We have 7,000 employees right now. One of the things we are now spending a lot of time and energy on are things like Medallia, customer sentiment. If you were to show up at some of our management meetings, the first metric they're looking at is not sales. It's not PT.

It's customer satisfaction. How are we doing down to a locker room level? We're able to track sentiment and we even train and compensate employees towards customer satisfaction. We've also spent a lot of money on The 4 Disciplines of Execution. And implementing that across the portfolio, which is, look, how do you really put the processes and lead measures and the scoreboard in place to win on things like cleanliness and friendliness and service? Because look, it's an easier thing to do when you're at one, 10, 15 locations. As you start to get to 100, 150, 200, it becomes difficult, but here's the thing, Chris. You can have all the nice amenities in the world.

You can have the cold plunge, you can have the cryo lounge, you can have all these things. If you're not keeping the gyms clean, if you're not winning on friendliness, and if you're not keeping the equipment working, people will leave. Look, there's a long list of this happening in our industry. Look, you're a fitness consumer, you've been in a lot of gyms, you've seen it. What happens when you go into a gym and all of a sudden, the bathrooms are dirty? Or your treadmill stops working, or the staff just seems checked out, especially in a price sensitive market like we are in, people will bounce.

So, all these things go into the way we look at the pipeline. So I think for now 20 to 25 locations, we think we can execute and keep things moving along.

[25:18] Chris Hatch: When you first chose to enter Utah, I think you had something like 20 to 30 locations as a chain. And I thought it was really fascinating because we did a lot of homework on the brand and went and looked at Google reviews and Yelp reviews. And what blew me away is how much higher the marks were for EOS. And I think what's blown me away even further is like, as you've gone into seven states, that those marks have continued, right? When I look at your locations in Florida and Texas, for example, you're still marking out very high in the comp set.

[25:53] Dave Reiseman: One of the really neat things this year: we've always really leaned into Medallia. But as I mentioned, as we leaned into The 4 Disciplines of Execution, the outcomes that we were really hoping to achieve was to win on things. As I mentioned, like cleanliness, friendliness and service. And then there was a report that came out earlier this year and it ranked gym chains based on who are, consumers favorite gyms based on review scores. They used AI and they went and they analyzed, and they analyze everybody. They analyze crunch and lifetime and 24 and everybody else. And not only did EOS win in terms of being named customers most favorite gym in terms of reviews, but the things that stood out in those reviews were cleanliness, friendliness, and service.

So look, it was a good feeling to know that what we're doing is working, but this is the thing, like. We'll never be comfortable. There's no end point for this, right? We realize we have to constantly innovate inside the box. We constantly have to train to these things because look, we're looking at this as a long-term. As I mentioned, we're maybe in the second inning of our growth. And so now how do we keep these things up? Because we also realize the competition won't be less, it'll always be more. And so how do we put ourselves in a position to continue to win both in markets that we're in and in the markets that we're going to.

[27:28] Chris Hatch: So with respect to how this interacts with turnover and retention, how does it work for a typical customer? Is there an average life you track of the customer?

[27:43] Dave Reiseman: Yeah, so we do, we track LTV, so total lifetime value, and then what's the length of stay? So we'll look at, how long have they stayed in terms of months? And then what's their lifetime value in terms of like, how much have they spent total in terms of memberships and personal training and supplements and all the other things that we sell? What I will tell you is, we invest heavily in CRM, things to keep members engaged. One of the things we've learned is look, if we don't get you engaged in that first 30 days, if we don't connect you to whatever the thing is that you are trying to do, whether it's a personal trainer, whether it's a class, whether it's a community, you are much more at risk of attriting.

And look, the world's changed too. At any given time, 30 to 40% of our membership is joining online. They're joining on the web, and in some cases, they've never set foot in the club. The technologies, the processes that we have to put in place now to make sure that not only do we do a good job of stepping you into that high tier membership or at least explaining the value, but that we get you into the club and immediately get you engaged is, is everything.

[29:02] Chris Hatch: It's interesting. Yeah, I love that. OK, so I know you joined the brand after COVID, but walk us through what an impactful event that was for your industry, right? So, some of your gyms were in California, some got shut down. It was unclear regulatory wise what was going to happen. You know, how did it work?

[29:36] Dave Reiseman: Yeah.

[29:44] Chris Hatch: How did you guys get through that and what are you seeing different post COVID?

