Show host Gene Tunny interviews Russell Harrison, CEO of Spartans Boxing Club. They discuss the rise of boutique boxing gyms, the benefits of boxing for fitness and mental health, and the challenges of expanding a fitness franchise globally. Russell describes how Spartans uses technology to enhance the member experience and how boxing training can benefit corporate executives and employees. Hear from Russell about Spartans’ “White Collar Boxing” events, where high-performing corporate executives and professionals undergo 12 weeks of boxing training, culminating in a black-tie gala event.
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What’s covered in EP252
- Introduction (0:00)
- Ensuring Safety in Boxing (3:13)
- Fitness Benefits of Boxing (6:01)
- Training and Techniques at Spartans Boxing Clubs (8:32)
- Expansion into the Australian Market (10:20)
- Boutique Fitness Market and Franchise Model (13:43)
- Gender Balance and Market Demographics (35:03)
- Corporate Wellness and Holistic Health (35:20)
- White Collar Boxing (43:10)
- Final Thoughts and Future Plans (45:16)
Takeaways
- Community-Driven Gyms: Spartans Boxing Club focuses on creating accessible, community-oriented gyms that cater to a wide demographic, including families and professionals.
- Franchise Success: Spartans Boxing’s franchise model is designed to be mutually beneficial, with a focus on providing value and support to franchisees.
- Holistic Wellness: Beyond physical fitness, Spartans Boxing integrates mental health programs, showing the importance of a holistic approach to well-being.
- Global Expansion: Spartans Boxing has successfully expanded into multiple countries by adapting its business model to local markets and regulations.
- Boutique Fitness Trends: The rise of boutique gyms like Spartans Boxing reflects a shift towards more personalised, community-focused fitness experiences.
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Links relevant to the conversation
Spartans Boxing Club:
A study reporting “Boxing appears to be an effective treatment for persons with Parkinson’s disease”:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9837687
Transcript: From Academia to Impact: TFranchising Fitness: Lessons from the Expansion of Spartans Boxing Clubs w/ Russell Harrison, CEO – EP252
N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.
Gene Tunny 00:05
Welcome to the economics explored podcast, a frank and fearless exploration of important economic issues. I’m your host. Gene Tunny, I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode. Please check out the show notes for relevant information. Now on to the show. Russell Harrison, CEO of Spartans Boxing Club. Welcome to the program.
Russell Harrison 00:38
Gene. Thanks for having me. Much appreciated.
Gene Tunny 00:41
Very good. It’s good to have you on Russ. You’re joining us from Singapore. So you’ve, you’ve started a network of Boxing Clubs. So can you tell us about this, please? What is it? What’s Spartans Boxing Club about? And, yeah, what’s the story so far? Please.
Russell Harrison 00:59
Yeah, thanks, Jean. And yeah, from, from sunny Singapore. So I’m originally from Melbourne, but glad to be away from Melbourne as we go through winters. But yeah, Spartans Boxing Clubs. That’s that’s what I do. We started the first club back in 2015 and the concept with Spartans was, was really simple. It was to create community boxing gyms in the community, for the community, and to make boxing accessible to people that may never have thought about boxing before. So typically, you know, if you think about boxing gyms, the typical image that people conjure up is, you know, big, tough guys punching each other in the face. And realistically, when you get into what makes the sport of boxing, one of the really unique things is it’s really great for its fitness benefits. It’s really great for mental health benefits and things like that. So what we were able to do with Spartans Boxing Clubs is we set up gyms that were a safe, inclusive environment. We started teaching boxing to kids as young as four years old. We did boxing classes for women, children, families, and a huge part of our demographic is, you know, working professionals. So, you know, not the typical people that would walk into a spit and sawdust kind of boxing gym. And so, you know, we’ve got lawyers and doctors and CEOs and, you know, all types of people that come into the gym, and they’re just really all about experiencing, you know, the benefits and the community that comes along with with Boxing Clubs. And so we did that well in Singapore, and we turned it into a franchise. And so now we’re sort of spread out right across Singapore. We’re now into we’re in Dubai, we’re in Cambodia, Philippines and in Australia as well. Now we launched our first gym down in Melbourne a few months ago, and so, yeah, we’re just sort of spreading that. We do some events and Academy stuff as well. But really the premise is to just make boxing accessible for everybody and let people experience the community of boxing.
Gene Tunny 03:03
Yeah, gotcha. You mentioned you’re trying to make it safe. Can I ask you about that? Because there are obviously a lot of concerns about boxing, and concerns about, I mean, boxers getting brain injuries, having long term conditions because of boxing, how do you ensure the safety of people who participate?
