cuernavaca fitness center final report

THE UNIVERSITY OF TEXAS AT AUSTIN

Cuernavaca Community Fitness Center

A feasibility study for Dr. Kathy Edwards

Pedram Rahmanian | Tatiana Noroozian

12/5/2012

The following report is a feasibility study on the possibility of opening a gym in the Lake Hills neighborhood in Austin, Texas 78733.

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Copyright 2012 | Pedram Rahmanian and Tatiana Noroozian

Contents Executive Summary ........................................................................................................................ 3

Project Proposal .............................................................................................................................. 4

About the Client .......................................................................................................................... 4

Desired Outcomes ....................................................................................................................... 4

Project Scope ............................................................................................................................... 4

Client and Consultant Responsibilities ....................................................................................... 4

Project Costs ................................................................................................................................ 4

Work Schedule ............................................................................................................................ 5

Deliverables ................................................................................................................................. 5

About the Consultants ................................................................................................................. 6

Signature Page ............................................................................................................................. 7

Research Methodology ................................................................................................................... 8

Interviews .................................................................................................................................... 8

Secondary Research .................................................................................................................... 8

Benchmarking ............................................................................................................................. 9

Action Learning........................................................................................................................... 9

Fitness Center Spatial Component Overview ............................................................................... 10

Proposed Amenities ...................................................................................................................... 12

Physical Fitness (Exercise) Room: ............................................................................................ 12

Multi-Purpose Court (Gymnasium): ......................................................................................... 13

Group Exercise Room: .............................................................................................................. 14

Locker Rooms and Associated Functions ................................................................................. 15

Lake Hills Demographics ............................................................................................................. 16

Competitive Landscape ................................................................................................................. 19

Locations ................................................................................................................................... 19

Competitor Overview and Analysis .......................................................................................... 20

Competitor Benchmarking ........................................................................................................ 21

Anytime Fitness ..................................................................................................................... 21

Gold’s Gym ........................................................................................................................... 21

The Hills Health Club ............................................................................................................ 21

Westlake CrossFit Model ...................................................................................................... 22

Real Estate Options ....................................................................................................................... 23

Start-Up Requirements.................................................................................................................. 25

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Flooring and General Construction ........................................................................................... 26

Multi-Purpose Court Requirements .......................................................................................... 27

Fitness Room Equipment Suppliers .......................................................................................... 28

LifeFitness ................................................................................................................................. 28

Vision Fitness ............................................................................................................................ 29

Precor ........................................................................................................................................ 29

Overview of Insurance Needs ....................................................................................................... 30

Personnel Needs ............................................................................................................................ 32

Recommendations ......................................................................................................................... 33

Option 1: Build a multi-purpose court first and add other amenities in phases. ....................... 33

Option 2: Build a fitness room first and add other amenities in phases. ................................... 33

Option 3: Build the group exercise room first and add the other amenities in phases. ............. 34

Option 4: Build the multi-purpose court, fitness room, and group exercise room at once and

add other amenities as desired. .................................................................................................. 34

Option 5: Do nothing and join one of the identified gyms. ...................................................... 34

Appendix A: Interview with Professor Edwards .......................................................................... 35

Appendix B: LifeFitness In-Depth Overview ............................................................................... 37

Appendix C: Equipment Costs..................................................................................................... 40

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Executive Summary Overview of Project

Dr. Edwards is a faculty member in the Management Department of the University of Texas at

Austin. Dr. Edwards brings a wide variety of organizational experience to her work. In addition

to her work as a faculty member, she has held executive leadership positions in business, non-

profit and governmental organizations, and entrepreneurial ventures. Her current consulting

interests include conflict management, mediation, negotiation, and team facilitation. Dr.

Edwards, a lifelong athlete, is interested in starting up a gym within a 10-mile radius of her

neighborhood. She currently drives into town to take boxing lessons from a local gym, and

would like to have an option that gives her closer access to a workout. She envisions a place for

the community to come together and to host classes. She also desires to provide her nephew with

an opportunity to work as a personal trainer. She does not necessarily wish to own the facility or

to maintain its operations.

Desired Outcome

As a team, we came up with a way to test the feasibility of starting a gym in the West Austin

area. Our client, Dr. Edwards, wishes to establish a fitness center for her community so that she

does not have to drive so far to get her desired workout. We consulted with Dr. Edwards to

determine what type of gym she aspires to open, as well as what services she hopes to provide to

clients.

Research Methods

Conducted interviews with Dr. Edwards (client), Brian Fahey (realtor), Brenda Starr

(realtor), Allison Van Leeuwen (Assistant Director-Facility Operations Gregory Gym),

Jim Anderson (Mondo Sports Flooring Agent).

Benchmarked with other gyms within a 5-mile radius to see what services and amenities

they offer to their clients.

Conducted research on the demographics of the 78733 zip code area.

Results

Our team will create a scalability tool (excel model) that will allow the client to change several

variables (features and amenities as well as their scale) and see the financial impact of these

changes on the feasibility of the venture. We gathered useful benchmarking information of

nearby gyms to give our client an idea of the competitive landscape.

Recommendations

We have identified several options for our client to consider.

Option 1: Build a multipurpose court first; add amenities in

phases

Option 2: Build a fitness room first; add amenities in phases

Option 3: Build a group exercise room first; add amenities in

phases

Option 4: Build a multipurpose court, fitness room, and group

exercise room simultaneously; add amenities as desired

Option 5: Do nothing and join one of the identified gyms.

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Project Proposal

About the Client Dr. Edwards is a faculty member in the Management Department of the University of Texas at

Austin. She is also involved in supervising independent research. Dr. Edwards is the founder of

The Training Institute, a consulting firm that just celebrated its 18th year in business. Dr.

Edwards brings a wide variety of organizational experience to her work. In addition to her work

as a faculty member, she has held executive leadership positions in business, non-profit and

governmental organizations, and entrepreneurial ventures. A sample of her consulting clients

include: Alcoa, Austin Police Academy, Dell, 3M, National Rural Electric Cooperatives, Texas

MHMR, Texas Pharmaceutical Association, etc. Her current consulting interests include conflict

management, mediation, negotiation, and team facilitation.

Desired Outcomes The desired outcome of this project is to test the feasibility of starting a gym in West Austin area.

The client wishes to establish a fitness center for her community so that she does not have to

drive 12 miles to a gym. She envisions a place for the community to come together and to host

classes. She also desires to provide her nephew with an opportunity to work as a personal trainer.

She does not necessarily wish to own the facility or to maintain its operations.

Project Scope Our team will research the specific costs of real estate based on the clients preferred location. We

will base several assumptions for equipment, revenue, and utilization by benchmarking with

several gyms in close proximity to the preferred location. Our aim is to provide a relevant and

useful tool for the client to test the feasibility of her visions.

We shall base our model on the up front and operational costs of the envisioned fitness center. In

the model we will include a fitness room, a group fitness space, a multipurpose gym, and retail

space for additional services (e.g. a café/ smoothie stand).

We will also provide 3 options or types of gyms, listing the average up front cost as well as

operating cost. In addition, we will include the types of services and activities for each

respective option.

Client and Consultant Responsibilities We expect to establish and maintain an honest collaborative relationship with open

communication. The consultants are expected to conduct thorough research using relevant

establishments as benchmarking tools in order to create the feasibility model. The client is

expected to be willing to meet on an as-needed basis in order to assist in the establishment of key

assumptions and to keep the momentum of the project flowing without interruption. The

consultants are expected to deliver accurate and relevant information to the best of their abilities.

The client understands that the deliverables are an estimate and not exact, and are meant to be a

tool to test feasibility should she choose to pursue the venture.

Project Costs The consulting team will provide services free of charge to Dr. Edwards.

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Work Schedule The consultant team will meet twice a week for one hour prior to class. Friday is an independent

workday. We will meet with the client as needed.

