The first of the two Turnaround King episodes takes us to a Whippany, NJ Gold's Gym franchise that's on the verge of closing.
The first of the 2 main Turnaround King episodes takes us to the Whippany, NJ Gold's Gym franchise that's on the verge of closing. Gym owners, the Puleos family, are faced not only with losing their business, but are also vulnerable to losing the family home which had been mortgaged to keep the business afloat.
Grant begins the show by entering the gym incognito - furnished with a concealed camera disguised as a button on his suit. He starts noticing problems at once. As a potential customer, Grant just isn't taken care of exceptionally well, and finds it tough to find someone to take care of him. Youngest son Jon sits behind the counter and is not very attentive. Grant asks questions. "Where is the pool?" Jon points toward an Olympic sized pool off in the distance. Grant notices an empty refrigerator. Asking about the price he is told $10 a month.
Jon explains this is because of the competition. There have been several gyms opening in the vicinity and the Puleos wish to offer the lowest price. Grant leaves the fitness center with nothing but a free 7 day pass. There was never any real attempt to sell him on Gym membership or another product.
The Puleos family thought it might an easy task to manage a gym when they first bought the place. They had seen other gyms doing well. Now, two and a half years later, they are struggling to remain open.
Grant sits down together with the Puleos family to go over what is happening wrong. Why are they struggling, and exactly what can they do to correct things, to turn things around and save their business along with their home? The family mentions the tough competition as well as the high franchising fees they need to pay for the Gold's name. Their answer to the problem of completion has thus far been to try and provide the lowest prices around.
Grant doesn't agree. Why are they wanting to have the lowest price when they have one of the nicest gyms in the community?
Staff Debriefing
Grant gathers owners and staff together for a meeting on the gym floor. This is when he reveals his visit while using the hidden camera. Grant plays the tape for everyone to see. It is not a flattering portrait of the right way to treat a client and the owners appear uncomfortable watching this video.
Grant makes some initial observations: The empty fridge - just looks bad. They don't seem to be doing business for the 21st century - they're not using email, cell phone, and other modern tools which is all so essential to run a successful business here in 2011.And maybe most importantly, they need a step by step process for enrolling a new customer. They didn't even speak about the gym to a prospective customer, they didn't show him around. They didn't even try to sell their product.
Grant asks the owners to leave the room. He wants to speak with the employees alone - they'll be more open. Immediately, various employees did open up. They had definite opinions on what the problems were. Gross mismanagement. The right hand doesn't really know what the left hand is doing. They call for a leader - somebody that will step up and take control.
At the moment, for these few days anyway, Grant Cardone will need to be that leader.
Grant knows already a very important factor that must change immediately. They have the most outstanding facility in the area however they are charging $10 a month. The numbers won't work with that. It needs to be considerably more.
"The staff has more pride in the gym than the owners."
Dinner with the Puleos - The family is frightened about losing the home. Grant tells his own story of losing his father at a early age and his mother not being able to keep up with the bills alone. Grant now feels invested in the family.
Grant Cardone leads the owners and staff on a tour of their own gym. They had avoided showing him the pool before, he believes, because they are embarrassed about some repair issues like mold and ripped up flooring. Still, he can't believe it took so long for them to show him the pool - the showcase of their business. Grant is extremely impressed with the facilities and comments on how someone is going to come in and then make it a profitable business. It's definitely something that can be successful.
"No one here is selling anything"
Grant emphasizes the need for selling. As author of the book "Sell To Survive" his philosophy is that selling is important for the success of any organization. "Nothing happens without sales. No Dream comes true without someone selling that dream. "He talks with all the staff trainers about having regular sales meetings and one of them mentions how they'd like to have a weekly sales meeting. Grant asks him if folks are coming in to work out on a daily basis, why would they simply have a sales meeting once weekly.
"They are so overwhelmed by what might happen they're no longer trying to find solutions anymore."
Grant will supply a business plan. The family members, Jo Jr. especially, are actually a bit skeptical up to now. They haven't bought into what Grant is offering at this time. It's the very thought of raising prices which has them particularly hesitant. Grant wants them to raise the cost of memberships to $59 a month for a yearly contract, and offer a onetime payment of $690. He arranges a mail out to get people in. He stresses that everybody must be dedicated to selling memberships.
Grant has everyone join every class the trainers put on at the gym. "Every company has to have firsthand experience with what you're selling" everybody has to understand exactly what the other people are doing. Tammy mentions that it is the first time anyone on the staff has had one of her classes.
Grant is turning the company back over to the Puleos the following day. He is confident the staff is prepared and pumped yet not so sure with regards to the owners. Jon Jr. is the one who's' not on board and Grant is afraid he could back out. He can see the enthusiasm from the employees the next day as potential customers, made possible by way of the mail out, begin to arrive.
Now, even Jo Jr. actually starts to see the potential and resolves to give it his all. Grant helps them try to sign new members up They register one, then another, all for the higher prices Grant has suggested. They even sell two people on year long memberships at $690 apiece.
Jo Jr. is entirely sold - he now has confidence.
Says Grant, "Anyone can sell"
Grant saw them sell with his help, but can they actually do it by themselves? If confidence level is any indication they should do just fine. Grant is hoping they go from red ink to black in 30 days.
Two months after the show was filmed, revenue increased by 30%.