Russell Harrison 03:26
Yeah, look really great question, and that’s probably one of the the main ones that we get, especially with kids. You know, when parents put their kids into boxing, the first question that they ask us, is my kid going to end up with some sort of brain damage? Yeah. Now it’s really important to distinguish between, you know, boxing as the sport you know, so the, you know, the typical sort of famous faces that you see, the Mike Tyson’s, and you know, any professional boxers compared to, say, somebody that is taking part in boxing training for fitness benefits. And so, you know, one of the key things with that is that, you know, most of our members who join and come and box, they never compete, they never spar. And, you know, they’re not getting into the ring and getting punched in the face, so to speak. They’re learning technique. They’re learning how to box. They’re getting all of the fitness benefits, but they’re not necessarily getting in there and, you know, getting punched. And I think that’s another important sort of distinction, is, when we look at sort of, you know, the negative press, like you see boxes that have acquired brain injuries and those sorts of things, you know, it’s really, it’s a high level of boxing with, you know, really big punches, guys that are really strong and professional at what they do, hitting each Other repetitively over a long period of time. Yeah. And so, you know, people that are doing it for fitness, that are coming into the gym to experience it for fitness, they’re just not doing that stuff. They’re just not they’re just not getting hit like that. And so that’s really the important distinction. And then, of course, if you do go into that avenue of, okay, look, I do want to do sparring or. You know, I do want to compete, then obviously, there’s ways in which you can try and make sure that that’s that’s done safely, yeah, and so, you know, if we take kids, or if we take, you know, our lawyers, who may think that they want a box when they do their sparring, you know, they’re using headgear, they’re using the right type of safety equipment, you supervise. And so you make sure that it’s done in a way that people aren’t just getting, you know, bashed up.
Gene Tunny 05:23
Yeah, yeah, good point. And you’ve had a professional or semi professional boxing career yourself, have you? Yeah,
Russell Harrison 05:31
you’d call it semi professional, you know, I’ve had a handful of fights over the years. And, you know, I started boxing when I was a kid. I got put in boxing gyms when I was really young. I’ve been in and around boxing and martial arts since I was about eight years old. So I’ve competed in martial arts and boxing ever since I was young. But yeah, I’m just too old now, right?
Gene Tunny 05:55
Well, yeah, happens to us all, doesn’t it? And what do you see as a fitness benefits? What, what’s so good about boxing relative to, say, doing CrossFit or, I mean, all the other things, aerobics or whatever else you could do in the gym?
Russell Harrison 06:13
Look, I think there’s a huge amount of benefits. I mean, if you just want to compare, say, the standard fitness benefits that people want to look at. So if you do a one hour boxing session, you can easily burn 800 or 1000 calories. So if you were to just take, you know, the part that most people are interested in when they talk about fitness, you know, you’re absolutely torching calories. I think for me, and you know, I’m obviously an advocate and a lover of boxing, but I think one of the things that makes boxing really unique is that there is, there’s still a mastery of the sport, right? And so it is a martial art. And so, you know, unlike you may go into CrossFit, and by the way, nothing wrong with our CrossFit buddies around, but you may go into a CrossFit gym and you do a series of movements, and kind of, once you’ve learned it, well, you can get fitter, or you can burn more calories, or you can get a little bit stronger, but there’s not necessarily the art to it, the martial art to it. And so one of the beautiful things about boxing is, you know, you’re forever learning. And I think probably one of the other things that we talk a lot about within our business, we have a section of our business called Spartans mind, and this is where we’ve linked boxing programs to mental health programs, one of the first types of programs that’s been done around the world. And you know what we, a lot of people, talk about these days is, you know, terms like mindfulness. And you know, boxing is the ultimate form of mindfulness. When you’re there and you’ve got somebody in front of you and you’ve got, you know, punches coming towards you, you really have to be in that moment. So being locked in and having that level of concentration, there’s really huge benefits as well, with regards to your sort of mental, mental proficiency and this sort of stuff. So the other part as well, and this leads on to a complete different demographic. There is a fair body of research around boxing and the benefits with Parkinson’s. So for the elderly and people that have experienced issues with Parkinson’s, there is a body of research that talks around the benefits of boxing for that too. So the overall health and fitness benefits are really wide and varied, which stick to both physical and mental health, right? Okay,
Gene Tunny 08:23
interested in if you’ve got any links, please shoot them through. That sounds interesting. I mean, them doing the training, not necessarily hopping in the ring and sparring with someone, just doing the training and precisely. And what does it look like? Russ? I mean, there’s the work you do in the gym, there’s the, you know, hitting the punching bag, there’s the Speedball, or whatever it is. I mean, what do you what sort of training is it? And jog? I mean, running. What are you doing? What are you doing? All of the
Russell Harrison 08:49
all of the above, yeah. And, okay, you know, that’s one of the really interesting things about people that are training for boxing. It’s a really, there’s some statistics that float around. I’ll send you some of these links in terms of difficulty of sport, boxing is ranked as one of the top three most difficult sports to not just master, but to do. Because, as you’d mentioned before, you know, there’s all different types of things that you will use, and there’s all different types of fitness that you need. So you know, there’s cardio fitness, there’s Strength Fitness, there’s all of the mastery as well, which I’d mentioned before, yeah, but just to sort of paint the picture for someone that’s not come into the gym, you know, we work on things like agility and stretching. So again, you know, if we go into demographics of, you know, the elderly or senior folks, a lot of that agility and stretching type stuff is very, very helpful. You know, there’s jumping, skipping, Skip rope, so that, you know, that’s sort of the old, you know, stereotypical boxing thing. But, you know, skipping rope is synonymous with boxing gyms. There’s shadow boxing, so actually learning the technique. There’s pad work, there’s bag work. The Speedball is a sexy one. Yeah, everybody. Know, if you can master the Speedball, that looks great. Most people, they can’t get it that well. And then, of course, there’s, you know, all of the partner drills and sparring and all that sort of stuff. So it’s, it’s really wide and varied,
Gene Tunny 10:13
yeah, gotcha. Gotcha, okay. And I’m interested in, you know the fact that you’ve started in Singapore, and then you you’ve gone to Dubai and to Cambodia? Is it Cambodia?