Deliverables Our team will create a scalability tool (excel model) that will allow the client to change several

variables (features and amenities as well as their scale) and see the financial impact of these

changes on the feasibility of the venture.

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About the Consultants

Pedram Matthew Rahmanian | BBA’14

The University of Texas at Austin | McCombs School of Business

Bachelor of Business Administration, Management | Pre-Medicine

Certificate in Innovation, Creativity, and Entrepreneurship

Pedram has a strong passion for personal health and fitness. He has

numerous entrepreneurial and consulting experiences that span this

industry, including a project with the Brushy Creek Community

Center.

Tatiana Noroozian | BBA’12

The University of Texas at Austin | McCombs School of Business

Bachelor of Business Administration, Management | Pre-Medicine

Tatiana is a business/pre-med major at the University of Texas at

Austin. She is a novice consultant but is very passionate in any

project she undertakes. With her science background, she is capable

of acquiring necessary information for the research needed for this

project.

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Signature Page Your signature below indicates acceptance of this proposal and the terms and conditions herein.

Consultants Client Name: Pedram Matthew Rahmanian

Name: Dr. Kathy Edwards

Title: Independent Consultant Title: Professor Date: ___/___/______ Date: ___/___/______ Signature: ____________________________________

Signature: ____________________________________

Name: Tatiana Noroozian

Title: Independent Consultant Date: ___/___/______ Signature: ____________________________________

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Research Methodology

Interviews For our project, the main method of research we will use will be conducting interviews with our

client as well as with various individuals that have started their own gym, have experience

running a gym, or others who have expertise in certain aspects of starting a company. Since both

of us are students in Dr. Edward’s class, this will enable us to be in contact with her (our client)

more easily. This will also allow us to get to know her better, since we get to see her every other

day of the week. Pedram has done a lot of networking with startup companies, and he currently

has a working relationship with SoZo Global (a nutritional and wellness company) and ETMG

Insurance Management Solutions, so he has developed contacts with relevant industries, which

will enable us to interview some individuals who could provide important information.

As far as our interviews and meetings with Dr. Edwards, we will focus on her desired outcome

for this consultation. To narrow our scope and avoid scope creep, we will ask her to define the

main issues she is interested in for starting up a gym. The components of a gym that she would

definitely want to be included in a start-up gym, all the way up to a dream gym—as one of our

team members said, “From a shanty to the Taj Mahal”. The information we would like to obtain

from our client is cataloged as follows:

1. What type of a gym are you interested in starting?

2. In what area of Austin would you like to open a gym?

3. Who is your target market?

4. Are you interested in renting an existing facility, or do you want to build a facility?

5. Do you think you want to offer amenities? And if so, what types?

6. How do you plan on financing this?

7. Who will run the facility?

8. How involved would you like to be?

Other interviews we plan to conduct will involve realtors, and individuals who currently are

involved in running a gym. We will be able to find out a lot of pricing estimates and information

from these sources. Examples of data we will collect include: cost of land, possible available

commercial property on Cuernavaca, cost of flooring and installation of a basketball court, cost

of exercise machines, maintenance costs, etc.

Secondary Research The second research method we will use: will be to gather resource information from secondary

sources, such as property listings and the Internet. Also, we will gather demographic data records

on the area of Austin that Dr. Edwards is interested in.

The information that we would like to acquire from these sources are as follows:

What is the average price of land in ‘west of Westlake’ area, specifically the

neighborhood on Cuernavaca Street?

Are there any commercial properties around that area that have existing buildings that

could be turned into a gym?

What are the demographics of that area of Austin: population, employment, household

information, education, and income, among others.

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Benchmarking The third method we will employ: benchmarking. By identifying and evaluating other gyms in

the desired vicinity, we will be able to provide our client an idea of how to develop her own

plans, with the aim of bringing her dream to fruition. This will also give our client an idea of

what the components of a gym she is interested in actually looks like, as well as provide her with

guidance for making her final decisions.

Action Learning Finally, we will use action research. Dr. Edwards presented this method to us in the classroom,

and we will put it to use in hopes of improving our strategy and practices of gathering

information for our project. By using this collaborative inquiry method, we hope to get the

opinions and advice of other fellow students who might open our eyes to an aspect of the project

or a particular tool that we may potentially overlook.

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Fitness Center Spatial Component Overview A Fitness Center is a health, recreational, and social facility geared towards active lifestyles. It is

a place for exercise, sports, and physical activities in general. A successful facility can

accommodate both the serious athlete and the casual recreational user.

The center can be either a for-profit commercial facility or a community/institutionally supported

center.

The social component of a fitness center is an important secondary function. It supports the

patrons’ fitness goals but also encourages social interaction. This is in line with Dr. Edward’s

vision of a place for the community to interact and lead active lifestyles. The social aspect is

represented by elements such as a juice or snack bar, sport spectator seating, and common places.

There are several spatial aspects of a fitness center. Three will be analyzed in detail as they are

the basis of establishing the business model and form the core revenue drivers – a fitness center,

a multi-purpose court, and group exercise rooms.

I. Physical Fitness (Exercise) Room:

This space is specifically designed for exercise, fitness training, and physical wellness

activities. This space provides a comprehensive and varied program of activities to meet

the individual training regiments of its patrons. These programs can be divided into four

categories: warm-up/cool down, free weights, circuit training, and cardiovascular

training.

II. Multi-Purpose Court (Gymnasium):

This space is a diverse asset. The space is characterized by a large open space with

impact resistant flooring such as hardwood. The fixtures put in place can alter the

characteristics of the space and outfit it for various activities such as basketball,

volleyball, indoor soccer, badminton, flag football, various youth activities, dance,

crossfit, boot camp instruction, group fitness, or even rental for special events such as

banquets, or meetings.

III. Group Exercise Room:

This room accommodates organized fitness class activities. It is characterized by an open

space with movable fixtures and equipment, impact resistant flooring, and mirrored walls.

This space can be used for group class instruction, personal training, crossfit, boxing

equipment, yoga, various dance classes, various martial arts classes etc.

The space options above are optional and design the core aspects of the fitness center model. A

center can have any combination of these facilities and in different proportions. It could exclude

various aspects altogether. How the fitness center is designed with respect to the three amenities

above shapes the value proposition and offerings of the fitness center as a whole. In addition to

these spaces, there are some general spatial aspects that any fitness center should incorporate.

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IV. Locker Rooms and Associated Functions

This space is typically separated by gender - possibly adding a third space for families.

This space accommodates the basic functions of changing, storing clothes, and patron

hygiene, including showers and restrooms. Additional optional spaces include: saunas,

steam rooms, and hot tubs.

V. Administrative and Support Spaces

These spaces include general lobbies, social spaces, and staff spaces accommodating the

operation and administration of the facility. It includes:

Reception counter and equipment rental space

Offices

Storage and custodial services

Staff Support

Receiving and equipment repair

The potentially hazardous nature of a fitness center requires that facility access must be

controlled even in non-profit facilities. This requires a primary entrance controlled by a

check-in point that has visual access to much of the facility. Ideally the various aspects of

the fitness center should naturally extend out of the main lobby, past the control desk.

There are also various optional enhanced spaces that offer additional value propositions and

present additional revenue streams. These spaces can enhance the patron’s social and overall

experience at the fitness center, which is crucial to maintain membership, increase word-of-

mouth referrals and establishing goodwill within the community. These intangible factors are

crucial to the success of a community fitness center.

i. Structured Activities: Include a variety of well-defined activities.

a. Racquetball

b. Squash

c. Rock Wall

d. Spinning class

e. Yoga and Pilates Studios

ii. Vending Area, Juice/Shake bar, Café, or other food service

iii. Retail shop (sales of athletic clothing and equipment)

iv. Spectator Seating in the Gymnasium

v. Child Care Services

vi. Fitness Assessment Spaces

vii. Message or Physical Therapy Spaces

viii. Spa / Tanning Salon

ix. Pool / Aquatic Center

x. Outdoor Spaces / Fields

xi. Community Special Events / Meeting Rooms

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Proposed Amenities

Physical Fitness (Exercise) Room: This space is specifically designed for exercise, fitness training, and physical wellness activities.

