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April 2017

Fitness Focus

fitnessfocus.jpg‭Unless there’s something profoundly unusual about residents of Kansas City or eastern South Dakota, a business model has emerged with major potential to revitalize golf by pairing it with fitness-club membership then scaling the whole thing up, at a profit.

A Burger King franchisee that once owned 60 restaurants has partnered with a former PGA Teacher of the Year to lead a company with a special formula for pricing, packaging and customer pleasing in this hybrid category. It’s branded as GreatLife Malaska Golf & Fitness, and if you live in Sioux Falls, South Dakota, you either are a GreatLife member yourself or you know one.

Some background: The fast-food entrepreneur, Tom Walsh, had been operating a single Sioux Falls course as a side business for several years when he spotted the fitness-and-golf experiment being tried in Kansas City. He strategized on ways to adapt and improve it, met renowned instructor Mike Malaska along the way, and learned golf and fitness had a fascinating nexus. Several years of strategizing and testing occurred until last November, when Walsh decided the GreatLife concept was proven enough that he could sell his remaining 26 franchises to focus on the new venture.

Within two years of making Sioux Falls its test market, GreatLife had sold 10,000 golf-fitness memberships at $60 a month. Malaska, former director of the Nicklaus/Flick Golf Schools, says there’s now an astounding total of 32,000 GreatLife members (out of a total Sioux Falls population of 165,000) in part because “people are always going to be drawn to the golf environment if you do it right.”

Rollout to markets east and west is soon to occur, he adds. “I expect GreatLife to own 100 golf courses within a year and as many as 1,000 courses within two or three years,” Malaska states flatly. “We buy them, retain their employees, invest in them and within a year that dying course is the hot spot in the neighborhood.”

Clearly this model calls for golf being positioned as a second benefit, behind family-oriented fitness (in Sioux Falls, a GreatLife membership also gets you free bowling at three area alleys). Veteran golf course owner Donn Hill built 18-hole Bakker Crossing with his family, and operated the facility with modest success from 2000 to 2013. One of the early converts to what Walsh and Malaska were developing, Hill is now president of the company’s Sioux Falls franchise market, meanwhile still operating Bakker Crossing, which looks very different—physically and on its income statement—since the GreatLife conversion.

“We created a 4,000-square-foot fitness center in the clubhouse and we increased our business from 20,111 rounds and $1 milion of revenue in 2013 up to 33,561 rounds and $1.3 million in revenue the following year,” reports Hill. “Our 2015 numbers were 43,633 rounds and $1.7 million in revenue.” Bakker Crossing has dropped its $900 annual golf membership and offered any golfer who held one a $720-a-year membership that includes fitness.

By “rounds,” Hill may more accurately mean “starts,” given the penchant among GreatLife Malaska members for playing just a few holes at a time. “The members who aren’t core golfers go out in the later afternoon and evening for a half-hour or an hour,” says Malaska. “Every inch of all our courses is GPS’d, so the staff can fit players into open areas on the course.” Pace of play has sped up at some GreatLife courses, he reports, in part because people who came in through the fitness portal don’t pay per round and don’t care about completing each hole.

Naturally, there is an indoctrination process, but it’s geared toward creating a link between the golf motion and what you do when you swim, play tennis, play softball or even basketball. That’s where Malaska has been highly influential. At the crossroads where swing technique, physical capabilities and the psychology of golf skill acquisition come together, his knowledge and experience are unrivaled.

“You can’t get a typical fitness guy interested in golf if you present it as golf,” says Malaska. “Instead, you offer a quick assessment of how their weight training is working, by having them swing a golf club.” Typical feedback from the coach, he explains, would be along the lines of “your left scapula seems very tight, and your pectorals are somewhat over-developed, which is putting them out of balance with your latissimus dorsi.”

Having gotten their attention, the former director of the Nicklaus/Flick Golf Schools will cite the full golf swing as an excellent diagnostic and development motion, unsurpassed for promoting balance and body control. “At that point the guy will look up and say, ‘Well, can I hit a ball?’ I’ll say sure, and before long they’re in a hitting bay and you can’t get them out of there.”

To summarize—golf, with a major fitness angle added, gets its biggest boost in a generation thanks to a fortune built on burgers and fries. That does sound like a long shot, but as they say in South Dakota, you can’t argue with success.

—David Gould

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