Russell Harrison 10:27
Yeah, Cambodia, Philippines, Australia as well, and now
Gene Tunny 10:31
you come into Australia. So I’m just wondering now, I mean, you probably, I’m sure you’ve worked it all out, but are you concerned about the higher cost of doing business in Australia, regulatory issues. I mean, there’s, yeah, we’ve, we’ve had this pickup in insolvencies. I don’t know if you’ve seen the the statistics. There’s a lot of concern about all the economy slowing down and and I know you’re looking more long term, but like, how do you feel expanding into the Australian market? Are you are you hesitant? Or are you excited? What? How are you how are you thinking about that?
Russell Harrison 11:05
Yeah, great question. Again, probably all of the above. We’re excited. We tried to get into Australia for quite some time. And I think one of the really nice things about the Australian market so we are in the fitness franchising space. And so, you know, franchising laws in Australia are some of the most stringent in the world. Yep, you know, you’ve sort of got the US and Australia, which are really sort of the high benchmarks. And I think that’s great, because obviously that makes barriers to entry much higher. So it took us some time to enter the Australian market. I think when we compare markets that we’re used to, so if you look at or not that we’re used to, but where we started, if you look at Singapore and Dubai, you know, costs are doing business, their rents are incredibly high. Yeah. So you know, in comparison, the rents in Australia are much more reasonable. But of course, staffing models need to change in Australia, because cost of staffing is much higher in Australia. So there’s little tweaks that we need to make to our financial model to make sure that our franchises are feasible. And you know, that’s sort of, I guess, one of the key things that we’ve done when we come into the market now, I think what is very interesting in compared to the markets that we’ve been in fitness franchising. In Australia, there’s a huge array of brands that have been incredibly successful, developing great franchise businesses. And the space that we operate in is the boutique fitness space. And so there’s, there’s a bunch of brands that have done really well there, and brands definitely scale in Australia. So I think that’s an exciting thing for us. And if you get into boxing specific as a modality, Australia really is still operating gyms that we consider to be, you know, old school boxing gyms, yeah, the first few boxing gyms that I was in a kid as a kid were, you know, an old Scout hall with a few bags and an ex boxer trainer. And, you know, they’re really sort of your old spit and sorter salt of the earth kind of boxing gyms, but they’re not necessarily accessible to everybody. And so the opportunity for us coming into the Australia market is that we see a real gap there, in the niche that we operate in, which is community driven boxing gyms, making accessible for everybody, but also authentic. And so for us, that’s the reason that it’s quite exciting. And even with the, you know, the sort of broader economic conditions, and I think that’s globally. You know, markets are tough everywhere, and key cost drivers are changing at a rate of knots. I think there’s tweaks that you make to the model in each of those markets, which makes the model definitely one that’s workable.
Gene Tunny 13:52
Okay, that’s good. You mentioned the boutique fitness space in Australia, and that there are some successful brands, just so I understand what exactly you mean by boutique fitness space. Could you just give me some examples, please? Russ,
Russell Harrison 14:06
yeah, sure. So the boutique fitness space is typically categorized by small footprint gyms and class based training. Okay, so if you give me an idea that the the fitness or gym model that most of us grew up on is the big box model. So you know, 10,000 20,000 square foot gym where you know the model is, you have to sign up 1000s of members, and maybe they come or maybe they don’t. That doesn’t really matter, right? And that’s sort of that model that we grew up on, the big box model boutique fitness is characterized by something which is almost the opposite of that. So small footprint gyms, so typically 150 to 200 square meter footprint class based training. So people training together, and it’s typically around different fit. Modalities. And so the most popular modalities in boutique are yoga, pilates, functional fitness, boxing now. So boxing now sits between the third to fifth most book boxing modality in the world for fitness. And so that’s sort of the boutique market that we talk about. And I think the key characteristic with Boutique is it’s all about building communities in and around those those clubs, yeah. And so it’s the real, if you think about it in Australia terms, it’s the real sports club mentality, you know, where the footy club or the cricket club becomes a real feature of that local community. And so you’re trying to do that with different fitness modalities, yeah,
Gene Tunny 15:40
gotcha, okay, I’ve got a couple of questions about your customer base. What’s the gender balance? I mean, is it mostly guys or girls too? I mean, what’s the gender balance?