This space provides a comprehensive and varied program of activities to meet the individual

training regiments of its patrons. These programs can be divided into four categories: warm-

up/cool down, free weights, circuit training, and cardiovascular training. These are typically the

heart of a fitness facility and include the following components:

Cardiovascular equipment (treadmills, elliptical, stationary bikes, etc.)

Free and plate-loaded weights

Selectorized weights (e.g. cable operated weight machines)

Stretching spaces

Running track

Value Proposition: This space provides patrons with the opportunity to build and maintain their physical fitness. It is

a space for members of the communities to work out without having to drive into town or

purchase expensive home fitness equipment. It is also a social place for community members to

support each other in meeting their fitness goals.

Relation to Dr. Edward’s Objectives:

This amenity would give Dr. Edwards a place to workout and stay active closer to home. She

would no longer need to drive into town to workout. It also gives her a chance to help her

community get more active.

Revenue Drivers:

There are two main revenue drivers of this amenity.

A. Membership Access to the room

B. Personal Training with certified trainers

Cost Drivers:

Equipment Start-up Investment – This requires a large upfront expense to purchase

commercial grade fitness equipment. This can be depreciated over time, but a large

capital investment is needed upfront. A percentage of equipment purchase price is

expensed monthly for maintenance needs. (See Appendix C for research data and cost

breakdown).

o Equipment depreciation

o Equipment maintenance

Utilities – Commercial cardiovascular equipment, lights, air conditioning, and optional

features such as televisions or speaker systems will require a large amount of electric

power on a monthly basis.

Custodial and General Maintenance Services – The space needs to be cleaned and

serviced regularly to maintain a clean and enjoyable environment.

Supervision and Support Staff Wages – We need general support staff to provide patrons

with support and administrative help. These staff members could be simultaneously

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serving other parts of the fitness center, making this expense non-controllable for this

option.

Personal Trainer Staff

o General – These trainers can be paid hourly to give general support to all patrons.

o Private – These trainers provide private instruction to individual patrons and are

paid by the patrons individually.

Multi-Purpose Court (Gymnasium): This space is a diverse asset. The space is characterized by a large open space with impact

resistant flooring such as hardwood. The fixtures put in place can alter the characteristics of the

space and outfit it for various activities such as basketball, volleyball, indoor soccer, badminton,

flag football, various youth activities, dance, crossfit, boot camp instruction, group fitness, or

even rental for special events such as banquets, or meetings.

Value Proposition:

This multi-purpose facility offers patrons with a wide variety of social and group activity

options. It’s a place for playing team sports, or to participate in various sporting leagues and

tournaments. It’s a place for the youth to participate in after-school activities and have fun with

friends. It’s a space to have group classes or crossfit/bootcamp sessions. Essentially it is a way to

add a social dimension to their personal fitness goals. Community members could also use the

big covered open space for special events.


This amenity gives Dr. Edwards the ability to foster a lot of community activity. It gives her

space to workout, and the opportunity to use her coaching and administrative experience with

team sports to host various tournaments and leagues.

Revenue Drivers:

There are numerous revenue drivers associated with this space, as it is a very versatile space.

A. Membership Fees for Open Court Access

a. Basketball

b. Volleyball

c. Indoor Soccer

d. Badminton

B. After School Youth Activities

C. Group Classes (CrossFit, Bootcamp, Dance, Yoga, Cheerleading, etc.)

D. Seasonal Sporting Leagues (For Adults and Youth)

a. Basketball

b. Volleyball

c. Indoor Soccer

d. Flag Football

E. Tournaments

F. Court Reservations (Hourly)

G. Special Event Space Rentals (Dances, Concerts, Community Festivals, etc.)

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Cost Drivers:

This space has a significant up front construction cost, but has very little operational overhead.

Upfront Investment

o Construction

o Equipment (Balls, hoops, jerseys, cones, volleyball net, badminton net, etc.)

Operational Overhead

o Maintenance and Custodial Services – Need to maintain a clean and safe

environment.

o Administrative and Support Staff – Needed to setup various outfits in the gym.

These staff members are shared with the rest of the facility.

o Utilities – Electricity for the light system and speaker system.

o Coaching Staff for Leagues (Volunteer basis)

o Class Instructors (varied with class offering)

Group Exercise Room: This room accommodates organized fitness class activities. It is characterized by an open space

with movable fixtures and equipment, impact resistant flooring, and mirrored walls. This space

can be used for group class instruction, personal training, crossfit, boxing equipment, yoga,

various dance classes, various martial arts classes etc.

Value Proposition:

The group exercise room offers patrons with a space to do various aerobic activities such as

yoga, warm-up/cool down activities, calisthenics, etc. It is also a place where they can take

various group fitness classes to meet various interests such as various dance classes, yoga

classes, various martial arts classes, Cross Fit and boot camp classes. It is also a place to do

specialty activities such as boxing workouts or sparring.


This amenity fits into Dr. Edward’s vision to have group fitness classes. It also satisfies her

desire to have specialty workouts, giving her the opportunity to keep up with her passion for

boxing without having to go to into town and visiting the specialized boxing gym.

Revenue Drivers:

A. General membership access to open space

B. Class fees for in-house hosted classes

C. Rental Fees for external hosted classes

Cost Drivers:

This space has a small up front construction costs, small equipment investments, and little

operational overhead.

Upfront Investment

o Construction

o Equipment (Yoga balls, mats, boxing equipment, various other equipment, etc.)

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environment.

o Supervisory and Support Staff – These staff members are shared with the rest of

the facility.

o Utilities – Electricity for the light system and speaker system.

o Instructor Fees for In-House hosted classes

Locker Rooms and Associated Functions This space is typically separated by gender - possibly adding a third space for families. This

space accommodates the basic functions of changing, storing clothes, and patron hygiene,

including showers and restrooms.

Revenue Drivers:

A. Locker Reservation Fees

B. Towel Service Fees

Cost Drivers:

Upfront Investment

o Construction



environment.

o Supervisory and Support Staff – These staff members are shared with the rest of

the facility.

o Utilities – Electricity for the light system and speaker system. Water for the

restrooms and showers.

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Lake Hills Demographics1

Lake Hills Community Association: www.lakehillsca.org

2012 President of the Board of Directors:

Joe Gimenez

512.358.1041

[email protected]

General Facts2:

90% Owner Occupied

90% White (7,878 people)

50% Female (4,548 people)

50% Male (4,596 people)

Observations:

1. There is a sizable youth population that would possibly be interested in sport leagues and

other youth targeted activities.

2. The majority of the population consists of adults between 25 and 64. Convenience would

be a significant issue for this group.

1 For a very detailed demographic breakdown of the 78733 zip code, visit:

http://www.city-data.com/zips/78733.html#b 2 According to Movoto.com Neighborhood information for 78733 zip code

1151

2228

293

1943

3330

199

0

500

1000

1500

2000

2500

3000

3500

6 or younger 7 to 18 19 to 24 25 to 39 40 to 64 65+

Population by Age

http://www.lakehillsca.org/

mailto:[email protected]

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The majority of the population in this neighborhood is well educated and employed.

148, 3%

1294, 23%

2512, 46%

1518, 28%

Population by Education Level

High School or Less

High School Graduate

Bachelors or Associate Degrees

Graduate Degrees

0, 0%

4321, 69%

1777, 29%

123, 2%

Employment Status

Employed (Armed Forces)

Employed (civilian)

Not in Labor Force

Unemployed

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Observations:

1. There is a significant number of households with children, indicating a significant need for a

family environment.

2. There is a niche market of single parent households with children that could possibly use a

safe place for their children to go after school.

