At the height of the COVID-19 pandemic, business owners like Justin Yule, the founder and CEO of The Transformation Club in Chanhassen, were tasked with answering questions that impacted not only their lives, but the lives of their employees and members.
One of the questions Yule and his wife, Janell, answered was about whether they would keep their employees and if they did, how would they pay them?
"We didn't let our staff go instead of becoming owner/operators," Justin Yule said. "We knew we were going to reopen and we didn't want to let great people go and have to try and get them back. We had to go in the hole to pay our employees."
Yule took out a loan and utilized the Payroll Protection Program as best as he could.
"The PPP was very helpful but there's going to be tax implications, so your revenue will take a huge hit," he said. "I am very grateful for what we did get, however, PPP did not come close to covering payroll."
Justin and Janell Yule are one of the countless gym owners across the United States wondering if and when Congress will approve financial relief targeted solely for the fitness industry.
The GYMS Act, which was not part of the latest round of COVID-19 relief, looks to, "create a $30 billion fund to provide grants to affected businesses in the health and fitness industry." Grants would be capped at 45% of the facility’s 2019 revenue—or $20 million, whichever is less.
Max and Jill Lipset co-own The Power House in St. Louis Park, Highland Park, and Woodbury. Right now, the husband-and-wife duo are focusing on their short-term goal of rebuilding their fitness community.
"We're focusing on what we can do," Jill Lipset said. "Certainly we can't predict the future so we're really focused on doing great work in the gyms, keeping people safe, and rebuilding our community with the ability to know that at any given moment we're going to need to pivot back to virtual."
The Power House saw membership revenue decline as much as 60 percent at the height of the pandemic. Even with restrictions lifting and society reopening at an instant, returning to the gym hasn't been instantaneous.
"We're definitely seeing people come back and have seen shakeups of gyms closing, inheriting some of the people impacted by that," Jill said. "We're seeing the people who feel like they're looking for some community and are sick of working out in their basement or alone."
Both The Power House and The Transformation Club underwent changes to promote COVID-19 safety. The Power House changed things up to promote distancing and less sharing of equipment, which they intend are planning to continue with.
The Transformation Club will have spent between $40,000-$50,000 all while reducing class sizes and not increasing membership rates.
"We dipped into the bucket quite a bit to pay our staff, rebuild our gym, and redesign everything that we do so it could be COVID-friendly," said Yule.
Both Yule and the Lipsets say they are not in danger of closing their doors anytime soon, however, that isn't the case for others. Both mentioned nearby club owners who will be closing, or already have closed, because of declining memberships and hesitation around going back to the gym.
When it comes to fitness industry-target financial relief, studies show that it is in fact needed.
The Community Gyms Coalition, which represents more than 15,000 community gyms, found that 80 percent of surveyed gyms were experiencing financial hardship caused by the pandemic. Of the gyms surveyed, the average debt was $75,000.
"We're good at putting on a brave face, but I think a lot of gym owners are just burnt out and disheartened," Lipset said. "It's been brutal. And I know it's not just the fitness industry that are feeling that as well."
The Community Gyms Coalition found more than 6,000 fitness facilities have closed because of the pandemic, with other gym owners reporting they have more than a one in three chance of bankruptcy before 2021 without direct aid.
"The GYMS Act would be a really nice step for small business like ours to have some resources allocated to us to get back focusing on delivering our services to the community in a way that they need now," Max Lipset said. "People's needs around health are different now because of the pandemic. Our industry can have a big part to play in helping people navigate that back to a place of health and fitness post-pandemic."