Crunch Franchise CEO on the impact of COVID-19 on the fitness industry
Ben Midgley, Crunch Franchise CEO, joined Yahoo Finance Live to disucss how COVID-19 has impacted the fitness industry over the past year.
ADAM SHAPIRO: So on this year anniversary since the WHO declared a global pandemic, we've been talking to different businesses-- how they got through it. And we invite into the stream now Ben Midgley, the Crunch Franchise CEO. And it's good to have you here. Good to see you again. You operate in more than, I think, 40 states. How did you manage to keep operating, 'cause it was different in each of the states?
BEN MIDGLEY: Sure. Yeah. Nice to see you again, Adam. It was very tricky, you know. I don't want to sugarcoat it. We've had different restrictions in different states that we've had to work with, as I'm sure you know in talking to all the businesses that you talk to.
So some states were closed for, you know, six to nine months. Other states had capacity limitations or restricting different activities, such as group fitness or child care. And then, of course, you had to put all these different processes in place, whether it's temperature checking, or air filtration, sanitizing stations. So it's been a bit tricky.
But our network really has done, what I would say, an amazing job in very challenging circumstances. And we've actually grown our membership over the last year. So we're very fortunate there.
SEANA SMITH: Hey, Ben, talking about growing your membership, I saw that it's up 4% at a time when a lot of your competitors are just trying to get back to the levels that they saw pre-pandemic. What do you attribute this to?
BEN MIDGLEY: Well, a couple of things. I mean, the Crunch, as a brand, has been around for 30 years. So our members are really committed to us. And we've got to give a big thank you to them. They're the reason we're here.
So our owners took this situation, obviously, incredibly seriously, as all business owners did across the country. And they wanted to do everything they could to make sure members felt safe and comfortable. So they did everything they could very quickly. We did a lot of communication with our members.
We stopped billing exactly when we should have, credited anybody who got billed in accident. We had a 40-page readiness plan ready for the network just a few weeks into the pandemic. So as an organization, I think, fortunately, we were ahead of that compared to some of our industry counterparts. And that gave us a big advantage coming out the other side.
I think we felt a little more prepared that way, even though we were working with, you know, challenging and sometimes changing information. So, you know, pat ourselves on the back. They did well.
ADAM SHAPIRO: The different stimulus and relief bills that Congress has passed, were you able to assist the different, you know, business owners in accessing available assistance?
BEN MIDGLEY: That was a big help-- the PPP loans. And they also had another loan disaster relief called the EIDL loan. The qualifications changed a little bit with EIDL. They had a higher cap at one point, and then they reduced that. So that was a bit challenging.
But the benefit of the PPPs can't be underestimated for the franchisees. You know, certainly, there was a lot of record keeping in that. And there was some ratio issues with how much had to go to payroll versus rent. So it made it a little bit challenging to keep up with your bills. But, you know, the franchisees took advantage of that.
There's another round coming out now. And then, of course, they all spent a lot of time working with their landlords for potential rent abatements or adjustments to their leases and as well as other creditors. And overall, I'd say, though it wasn't perfect, everybody worked pretty well together to help get us through.
ADAM SHAPIRO: Ben Midgley, Crunch Franchise CEO. I know people talk about the COVID "19." I stepped on the scale this morning. It's actually 11.
So I think I need to be looking at some memberships. All the best to you.
BEN MIDGLEY: That's not bad.