First, a thank you. Lost in all of the daily grind to keep the engine moving was our 9 year anniversary last Friday. Though we are not running classes right now we still have a small world of support behind us that’s keeping us motivated and on the path towards resuming the community we all know and love when this is all over. It’s you who will ensure that we see a tenth year of business as well as many more. So a quick moment of thanks to you and acknowledgement for what you’ve allowed us to achieve.
It’s been nearly a month since our open letter to membership, and as I stated in that letter I was not going to bombard you with useless crap every week. We all know the situation we’re in, no point in subjecting you to my hot take on it. I know that this update finds some of you in less fortunate situations than you were in last update, and I am sorry for that. My wife lost her job completely over the pandemic so I’ve experienced the abrupt life redirection that can occur over this. For those of you whom this has happened to, I am so sorry. As we said in our email to you guys, if you lost your job over this you won’t lose your gym membership. While we know it’s not a lot, we will pick up the tab for one month for anyone who has lost their job when we re-open. Reach out to us.
Things have been in motion very aggressively behind the scenes for the last few weeks. We applied for the Paycheck Protection Program and did not make the timeline. Candidly, this was a very frustrating outcome as we reached out to our bank three days before it was even passed into law and asked to be the first in line. We were told we would be. I’ll save you the sob story but that didn’t work out. By the time we could switch to a better bank and get our application accepted the funding was dry. It’s since been made very clear that a large portion of this “small business” funding was earmarked for multi million dollar companies, even publicly traded companies, Ivy League universities, hedge funds, and those with millions of cash reserves. That’s okay. While we are hopeful to be included in round two of PPP funding, I didn’t expect Uncle Sam to hold our hand through this nor do I accept feeling helpless. This is a P360 community task and has been from day one and we will continue to do whatever we need to move forward.
As far as impact internally, we will continue to find financially creative ways to help our coaches in addition to the process of traditional individual government help. I don’t want to mislead you into thinking that our entire team is getting paid full freight right now. They aren’t. Some of you have indicated that’s why you continue to pay your membership, and we tapped that well for as long as we could. I’d love to tell you otherwise but that is far from the reality of this situation and small business finances. The important thing is that with the level of continued membership support you are currently providing, there will be jobs to return to and that ultimately is what matters most.
A continued challenge will be working with individual landlords at the local level. Some are more flexible than others and unfortunately, we still owe rent even though our government has made it illegal to operate (if anyone has any concrete legal knowledge of this, please reach out). I certainly wish we could go back in time with more knowledge of the back pages of leases and do it all over again, but that’s spilled milk. All of that said, we believe a positive outcome will be reached and we don’t run our business with the intentions that our government is coming to save us. No thank you. The good news is that we have always run the gym responsibly and as presently forecasted are not at risk of running out of funds. We are being as responsible as we can to ensure we continue to make it through any worst case scenario and with your continued help, we absolutely will.
Finally, ownership has not taken any compensation during this. Ours was the first expense eliminated in March.
Re-Opening / Crown Point News
It is my personal opinion that we will be able to resume classes sooner than later and we are starting to plan our “re-opening” accordingly, to the extent that is possible. I am very excited about it for a number of reasons.
But first, I will share with you that we have made the difficult decision to not include Crown Point as part of our operations when classes resume. Our lease has always been set to outright expire (not renew) at the end of May, and while we originally were going to look at a renewal two seismic events happened.
1. The marina unexpectedly went up for sale earlier this year making it impossible to even enter into lease renewal talks.
2. The Corona Virus shut us down.
There is unfortunately no plausible way we can enter into lease renewal talks when we are not allowed to run classes, support our members in our normal way, or take on new members, all while processing holds and cancels daily. The virus closure has stripped our ability to forecast membership on any level. To re-commit to a second multi year lease obligation in the same 92109 zip code in the face of those glaring unknowns, would be reckless to the point of endangering the entirety of P360.
I have no doubt that this comes as a crushing blow to those of you who loved the Crown Point location. It was my personal favorite location by far, and it’s chapter in our history is huge. I have no words other than to say that I’m very sorry for you and very sorry we were forced into this decision. This is without a doubt the single hardest communication I’ve ever had to write. Lot of sleepless nights. Lot of pacing around the neighborhood. We tried to talk ourselves into any scenario where bootstrapping a brand new lease at a second PB location made sense, and no matter how we looked at it the risk of the entire P360 operation was too great.
Ultimately, the bright side is that this has the positive side effect of ensuring the overall security of Performance360 for years to come, so if I can offer you any consolation it would be that.
The “good news” is that when we opened Bay Park last year, we did so knowing that there was enough geographic barrier between Bay Park and Crown Point that they could co-exist despite close proximity. But, we did so also with the belief that due to it’s eastward location and easier access for 90% of Crown Point membership, that Bay Park would be a great safeguard against the possibility that we would have to consolidate PB (since our lease was expiring). We have always been prepared that a PB consolidation might occur and the virus stoppage obviously pushed us into that direction.
If I can speak personally, where the positive of this excites me is that PB will be allowed to return to its roots of very strong community and cohesive membership. This is not to take anything away from the current community we have, but when we opened the second PB location it lead to growth but it also had a certain aspect of culture dilution since members were split between two locations. Now with a single location, the possibility for our strongest community yet exists and frankly, that really excites me.
Here are a few logistics notes:
–For those who prefer Crown Point, we hope that you’ll give consideration to training at PB, Bay Park, or OB, as all three are positioned less than 3 miles from Crown Point. We know that the other three may not have the view, but all three offer more square footage, are all within 3 miles of Crown Point. More importantly they have the same great coaches, training, and community, and we’ll work very hard to ensure it’s an easy transition for you.
–We have a full schedule of class time additions ready to go in PB and Bay Park (the two locations most likely to absorb those who prefer Crown Point) for when we need them.
–We are currently making some minor improvements in PB to improve the overall experience and we think it will make a big difference.
I know it will be an adjustment for Crown Point attendees, I won’t tell you otherwise. But we have a lot to look forward to when classes resume and candidly, we continue to need your membership and your support more than ever. We already have designed our first three PSC blocks, a rested and re-energized staff, and progress to reclaim and expand upon. If you’re a member specifically for Crown Point, please give us a month to show you that Performance360 is not the location in which it operates. It is the members, the coaches, and the fitness. In every space we’ve existed, from the grass in Mission Bay in 2010 to the large facility in Bay Park in 2019, this concept has proven true.
I know this was not the most positive of updates, but it’s the honest one. There are absolutely, without question much brighter days ahead for us in the near future as a gym community and there is no question that the vibe and the positive buzz in the gym when we resume classes will be unprecedented. I share all of this with you today because I think you deserve to know what’s really happening at the small business level. There are no handouts that erase forced closure, no one coming to save small business other than its customers. Every business continues to need customers. Every business continues to need support. Now, more than ever. Go local.
If there is a way we can do better at helping you currently, please let us know.
It feels hollow to continue to say “thank you for your support”, I truly wish I had something more profound or meaningful to say. But I don’t. So “thank you” will have to do for now. We plan on earning those thanks when we re-open and roll out what will indisputably be our best product to you guys yet. That is my promise to you.
In this together. Now and always.