396

145

25

1503

131

396

35

32

682

131

0 200 400 600 800 1000 1200 1400 1600

1 Person Household

Female Household

Male Household

Married Household

Non-Family Households

1 PersonHousehold

FemaleHousehold

MaleHousehold

MarriedHousehold

Non-FamilyHouseholds

Without Children 396 35 32 682 131

With Children 396 145 25 1503 131

Household Type by Children Presence

219

779

1108

843

0

200

400

600

800

1000

1200

<$30,000 $30,000 to $74,999 $75,000 to $149,000 $150,000+

Household Income Levels

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Competitive Landscape View Interactive Map Here: http://goo.gl/maps/jVDvv

Locations There are four competitors within a geographic proximity to the Lake Hills neighborhood:

Competitor Locations:

A. Westlake CrossFit

B. Gold’s Gym

C. Anytime Fitness

D. The Hills Health Club

Lots Available for Sale

I. 810 Tumbleweed Tr.

II. 1604 Lipan Tr.

http://goo.gl/maps/jVDvv

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Competitor Overview and Analysis The Hills Health Club and Wellness Center(D)

4615 Bee Cave Rd.

West Lake Hills, TX 78746

512.327.4881

www.thehillsfitness.com

This Center Competes with:

Physical Fitness (exercise) room

Multi-Purpose Court

Group Exercise Room

This country club offers everything to its clients:

Swimming pools (outdoor and indoor), basketball gym, racquetball courts, outdoor running trail, a wide variety of

cardio equipment, child care, and a café. They also offer a variety of programs and classes, including: general

fitness, group fitness, and water aerobics. This club also offers personal training programs and Pilates classes.

Additionally, they offer massage services to their clients.

Westlake CrossFit (A) 1302 Cuernavaca Drive

Austin, TX 78733

512.364.0365

http://www.westlakecrossfit.com/


Group Exercise Room

This training center offers group training and personal training. They offer workshops to their clients, specifically

targeted at improving your deficiencies and optimizing your strengths. The facility includes Olympic lifting

equipment, as well as simple training tools necessary to give clients the most intense and complete training.

Gold’s Gym (B)

12480 FM 2244

Bee Cave, TX 78738

512.263.0700

www.goldsgym.com



Group Exercise Room At Gold's Gym you'll find all of the latest cardio and strength training equipment along with a dynamic group

exercise program that includes classes like yoga, group cycling, mixed martial arts, muscle endurance training and

Pilates.

Anytime Fitness (C)

6317 Bee Caves Road

Austin, TX 78746

512.327.9300

www.anytimefitness.com



Anytime Fitness is open 24 hours a day, 365 days a year. Membership gives access to thousands of clubs and is

affordable. The focus of attention is on affordable convenience. Inside, members have access to a wide variety of

cardio and strength equipment.

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Competitor Benchmarking

Anytime Fitness

3 Gold’s Gym The Hills Health Club

Contact: Jim Schuppenhauer Anthony Michelle

Membership: 5200 2700

>Contract? No Yes

>Enrollment Fee No $195

>Monthly Fee $30-$35 $79 + tax (12 mo.

Contract)

>Access to

Multiple Locations?

Yes Yes No

>What does

membership fee

include?

24/7 Access Everything

including classes

Access to center except:

Pilates

Personal training

Child care

Massage

Café

Amenities:

-Fitness Room? Yes Yes Yes

>Personal

Training?

Yes Yes Yes

-Multi-Purpose

Court?

No No Yes

-Group Exercise

Room?

Yes Yes

>Classes? Yes Numerous, Varies

by Month and

Location

Cardio and

Strength

Pilates

Cycling

Mind and Body

Circuit

Senior

Water Aerobics

-Swimming Pool? No No Yes

- Locker Room? Yes Yes Yes

-Childcare? No No Yes

-Café? No No Yes

-Spa/Massage? No No Yes

3 We were unsuccessful in establishing contact with Anytime Fitness and obtain specific information about their

business model. We obtained the information above through research on their website.

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Westlake CrossFit Model

Contact: Amanda

Westlake Crossfit operates on a model unique from the gyms aforementioned. They have a

personal element to their value proposition. The class sizes are limited and there is always a

trainer present. It is not a gym to workout at on your own. They have a three step member

acquisition process outlined below:

1st step: One-on-One Consultation

They walk you through a short workout (1hr long consultation) and it's FREE.

2nd step: A one-on-one (3-session) "Elements Course" (each 1 hour long)

They walk you through the basic movements of the crossfit workouts and they will do a small

sample workout with you. This 3 session package is $150

3rd step: Sign up for a monthly program (depends on two things: duration of your workout and

duration of your contract).

A basic package (3 times a week, one hour each time) ranges from $120-160 per month. BUT, if

you sign up for longer than a one year contract, you could get a cheaper package.

Benefits of Westlake Crossfit:

You are working with a personal trainer at ALL TIMES

There is a maximum of only 12 people per class (and usually only 3-10 show up)

o Small trainer to client ratio

Classes offered all day, from 6 am-6:30 pm. These classes are one hour long each.

Page | 23


Real Estate Options

www.BrianFaheyRealtor.com

Real-Estate Consultation Provided By:

Brian Fahey

Realtor Coldwell Banker United

Contacted on November 4, 2012

D: 512.970.8772 E: [email protected] 609 Castle Ridge Rd. Austin, TX 78746

Brian provided us with a ballpark estimate cost of a commercial acre of land in the Lake Hills

neighborhood to be between $200,000 and $250,000.

www.bstarraustin.com

Real-Estate Consultation Provided By:

Brenda Starr

Realtor, License #535034

Sky Realty

Contacted on November 4 and 5, 2012

D: 512.940.3353 E: [email protected] http://BrendaStarr.actris.mlxchange.com/?r=1017050994&id=31363534323838.370

Brenda found two available lots for sale in the Lake Hills neighborhood. The link above will

direct you to an online posting of the two lots. You can see the geographical location on the map

in the competitive landscape overview. Both of these lots are competitively located in the

neighborhood and provide a high level of accessibility to the residents. They could possibly even

walk to the gym.


http://brendastarr.actris.mlxchange.com/?r=1017050994&id=31363534323838.370

Page | 24


Option I.

Address: 1604 Lipan

ML# 6414249

List Price: $787,000

Type: Multiple Lots (Adjacent)

1.95 Acres @ $402,763/acre

View: Greenbelt

Zone: Unknown

Option II.

Address: 810 Tumbleweed

Trail

ML# 9091256

List Price: $450,000

Type: Single Lot, Cul-De-

Sac, Backs to Greenbelt,

Open

5 Acres @ $90,000/acre

View: Greenbelt,

Creek/Stream

Zone: Unknown

These two lots require a much greater level of due diligence. A concern we want to point out is

their unclear zoning. This may be negotiable and there is the possibility to get the land rezoned if

need be. Otherwise, Option II presents a great opportunity. The land is priced lower than the

average given by Brian Fahey, and the sizable lot gives the opportunity to grow considerably, or

even to provide a hike and bike trail to the community.

Page | 25


Start-Up Requirements

Gym Consultation Provided By:

Allison Van Leeuwen

Assistant Director – Facility Operations

Division of Recreational Sports

Gregory Gym (D7500)

Austin, Texas 78712

Contacted from November 1 - 5, 2012

D: 512.471.6045

E: [email protected]

Allison gave us an estimate average cost per machine for treadmills, ellipticals, etc. to be around

$5,000. She explained that the operational costs such as maintenance, utilities, and operational

expenses such as payroll are too specific to each company and are not easily generalized.

Therefore, we excluded such figures from our project scope. Furthermore, Allison led us to

specific vendors to research for flooring and gym startup expenses. We describe these elements

in detail below.

Mondo Flooring : www.MondoUSA.com

This vendor provides various flooring products.

Sports Imports: www.sportsimports.com

This vendor supplies indoor volleyball, badminton, and tennis equipment.