Russell Harrison 15:52
Really, really great, great question. And I think that’s one of the things that has really allowed us to sort of scale and grow. You know, we’re now about 65% men, right? So that’s a pretty surprising gender split for most people when they hear boxing, I think the you know, if we talk about women’s boxing as a sport globally, there’s a lot going on there. It’s a really, really exciting time. So we are seeing women taking part in perhaps these non traditional female sports, such as boxing or weightlifting as well. So you know, that’s been really interesting for us. And I think probably one of the other things that has driven that gender split for us is we talk a lot about, you bring we do boxing classes for kids. And so one of the things that we talk a lot about is kids bring families, and families build communities. And so we put a huge focus on bringing the kids in, because we want the family to come. And so, you know, a good result for us is kids join dad joins, mum joins, not particularly in that order, but you get the whole family there and they train together.
Gene Tunny 17:02
Gotcha. Okay, that sounds good. I like that. Now you’ve you’ve got your boutique gyms or your Boxing Clubs in Singapore, Dubai and Cambodia. What’s the market like? There? Is it mainly expats in those places, or is it, do you have locals come to the gyms? What’s the market like
Russell Harrison 17:28
in Singapore? It’s heavily local, with some expats. And you know, that’s also got a lot to do with it. We’ve been in operation in Singapore now for nine years, and a lot’s changed. Singapore itself used to be heavily expat, and it’s not so much anymore, right, so, but we’ve always had a heavy skew towards locals in Singapore. In Dubai, it’s pretty much the opposite. And again, that’s based on, you know, Dubai in general, almost everyone in Dubai is an expat. I think it’s about 70 or 80% of the population there is expat. Developing markets is a little bit more interesting, and it really depends on your locations in developing markets. For our concept, we’ve only got one in Cambodia. The concept there is, we’re in a luxury hotel. So there’s a boxing club inside the luxury hotel. So we’re pretty much the mercy of the type of guests that go through the hotel itself. In the Philippines, you’d be surprised, but we’re heavily local. And I think one of the interesting things in developing markets, so whether we talk about the Philippines or Vietnam or Indonesia, or any of these others, is that there is a huge growing middle class in these developing countries. And so bringing in international brands such as ours is really attractive to, you know, those middle class locals, and that’s typically the demographic that we attract in those markets. Yeah.
Gene Tunny 19:01
Gotcha. Okay, that sounds good. Back to the some of the business issues. I’m interested in the fact that, I mean, this is a so it’s a franchise arrangement. You mentioned the regulations around franchises, and I mean, they’re there for a reason, and they’ve been concerns about exploitation of people. Actually should know this. Who’s is it the franchisee who buys the the franchise, or are you the franchisor? You’d wear the franchisor. You’re the franchisor. Okay, yeah. How do you get that win? Win for you and the franchisee, what does it look like? Because, I mean, I mean, I know. I don’t expect you’re doing this. I’m trust you’re not. But there’s all of those. They’re all those concerns that there are some dodgy, it looks like there were some dodgy operators, particularly in the food space there, where they’re selling product. To the franchisees, and they have to buy it, but the quality has declined over time. And, you know, there’s just really awful stories. How do you get that win win for you and the franchisees? Yeah.
