🚀 Exciting Insights from the Boutique Fitness Studio 2025 Report! 🚀
On the latest HALO Talks Fast Break Julian Barnes peels back the curtain on (some) of their findings in report that took 9 months to put together—and the data reveals some eye-opening strategies for boutique fitness studio success.
Here are 3 key takeaways every studio owner or industry investor should know:
🔑 Referrals Power Growth:
44% of new client leads in profitable studios come from referrals. Word-of-mouth remains the most effective—and cost-efficient—lead generation tactic. Deliver an exceptional member experience, and your clients will do your marketing for you!
🔑 Profitability is Rising—But Operational Excellence is Key:
Studios running at a 20% profit margin nearly doubled since 2022—but only when fundamentals are executed rigorously. That means consistently finding (50+ leads/month), enrolling (30% conversion), and retaining (less than 5% churn) your members.
🔑 Invest in Management for Sustainable Growth:
There’s a direct correlation between having a full-time manager and higher studio revenue and profit margins. Owners: Empower talented managers to focus on client acquisition, experience, and retention—it’s a proven path to scaling success.
đź“Š Want deeper data and actionable benchmarks? Download the full BFS 2025 Report at BFSReport.com
You can also register for their free webinar on May 13th at 3pm EST where they go into a ton more details:Â
https://main.bfsnetwork.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
This is Pete Moore on Halo Talks NYC on location,
Scottsdale, Arizona. I have a pleasure of bringing a close friend of the
square. He has always been inside the square.
Julian Barn. Go for it. This is
Pete Moore on Halo Talks NYC. I have the pleasure of bringing
back to our podcast channel the one, the
(00:24):
only Julian Barnes. We're gonna talk about the BFS
2025 report and everything that's going on in the boutique
industry as a fast break. So, Julian, welcome back to the show.
Hey. What's going on, Pete? Thanks for having me again. So I love the data
that you guys are providing and not just, qualitatively,
but quantitatively finally, where I could actually have a statistic and
(00:47):
it can be backed up. So I love the fact that the referrals are coming
in at 44%, and I want you to give us a quick overview of
what the report has so we can make sure everyone's reading it after you overview
it. Absolutely. But, again, thanks for the opportunity. We've spent
the last nine months conducting a worldwide survey, mostly
North America, but a little light representation from UK and Australia and
(01:09):
a few other countries asking studios across
the entire world, across every modality
what their metrics look like so we could produce a
profile of a profitable studio. And not only did we
do that, we produced seven profiles. So I'll talk about one
of them today. Let me show you the profile of
(01:33):
a profitable studio, all modalities, any
market size. And this is only profitable
studios. They are overwhelmingly generating less than half
a million in revenue with a profit margin of 10 to
19%. They are single location businesses
averaging two to 2.5 visits per week. They have between a
(01:54):
249 clients, and their average revenue per
member is between a hundred and $2.49. They pay
their front desk people sixteen to twenty bucks an hour. They pay their
instructors twenty six to fifty an hour. Their managers earn
50,000 to 75,000 per year. Their churn is
less than 5%. Referrals is their most
(02:16):
effective lead generation tactic, and they're spending less than
$2,500 a month on marketing and paid ads. That is
the profile of a profitable studio, any modality,
any market size.
One thing that's interesting to me is some of the
groups that I've seen in New York are starting to add more and
(02:39):
more classes to the menu. You know? And I liken
that to Southwest Airlines. You know? They fly that plane fourteen hours a
day, and some airlines are at eight to ten hours a day. So the
studios that are adding the the the classes are adding the volume.
Absolutely. And so one of the results of what
you just said is we saw an increase
(03:03):
in the number of studios that are generating a profit margin of
20% or more that increased from 9.2%
to 17.4% from 2022 to
2024. Now that's still less than one fifth
of the entire market, but it is a almost a
% increase from the last time we conducted the survey.
(03:25):
So that is significant for, investors out there and owners
that are thinking about about investing to know that
that there's a segment of the boutique fitness community that
is becoming more profitable. And you know better than anyone else how
critically important it is for these businesses to run, when
I say profit, at a 20% profit
(03:47):
margin. That's what this number says. 20% of the
studios we surveyed are generating I'm sorry.
17% of the studios we surveyed are generating a
profit margin of 20% or more. You know, Julie,
when you look at at QSR and and fast food, restaurants,
you know, their their barometer is kind of a 15% margin just given the
(04:09):
the food and the labor cost typically be at around 60 percent. So if
you are a small operator in the boutique space, if you're getting to 20%
and higher, you know, you're doing the right things. And I would
hope, as you were hoping as well, I'm sure that people are continuing to
increase their price because the price to value that you're delivering to help
someone lead a healthy lifestyle is worth way more than what their per class
(04:32):
session is. And don't give up on price because you'll never get it
back. That is absolutely correct. In fact, I was just at
a dinner a couple nights ago with some industry
industry colleagues, owners, and and other vendors, in New
York City Two Nights ago. And one of the points I made
is that our industry as a whole doesn't charge enough.