[29:47] Dave Reiseman: Yeah, by the way, wasn't COVID a blast? I mean, didn't everyone just like sit back and have a good time during COVID? Look, I think you learn a lot about yourself and you learn a lot about the brand when you go through an event like that. So a couple things. Number one, the brand got incredibly creative in terms of pivoting to do everything from holding classes outside to workouts outside. The gyms literally were shut down. Two things happened that I think speak volumes about the brand. So Rich, our CEO, literally the day that the gyms were shut, called every employee and said, you've got a job, you're not going anywhere.

We will continue to pay your salaries no matter what. Concurrently, we reached out to every landlord that we had proactively. I always say, look, if you want to learn more about us, talk to our landlords. Those relationships are everything for us. And so immediately worked out deals with all of our landlords hand in hand, how to navigate this open line of communication. And then here's the other crazy thing. We doubled in size during the pandemic. And I think it's because look, we were bullish on the gyms are going to come back there. There's no replacing in-person fitness. And also it was like, look, we're swinging for the fences here, right?

We can't let the world shut us down. So we doubled in size during the pandemic and coming out of it, I mentioned before, right now there is more demand for fitness than we've ever seen. You've got more people working out than before COVID. You're seeing year over year increases in total memberships in the industry and retention in workouts. So look, as I mentioned before, we're in a really good spot. We're at this intersection of the industry's growing. There's more demand than ever. We've got a product that is resonating with people. So now our job is to keep things moving. But I think one of the springboards, ironically, for all that was COVID.

[32:02] Chris Hatch: You know, the healthy trend is fantastic, right? I mean, because I'm not sure. I'm not sure really that's the common public perception, right? Is this the RFK effect, or did this start before?

[32:14] Dave Reiseman: The healthy trend... there's always been, I think just over the years, people have started to become more aware of the benefits of working out and strength training. I think strength training continues to just get really, really popular. But here's the other thing. At the end of the day, our end product is a feeling. Call it what you want: that runner's high, the pump, the feeling you get after a good workout. Our job is to give you more ways to connect to that feeling. And I think that over time, look, the offerings in the gym have also expanded to appeal to a broader audience. So yes, we've got the strength training, we've got the cardio, if that's what you're into.

We've now got recovery. We've now got the hot/cold plunge, as I mentioned. We've got compression pants. So I think that's also driven it. But look, it's for us, it's exciting to see more and more people get into the space. And look, certainly the more people that are out there advocating for being an exercise and living a healthy lifestyle that only benefits the gym.

[33:32] Chris Hatch: Yeah, that's fantastic. When I think about growth at the pace of 20 to 25 gyms per year in this year 28, it just makes it kind of blows my mind. I mean, it's not like we're building more shopping centers. So how are you getting deals done?

[33:49] Dave Reiseman: Yeah. So a couple things. So first off, look, we're really lucky to work with some great landlords and developers across the country. Obviously we have an incredible broker network. And so, a few things first in terms of just like how deals are are found our brokers or some of our landlord partners or developers will bring us deals. Whether it's a ground up and second gen, and we do about a 50-50 split between ground up and second gen. I think a couple of things. Number one, the gym is such an energy driver if we're going into a center, right? So I mentioned we're doing two to 3000 workouts a day, and we've done a ton of research on our members and look, they've got strong household income, about 120,000.

They're about a 50-50 male-female split. Average age is 35, but one of the interesting things that we saw is 95% of our members are shopping within two hours of working out, which is kind of intuitive, right? You're going to go, you're going to put on your lulus, you're going to go hit the gym, and then you're going to go knock out your errands. What that means is in the centers that we're in, other co-tenants are seeing a lift, right? And it's not just at five o'clock. Look, one of the most amazing things coming out post-COVID is the time people are consuming fitness. And now it used to be, five o'clock and nine o'clock or eight o'clock, whatever it was, those are your peak times.

Now the gyms have a steady flow at two in the afternoon, at one o'clock in the afternoon, at 10 at night. And so you're seeing people go and cross pollinate and go buy groceries or go into Target or whatever the case may be. So from a landlord perspective, I think that's become an attractive thing to drive energy into existing centers. Or maybe to backfill a tenant, a box that is empty. We're in six markets, soon to be seven. I think we look at the pipeline as we tour. Look, we'll go to high growth areas. If you think about where we're at, we're in Florida and Texas and places that are high growing.