Russell Harrison 20:11
So look, I think if you talk about Australia, I think the you know, the legislation, the franchising laws in Australia, are very, very clear in terms of how that has to happen. Now, obviously that doesn’t negate everything, but I think probably for us, if we back step from Australia, we set our franchise model up in Singapore, and there’s no franchising laws in Singapore whatsoever. It’s just common law. And so I think one of the key things for us, or the principle that we’ve built our franchise model on, is that we always have to be providing value to the franchisees. So we see our role as innovator and adding value. So when you grow up in a market like Singapore, you just have to provide that value. There’s no legislation or mechanism to protect anybody. So the fact that we grew up in that type of an environment, we really leaned into the fact that what we’re doing has to be advantageous to our franchisees. Now there’s a few things that you can set up commercially that make sure that it’s a win win for everybody. So for instance, the royalties that we charge, we charge percentage of revenue that the franchisees do. We don’t charge flat fees, so there’s a share of success in the commercial model. Yeah. And I think that’s really important one as well. And I think again, if we sort of jump back to Australia, I think one of the things that you have to do is with all of your non disclosure documents and these sorts of things. You can’t mandate a franchisee using a certain supplier. They’re able to go out and source their suppliers as long as they can, you know, do things according to spec, yeah. So as the part of the franchise model, of course, you will provide options. And I think, you know you need to, you need to outline who the suppliers are and what the relationships are. So that’s all done really clearly in Australia. But that is one of the things in franchising that we’ve always got to make sure that we’re aware of, because there are plenty of cautionary tales around of, you know, franchisees getting the raw end of the stick. Yeah,
Gene Tunny 22:18
gotcha. And how do you like do you vet the people who get the franchise? I mean, what’s the what’s the process like, if say, I want to set up a boxing gym or Spartans Boxing Club, do I make an application and you you’ve interviewed me? Or what’s the process look like? Russ,
Russell Harrison 22:35
yeah. So look, it’s a pretty extensive process. You know, other than sort of buying a house. This is typically the largest purchase that a lot of people will make. Yeah, you know, we’re typically talking to franchisees anywhere from three to 12 months before they actually bite the bullet and decide that they’re going to do it. The process itself usually involves about six to eight rounds of calls and interviews, then there’s KYC, there’s application forms and all of that that goes along with it. And you know, I guess my background before running the boxing gyms, I was a 15 year recruitment guy, so you know, we’ve built in some pretty robust recruitment processes and procedures as well throughout that process, but it’s pretty extensive. There’s a lot that goes into it. You know, quite often we want someone, they might not necessarily want us, and vice versa, yeah.
Gene Tunny 23:36
And so you’ll have, you’ll have an operation here in Australia. So you’ve got to set up a company in Australia or a subsidiary in Australia, and you will have people, will you, and you will be checking that the quality is at the right level. They’re delivering what they need to do as franchisees,
Russell Harrison 23:54
correct, correct. So, if you like the so in terms of the corporate structure, so we’ve got a an Australian company which is 100% owned subsidiary of our HQ from here in Singapore, yeah, so, and that’s very important, because obviously, with the franchising laws and that sort of thing is all relevant to that business, the backbone of, you know, quality standards, audits, process, procedures, and all of that sort of stuff is built around our digitized franchise management system. So everything that the franchisee needs to do, from onboarding to training to audit to dashboards, analytics to time, sheeting, inventory, all of that is built around the technology. So we can basically see how that business is being run from anywhere in the world, gotcha. But then at the same time, obviously we need to, you know, we have to go into the gyms themselves, make sure that they look and feel how they’re supposed to feel. And I think one of the key things to highlight with our business, because it is sports and. Fitness coaching is a huge part of that quality and standards process, and so we have something called Spartans Boxing Academy, and that’s where we’ve basically set up our own accreditation courses to make sure that all of our boxing coaches go through a process to be able to safe and properly coach boxing the way that we want that rolled out, and so we roll that Academy out globally, so any coaches that coach in our gyms have to meet certain quality standards.
Gene Tunny 25:32
Gotcha. Okay. Okay. That makes sense. That makes sense. So you mentioned KYC before, know your customer. That makes sense, that you’ve got to do that. Can I ask you what what happened with F 45 I mean, I’ve seen all this news about F 45 Jim’s collapsing. Are you worried about that sort of thing? Do you know what the story is there?
Russell Harrison 25:52
Yeah, I know it very well, very well. I mean, F 45 for anybody in my line of work, was the North Star for a long time, right? Fantastic business, an amazing concept. And you know, the growth trajectory of that business was nothing short of amazing. I’ll be careful how I answer this. Okay, they went for IPO, and they listed the business on the NASDAQ, and to get it to that IPO, they obviously, they grew that. They grew it hard, right? And so, at least from afar, you know, they had X number of units sold globally, which were obviously on the books but weren’t yet opened and delivered. And they had a huge backlog in terms of opening and stuff like that. And so I think that’s where they started to encounter some, some issues. Long story short, they got delisted a little while after, and that’s sort of when it really hit the, you know, hit the press and that sort of thing. I think I don’t know what their failure rates are in F 40 fives now, and I think that’s a one of the key metrics that franchises are measured on three year ROI, as well as failure rates. Yeah, I don’t know whether or not they had higher failure rates or not, but I do know that the winners were winners in F 40 fives and the others weren’t so much. But also, covid happened to those guys. So, you know, there’s a lot. Yeah,
Gene Tunny 27:24
I just saw all the media about it. I thought, oh, that doesn’t look good. And I just wonder if that’s something that makes you hesitant about gyms. And, yeah, I mean, I mean, it’s a big risk opening a business, as you know. And, yeah, I mean, good, good luck. I mean, I hope, hope it works out. And I mean, it sounds like you got to, got it worked out. You got a good system. You’ve, you’ve tested it in these other markets. And I must say, I do, I do like the concept. I like, I like the idea. So it’s, it’s definitely good in that regard. So, yeah,
Russell Harrison 27:56
I think just on, you know, on that sort of, you know, the F 45 or even any fitness franchise globally. You know, we pay a lot of attention to the North Stars. There’s some amazing brands. A lot of them have come out of Australia, yeah, and not necessarily the global giants. You know, some of the sort of mid tier fitness franchise brands that have come out of Australia are amazing. So I think for us, we do sort of two things. We look at the North Stars, and we keep a close eye on those guys, and then we probably keep a closer eye on the cautionary tales. Yeah, and, you know, we try and make sure that we act accordingly.