(04:57):
And I'm not saying they're not charging enough for the commodity of
fitness. It's my opinion that we're not charging
enough, in the role of
preventative health and and packaging what we
do as helping people improve their health.
If you told me that you could absolutely,
(05:19):
transform my life, there's no amount of
money I wouldn't pay. I would pay anything for that. And not only
that, it would be the last bill I would cut. I would cut my
Netflix. I would cut my Whole Foods. I would cut almost
everything before I cut my my bill that I pay
every month to whoever is helping me live a healthy life. So,
(05:40):
yeah, you're absolutely right. We're not charging enough. Yeah, Julian. There was
a, a client I spoke to the other day, and, I I my
eyes popped open. He had a $385 per month,
unlimited membership, but I had I said, how did you get to that? He's like,
I'm not afraid. I'm not afraid to charge that because I know I
deliver that. Exactly. I love that fact. He was just not afraid. Like, I'm not
(06:02):
gonna lose business. Do people actually gonna perceive it as something
that's different than some of the other places
that are you know, if if something's priced low, it means it's it's it's less
expensive because for a reason, because it's not as good. Correct. You know? So
Right? So here's the other good news from the from
the report. It's what you're looking at here on the screen. The
(06:25):
profitable studios are executing the
fundamentals of studio ops at a very high level. They
are consistently and rigorously implementing
basic boring fundamental principles of
studio ops. What do I mean? They are finding
so f is find. They're finding new leads at
(06:47):
50 leads per month. E, they are enrolling
these leads by converting them at a 30% conversion
rate. And, r, they are retaining these new members,
with a less than 5% churn rate in a two year LTV.
So they're finding, enrolling, and retaining. And as I mentioned
a few minutes ago, referrals is the number one or is
(07:10):
the most effective lead gen tactic. So it's not it doesn't
require you to have a a huge, digital marketing
budget. You don't have to hire an agency. You just have to do
the consistent things well each and every
day, and that is proven from this report
to be the path or one of the paths to profitability. So that I
(07:32):
think that's a great message for everyone to hear. Yeah. And and some of the
takeaways that we see, from some of the clients, you know, when we say, this
is what you need to do in order to build a relationship with someone.
And if they leave your studio, you know, they broke up with
you. Okay? So let's, like, call it what it is. I have a relationship, you
deliver. I pay you for that relationship that you deliver
(07:54):
value, or you didn't give me what I expected. And I
feel like a lot of studios are starting to understand that it's not just the
word community. It's it's relationship, and it's gotta be real, and it's
gotta provide results. Well and that's who drives the referrals as you can see here
on the screen. Yep. Right? There are lots of different ways, to have referrals.
It can be indirect, direct. You can you can reward members. It
(08:16):
can happen organically. But the point is word-of-mouth marketing
is the most powerful form of marketing. And I'm not gonna call it
free, but it's not expensive. Right? It's not hiring an
agency and trying to figure out the algorithms changed. It's really
based in client experience because if you keep your clients happy, they're gonna tell
their friends, hey. You should join me for class. So that's takeaway number
(08:39):
three. Referrals are the most effective lead gen source. And then I wanna
jump to takeaway number six, which is the one that surprised me the most.
I wasn't expecting it, but it makes a lot of sense.
There is a direct correlation between
studios that have a manager and their top
line revenue and their profit margin. So in other words, if
(09:02):
you're if you're listening to this and you are, you're
you're thinking you have a part time manager, but you can't afford to invest in
a full time manager or you you wish you could afford a manager, but you're
not willing to make that investment, This
takeaway is unequivocal
unequivocal in suggesting when you invest in a manager,
(09:24):
your total revenue increase and your profit margin will increase.
And if you think about what I said a few minutes ago about
find, enroll, and retain, well, that's the manager's
job to be finding new leads, to be running the
plays, to convert those leads into members, and running the
client experience plays to keep those members, for two
(09:46):
years of plus. That's the manager's job. So when you have a manager focus on
doing that, then you, the owner, can be out there growing the business,
cultivating relationships. Hard to do both. I will
say is two takeaways here, and and this is great stuff. You know, one
is, a client of ours, used to use this phrase. He's
like, I can't microwave a manager after crockpot.