BSN Sports: www.bsnsports.com

This vendor supplies various sporting equipment, including basketball equipment,

bleachers, and fitness equipment.

http://www.mondousa.com/

http://www.sportsimports.com/

http://www.bsnsports.com/

Page | 26


Flooring and General Construction

Insurance Consultation Provided By:

Jim Anderson

Mondo Flooring

D: 630.242.4729 W: www.mondoworldwide.com

Local Dealer: Mondo USA Southwest

Michelle Music

C: 512.410.9655

202 Walton Way, Suite 192

Cedar Park, TX 78613

Mondo is an international flooring supplier of fitness facilities. They even do the flooring for the

Olympics. The have various specific products for specialized needs. For the sake of simplicity,

we looked at their multi-purpose indoor flooring products, specifically the Mondosport II which

comes in both a vinyl and wood finish. This flooring can be used in fitness/cardio rooms, indoor

basketball and volleyball courts and gymnasiums in general. Thus, the same flooring can be used

across our entire facility.

MondoSport II - Texture MondoSport II - Backing MondoSport II Wood

Jim gave us a quote of $5.25/ square foot. This price includes delivery, the laminate over the

foundation and the actual flooring, and installation.

Page | 27


Multi-Purpose Court Requirements

Multi-purpose courts are designed around the basketball court. All courts for high school and

beyond have a width of 50 ft. and a length of 84 ft. for high school divisions and 94 ft. for

collegiate and above. Additionally, you need a 3 foot minimum unobstructed space (preferably

10 ft.) bordering the court. .

Dimensions (L x W) Area Cost at $5.25/sq. ft.

No Border 94 ft. x 50 ft. 4,700 sq. ft. $24,,675

3 Foot Border 100 ft. x 56 ft. 5,600 sq. ft. $29,400



Installations of lines: $3,500

Goals and Backboards: $2,000 - $2,500 depending on the brand and quality.

2 Row Tip n’ Roll Bleachers: BSNSports.com

Length Seats Price

8 Foot 10 $675

15 Foot 20 $1,035

21 Foot 28 $1,395

Page | 28


Indoor Volleyball Equipment from Sports Imports

Upright Storage cart (holds 4) $810

International Official Stand $850

Safety Pad for Uprights $245

Net $355

Uprights >$360

Fitness Room Equipment Suppliers There are a number of manufacturers to consider in purchasing gym equipment. These companies vary in their product offerings, service, warranties, pricing, support, and overall value proposition. It is important to do detailed research and contact different companies to find the best fit for your needs. Equipment costs are benchmarked in Appendix C.

The information in the following company profiles are clippings directly from the respective company websites.

Selecting a manufacturer is a very personal decision, and is dependent upon specific needs that are difficult to predetermine. On a very broad level, we believe LifeFitness is a great candidate. They are the market leader and set standards for other companies to strive for. They’ve been around for a long time and have been a leader in product innovation. Most importantly, they have a cooperative philosophy of business. They view their customers as ‘fitness entrepreneurs’ and strive to help them succeed. An example of one of their services is equipment financing, to help you reduce the initial investment hurdle. This has led them to be used by countless businesses across the globe, including mega-chain LifeTime Fitness. An in-depth overview of their service offerings is provided in Appendix B.

LifeFitness www.lifefitness.com

Virtual Room Planner: http://lifefitness-commercial.icovia.com/

5100 North River Road Schiller Park, IL 60176 [email protected]

Commercial Sales

Phone: 800.527.6065

Available Monday-Friday, 8 am to 5 pm CST

[email protected]

It is a point of pride that the history of the company effectively mirrors the timeline of the fitness

movement. While many were still calling it a craze, we were deepening our understanding of

exercise in order to make it easier for people to enjoy the benefits of a healthy lifestyle.

As a fitness entrepreneur, we know you share our commitment to helping people live healthier

lives.

There has never been a better time to invest in your club. By working together, we can help you

improve your business. Together, we’ll keep helping people get the most out of their workouts.

http://lifefitness-commercial.icovia.com/


Page | 29


Vision Fitness www.vision fitness.com

Virtual Room Planner: http://visionfitness.icovia.com/icovia.aspx

1600 Landmark Drive

Cottage Grove, WI 53527

Toll free 800-335-4348

Fax 608-839-8994 [email protected]

M-Th 7 AM – 7 PM CST Friday 7 AM – 5 PM CST Saturday 9 AM – 3 PM CST (Sept. - April)

Local Retailer:

Fitness in Motion

10900 Research Blvd.

Austin, Texas, 78759 United States

512-345-2333

Vision Fitness is part of Johnson Health Tech (JHT), a name synonymous with quality fitness solutions for more than 30 years. In addition to Vision Fitness, the JHT family consists of some of the most respected brands in the industry, including Matrix, LIVESTRONG, AFG and Horizon. From high-end health clubs to specialty fitness retailers to sporting goods stores, JHT products are sold in over 60 countries. A strong commitment to product innovation, superior value and unmatched customer service has made JHT a leading provider of high-quality home and commercial fitness equipment around the world.

Precor www.precor.com

Virtual Room Planner:

http://precor.icovia.com/icovia.aspx

20031 142nd Avenue NE

P.O. Box 7202

Woodinville, WA 98072

T: (425) 486-9292

T: (800) 786-8404

Local Retailer:

Fitness in Motion

10900 Research Blvd.

Austin, Texas, 78759 United States

512-345-2333

THE PRECOR VISION:

To be the world's most recognized and respected brand in health and fitness.

Precor designs and builds premium fitness equipment for effective workouts that feel smooth and

natural. Our equipment is chosen by health clubs, hotels and spas, universities, and individuals

all over the world. For nearly three decades, we've driven fitness forward with a passionate focus

on ergonomic motion, proven science, and superior engineering. We constantly study and

anticipate the needs of the people and organizations we serve, and continually redefine the levels

of innovation, quality, and service necessary to deliver the very best fitness experiences – all

with the goal of improving the ways people improve themselves.

http://visionfitness.icovia.com/icovia.aspx


http://precor.icovia.com/icovia.aspx

Page | 30


Overview of Insurance Needs

www.etmg.us

Insurance Consultation Provided By:

Thomas J. Smith

CPA,CPCU, ARM, ARe

Member, Board of Directors

D: 512.279.5611 M: 512.680.6195 E: [email protected]

6300 Bridgepoint Parkway Bldg. One, Suite 480 Austin, Texas 78730

Your business needs business insurance because of the many risks and potential threats to its

successful and continued operation. By its nature, a fitness center is subject to heightened risks

as people are in a physically risky environment. A good, tailored business insurance plan can

help protect you and your venture as much as possible.

An exact quote on the premiums cannot be given in a theoretical situation. The estimated

premium figures presented below are estimates from Thomas Smith based on his vast experience

and historical data.

Types of Insurance Coverage to Consider:

1. Employee Benefits [Est. $445 per employee per month]

Health Insurance is now one of the key factors in the decision of a skilled employee to

accept a job. This insurance offers a health coverage benefit. It can either be

participatory (in which the employee shares a portion of the premium payment) or non-

participatory (in which the employer pays the full premium). Aspects of this benefit

include:

a. Health Insurance (Major Medical) [Est. $400 per employee per month]

b. Vision Coverage [Est. $10 per employee per month]

c. Dental Coverage [Est. $30 per employee per month]

d. Supplemental Riders [Volunteer basis, employee pays premium]

e. Group Life insurance [Est. $5 per employee per month]

2. Key Employee Life Insurance [Est. $2,000 monthly]

This policy is used to protect the business from interruptions caused by the death of a key

employee or executive. This person could be any person whose contributions to the

operations and success of the business are essential, such as the owner and operator. The

business is the owner, beneficiary, and premium payer of this policy. In the event that the

person dies, the business receives the proceeds of the policy which gives it the flexibility

to continue operations.