Gene Tunny 28:34
Yeah, what are some of the mid you mentioned, mid tier fitness groups or companies that have come out of Australia. Are there any that really excite you? Mean, what are some that you would you would say are worth looking at?
Russell Harrison 28:50
Yeah, absolutely. I think probably the most successful one out of odd reason oz recently is BFT so body fit training, yep, yep. So they’ve done incredibly well. They’re in a functional fitness space. There’s a few others in that space as well. Fitstop, out of Australia, has done incredibly well. Yeah, they’ve expanded into the US markets. If you go further down and into a different modality, you’ve got Pilates cakes, pilates, who were out of Queensland originally. I believe they’ve done really, really well in the boxing fitness space. Danny Green’s business, ubX, they’ve done a really good job at Circuit style boxing training. So quite different to what we do. They’re out of Oz as well. So, you know, there’s, if you look at the Asia Pacific region, when you go along to sort of, you know, any conferences and that sort of thing, there’s heaps of brands out of Australia that are really well looked up to,
Gene Tunny 29:54
right? So we’re punching above our weight, so to speak. So that’s so to speak.
Russell Harrison 29:58
No pun intended. And very good on the functional
Gene Tunny 30:02
fitness, just so I understand it. This is where you got the is this kettlebells, and this is the sled you’re pushing. The sled loaded with weights, that sort of thing, battle ropes, or whatever they are, yeah, that
Russell Harrison 30:15
sort of stuff, you know, body weight exercises, you know, pull ups, you know, all that kind of stuff. So look really simple modalities, but just engaging for people. And I think one of the what all of the really great brands have done, and again, talking about North Stars, this is something that we do. They’ve harnessed technology in really simple concepts. And so for the average punter off the street, what you’re able to do is you’re able to show progress. Essentially, what members buy from any fitness business is accountability and motivation, right? And the best way to do that is to be able to track progress. And so technology plays a huge part. So when we look at functional fitness, the best brands have done a really great job at gamifying that and, you know, bringing technology to the fore. You know, that’s what we’ve done in the boxing space. If you go into a Spartans boxing gym, on the punching bags, there’s a sensor, so when you you hit the bag, it tells you how many times you’ve hit it, it tells you how hard you’ve hit it, and it keeps a score up on the screen. And so you can compete against your friends. You and I not, might not want to punch each other in the face gene, but it’s still nice to have that competition. So you know, we both see a score up on the board, yeah, creates that friendly competition, and then people get sent those scores as well. So I think all of the good boutique fitness brands have done that well
Gene Tunny 31:40
now that you mentioned that, I mean, that raises the possibility of extended reality, virtual reality, doesn’t it? Is that something you’re looking at?
Russell Harrison 31:48
Absolutely? Yeah, absolutely. And so to give you an idea, the technology that we use coming up, try not to make this session time sensitive. But so coming up next month, we’re doing a global competition against all of our gyms, where the gyms can compete to who gets, you know, who racks up the top scores for this punching technology. You can do it by gym. You can do it by individual. And so we’re rolling that out as a global competition. And again, that’s just a tool for members to be able to engage, be able to see progress, and you want people coming back. And if you link that to what I was saying before, in terms of the big box model, one of the key features to Boutique is you may only have a few 100 members in your gym, but you want them in there, 345, times a week. And that is how you create communities, and that’s how they become really sticky,
Gene Tunny 32:52
yeah, gotcha Okay, right? And in terms of the like it is boutique, you got fewer members in the big box gyms now they’ve got they’ve got a bigger floor area, they’ve got more gear. I’m just thinking, how does the price, or the cost per member compare with the big box gyms?
