SBJ/April 21-27, 2014/In Depth

UFC’s health club venture is working out

When the UFC and 24 Hour Fitness founder Mark Mastrov combined on their first gym in the East Bay area near Oakland five years ago, the initial stream of customers looked much as you would expect at a large health club that hung a mixed martial arts promoter’s name atop its doors.

About 80 percent were dedicated UFC fans who knew that Georges St-Pierre was a fighter, not a fashion designer, and recognized a Kimura as a submission hold, rather than as Russell Simmons’ ex-wife. Seventy percent were male. Plenty aspired not only to train as UFC fighters do, but to fight for a living.

This UFC Gym in Torrance, Calif., features the standard equipment, but also an octagon (below) for using mixed martial arts training to stay fit.
Photos by: UFC
Fast forward to a recent Thursday afternoon at a UFC Gym in Torrance, Calif., a 40,000-square-foot facility that anchors a suburban shopping center about 20 minutes south of Los Angeles International Airport, and the scene is quite different.

It is impossible to miss the connection between the gym and the MMA promotion company. An oversized UFC octagon is the centerpiece of the sprawling facility. Larger than life photos of UFC stars dominate the length of one wall. An Arm Bar Cafe serves protein shakes with names like the Leg Lock, the Tap Out and, yes, the aforementioned Kimura.

But the clientele doesn’t look much different from what you would expect in a large Southern California fitness center. Almost half are women. Most are doing what they would be doing elsewhere, working out on an array of machines.

There’s a kickboxing class, sometimes taught by a current or former UFC fighter. But there’s also yoga. There’s an area filled with a couple dozen bags to punch and kick. But there’s also a fitness room with hardwood floors and a wall-length mirror.

“A lot of our members come in here not necessarily associating UFC fighting with UFC Gym,” said UFC Gym President Adam Sedlack, who joined the joint venture in 2008 after 14 years in management at 24 Hour Fitness. “They think it’s the Ultimate Fitness Club. And they come in and go … ‘You guys are the Ultimate Fighting Championship? I don’t want to fight.’

“They start off because they like our weights and machines. But then they see people running around, and they hear people clap. They hear people kick the bags. So they try it. And they realize this is a great way to train. And for those who don’t, it’s still a great place to train.”

If there is a genius behind the UFC Gym chain, it might be this: It is like other gyms in the ways it must be, but different from them in the ways that only it can be.

When Mastrov sold controlling interest in 24 Hour Fitness to private equity firm Forstmann Little for $1.6 billion in 2005, it had grown to 330 clubs in 15 states and more than 3 million members. But there was little that the chain offered that others couldn’t replicate.

At a meeting set up by mutual friend Perry Rogers, former agent to Shaquille O’Neal and Andre Agassi, Mastrov and UFC Chairman Lorenzo Fertitta began talking through a concept Mastrov had for a new wave of fitness centers that would offer MMA training, but for those who were attracted to it as a way to stay fit, not fight. There would be no sparring or contact. Just workouts.

Fertitta, who not only owns an MMA company but trains in muay thai, was well aware of the growth in martial arts training in the last decade, and in the popularity of boxing and kickboxing as a fitness regimen. The growth of the UFC played a role in that, but had no direct hand in it.

Fertitta was looking for brand extensions, but the ones that came his way were the usual suspects, none of which appealed to them. “We kept hearing, ‘Let’s do a UFC restaurant or a UFC retail store,’” Fertitta said. “We turned those down because it wasn’t a natural fit. You wouldn’t be living the UFC lifestyle by going to a restaurant and ordering Chuck Liddell chicken fingers. That just doesn’t make sense.”

To Fertitta and the company’s management, a UFC-themed gym chain did. The UFC entered into a 50/50 joint venture with Mastrov’s New Evolution Ventures, which also has developed gym chains with Madonna and Steve Nash.

New Evolution operates the gyms. The UFC provides brand assets, along with promotional and marketing support.
“We’re very focused on what we do well,” Fertitta said. “We promote fights, create content and distribute content. They’re the experts in the fitness business. If I didn’t feel we had the right partners in this, we wouldn’t have done it.”

Torrance was the fourth of eight big box, owned and operated UFC gyms in California, New York, Honolulu and Sydney, each of them exceeding 30,000 square feet, or the size of a typical Best Buy.

Two years ago it became clear that growth would be slow if the chain restricted itself to the large footprint of the gyms it owns and operates. To accelerate expansion, UFC Gym purchased the LA Boxing chain, adding 81 outlets in 23 states and moving to a franchise-model that applies the same workout concepts to 5,000-square-foot gyms operated by franchisees.

In February, UFC Gym hired a longtime restaurant executive, Hannibal Myers, to head its franchise division. Myers
The UFC provides brand assets, along with promotional and marketing support.
Photo by: UFC
brings previous franchise development experience with Taco Bell, KFC, Quiznos and Shoney’s, an indication of the way that Fertitta and his partners view the development potential of their gym chain.

Regardless of whether it’s a big box or one of the smaller franchise operations, UFC Gyms all offer a handful of core classes meant to distinguish them. There is always Daily Ultimate Training, a team-oriented strength and conditioning program that moves throughout the gym, as well as classes in MMA, Brazilian jiujitsu, muay thai and boxing. And there always is a UFC Fit class, based on a series of DVDs designed by nutritionist Mike Dolce. There also are programs for children. A basic membership typically costs about $45 a month, while a membership that includes unlimited classes starts at about $100 a month.

There won’t be as many classes, as many teachers or as much equipment, but a person can get the same workout, Sedlack said.

“Same brand, same look, just a smaller box,” Sedlack said. “It’s a convenience factor. But you still feel the same after you take a class. And the feeling a customer has when they exit those doors is what this business is all about.”

On a single Thursday at the Torrance gym, upward of 1,500 members and guests will work out, Sedlack said. There were five jiujitsu classes, two muay thai classes, two kickboxing classes, two MMA classes and a self-defense class. On other days, the schedule includes boxing, wrestling and judo. There also are cycle and conditioning classes, along with yoga and Zumba.

Success can breed success in the fitness business. In February alone, the Torrance club attracted 1,300 guests who came on referrals from members. Part of that almost certainly is attributable to the UFC’s social media culture, which has been a good fit for the chain. Each outlet hosts a Facebook page and a Twitter feed, but they’re driven primarily by members.

When a member posts a complaint, managers leave it up, Sedlack said, using it as an opportunity to address the problem and then post a reply.

“It’s the community factor that makes the difference for us,” Sedlack said. “It’s what makes this work. They’re bringing somebody in to say this is a special part of my life and I want you to be part of it. That’s the way we look at it.”

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