We'll go to places where... There's maybe high growth and it's underserved. I'm here in Texas right now and you go up to places like Salina and Prosper and Anna, there's this huge growing population, but really not much from a fitness offering. Look, we'll also go to places where it's a mature market with good density, but just older outdated product and we'll drop a box right in it. So I think what we have found is look, there's more than enough to fill the pipeline. And we're grinders, man. I think I mentioned like we will tour 250 sites this year. I mean, that's in the car, torn around doing an analysis, like looking at the sites. And that will ultimately help get us to that that 20 to 25.

[36:54] Chris Hatch: So there was a situation here locally where there was a grocer, WinCo Foods. And I think it's interesting because you mentioned the co-tenancy and what was the statistic there? Was it 28% of people shopping within two hours? 95%, excuse me. That's wild. So one of your competitors dropped a box in and it was an HVLP model and they put it next to the WinCo Foods.

[37:09] Dave Reiseman: 95, 95%, 95% of our membership.

[37:23] Chris Hatch: And this was a seasoned store. I mean, the store, think, has been open for like eight or 10 years. And the following year, the grocery sales volume went up by 28 percent. That's where the 28 was in my head. And I thought, what a wild thing, because typically grocers have restricted gyms because they see them as a parking hog and they don't want them next to them. It's almost like we need to look at that and fundamentally rewire things from an anchor tenant perspective.

[37:50] Dave Reiseman: I think one of the really interesting things is as we go to ICSCs and look, we've got good partnerships with everyone from the Targets of the world. I mean, we're in centers where there is a Ross or other tenants. And for sure, think even going back three, four years, there was some hesitance about a gym maybe because of parking. But I think a couple of things. There used to be this thought of like, it's just going to get overrun at five or at eight o'clock in the morning. And now what people are realizing, especially the way that consumers consume fitness post pandemic, it's really more of a steady stream throughout the day.

But also look, we try to be good neighbors. So we will work with our tenants in terms of making sure that the parking field is tight, that there is some separation there. But it's been a good story. And I think by and large now what we're seeing is, majority of centers that we're going in, they want the traffic. They're seeing the lift. I mean, you we, there was one of our landlords, Whitestone REIT, we went into one of their centers. The center saw a 60% lift in traffic. And so the other tenants also saw a lift in sales. So look, it's a good thing. I think knock on wood, the perception of of the gym. And the gym user and their patterns of consumption are changing.

[39:21] Chris Hatch: Yeah, I love that. All right, so you and the team are out. You see 250 stores. You're dirt dogging, right? You're out there on the road. That's it. There you go. There's the namesake. OK, so your broker presents you a site and says, look, this is the best site. Hands down, it's going to be a banger. We're going to knock it out of the park here. What do you do personally to determine if you agree with what their sentiment is? How do you figure out this is the next best EOS? Yeah.

[39:51] Dave Reiseman: Well, if it's you, we just go straight to lease. We know it's game, set, match. No, look, this is something else that I feel like has become really our secret sauce. So the first thing we do an analysis of the site and we have created our own model where, we've taken all of our member data, our 1.3 million members. We've partnered with [BoxedIn]. We've gone through a ton of iterations to be able to look at a site and long story short, create an index score. The index score essentially is a projection of member count. Now where we've got it down to is a plus or minus 13% margin of error, which is pretty good.

Meaning it'll look at a site. It'll project and we went back and ran the model on existing locations to see, is it right? Is it guessing right? And it was within 13% margin of error. And if it erred, it was erring on the side of shooting too low. So that's one thing. And again, all those things for us, they're a data point. They're not the only data point. We will try to get a sense of the trade area, which obviously a lot of times happens in partnership with the brokers. But again, if there's a daily needs, I'll use one next door to where we're looking.

We'll drop a pin in it, see how far away people are coming from. Because again we'll typically we're looking for and this is horseshoes and grenades here, but a hundred thousand people within the trade area, either there or on the way. And it's not to say that has to be that number, but obviously, as you know, the way that you look at the trade area, it could be radically different. I mean, the old way was, okay, what's happening at three miles? For us, we want to know how people are trading. What the trade area looks like in downtown Dallas is radically different from what it looks like and how far away people are coming from in Salina, as an example.

