1february 2010 SUCCESS

february 2010 $5.95

Entrepreneur of the Month

Dave LeonPLanet Fitness

Hinman Constructionempire Martial artsWho’s Who of Success

Whittemore, Dowen & Ricciardelli, LLP

25february 2010 SUCCESS

Success Magazine: Dave how did you get started in the fitness industry?

Dave Leon: I began as a national bodybuilding competitor. I started my first gym in a garage, taking donations for heat and new equipment in a coffee can.

SM: What inspired you to start your own business?

DL: I saw a need for fitness and discovered early on that I could help people help themselves. When that coffee can got up to $1,000, I started developing a business plan.

SM: Did you have the financing to get started?

DL: I had no financing and was

denied everywhere I turned. It was the Schenectady Local Development Center that gave me my first loan, and the local YMCA donated old equipment to help me get started. In the beginning, my business plan was to cater to athletes and competitive bodybuilders and power

lifters. I have evolved since that time.

SM: Your approach to fitness is very different from other centers. How did you grow into this model?

DL: As I evolved, I opened a much

larger full-scale fitness center in Rotterdam. In 2000, I built my own building complete with hair salons, fireplaces, waterfalls, and juice bars. Even after all that, I found it increasingly difficult to sell memberships. In 2004, a big box operator moved a half mile

from me, selling m e m b e r s h i p s at half of what I charged, forcing me to reinvent myself again. After looking long and hard, I found a company in New Hampshire called Planet Fitness that c o m p e t e d

directly with our competition and won. Planet Fitness was known for pushing the envelope and having a non-conventional business model.

SM: What was the deciding factor in opening a Planet Fitness?

“My quest is the same as when I started— to help people help themselves.

With 80,000 fitness members, I am on my way. I sleep well at night.”

Planet FitnessDave LeonPlanet FitnessDave Leon

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DL: I called and talked to the CEO, Mike Grondal, and told him of my situation. He invited me to come see his operation. At that time they owned six clubs. When I walked inside his fitness center, I immediately felt the magic. It finally all clicked. I saw people you would have never seen in a fitness center before—normal, everyday people—and a lot of them. And, everyone was happy. I knew then that this was the direction I had to take, and soon after became the first Planet Fitness in NY.

SM: What sets Planet Fitness apart from others in the industry?

DL: Planet Fitness has the opposite business plan of traditional fitness clubs. For starters, we build our base around a $10 monthly fee with no contracts, no commitments, and no cancellation fees. All our clubs are open 24 hours a day with free training, a very structured 30 minute express center, and unlimited tanning and guest privileges built into our black card memberships. But what really makes us unique is our JUDGEMENT FREE ZONE, which simply means we do not cater to bodybuilding or any other special interest group. No one will judge you by how fit you are, or for any other reason. We have NO CRITICS, meaning that all members are equal and nobody will challenge our atmosphere. If they do, the “LUNk ALARM” (in every club in the country) will sound and that member will be asked to LEAVE THE EGO AT THE DOOR. These signs are posted in every club and help keep this sanctuary that we call Planet Fitness. It is almost like a religious experience when you see so many different people together in one place working toward a common

goal. Everyone is greeted at the door and told to have a nice day when they leave.

This business plan is designed to attract over 20% of the population instead of the traditional 5% the other gyms fight for.

SM: How many fitness centers do you currently own?

DL: At this time, I have eleven clubs from Albany to Buffalo. I opened a club

two weeks ago in Rochester and sold 5,000 memberships in three weeks— I think it’s a new national record.

SM: What are your plans for expansion over the next five years?

DL: I have an area development agreement that will add twelve more clubs over the next five years, but I anticipate more, as I will open six clubs this year alone.

B e s t o f s u c c e s s N o m i N e e

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SM: What geographic areas are you expanding into?

DL: In Rochester we already have three clubs and will add three more. In Buffalo we have two with five more anticipated. In the Capital Region I will add Saratoga, Troy, Queensbury, Guilderland, and Latham.

SM: How do you choose your demographics for expansion?

DL: I look for areas that have 70,000 people or more in a five mile radius.

SM: Since beginning your new career as an entrepreneur, what has been the most difficult aspect of your entrepreneurial career choice?

DL: In business there is no down time. My phone is never turned off. I am responsible for every club—the staff and each member. With over 200 staff and 80,000 members, that is a lot of responsibility.

SM: What prepared you for being an entrepreneur?

DL: I came f rom a low income family, growing up in Hamilton Hill in Schenectady. I started working full-time when I was fourteen years old, but learned as early as twelve years old that if I did not deliver the

papers on my route, someone else would.

SM: If you had to change any aspect of your last five years what would you do differently?

DL: I don’t believe in second guessing myself. I believe it slows you down, and in business you must react quickly. That ’s not to say I haven’t learned f rom my mistakes—I have made them, but they have made me stronger. In the end, I wouldn’t change a thing.

SM: With all of your expansion, how are you able to keep your cash flow monitored in this recessionary economy?

DL: Through very careful management. The lending environment has totally changed, forcing me to negotiate with landlords heavily to include tenant improvement money on every deal I make.

SM: With each new expansion, your time management becomes more critical. How are you maintaining a sense of balance in your life?

DL: Teddy Roosevelt once said, “The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint enough to keep f rom meddling with them while they do it.” I believe that, though, my right hand man is a woman. I believe family should always be the first priority in life. It is also hugely important to make time for yourself and your health. I am an outdoorsman—I hunt and fish every chance I get. There is nothing more ref reshing than being on a dark mountain when the sun comes up and the woods come alive.

SM: What aspect of being an entrepreneur do you love? What do you hate?

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DL: I love the f reedom. I don’t hate it at all. You must love it or walk away.

SM: How has the recession affected your business?

DL: When gas went to five bucks a gallon we were still busy. Let ’s see…two gallons of gas or my monthly membership of ten bucks?

SM: What has helped you most in this economy?

DL: Having the best price point is a great spot to be in, and in these times it really helps. But I have to say, it really is the “wow factor” that sells memberships for us. Over a million dollars of new equipment in every club, everyday people working out and having fun, 30 minute circuit, 24 hours a day f ree training, no contracts or salesmen, all in a clean, bright place for ten bucks… WOW!

SM: What is the most important lesson you have learned as an entrepreneur on your road to success?

DL: Never rest on accomplishments, never become complacent, never think that you have all the answers, and always be ready to start over. Planet

Fitness has made me a wealthy man, but in the end, when you leave this world it ’s not the money you have but the people you have touched while you were here. So, in the end my quest is the same as when I started— to help people help themselves. With 80,000 fitness members, I am on my way. I sleep well at night.

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