Russell Harrison 33:13
Yeah, so cost per member, we’re typically a premium so Boutique is premium price, okay, right? And so that’s how the sort of economics of it works. But again, if you look at just sort of a, you know, gym level economics, and this is one of the benefits to our franchisees, yeah, the break even number of members on a boutique gym is much lower than, say, a big box, yeah, you know. So typically in our gyms, you’re looking at 120 to 140 members to break even. Yeah, right. And so that’s one of the real attractive things for our franchisees. They can get to their OPEX break even by launch or within the first few months of running the gym, and they’re typically profitable from year one. So you know, if you look at that as an investment in comparison to, say, doing big box, where you need 1000s of members to break even, and your ROI is typically, you know, beyond seven to 10 years on big box. You know, within boutique, it’s much shorter, right? Your ROI in boutique can be anywhere from three to seven years. Gotcha
Gene Tunny 34:17
buy a premium price. What do you mean? You mean 20% 50% 100%
Russell Harrison 34:25
it depends. It depends because, so if you use Australia as an example, yeah, the industry is quite fragmented. So you know, you can walk into a gym down in a local neighborhood, and you know, it might cost you five bucks an entry, whereas, you know, if you go and do another gym, similar concept, that might cost you 120 bucks a month. So, but to give you an idea, in Australia, a boutique fitness membership is typically going to cost you around 220 to 280 bucks a month. Okay? Boutique, yeah, right, yeah, some of them will probably. Maybe premium out over that, whereas, if you take a big box type membership, they could be anywhere from, you know, 80 to 120 bucks a month. Yeah,
Gene Tunny 35:09
yeah, gotcha. Okay, yeah, that makes sense, right? Okay. Well, before we wrap up, I’m keen to ask you about the corporate side of things. And you mentioned you have lawyers and professionals that are coming to your to your gyms. I mean, what do you see as the benefits for them? I mean, it’s about fitness, which is a good thing in itself. But do you see that this translates into higher productivity? You know, healthier people, less absenteeism. I mean, this is one of the things I’ve been interested in, is there an ROI from doing this training, which might make it beneficial for companies to invest in this sort of thing? Are you able to talk about that? Please? Russ,
Russell Harrison 35:51
so I can’t talk about it from an ROI point of view for companies. I’m not sort of, you know, the corporate wellness guy within a corporate but what I can talk about is that, you know, all companies these days have got, you know, well structured corporate wellness programs, as we know, you know, they can go anywhere from EAP all the way through to really simple stuff, like, you know, bulk Purchase of jib memberships. Yeah, I think probably post covid, one of the things that both corporates and businesses like mine have really leaned into is this whole concept of holistic wellness, yeah, and so, you know, the doctor or lawyer who comes into a Spartans boxing gym, and, you know, punches the bag three or four times a week. Yeah, sure, he might torch some calories, but in terms of the benefits for him, in terms of stress relief, in terms of, you know, mental health, you know, in fact, I mentioned this before, but we’d set up this arm of our business a few years ago. There’s a guy that works within Spartans by the name of Dr Paul Englert. So he’s a PhD. He specializes in a few different things around corporate leadership and stuff like that. Yeah, that’s his wheelhouse. Yeah. He’s his PhD thesis was on something called future selves, which is sort of a segment set of cognitive ideas around, you know, how people create a version of themselves across different areas of their their lives. Yeah, and so through all of that thinking and boxing programs and stuff like that, we created this concept of Spartans mind. And Spartans mind is the part of our business which focuses on holistic health. So it’s not just telling the doctors and lawyers, Hey, come on in because you want to punch something and you know, you’ll lose a little bit of weight. It’s the whole thing. It’s stress relief, it’s being able to tap into mental health services. So we link up with psychologists and psychotherapists, where, if they’re giving somebody type of therapy, and it may not be some serious pathology, it could be something like, Hey, I need help with stress or anxiety or whatever else. They will plug their patients into our programs. And so I think the general consensus, even just anecdotally, is that this idea of holistic hellness, holistic wellness is, you know, that’s the way the world is most definitely going,
Gene Tunny 38:22
Yeah, absolutely. And Spartans or Spartans minds or Spartan mines, is that part of your core offering, or is that an extra? That’s something extra you have to pay for?
