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SimonCRE TI Series: CorePower Yoga

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CorePower Yoga has established itself as one of the premier yoga studies in the country, with more than 160 locations in 22 states. The company has three locations within the Phoenix Metro area, with studios in Scottsdale, Tempe, and Chandler. We sat down with franchisee Michael Chin to discuss future tenant expansion within the Phoenix market, what separates CorePower from the competition, and what he thinks may be the next hot concept in the fitness world.

What made you, and CorePower want to enter the Phoenix Metro market?

Phoenix is a very mature, major market and because of that it was quite attractive to CorePower Yoga. There’s a significant yoga scene around the Valley, so we knew there was demand, and a place for CorePower here.

 

CorePower_Tempe.jpgWhat kind of response have you seen since entering Arizona?

We’ve seen a very positive response. CorePower’s founder’s mission, from the beginning, was to make yoga accessible to the masses. With that in mind, I think that CorePower brings a unique interpretation of yoga to the Phoenix market.  In our initial research of the Phoenix market, we noticed that the market was more class pack based where practitioners would follow their favorite teachers around the Valley. We are focused on building communities, and our customer base has loved that aspect of CorePower. At CorePower, we try to provide a more consistent product across the entire platform. When you walk into a CorePower, you should know what type of workout you are going to get regardless of the studio or teacher. We also bring an extensive network both locally and nationally, which is a huge benefit and very popular. People love the diversity that comes with the multiple formats (CorePower 1, CorePower 2, Yoga Sculpt, Hot Power Fusion) that we provide while still following through on that consistency. Additionally, on top of a consistent product and experience, CorePower does offer a unique brand in each of its instructors. Our methodology allows our instructors to add, what we call their “personal brand”, to each of their classes. So even though we have that consistency, we have really awesome, unique teachers of our own!

 

Who do you see as your competition in the fitness/yoga business, and what do you believe separates CorePower from that competition?

We’d say that there is a lot of competition in the fitness/yoga world living in Phoenix. If we were to specifically compare ourselves to the market, I guess that we’d identify with places like Madison Improvement Club, Sumits Yoga, and LifePower Yoga. We believe that the market is use to a certain way of doing its yoga and exercise, and we’re thinking about things in a different way. To build on that, in some of our research we found that in the class pack herd mentality model, many of those popular teachers don’t necessarily want to teach at odd hours. We found very few classes in the evening and the weekends. CorePower tries to offer many options for classes throughout the week where it seems that most of our competition does not.

 

What are your thoughts on the state of the fitness market today?

In general, I think every market is cyclical in nature, and I think we’re nearing the top of that in the boutique fitness space. There’s definitely a lot more competition in the specialty boutique fitness world than there was just a year or two ago, let alone 15 years ago, when CorePower got its start.

 

What do you think are the next hot concepts in the fitness world?

First off, I think that yoga is timeless. I can’t say specifically what the next hot concept is going to be, but it’s going to be one that captures the market. For longevity sake, an important factor is accessibility to the customer base. What CorePower Yoga has done to make yoga more accessible to the masses is incredible. And while yoga may not feel as comfortable as running or lifting weights, initially, so far as exercise goes, the truth is that yoga is something we can do throughout our lives, whereas the thought of doing crossfit, high intensity interval training, and cycling, for example, is less realistic.

I think one thing that sets us apart from all the other boutique fitness competitors, not just in the yoga sector, is the fact that we have a heated environment, which is a much friendlier environment for our bodies to work out in.

 

How many more CorePower studios do you see yourself doing as a franchisee? How many do you think CorePower will end up doing? And in what time frame?

CorePower Yoga has roughly 150 to 160 locations combined between corporate and franchises. When you look at someone like Orangetheory, who has something like 500+ locations and is still growing, I think the answer is that there is lots of room to grow for our brand across the county. CorePower is generally in major markets and we still haven’t gotten to all of those yet. The runway for CorePower Yoga is pretty big. The plan was 30 to 50 locations a year for corporate, for the foreseeable future. Specific to Phoenix, I think this market could reach 10 to 15 studios, and that’s just at first glance. When you fully build out and you’re looking to fill voids and even infill locations, there may turn out to be even more. If you look at a market like Denver, they have 25 stores and it’s a smaller market than Phoenix.

 

Considering there are that many studios in Denver, would you consider Phoenix comparable to Denver?

Denver is different. Denver is corporate’s home turf and they’ve been there for 15 years. They’ve redefine the Denver market, so it’s a CorePower Yoga market. There is competition there, but they own that market. I would hope that we do such a good job that we can do the same in Phoenix.

 

What are the unique characteristics you’re looking for in a specific retail property or trade area?

The target line is that we want to see high-profile, high-traffic, locally-oriented sites that our customers can get to class easily. In terms of size, we’re looking at getting a little smaller. Our bigger stores are around 4,200 to 4,500 SF similar to what our Old Town or Chandler locations are. We’re even open to more of a hub-and-spoke model, where we don’t always have to have two rooms. So, on the smaller end, we’ll have 2,500 to 3,000 SF for a one-room studio and anywhere from 3,600 to 4,500 SF for a two-room studio. We may change up the way the interior looks as well, in terms of how we build out our locker rooms and changing areas for example, but we are still assessing that against what our customers want.

 

What is it about SimonCRE that has made you want to work with us on multiple projects?

SimonCRE makes the commercial development process very easy. On the developer end of things, the company is very tenant friendly in trying to get deals done, from reasonable lease terms to reasonable tenant improvement allowance terms. I don’t have to fight to get a reasonable answer and results from SimonCRE. And post-lease, SimonCRE has been very accommodating. I have yet to hear a “no” from SimonCRE.

 

What are the key components to determining strength or success of one of your locations?

Attendance per class and per day really helps define the health of the location. Additionally, membership counts are very important. I think having vibrancy, community, and energy is really what CorePower is all about and really shows the strength of the brand. It’s that sense of community that draws people in and really defines what a great CorePower location is.

 

As a franchise, where are you currently looking to expand?

Our markets are Phoenix Metro, Denver suburbs, Chicago suburbs, and Raleigh-Durham Metro, and we’re actively looking to expand in those markets.

 

What’s the most memorable feedback you’ve received about CorePower?

It all comes back to community and changing of lives. Personally, I wouldn’t be in the position I am and know the people I know, without the CorePower community. There are some powerful stories. When you sit through the annual summit and you have the teachers and managers tell these stories about people reaching out to them about how their lives have changed, it’s powerful.

Tags: Tenant Expansion Tenant Interview

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