(10:09):
So invest not only in the right talent, but cultivate that
talent, make them part of the ownership team, make sure everything's
aligned, and make sure they get educated by going to events,
by getting online, by doing continuing education. And then my other
takeaway here with you is when you get this
report, there's a link to get this report, don't just read the
(10:31):
report. Okay? This is basically a playbook
of someone else's scorecard on how they run their
business, and these are attainable statistics. So if I
say someone's getting 50 leads a month, don't tell me you can't get 50 leads
a month Correct. Because it's getting done and it's across the world. So
make this a benchmark, make this a bar that you need to cross,
(10:53):
and successful studios make successful communities. Successful
communities make successful health health health environments for all of us.
Go halo. Go BFS. Julian, look forward to seeing you in person.
+1, 23, halo. Halo. Halo, baby. Alright. Good stuff.
Get the report real quick.
BFSreport.com. BFS
(11:14):
reports with an s Com. Either one. Fantastic.
Thank you. We got all the doc
This is Pete Moore on Halo Talks NYC on location,
Scottsdale, Arizona. I have a pleasure of bringing a close friend of the
square. He has always been inside the square.
Julian Barn. Go for it. This is
Pete Moore on Halo Talks NYC. I have the pleasure of bringing
back to our podcast channel the one, the
(00:24):
only Julian Barnes. We're gonna talk about the BFS
2025 report and everything that's going on in the boutique
industry as a fast break. So, Julian, welcome back to the show.
Hey. What's going on, Pete? Thanks for having me again. So I love the data
that you guys are providing and not just, qualitatively,
but quantitatively finally, where I could actually have a statistic and
(00:47):
it can be backed up. So I love the fact that the referrals are coming
in at 44%, and I want you to give us a quick overview of
what the report has so we can make sure everyone's reading it after you overview
it. Absolutely. But, again, thanks for the opportunity. We've spent
the last nine months conducting a worldwide survey, mostly
North America, but a little light representation from UK and Australia and
(01:09):
a few other countries asking studios across
the entire world, across every modality
what their metrics look like so we could produce a
profile of a profitable studio. And not only did we
do that, we produced seven profiles. So I'll talk about one
of them today. Let me show you the profile of
(01:33):
a profitable studio, all modalities, any
market size. And this is only profitable
studios. They are overwhelmingly generating less than half
a million in revenue with a profit margin of 10 to
19%. They are single location businesses
averaging two to 2.5 visits per week. They have between a
(01:54):
249 clients, and their average revenue per
member is between a hundred and $2.49. They pay
their front desk people sixteen to twenty bucks an hour. They pay their
instructors twenty six to fifty an hour. Their managers earn
50,000 to 75,000 per year. Their churn is
less than 5%. Referrals is their most
(02:16):
effective lead generation tactic, and they're spending less than
$2,500 a month on marketing and paid ads. That is
the profile of a profitable studio, any modality,
any market size.
One thing that's interesting to me is some of the
groups that I've seen in New York are starting to add more and
(02:39):
more classes to the menu. You know? And I liken
that to Southwest Airlines. You know? They fly that plane fourteen hours a
day, and some airlines are at eight to ten hours a day. So the
studios that are adding the the the classes are adding the volume.
Absolutely. And so one of the results of what
you just said is we saw an increase
(03:03):
in the number of studios that are generating a profit margin of
20% or more that increased from 9.2%
to 17.4% from 2022 to
2024. Now that's still less than one fifth
of the entire market, but it is a almost a
% increase from the last time we conducted the survey.
(03:25):
So that is significant for, investors out there and owners
that are thinking about about investing to know that
that there's a segment of the boutique fitness community that
is becoming more profitable. And you know better than anyone else how
critically important it is for these businesses to run, when
I say profit, at a 20% profit
(03:47):
margin. That's what this number says. 20% of the
studios we surveyed are generating I'm sorry.
17% of the studios we surveyed are generating a
profit margin of 20% or more. You know, Julie,
when you look at at QSR and and fast food, restaurants,
you know, their their barometer is kind of a 15% margin just given the
(04:09):
the food and the labor cost typically be at around 60 percent. So if
you are a small operator in the boutique space, if you're getting to 20%
and higher, you know, you're doing the right things. And I would
hope, as you were hoping as well, I'm sure that people are continuing to
increase their price because the price to value that you're delivering to help
someone lead a healthy lifestyle is worth way more than what their per class
(04:32):
session is. And don't give up on price because you'll never get it
back. That is absolutely correct. In fact, I was just at
a dinner a couple nights ago with some industry
industry colleagues, owners, and and other vendors, in New
York City Two Nights ago. And one of the points I made
is that our industry as a whole doesn't charge enough.
(04:57):
And I'm not saying they're not charging enough for the commodity of
fitness. It's my opinion that we're not charging
enough, in the role of
preventative health and and packaging what we
do as helping people improve their health.