Russell Harrison 38:33
No, so it’s you’d have to pay for it. So just to give you a real quick sort of, the main three pillars of our business are gyms, events and the Academy, okay, the three main pillars of the business and Spartans mind underpins all of that. So it’s like an enabler of our business. Within Spartans mind, we’ve got different programs. So we have a program where we help help youth at risk and ex offenders. So there’s programs built around getting those groups into into boxing programs, as well as counseling programs. We have another program which helps people to optimize so, you know, the everyday person off the street to make sure that they’re getting the best out of themselves. And the other program is the one that I’d mentioned before, which is repair, so we partner up with psychologists and where people are getting help with therapy, the psychologists plug them into our boxing programs. So it’s not an additional charge. It’s part of the DNA of what we do. We just were able to put a bit of a brand across it. Yeah,
Gene Tunny 39:36
yeah. I imagine that’s difficult. I mean, it’s good. You’re doing it, but working with ex offenders, because they face all sorts of challenges reintegrating into the community, and if they don’t reintegrate, then they’re more likely to reoffend and go back to prison. So it’s good that you’re you’re doing that. That’s more of a comment. No need to respond. I have to ask you. Mentioned before you talked about bulk purchase of gym memberships, there was a term. You used EAP,
Russell Harrison 40:01
yeah, yep. So the employee assistance programs, you know, companies have been, yep, doing those for years. And I think, you know, again, I when I was jumping on this to talk about the sort of corporate wellness stuff, I wanted to make sure that I didn’t sort of step outside of my my wheelhouse, there’s, there’s some really sophisticated models for the way that corporates now buy, you know, the total wellness package, and that could be anything from what we do fitness. And there’s some people who are much, much smarter than me, who design those overall programs and also sell those programs on the fitness side, yeah. But I’ve, you know, from where we sit as the, let’s call us the vendor as the operator. You know, we’ve seen amazing things, not just in in Singapore, but in Dubai as well. You know, I’ll just give you a sort of, maybe a couple of examples of
Gene Tunny 40:58
fuel that is
Russell Harrison 41:01
probably the one of the better ones that I’ve seen here in Singapore is done through one of the international schools here, and they have somebody that runs their sort of entire PE and wellness program. What this guy does? He basically brings in faculty, students, PTA the entire school community, and taps them into not just fitness programs, but wellness events. Wellness could be anything from, you know, fitness all the way through to, you know, mental health and wellness, you know, retreats, all of that sort of stuff. But they basically build this into the fabric of the entire school community. And so, you know, they have people participating in triathlons, they do bodybuilding competitions, they come along to the boxing gym. But I think the beauty of what they do, and the reason that I see that as a real best in class, is because they really get the school community behind it, everybody. So that’s a really great example. I think a couple of the big banks in Singapore do varying things, from health and wellness events through to team building events. You know, we constantly have groups of bankers coming through boxing and, you know, they usually want to hit each other, but trying to avoid them from doing that. And then, you know, one of the other things that I I see, which is really unique, you know, I’ve got a recruitment business here. We do something that’s called boxing and beers. And so, you know, Friday afternoon, we get a bunch of clients all come along. They all train together. Most of them have never boxed, trained together, sweat together, and after that, there’s a networking event with beers. Now, obviously that’s not corporate wellness event. That’s not corporate wellness per se, but it most definitely talks to that corporate audience.
Gene Tunny 42:51
Yeah, yeah. Okay, that’s it. All sounds all. Sounds good. Russ, this has been terrific. I’ve really enjoyed learning about what you’re up to with your your Boxing Clubs there with Spartans Boxing Club, it’s been, been a really. It’s great what you’re doing, and I hope it does go well in Australia. Anything else before we wrap up? Anything you would like to have covered, anything you think’s important for for us to know at the moment about what you’re up to with Spartans.
Russell Harrison 43:26
No, I appreciate you saying that gene. One thing that I will mention because it’s, again, it’s relevant to corporates. With our events business, we have a concept called White Collar boxing, and this is, as the name suggests, you know, some people, high performing individuals, want to run marathons, and some people want to climb climb Everest. We’ve got a crazy bunch of people that decide they want to have a boxing fight. And so, you know, the demographic that we attract is typically, you know, CEOs, MDS, founders of companies, entrepreneurs, bankers, etc. And through this process, they sign themselves up for a 12 week training camp. They come in, they train and act like fighters for 12 weeks. And at the end of it, it culminates in a black tie event, a huge gala event at a five star hotel, all the food, all the booze, and we put on a huge gala event for them. And, you know, it’s surprising the number of CEOs that you see that go through this event and their WhatsApp picture after that is them at their, you know, their boxing thing. So, you know, that’s the only other thing that I’d say that’s really geared towards corporates. That’s the demographic there. So we bring people’s networks together through these events, and they’re an incredible spectacle. So we’ll do those in Oz next year. We’ve got two in Dubai, one in Singapore this year, but we’ll launch those in Australia as well. And. Oh, good. 2025
Gene Tunny 45:00
I expect they’ll be, they’ll be popular. It’s like Fight Club, but classier. So I think it’ll
Russell Harrison 45:06
be, you hit the nail right on the head Fight Club, but classier. Very
Gene Tunny 45:10
good. Okay. Ross Harrison from Spartans Boxing Clubs, this has been terrific. I’ve really enjoyed the conversation. So all the best with it, and I’ll I’ll keep informed about what you’re up to, and yeah, hope to chat with you again someday. So thanks again.
Russell Harrison 45:28
Thanks gene, thanks for your time. Bye.
Credits
Thanks to the show’s sponsor, Gene’s consultancy business, www.adepteconomics.com.au. Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts and other podcasting platforms.