So once we do that level of analysis, and we've got a lot of other things that we look at from just a data perspective. You then got to go, as you know, you got to put eyes on it, right? And so what are we looking for? We're looking for things like visibility. We're looking for things like traffic count, right? I we've gone to places where the density isn't there, but there's so much traffic going by that we know we'll be able to dip our cup and get members that way. We're looking for access. Is there tough access? Are people going to have a tough time getting in and out of the center or the place?

Because look, you need the gym to be as convenient as possible. And then we'll look at the competition, honestly for us, I think nine times out of 10, if there's competition nearby, we see that as a good thing just because of the value prop. And then I think look, the last thing is in addition to broker input, which all kidding aside, like we take that very seriously because the brokers know the trade area. is just knowing what we know about the characteristics of a good gym. And again, this is all we've ever done, right? We might not be good at much else, but we're good at operating gyms.

And so we know some of the things to look for. So you put all that stuff in the blender, so to speak. And then it's just a matter of, look, can we get the deal done, right? Which obviously is the biggest part of it. Can we get the deal done at the right rents, the right TIs, all that kind of thing. But look, it is a fun... One of the most fun parts of the job is seeing the growth of the brand. And the last thing I'll just say is, I think what's been really fun is as we've gone into new markets. And pick sites and gone places where we have no brand awareness.

I mean, nobody knows who or what an EOS is. The model is still killing it. And we're still getting to that the 12 and a half thousand number, even though we don't have much brand awareness when we open and we're getting outspent by the competition.

[44:07] Chris Hatch: Wild. When you look at the model and you're trying to project stabilization, how many members and how far down the road is that?

[44:16] Dave Reiseman: Yeah, this is the, and this is one of the things we are constantly updating the model on. So look, again, I'm using air quotes here. Mature club for us, if you average across the portfolio is 12 and a half thousand members. Now we used to have a certain time period by what we anticipated it ramping to that number. What's starting to happen is we, there's a club in California that literally opened the doors with 10,000 members. That has changed the way we look at ramp and our IRR and really everything, the way that we look at ramping and maturity. We had a gym here in Dallas, actually the first club that we opened here, it was a former 24 hour fitness.

We took it over, stripped it down to the studs. At its peak, it had 4,000 members. We stripped it down to the studs, built it up kind of the EOS way. We opened the doors with 8,000 members. That club is now at 13 and a half thousand members. So we're actually looking at a new club to offload some pressure there. So it's a long way saying the model is still learning and growing. And I think the other thing that's happening with the model is as we enter new markets, the characteristics of, and the demographics of the markets that we're in all come back in to inform the model.

So look, we're learning, growing. It's never a perfect science, but what I will tell you is the model is, it is a data point. But like we always say, we're not going to approve a site just off the model. We're not going to kill a site just off the model.

[45:51] Chris Hatch: How do you open a gym with 8,000 and 10,000 members? Because you're not open yet.

[45:54] Dave Reiseman: So we do a pre-sale, we start, we go into a pre-sales period, we do a one day sale and essentially you're building excitement around the gym coming. And so people will come in and then you'll have a pre-sale center. They can get a sense of what's coming, what the amenities will be, what the gym will look like. And so they're signing up on the spot and they don't get charged obviously dues until the gym's open, but it's just. There's that much demand. Look, I think for fitness in general, but more specifically for the EOS offering.

[46:32] Chris Hatch: So you drop a double-wide or whatever in the parking lot, and that's your temp sales office?

[46:38] Dave Reiseman: Yeah, we're actually not doing the trailers anymore. We're usually looking for space. Look, if we can get it inline in the center that we're in, but typically we will go and we will rent an actual space for it. But yeah, I mean, that's it. You set up shop, you've got your staff, you've got renderings of what's going to be going on. And look, the product again, we're very fortunate the product is selling itself.

[47:05] Chris Hatch: It's pretty wild if you think, I mean, you sell a subscription model at the end of the day, right? And you've obviously created a good mousetrap, which is why you have so many customers, right? So many members, but it's pretty wild to think about opening a gym with eight to 10,000 members. I mean, that's nuts.

[47:19] Dave Reiseman: Look, it's nuts to think of a gym having 10,000 members. I mean, again, in the world that we came from, five, six, 7,000 members, that was pretty good. That wasn't a bad number. Look, having 12 and a half thousand members per location. I mean, this is, and by the way, I don't say this lightly at all, but I mean, it really is a category of one in terms of like, who's doing the volumes at the size, at the price point for what we're delivering. And look, it's not lost on us. I mean, it is humbling to be in this position, but it also means, okay, look, we're doing something right.