If you told me that you could absolutely,
(05:19):
transform my life, there's no amount of
money I wouldn't pay. I would pay anything for that. And not only
that, it would be the last bill I would cut. I would cut my
Netflix. I would cut my Whole Foods. I would cut almost
everything before I cut my my bill that I pay
every month to whoever is helping me live a healthy life. So,
(05:40):
yeah, you're absolutely right. We're not charging enough. Yeah, Julian. There was
a, a client I spoke to the other day, and, I I my
eyes popped open. He had a $385 per month,
unlimited membership, but I had I said, how did you get to that? He's like,
I'm not afraid. I'm not afraid to charge that because I know I
deliver that. Exactly. I love that fact. He was just not afraid. Like, I'm not
(06:02):
gonna lose business. Do people actually gonna perceive it as something
that's different than some of the other places
that are you know, if if something's priced low, it means it's it's it's less
expensive because for a reason, because it's not as good. Correct. You know? So
Right? So here's the other good news from the from
the report. It's what you're looking at here on the screen. The
(06:25):
profitable studios are executing the
fundamentals of studio ops at a very high level. They
are consistently and rigorously implementing
basic boring fundamental principles of
studio ops. What do I mean? They are finding
so f is find. They're finding new leads at
(06:47):
50 leads per month. E, they are enrolling
these leads by converting them at a 30% conversion
rate. And, r, they are retaining these new members,
with a less than 5% churn rate in a two year LTV.
So they're finding, enrolling, and retaining. And as I mentioned
a few minutes ago, referrals is the number one or is
(07:10):
the most effective lead gen tactic. So it's not it doesn't
require you to have a a huge, digital marketing
budget. You don't have to hire an agency. You just have to do
the consistent things well each and every
day, and that is proven from this report
to be the path or one of the paths to profitability. So that I
(07:32):
think that's a great message for everyone to hear. Yeah. And and some of the
takeaways that we see, from some of the clients, you know, when we say, this
is what you need to do in order to build a relationship with someone.
And if they leave your studio, you know, they broke up with
you. Okay? So let's, like, call it what it is. I have a relationship, you
deliver. I pay you for that relationship that you deliver
(07:54):
value, or you didn't give me what I expected. And I
feel like a lot of studios are starting to understand that it's not just the
word community. It's it's relationship, and it's gotta be real, and it's
gotta provide results. Well and that's who drives the referrals as you can see here
on the screen. Yep. Right? There are lots of different ways, to have referrals.
It can be indirect, direct. You can you can reward members. It
(08:16):
can happen organically. But the point is word-of-mouth marketing
is the most powerful form of marketing. And I'm not gonna call it
free, but it's not expensive. Right? It's not hiring an
agency and trying to figure out the algorithms changed. It's really
based in client experience because if you keep your clients happy, they're gonna tell
their friends, hey. You should join me for class. So that's takeaway number
(08:39):
three. Referrals are the most effective lead gen source. And then I wanna
jump to takeaway number six, which is the one that surprised me the most.
I wasn't expecting it, but it makes a lot of sense.
There is a direct correlation between
studios that have a manager and their top
line revenue and their profit margin. So in other words, if
(09:02):
you're if you're listening to this and you are, you're
you're thinking you have a part time manager, but you can't afford to invest in
a full time manager or you you wish you could afford a manager, but you're
not willing to make that investment, This
takeaway is unequivocal
unequivocal in suggesting when you invest in a manager,
(09:24):
your total revenue increase and your profit margin will increase.
And if you think about what I said a few minutes ago about
find, enroll, and retain, well, that's the manager's
job to be finding new leads, to be running the
plays, to convert those leads into members, and running the
client experience plays to keep those members, for two
(09:46):
years of plus. That's the manager's job. So when you have a manager focus on
doing that, then you, the owner, can be out there growing the business,
cultivating relationships. Hard to do both. I will
say is two takeaways here, and and this is great stuff. You know, one
is, a client of ours, used to use this phrase. He's
like, I can't microwave a manager after crockpot.
(10:09):
So invest not only in the right talent, but cultivate that
talent, make them part of the ownership team, make sure everything's
aligned, and make sure they get educated by going to events,
by getting online, by doing continuing education. And then my other
takeaway here with you is when you get this
report, there's a link to get this report, don't just read the
(10:31):
report. Okay? This is basically a playbook
of someone else's scorecard on how they run their
business, and these are attainable statistics. So if I
say someone's getting 50 leads a month, don't tell me you can't get 50 leads
a month Correct. Because it's getting done and it's across the world. So
make this a benchmark, make this a bar that you need to cross,
(10:53):
and successful studios make successful communities. Successful
communities make successful health health health environments for all of us.
Go halo. Go BFS. Julian, look forward to seeing you in person.
+1, 23, halo. Halo. Halo, baby. Alright. Good stuff.
Get the report real quick.
BFSreport.com. BFS
(11:14):
reports with an s Com. Either one. Fantastic.
Thank you. We got all the doc
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