Page | 31


3. Premises Liability [Est. $1,500 Annual Premium]

This coverage provides protection from unexpected expense liability arising from

accidents or injuries of guests arising on the premises of our facility. It also covers costs

arising from law suits related to such incidents. Possible scenarios where this coverage

could come into play include:

A guest slips on the bathroom floor and is injured

A guest falls down the stairs and is injured

When a claim is made over injuries sustained on the premises by guest on the premises

not covered under other insurance policies, premises liability insurance covers costs

related to the primary injury such as the doctor visits, medical bills and surgery,

permanent physical disfigurement, inability to work as well as pain and suffering. There

is liability only if the injured party was injured on the business’ property.

4. Property Coverage [Est. $750 Annual Premium]

Business property insurance is a must to protect the company assets (the building,

fixtures, computers, gym equipment etc.) and limit liability in the event of a natural

disaster or other calamity. Business property insurance can be either basic form policies

which provide coverage for damages from such events as fires and storms, or special

form coverage which offers broader coverage. This policy covers damage to the

property, the property of the gym guests that was in the building at the time of the

incident, and the lost income due to the disaster.

5. Crime Policy [Est. $200 Annual Premium]

Crime insurance is usually sold separately because regular property insurance does not

usually cover losses caused by dishonest employees. Businesses use crime insurance

policies to file claims for employee thefts and other offenses with the potential to cause

financial harm, such as:

embezzlement

theft

forgery

computer fraud

counterfeiting

breaking into a safe

general crime and dishonesty

6. Workers Compensation [Est. $1,500 Annual Premium]

This policy insures a business’ employees from on-the-job injuries. Employees cannot sue

the employer for on-the-job injuries by statute, and in return the employer must participate in

the workers compensation system that triggers payment to the employee in case of injury for

medical bills and damages.

Page | 32


7. Commercial Automobile [Est. $2,000 Annual Premium per vehicle]

Personal automobile policies do not cover vehicles used by the business. If the business uses

vehicles or anything that is required to be titled by the state, then a commercial auto policy is

needed. This policy insures against property damage to vehicles and damage caused to others

by those vehicles.

8. Umbrella Liability Insurance [Est. $250 Annual Premium]

Also known as excess liability or commercial umbrella insurance, this policy provides

additional protection when the business exceeds insurance limits on an underlying policy.

For a single premium, umbrella policies add another layer of protection to any of several

other policies that are held. It is generally the most affordable way to get higher policy limits

on several other small business insurance policies.

Personnel Needs Starting a gym will demand a number of human resources. Determining how to staff these needs

is very flexible. The general needs include:

Administrative/ Supervisory position – Make sure member needs are served.

Maintenance/ Custodial – Make sure the facility is clean and safe. This can be

outsourced.

Coaching for sport leagues – This can be on a volunteer basis.

Class instructors – This depends on the classes offered, and typically you can

establish a partnership or contract agreement with independent instructors.

Personal Trainers – They can be hired full-time, part-time, or on an independent

contractor basis.

Many of these roles can be filled on a part-time basis, outsourced to other companies for a fee,

fulfilled by contractors, or filled on a volunteer basis. You can further gain value by offering

internships for the local youth. Any of these options would allow you to fulfill your needs

without having to have full-time employees and therefore have to offer benefits and pay

additional taxes.

Page | 33


Recommendations We have identified several options for our client, Dr. Edwards to consider. The final decision has

to be a personal reflection considering her financial circumstances, her desired level of

commitment and her level of risk tolerance.

Option 1: Build a multi-purpose court first and add other amenities in phases. This is our first option because we believe it to be the most versatile. While any aspect of a gym

will have significant start-up costs, the multipurpose court requires much less than a fitness

room. They have the same cost per square foot in terms of flooring/construction, but a court

requires much less equipment. In addition, the space is much more versatile and can be used for

many different purposes, each of which presents a revenue driver.

For example:

1. Membership fees for open court access

2. After school youth activities

3. Group classes

4. Seasonal sporting leagues

5. Tournaments

6. Court reservations (Hourly)

7. Special event space rentals (dances, concerts, community festivals, etc.)

In addition, we believe this fits into your passion and experience well. You stated that you have

coached basketball, have tremendous nostalgia for your coach, and have experience running

tournaments. This gives you the ability to tap into the identified youth market and bring new

services to the community that is not already offered by the competitors in the area. The social

element of this option can help you succeed with the future expansions.

The downside of this option is that it does not directly give you a place to workout close to

home.

Option 2: Build a fitness room first and add other amenities in phases. This is our second option because it requires a significant upfront investment in terms of flooring

and equipment. Furthermore, this need is somewhat already met in the neighborhood by the

presence of Gold’s gym at the end of Cuernavaca. Therefore, leading with this amenity will

impose a greater challenge of breaking into the market and gaining market share in the

community. Additionally, it has less possible revenue drivers than the multi-purpose court.

Revenue Drivers:

1. Membership access to the room

2. Personal training with certified trainers

The advantage of this option is that it satisfies the client’s personal needs more directly.

Page | 34


For example:

1. It provides her with a place to workout.

2. It eliminates the need for her to make long drives into town to exercise.

3. It gives her nephew, Mark, a place to work as a personal trainer.

Option 3: Build the group exercise room first and add the other amenities in

phases. While this option has the least start-up expenditure, we do not believe it is a feasible option. It

does not resonate with the client’s personal objectives or experience. The revenue drivers are

dependent on offering fitness classes, which our client does not want to do personally, and must

therefore rely on outside sources for the core value of the business. This is not a smart way to

start a business. Furthermore, the need is well met by Westlake CrossFit.

Option 4: Build the multi-purpose court, fitness room, and group exercise

room at once and add other amenities as desired. This option is the most risky due to having the highest up-front costs; however it also gives the

community the highest value proposition and has the most possible revenue drivers. This will

help break into the market faster and gain membership quicker. Further expansion could include

adding the following features:

1. Structured Activities:

a. Racquetball

b. Squash

c. Rock wall

d. Spinning class

e. Yoga and pilates studios

2. Vending Area, Juice/Shake bar, Café, or other food service

3. Retail shop (sales of athletic clothing and equipment)

4. Spectator seating in the gymnasium

5. Child care services

6. Fitness assessment spaces

7. Message or physical therapy spaces

8. Spa/tanning salon

9. Pool/Aquatic Center

10. Outdoor spaces /fields

11. Community special events /meeting rooms

If you outsource these services, you can gain revenue from rent, increase the value of your

facility in comparison to the competitors, better serve the community, and recover your

investment quicker.

Option 5: Do nothing and join one of the identified gyms. If the client decides that this venture is unfeasible for her, she can still meet some of her

objectives by joining one of the other gyms in the area. This can give her space to workout closer

to home, even though it is not her ideal situation.

Page | 35


Appendix A: Interview with Professor Edwards Wednesday, October 10, 2012 at 5 PM CST

1. What type of gym were you thinking of? - Um, what I have had in mind for a while is kind of a community gym for all ages, you know—

really for the neighborhood I live in. Let me just give you some of the threads of my thoughts.

One is that I started my life, my career as an athlete and was a real gym rat. I just want to stay in

shape, for one thing—especially as I get older. And it’s costing me a fortune to drive into town

and work with a personal trainer and all that. And so that’s one thing influencing me. The other is

my nephew, um, is thinking about becoming a personal trainer. He, uh, he’s kind of had a hard

time figuring out what direction he wanted to go in his life and so forth, and he got all into fitness

and lost a hundred pounds on his own and trimmed down to, you know, about as good as it can

get. So, he works out every day, so he’s seriously considering getting his certification for training.

And I thought, well, you know that might be cool to have a place for Mark to work.

2. Similar to a YMCA? - Kind of like that. And then also, you know, the weights and all that so that you could do Little

Dribblers for five year olds one night, and you could have a volleyball league going the next, and

basketball tournaments. So, a pretty good size gym.

3. For the area that you’re in, is there a building or a facility that you have your eye

on? Or would you build? - Uh, no, the main road that when you cut off Bee Caves Road, that goes down two or three miles,

is a road called Cuernavaca—it’s the name of the street, and it’s mixed residential and

commercial. And there’s still some property along there.