We got to keep upping our game. A couple of things I'll say: if you go to a box that we opened in 2015, it's just as important that a box that we opened 10 years ago feels like a box that we're going to open tomorrow. That's one. The second thing is you have to win, as I mentioned earlier, on cleanliness and friendliness and service. Those are the table stakes. And I think that stuff also starts to become part of the brand story, either for better or for worse, right? But you have to innovate. It's one of the lessons learned from our industry. What people are looking for, what people are consuming, and what their expectations are changing.

Things like the Cryo Lounge I mentioned earlier, that wasn't a thing two years ago. We went to a trade show, we saw these cryo beds get premiered and we're like, know what, that's pretty awesome. We meet as a company every two weeks. We have a bi-weekly meeting where we talk about innovation. And it's a rhythm of, what did we see? And if we're going to open up 28 locations this year, how do we want to test something new, put it in a location? And the cryo lounge, we put it out, we tested it. It was a smash hit. And as a corporate location, we were able to pivot and then get it in our new builds going forward.

And look, this is everything. Another really quick, funny story is listening to member feedback. One of the things that was happening is we look, we live in this Instagram era for better or for worse. And people are showing up at the gym with tripods and, filming and all kinds. And look, depending on who you are, you probably have very mixed emotions about that, right? There are some people that they want to come to the gym and they want to post their instant. And then there's some people that drives them nuts. And, we started to see that show up in our customer feedback. And we said, okay, look, this may be an opportunity because we're also always looking for more gym space.

So we actually converted a basketball studio and turned it into something called the set, which is like a space. Dedicated for Instagram for tripods. It's very Instagramable.

[50:18] Chris Hatch: If you're a creator and you like to work out, you go there. Yeah.

[50:21] Dave Reiseman: Have at it. And it got it off the gym floor, it gave people who want to do that a place to go. And then concurrently made the people who didn't want it very happy. And then we also got the side benefit of creating additional social buzz because people are posting, we've got all kinds of like cool sayings, like be a bada** with a good a** and all kinds of stuff that are part that just represent a little bit of the attitude of the brand. And it's been a hit. It's been a smash hit. So that's something else that just we're constantly looking like how do we evolve the experience? Because if we don't, someone else will.

[50:53] Chris Hatch: I can't wait to try that out. I'm going to get my Rex Kwon Do from Napoleon Dynamite: American flag bandana, fishnet tank top, right? Like, yeah. And just go crush it.

[51:00] Dave Reiseman: That's it. Go crush it. Post it on Insta man. You can post it live from the set.

[51:10] Chris Hatch: I don't think anybody's paying to see that, by the way.

[51:13] Dave Reiseman: Well, look, I will. You'll have one follower in me, for sure. Yes.

[51:16] Chris Hatch: That's good. Thank you for that. Thanks for the confidence. Yeah. Thank you. We have a lot of newer people in the commercial real estate that follow the podcast and comment and come weigh in. What advice would you give to somebody that's new to the commercial real estate industry? That might be somebody that's a recycled executive that's in their 30s or 40s, and it might be some just newbie at 20 years old. What would you tell them?

[51:43] Dave Reiseman: It's a great question. I mean, look, for me, I come back to you have to just be so passionate about what you do. And like, as a, for instance, here, I think all of us at EOS would agree, we are passionate, first and foremost, about fitness. And then all the other disciplines within the company kind of filter out. Like, we all love what we're doing. We all feel like this has been our calling. And so all the areas that are attached to this business, we want to be as good at and become as fluent as because again, going back to like at the end of the day, what we do is we are changing people's lives, right?

And you feel that impact no matter whether you're in accounting or on the real estate side or in marketing. So the only advice I can give is, you have to be passionate, and be passionate about the place you're doing commercial real estate for. I mean, look, for sure there's the other stuff like all the different areas like how fast the tools are changing in the industry from the site selection tools to being fluent in Esri and whatnot. The second piece of advice I would give is, every industry is a relationship driven industry, but maybe none more so than commercial real estate, both in terms of the deals that you do, whether you get a deal done or not.

