Gold’s Gym

Country: Manila, Philippines
Structure: Joint Venture/License/Franchise
Industry: Health and fitness club chain

Background
Gold's Gym, headquartered in Venice, California, is the most recognized fitness chain and largest franchisor of gyms in the world. The original Gold’s Gym started in 1965 as the place for serious fitness. Gold’s Gym quickly became known as “The Mecca of Bodybuilding.” In 1977, Gold’s gym received international attention when it was featured in the movie Pumping Iron that starred Arnold Schwarzenegger and Lou Ferrigno. Gold’s Gym now has 648 corporate-owned and franchised locations in 45 states and 35 countries with approximately 2.5 million total members.

BrandAmerica’s portfolio company, GlobalFit Asia (“GFA”), is the Gold’s Gym Master Franchisee for Asia (excluding Japan), holding the exclusive rights to develop and franchise gyms under the brand throughout the territory. Starting with a handful of city-specific licenses in 1997, GFA later purchased the Asia Master Franchise at the suggestion of Gold’s Gym executives in 2001.

Challenge
Under a joint venture structure, which would hold the Gold’s Gym license for Metro Manila, BrandAmerica sought to develop that market as a joint venture partner and the Operator of each Gold's Gym in Metro Manila. A local partner was needed that would bring both development capital and access to commercial and retail real estate in “AAA” locations throughout the city.

Solution
Through BrandAmerica’s network of Asian contacts, a joint venture partner was identified within six months and ground was broken on the first Gold’s Gym in Metro Manila in the following 12 months. The joint venture partner selected was Victor Siasat, a local entrepreneur with extensive experience in American consumer brands. Mr. Siasat holds the Philippine market rights to Gloria Jean's Coffees, Carl’s Jr. fast food restaurants as well as distribution and manufacturing rights to Guess clothing and Mossimo athletic apparel and accessories.

Comprising the joint venture, named Gold’s Gym Inc., was Mr. Siasat’s commitment of US$ 2.5 million in development capital and BrandAmerica’s contribution of its rights to develop Gold’s Gym in Metro Manila along with its business systems, development experience and ongoing operating expertise.

Result
Gold’s Gym Manila, unit one, opened its doors on September 19, 2002 in the Glorietta Mall next to such prominent American brands, such as Hard Rock Café, T.G.I Friday and Haagen-Dazs ice cream. The Glorietta Mall is the most heavily trafficked shopping mall in the Philippines, seeing over 1 million patrons on an average weekend day.

In less than two years of operation, Gold’s Gym is already recognized throughout the Philippines as the premier fitness chain. To date, three Gold’s Gym facilities have been developed in Manila, with additional locations under consideration.

Going Forward
Since the formation of the Gold’s Gym joint venture in the Philippines, BrandAmerica has changed its strategic approach in administering the Gold’s Gym brand throughout Asia. Preexisting relationships have been restructured to reflect a strict franchising model. BrandAmerica's portfolio company, GlobalFit Asia, will no longer be involved in the development or the day-to-day operation of the Gold's Gym facilities, but now looks to accelerate the expansion of the Gold’s Gym brand throughout Asia via franchising.