4. Are you interested in amenities? - Yes, the other thing going through my mind was for other people as I’m watching people in my

family now, who are in their 80’s—of all of the aches and pains and stuff like that. And I thought,

well you know, wouldn’t it be cool even to do like a medical spa or something, where you had a

whirlpool, or maybe you rented out some space to a chiropractor or physical therapist. You

know—that kind of thing; a medical thing. So of course, now I’m just talking strictly fantasy. So

beyond that, that’s as far as my thinking has gone. To say, you know, there’s a lot of different

needs out there—both for the community, for older people, for little kids, for medical purposes

and things, and that there’s just nothing—you know we’re probably...360 is the nearest big road

to us, which is 3 or 4 miles back into town and then it’s further than that. Now if you go all the

way out to Bee Caves there’s a Gold’s Gym out there, but they don’t have an indoor pool or

anything like that. They’re mostly weights. It may just be totally prohibitive financially, at this

moment. The most money I could put together in a short period of time would be maybe $50,000,

you know, from one source or another. But, this is, you know, this is probably millions—I don’t

know.

5. Is your vision more to own this business, or just to have this center to exist? - Just to have it there. And so, one of the questions, to me, would be the possibilities of either

putting together a corporation versus making it non-profit, and my role just being kind of to get it

going and maybe doing some of the management to get it started…let Mark have a place to have

a job and so forth, you know.

Page | 36


6. You don’t want to be too involved after you set it up, but you do want to retain

ownership of it? - Not necessarily. If it could be a nonprofit, then... Also, someone was telling me the other day—

you guys may know more about this—organizations where it’s kind of a combination of nonprofit

and profit. So, what I’m thinking is that area is in the Eanes school district, and the taxes are

pretty substantial out there. And so that’s one of the things kind of holding me back: what would

a commercial building out in that area—what would the taxes be? And would it be better to build

the building as a nonprofit, and then maybe manage it for profit or nonprofit. I’m not so interested

in money. I don’t want to lose money. But you know, I want it to be worth my while. But I don’t

want to be personally stuck in debt for 20 years. I want to set it up so that it would be sustainable

without me. So those are all the thoughts I’ve had so far.

7. And how set are you on the location? - I would be flexible within about 10 miles.

8. So, is this a situation, where maybe this facility doesn’t need to focus on machines

more so than maybe group activities? -Yeah, I think we’d want to have a weight room and machine space of some kind. But, I also

think group classes would be nice: yoga or body sculpting. My assumption is that there’s a lot

instructors who, if they had space, would be happy to you know, do that. So that would be part of

my…you know, I have no interest in the teaching or training part of it. I’m past those days, but I

think that would be an interesting win-win to offer space for those classes.

9. What do you typically do when you go to the gym? -Well, it just depends on what the facilities are. Uh, when I was at Gold’s, it was just strictly

weights, and I didn’t do the group classes at all.

10. So, to recap, are you looking for simply a facility and things to fill that facility? -In terms of data: like just knowing like in that Cuernavaca area what land is going for. Who

builds gyms and what does it cost to build a gym? What does a weight room cost? What does,

you know, the whole basketball/pool thing cost? Breaking that down—what do those elements

cost to build and maintain?

11. You mentioned the areas by the lake. There is a YMCA off the old 183. It has like 2

lakes so they have kayaking and stuff. So would that be something you want to do

too? -Um, I probably wouldn’t go that far, just because there’s not a lot of space in that area. And the

clubhouse, they do let people store their kayaks and stuff there. So, people store their stuff

there—the storage costs something, but they store their stuff there for free. So I would probably

stay away from that since that need is pretty well met. Probably wouldn’t be able to get too close

to the lake since the clubhouse is right on the lake, and Cuernavaca runs up probably 3 or 4 miles

back so it will probably end up being a couple of miles from the lake. Because right next to the

lake is pretty built up.

Page | 37


Appendix B: LifeFitness In-Depth Overview

LifeFitness www.lifefitness.com

Virtual Room Planner: http://lifefitness-commercial.icovia.com/

5100 North River Road Schiller Park, IL 60176 [email protected]

Commercial Sales Phone: 800.527.6065

Available Monday-Friday, 8 am to 5 pm CST [email protected]

The following information is clipped from the company website.

Our Mission

We're called Life Fitness for a reason, because helping people live healthier lives is more than just our business, it's our passion. Commitment, it's what sets us apart. And it doesn't end with the equipment, that's just the beginning. Life Fitness. It's more than just our name, it's What We Live For.

Our Enduring Commitment

Life Fitness began over 40 years ago with an idea, and a vision - Create a different kind of fitness equipment. Something that will engage and inspire exercisers to do more, to push themselves further.

Out of this vision was born the world’s first electronic piece of fitness equipment, the LifeCycle Exercise Bike. Our long-standing commitment to thoughtful product development and partnership has resulted in the global leader in the commercial fitness industry with over 400 different products delivered to thousands of commercial and home fitness customers worldwide.

Throughout our history, Life Fitness’ dedication to constantly develop better, more effective fitness equipment is rivaled only by our desire to be a partner to help our customers who choose to become fit, or to provide a healthy lifestyle to others.

Commitment to the Best in Product Development and Innovation

Investment in great products means more than just innovation for innovation's sake. It means thoughtful creation of products and product features so our customers have the right choice of equipment that is right for them, not the newest fad the will be hyped today and gone tomorrow.

Our commitment to product leadership is displayed each and every day, by dedicating more people and resources to make sure our product feel great and perform safely. That they have the best industrial design on the market, with unsurpassed reliability and durability built in.

A Partnership for Success

Whatever it takes to help our customers. As the top-selling and most trusted fitness equipment manufacturer in the world, Life Fitness supports your success in ways no other company can. Our global sales and distribution teams are known world-over for going beyond just bringing you great fitness equipment, by developing a true partnership to help you achieve your business goals.

http://lifefitness-commercial.icovia.com/

Page | 38


LifeFitness Provides the Following Additional Services: Equipment Selection Our two industry-leading brands, Life Fitness and Hammer Strength empower you to create a fitness floor tailored to your exercisers. We offer variety in our two cardio lines and 12 different strength lines, because we know that having choices helps you choose the right equipment to best suit your needs. A variety that also helps exercisers avoid boredom, plow through plateaus and achieve their goals—which they will attribute to your facility. Because the best exercise plan is one with room to grow, the best facilities enable that growth and thoughtful owners are rewarded for their foresight with very loyal members. Including:

Experienced sales consultants

Life Fitness and Hammer Strength brands

Life Fitness Journey

Facility Layout Services Creating a safe and inviting facility floor plan that maximizes your space is the first step in creating a successful fitness facility. Whether you are adding new equipment, expanding an existing facility or building a new one, Life Fitness has unsurpassed facility layout services and expertise to set your facility apart. Including:

2D and 3D layout services

Visio and CAD resources on media website

Online facility planner

Equipment Financing Life Fitness finances more fitness equipment than anyone in the world, including banks and leasing companies. We help our customers grow by investing in their future. Several of our customers have started out with us as single-club operators and after we took a chance on them, expanded to become multiple-club owners. Life Fitness understands club operations, and this allows us to not only assist with financing, but to help you avoid common—and costly—mistakes. Including:

Equipment financing team

Leasing and financing options

Pre-Sales Office Support Channeling the energy of a bustling exercise facility in a sales office is fairly daunting. We offer promotional videos to create visual excitement that also educates on the features of Life Fitness equipment. This way, exercisers immediately connect the idea of your facility helping them reach their fitness goals. Including:

Product/promotional posters

Life Fitness and Hammer Strength promotional DVD

2D and 3D layout posters

Staff Education Tools The Life Fitness Academy has devised a multi-step learning solution with options that benefit every fitness professional. It all begins with e-learning where staff and trainers can conveniently gain and test their knowledge. Fun, dynamic live and on-demand webinars comprise the next level of available training. Including:

On-Site training

E-learning

Webinars

Grand opening on-site trainer support

Product education videos

Member Education Tools For those facilities that have limited staff, having great instructional materials to help train your members on features and proper usage of your Life Fitness and Hammer Strength equipment can be a big help. The Life Fitness website Fitness Advisor section is a great place to direct your exercisers for fitness articles instructional videos and other tips on how to get the most from their workout. Our Life Fitness Academy trainers can further personalize equipment training for your exercisers by providing in-person instruction for your members, in your own facility. Including:

Educational video content

Grand opening on-site trainer support

http://www.lifefitness.com/commercial/working-with-life-fitness/opening-a-new-facility-of-refreshing-your-existing-facility/equipment-selection.html

http://www.lifefitness.com/commercial/working-with-life-fitness/opening-a-new-facility-of-refreshing-your-existing-facility/facility-layout-services.html

http://www.lifefitness.com/commercial/working-with-life-fitness/opening-a-new-facility-of-refreshing-your-existing-facility/equipment-financing.html

http://www.lifefitness.com/commercial/working-with-life-fitness/opening-a-new-facility-of-refreshing-your-existing-facility/presales-office-support.html

http://www.lifefitness.com/commercial/working-with-life-fitness/opening-a-new-facility-of-refreshing-your-existing-facility/staff-education-tools.html

http://www.lifefitness.com/commercial/working-with-life-fitness/opening-a-new-facility-of-refreshing-your-existing-facility/member-education-tools.html

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Membership Sales Tools We understand selling memberships or promoting your facility to prospective exercisers is critical to your success. That's why Life Fitness wants to help you maximize your equipment investment, by giving you the tools to promote your equipment and it benefits, and give you unique ways to distinguish your facility. Things like the Life Fitness Journey Concept and unique workout tools like Life Fitness Virtual Trainer website. And staff education tools, so your trainers and staff can highlight all the features that help sell the equipment's benefits - and ultimately those of your club - to prospective members. Including:

Life Fitness quick product reference guide

Life Fitness Virtual Trainer website

Life Fitness Journey

Product education videos

Marketing Support - Print and Online Our marketing teams support 120 countries around the globe from headquarters and regional offices. We work hard to understand your specific needs from a point of view that will resonate with the exercisers you're trying to attract. We offer custom and ready-made solutions and collaborate with our customers to create the ultimate fitness experience. In addition to our capabilities in creating printed marketing materials, we recognize that the world is changing and moving to an ever more interactive existence. We can help you with website content and online resources to reach your exercisers before they ever walk through the door. Including:

Business solutions website

Media assets website

Video content

In-Facility Promotional Materials Keeping your facility looking and feeling fresh and exciting can be as easy as adding some new visual elements. We believe that these can be both eye-catching and educational. Many of our posters call out relevant information that makes exercisers feel comfortable. Including:

"Coming soon" posters

2D and 3D layout posters

POS promotional items

Public Relations You’re out there in your area, supporting area residents and their desire to live healthier lives. Public relations, both through the media and community, is a great way to spread the word about your accomplishments and attract new members. Including:

Public relations guide

http://www.lifefitness.com/commercial/working-with-life-fitness/opening-a-new-facility-of-refreshing-your-existing-facility/membership-sales-tools.html

http://www.lifefitness.com/commercial/working-with-life-fitness/opening-a-new-facility-of-refreshing-your-existing-facility/marketing-support-print-and-online.html

http://www.lifefitness.com/commercial/working-with-life-fitness/opening-a-new-facility-of-refreshing-your-existing-facility/infacility-promotional-materials.html

http://www.lifefitness.com/commercial/working-with-life-fitness/opening-a-new-facility-of-refreshing-your-existing-facility/public-relations.html

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Appendix C: Equipment Costs

Manufacturer Treadmills MSRP

Length

(in.) Width (in.)

Footprint

(ft2)

LifeFitness F1 Smart $2,499 77 34 18.2

LifeFitness F3 $2,999 79.5 34.5 19.0

LifeFitness T3 $2,999 78.5 34.5 18.8

LifeFitness T5-0 $3,699 80.25 32 17.8

LifeFitness T5-5 $4,199 80.25 32 17.8

LifeFitness T7-0 $4,699 80.25 32 17.8

LifeFitness Club Series $5,499 83 37 21.3

LifeFitness

Platinum

Club $5,999 80 37 20.6

Vision

Fitness T80 Classic $4,599 80 43.5 24.2

Average: $4,132 79.9 35.2 19.5

Manufacturer Exercise Bikes MSRP

Length

(in.)

Width

(in.)

Footprint

(ft2)

LifeFitness R1 Lifecycle $1,599 57 26 10.3

LifeFitness R3 Lifecycle $2,599 57 26 10.3

LifeFitness

Club Series Recumbent

Lifecycle $2,999 54 26 9.8

LifeFitness

Platinum Club Series

Recumbent Lifecycle $3,499 65 27 12.2

LifeFitness C1 Lifecycle $1,399 45 27 8.4

LifeFitness C3 Lifecycle $2,299 45 27 8.4

LifeFitness

Club Series Upright

Lifecycle $2,699 48 24 8.0

LifeFitness

Platinum Club Series

upright Lifecycle $2,999 43.5 21 6.3

Vision Fitness V-Series Indoor Cycle $1,199 56 21 8.2

Vision Fitness U70 Upright Bike $2,499 41 26 7.4

Vision Fitness R70 Recumbent $2,999 67 28 13.0

Average: $2,435 52.6 25.4 9.3

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Manufacturer Ellipticals MSRP

Length

(in.) Width (in.)

Footprint

(ft2)

LifeFitness X1 $2,199 81 30 16.9

LifeFitness X3 $3,099 81 30 16.9

LifeFitness X5 $3,899 83 26 15.0

LifeFitness X8 $4,699 83 26 15.0

LifeFitness

Club

Series $4,299 83 28 16.1

Vision

Fitness S60 $3,999 73.2 29.5 15.0

Vision

Fitness S70 $4,999 75 35 18.2

Average: $3,885 79.9 29.2 16.2

Manufacturer

Summit

Trainer MSRP

Length

(in.) Width (in.)

Footprint

(ft2)

LifeFitness

Integrity

Series $4,699 68 33 15.6

Average: $4,699 68 33 15.6

Manufacturer MultiStation MSRP

Length

(in.) Width (in.)

Footprint

(ft2)

Vision Fitness ST710

111 87 67.1

Vision Fitness ST700

57 62 24.5

Vision Fitness ST780 Bench

61 26 11.0

PreCor S3.45 $5,799 117 92 74.8

PreCor S3.23 $3,199 53 38 14.0

PreCor S3.15 $1,299 108 72 54.0

LifeFitness G7 $2,999 68.5 70 33.3

LifeFitness G4 $2,499 80 53 29.4

LifeFitness G3 $1,999 80 53 29.4

LifeFitness G2 $1,499 71 48 23.7

Average: $2,756 80.7 60.1 36.1

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Manufacturer Bench MSRP

Length

(in.) Width (in.)

Footprint

(ft2)

Vision

Fitness

ST780

Bench

61 26 11.0

PreCor Multi-angle $329 52 24 8.7

PreCor

Super

Bench $1,050 54.3 26 9.8

Average: $690 55.8 25.3 9.8

Manufacturer Core MSRP

Length

(in.) Width (in.)

Footprint

(ft2)

PreCor

240i Stretch

Trainer $895 53 16 5.9

PreCor Ab-X $1,195 57 32 12.7

Average: $1,045 55.0 24.0 9.3

Manufacturer

Body

Shape MSRP

LifeFitness Regular $299

LifeFitness Plus $399

Average: $349

cuernavaca fitness center final report

Health & Medicine

boot camp

comvirtual

estate consultation

martial arts

il 60176customersupportlifefitness

motion10900

impact resistant

group class