Cocky gym bros’ brutal slapdown
A PAIR of cocky gym bros who boasted that they would score "deals" on Tinder thanks to the publicity of being on Shark Tank have been slapped down by the judges.
The Perth mates, 24-year-old Jack Zuvelek and 26-year-old James Buchanan, came into Tuesday night's episode seeking a $500,000 investment for 25 per cent of their personal training business The Body Consultants.
"We can't really lose," Mr Zuvelek said before going in. "We either get a deal or we get really good publicity and I'll be able to use it on my Tinder profile. I'll be getting deals left, right and centre."
Pitching to the Sharks, Mr Zuvelek said The Body Consultants' purpose was "to elevate the human status quo". "We do that by combining our core four, which is training, nutrition, mindset and lifestyle, to bring to market an offering that's never been done before," he said.
The business claims a client retention rate of 60 per cent even while charging $5000 a year - five times a standard gym membership. Their five personal training studios turn over $2 million in revenue and generate around $500,000 profit a year.
It also has higher-than-average staff retention. Within nine months, 80 per cent of personal trainers leave the industry. The Body Consultants said its average trainer had been with the business two years.
Asked by investor Andrew Banks whether the TV screens behind the pair were going to "do anything", Mr Buchanan shook his head. "Our belief is you're buying us," Mr Zuvelek said. "Ideal situation, you'll give us $100,000, 5 per cent each."
But the pair's arrogance immediately put the Sharks off-side, particularly internet entrepreneur Steve Baxter.
"I'm going to give you nothing," he said.
"You are selling a piece of your company and I'm buying it. I'm not Santa Claus, alright, I don't give s**t. It's a sales process, investment's a serious sales process. Please treat it as such."
Asked by Boost Juice founder Janine Allis how they could have a retention rate of 60 per cent while charging $5000 a year, Mr Zuvelek said it was due to the personalised service.
"You go to Good Life, you get a key tag, you scan in. You don't come, you go on holidays, no one cares. They'll only call you when your debit bounces," he said.
"Every single session, our trainers call our clients if they weren't there, they find out why they're not doing what they signed up to do and they committed to do. That is the big difference. We're not selling training, we're not selling nutrition, we're selling relationship and accountability."
The Sharks were briefly left speechless, however, when the pair revealed their "mentor" had taught them "sales and marketing" - for a $350,000 fee. "Hang on, you have invested $350,000?" Andrew said.
"I would say at least," Mr Buchanan said. "That's not in the business. That's on us. That's personal development."
Already sceptical, RedBalloon founder Naomi Simson was even less impressed when Mr Buchanan couldn't answer what each centre's revenue was on a like-for-like basis compared with the previous year.
"I think you're both incredibly naive," she said. "The first rule of business is to respect the competition and really you have no understanding in terms of the contribution or relationship that many personal trainers have. There is nothing like experience. Therefore I'm out."
Greencross founder Glen Richards said he was impressed by the pair but that he already had enough health investments. Janine and Andrew also pulled out.
"I don't think it's scalable," Janine said. "I think you I think you've done an amazing job. The double-edged sword comes from scalability.
"Those personal trainers you're going to be trying to get in Melbourne, Sydney, everywhere, won't actually be able to stay and commit like you guys, because I think you guys are really unique and that's why you're successful."
"I find you guys amazing," he said. "I can't actually fault the business model or even your valuation. My challenge is the same as Janine's, it's barriers to entry. I think the business is highly dependent on you two."
Steve came close to making up an offer.
"I think always in business first impressions are massive," he said.
"You felt a bit cocky when you came out, that really put me off-side. But I've looked at the numbers here, and I just think it seems really good. I'm trying to find reasons to do the deal and not do the deal at the same time."
But Steve said he "learned a long time ago that my first impression is usually the one I have to follow".
"So I probably can't get past that," he said.
After the pair left empty-handed, Glen chided the other judges.
"You guys are too harsh," he said, adding he would have "absolutely no problem" working with them.
"You know what I like, that humble arrogance of the 20-year-olds that need a bit of active [mentoring], they will listen," he said.
"No they won't," Naomi said.
Shark Tank returns to Channel 10 on Tuesday 5 June at 8:30pm.