Pickin’ up good vibrations
Brothers Jeremy and Jonathon Ullrich are on their second business — a chain of franchised vibration training studios.
Sunday, April 29 2007 || BY Fiona Rotherham
Jeremy Ullrich gets a lot of ribbing from his mates about this: these days he sports a hot pink business card. He thought it fitting given he and brother Jonathon have started a chain of women-only fitness studios, called Vibex.
Jeremy, 33, used to work with his father (who started Hurricane Wire) in the electric fencing business. When his younger brother Jonathon, now 29, bought into a gym in east Auckland, Jeremy thought it sounded a lot more fun than electric fencing and the brothers ended up in business together.
They spent the first ten years making all their mistakes, Jeremy Ullrich says. The experience of starting a new venture this time around has been markedly different. Startup owners typically spend a lot of time and energy at the outset setting up procedures and systems but the brothers already had a lot of that in place from their existing business that they could adapt. They had already learned the hard way the value of using professionals for tasks they weren’t good at, so sought advice from Franchize Consultants and also joined the Franchise Association of New Zealand.
They’ve spent around $250,000 so far setting up Vibex but this has been funded from revenue from their two All Seasons gyms. That has also given them the luxury of being able to wait until the right franchisees comes along (the franchises range in price from $85,000 to $125,000).
“Having everything 95% proven for the new business means we have that extra confidence and are hitting the ground running,” Ullrich says.
The Vibex studios are a mix of franchise and company-owned; so far there are three franchised ones, in Hamilton and Birkenhead, and one company-owned studio in Mt Wellington.
So why this new business venture instead of expanding their existing gym model? Ullrich says there are two trends in the gym industry worldwide: one is for the big gyms to get even bigger and the other is for smaller workout studios situated in convenient locations offering a quicker workout.
Given there’s upwards of $5 million of capital tied up in the bigger-gym concept, the two brothers decided starting a new business with small studios was way less risky. The advice they’ve had is that the plural model of franchising works best where you have a mix of both company-owned and franchised studios.
Ullrich says they looked at what sort of training would be best for women wanting a quick workout and settled on vibration training targeted at 15-minute workouts.
While a number of other vibration training studios have sprung up around the place, Ullrich says Vibex differentiates itself by also offering a weight loss plan and a walking programme as part of its membership fee, providing women with what they need to stay fit and slim.
The big goal is to have 50 studios nationwide within the next five years with around a two-to-one ratio of company-owned to franchisee. Ullrich says conventional business wisdom is you target higher socio-economic spenders first, but the first studio, which opened in the Hamilton suburb of Norton, has so far traded better than one opened at the same time in more upmarket Birkenhead in Auckland. That’s why the company chose Mt Wellington for its first studio.
Maryann Elliott, who with her sister owns the two franchised Hamilton studios, says Vibex’s low-cost model — $20 to $24 a week — appeals to a lot of users. Elliott, who was a regular gym bunny when she lived in Australia and had a corporate role in IT, says the vibration machines appealed to her because she was never comfortable with resistance training in ordinary gyms. “I came from a business management background so I bring those skills to it but really, at the end of it, you have to be passionate about the product.”
And the perils of working with family? Ullrich says he has complementary strengths to his brother; he handles the finances and back-end operations while more-extroverted Jonathon handles the marketing and sales side. And when they do have the odd disagreement, blood is thicker than water and they always make up pretty quickly, he says. Besides, they have Mum to answer to if they don’t.