9Round makes push further into Southeast Asia
|9Round has found its footing in Southeast Asian countries such as Japan, above. Growth in Vietnam and Indonesia are up next for the kickboxing concept.|
Vietnamese consumers, many new to fitness programs, want structured workouts with someone to lead the way. So says Ted Lee, the master franchisee who believes 9Round’s concept is the right fit and is moving forward with development despite pandemic delays.
Ted Lee signed his master franchise agreement for Vietnam in late 2019, expecting to open his first 9Round gym in Ho Chi Minh City by early 2020. As of mid-July, however, Lee was still stuck in South Korea, where he’d been living for several months because Vietnam’s COVID-19 related travel restrictions prevented him from entering the country.
Admittedly, said Lee during a video call, it’s been a rough start to his development plan that calls for 24 locations to open in 10 years, but he’s committed to pushing ahead and already has an opening team in place.
“Fortunately and unfortunately, I tried to open my center in Vietnam in the first half of this year, but now because I can’t get back, I had to hold,” said Lee.
So what exactly is the fortunate side of the situation? Lee had already secured real estate for his first gym, which he had to give up, but he anticipates finding a better location following pandemic-related business closures in the area. And because he’s already hired staff, he’ll be able to move quickly once the Vietnamese government eases restrictions.
While 9Round has locations of its kickboxing-focused fitness concept in 20 countries, including Japan, Singapore and India in Asia, it took a trip to Mexico to introduce Lee to the brand.
Also the president of Wooyang Co., a suit manufacturing company, Lee was in Mexico meeting with a business partner and friend whose brother, Isaac Kably, is 9Round’s master franchise owner in that country. Lee visited some of Kably’s gyms and tried the circuit format workout.
“It was just a 30-minute exercise and I was sweating,” Lee recalled. “So I thought, this is a very efficient way to exercise” that would appeal to Vietnamese consumers, half of which are under the age of 30 and, according to Lee, looking for a structured workout experience.
“Vietnamese, they really want to take care of their body shape,” said Lee, with yoga, Pilates and other fitness regimens gaining popularity. Large-format players such as California Fitness and Elite Fitness are growing their footprints in the country of 98 million people, but Lee expected the service standard inherent in 9Round’s model to stand out.
“At California Fitness, when you go there, and I hear this from my Vietnamese friends, people were expecting a high level of service because the cost of membership is quite high,” said Lee. “But once they join, they have to pay again for personal training, for all the things. My friends, they were expecting more training, education, because they don’t know where to start.”
9Round’s instructor-led classes bring a professionalism to the experience that Vietnamese consumers appreciate, and, as Shannon Hudson, 9Round’s founder and CEO said, help the concept overcome any cultural barriers when entering new markets.
|From left, 9Round founders Shannon and Heather Hudson with Ted Lee, master franchisee for Vietnam, and 9Round CFO Matt Foreman at the International Franchise Expo in 2019.|
“A jab, a punch, a front kick, that translates everywhere,” said Hudson as he also noted martial arts have roots in Asia, “so kickboxing, they’re familiar with it.”
Hudson, who along with wife and co-founder Heather and 9Round CFO Matt Foreman met with Lee during the 2019 International Franchise Expo in New York City, said Lee has “the passion and the enthusiasm” to go along with solid business experience necessary to drive development.
“I can tell he’s scaled that business well, he knows how to run a large staff,” said Hudson of Lee’s apparel manufacturing company that includes an office in Busan, South Korea, and two factories in Vietnam. Lee also operates a location of South Korean chain Ediya Coffee.
Lee plans to open three or four 9Rounds as company units before signing franchisees, he said, and he explained that over the past couple of decades, the popularity of the franchise model in Vietnam has increased.
Quick-serve restaurant brands such as KFC, Pizza Hut, Jollibee and Dairy Queen are established in Ho Chi Minh City, the commercial capital, and Hanoi, the country capital, and Chili’s opened its first restaurant in the country last year. Local brands have also emerged, mainly in foodservice, such as Trung Nguyen Café, Kichi Kichi and Sumo BBQ.
For 9Round, which has quickly expanded to nearly 800 units, about 200 of them international, the impacts of the COVID-19 pandemic have put things on pause, said Hudson.
“The rest of the year’s plan is to just tee up for 2021 and put the pedal to the metal,” he said. The brand, he emphasized, is still focused on global growth, with gyms also set to open later this year in Indonesia following another master franchise agreement signing.
Domestically, while 9Round opened six locations in June and another two in July, Hudson said shutdown orders heavily impacted the system and member retention is suffering, even as the company created enhanced cleaning and sanitization requirements and physical distancing guidelines.
“People are scared. Member retention is not going up right now,” said Hudson. “Our strategy right now is to not have closures” and switch people to online programs.
While it’s an undoubtably difficult situation for the company and its franchisees, Hudson said there’s reason to be optimistic.
“It has forced us to adapt to three different customer types,” he said. There are those who want to go into the gym and work with a trainer, those who only want to work out at home and, increasingly, “a hybrid customer,” someone who wants to visit the gym and have home workout options.
In March, 9Round launched its first online workouts and is building its own filming studio with the goal of developing a robust virtual fitness program.