And this is something I think that is a huge value and a huge importance to us is the relationship you have with your brokers or your landlords or developers. Both for maybe deals that you're working on, but also things you might do in the future or things you might never do. I've never seen a space where the relationships matter more. And so look, I think the more that you can build relationships, I know sometimes people think, gosh, another ICSC is coming up and there are a lot of ICSCs and for sure, but man, if nothing else, like what an incredible forum. To continue to build relationships.

Now I've been at EOS long enough to know there are conversations that we had in 2021 that didn't really bear any fruit from a deal perspective necessarily until 2024, 2025. But those things matter. Yeah, passion and relationships I think are just the backbone of any advice I would give.

[54:30] Chris Hatch: One of the things I constantly tweet and put on LinkedIn is meet people on social media and then convert it to a real life relationship as quickly as you can.

[54:39] Dave Reiseman: Yeah. And when you say real life, that resonates with me because I also think real life meaning getting in front having lunch like I know it might sound old school today, but there's no replacement. Look, it's like the gym. There's no replacement for this for being in the same room with someone and connecting and that energy and it's the same way that I feel about the gym. To your point about like, look, turn it into a relationship and ultimately like shake somebody's hand, sit down across from someone, have just a free flowing conversation and get to know them as a human being and a person because look at the end of the day, mean, that's what it's all about.

[55:21] Chris Hatch: Yeah. Tell us about a giant mistake you've made professionally and then what you did, what you did to fix it or what you learned from it.

[55:32] Dave Reiseman: My goodness, gosh, that's a good one. Man, that's a great one. I've got to think about this. That's a really good question. Let me think on that. But by the way, this is probably me having to cherry pick from a bunch of different mistakes that I've made. So I'll try to think of one that's more applicable to here. But let me think on that.

[55:56] Chris Hatch: Yeah, I was going to say, when I ask this question, I just think in my life, what was the last big mistake I made? Not what was the biggest. I mean, there's so many, it's just like, all right, well last week, yesterday I really, really messed that one up. Anyways, I find it's interesting as I've asked that question to various guests, some of the things that have come out. And I think people learn more hearing what you did wrong. and what you learned from it, than maybe what you did right. And I think so much of what we project out into the, especially in the social media side of things is all the positives. It's the wins. Nobody talks about the losses. Nobody talks about what went wrong.

[56:40] Dave Reiseman: Yeah, yeah. Is there any, I'm just curious, any recent examples from your own world in terms of something that you're like, gosh, that was. That was a big one or whatever.

[56:56] Chris Hatch: You know, I think I've learned because I speak so much about particularly drive-throughs on both X on real estate Twitter and as well as LinkedIn. What I've found is sometimes I'm not intentionally saying something that's damaging to a brand, but it might actually be damaging to a brand. And so I've had to really think through and what I do is I just go through a gut check. And the last thing is right before I publish something or push it out or post it, I just think to myself, boy, could this be construed in any way? And then I think through, I try to think through every department of the retailer, right?

So I try to think through marketing, operations all the way through is there anything that I've done that's any kind of damaging? Because the last thing I want to do is speak damaging about any of these brands. And really I'm just trying to be the pertinent fact leader in the fast food world and share thoughts.

[57:55] Dave Reiseman: Yeah, yeah, that's a good one. Yeah, that's interesting. Yeah, I mean, listen, like anyone else, you could probably write a daily list of mistakes that I make or mistakes that happen professionally. Look, we have a big thing here at EOS Learn and Grow, is, look, you should always be learning and growing and learn from your mistakes. I mean, I think a recent one that kind of comes to memory is look, sometimes you have to have tough conversations sooner than later. Being able to be direct, even though it may not be the most popular thing, being able to get to those conversations faster, especially look, one of the hallmarks of EOS is speed.

We have something here where it's like, look, we never want to let an LOI sit longer than a week. We're never going to let a lease sit longer. Than a week. And look, to get to that there's got to also be some healthy debate internally. I think as I learned on the job, I think there were times where maybe I could have had some direct conversations sooner, which led to us potentially moving a little bit slower than we should. But look, everything is learning grow. And by the way, I'm sure there's much more other examples that I can think of, but that's one that jumps off the top of my head.

[59:26] Chris Hatch: No, that's great. Dave, we want to thank you for coming on the Dirt Dog Pod today and telling us the story, your story and the story of EOS. We appreciate you, fellow road warrior.

[59:37] Dave Reiseman: It is great to see you, my man. Look forward to touring some sites together and look forward to seeing you in the set with those 150-pound dumbbells.