TT: What are the core precepts of making a buck in the fitness industry?
Levine: On the outside looking in, it probably looks like it's pretty easy. You put up some lights and some televisions and people are going to come. But the procrastination barrier is amazing. "I'll start my diet tomorrow, tomorrow I'll get in shape." Tomorrow never comes. There are so many bankruptcies in the fitness game. In the US I read that fitness centers are in the top three. It's because people get involved because they like to exercise and they think that they can run a fitness center. It's not the same thing. It's a very professional company in an industry that's growing very quickly. I've been doing it for 23 years. The CEO of our parent company -- 24 Hour Fitness Holdings Worldwide -- Mark Mastrov, has also been doing it for 23 years. We have been all over the world and we've made so many adjustments over the years. You've got to get a formula that will attack enough new members [and then] you've got to keep them. Keep them motivated, keep them getting results. Have them so happy that they bring in their friends -- and that is not easy. Getting them to stay as members is probably the most important thing. In Taiwan -- because people are mostly first-time users -- you see a spike in the first year in a fitness center. But as we've seen across Asia in years two, three and four, [the membership numbers] return to world-wide standards.
TT: How much have you invested already in Taiwan and when do you expect to start seeing some returns?
Levine: We're doing extremely well, better than we forecasted when we came into Taiwan. We're ahead of all of our forecasts. The Tonglin club [on Chunghsiao East Road] cost us US$11 million. The other two clubs cost us US$6 million each so we have about US$23 million [invested]. And it's usually in your third year when you've done all your homework, you've got a good loyal base in your third year you should be having a wonderful financial year.
TT: What have been the major obstacles to establishing a business in Taiwan?
Levine: There hasn't been any major obstacles. The government has really been very helpful. When we have any concerns we've been able to partner up with some great people like the Chinese Taipei Olympic Committee, the [National Council on Physical Fitness and Sports] and the Formosa Television Network. But there's been some challenges doing business, like the banks haven't been so connected. For example, in other countries you can do an auto-pay on Visa cards with one central system. They didn't have that infrastructure here [when California first entered the market]. So there was a lot of groundbreaking that we've had to do. There's been learning curves.
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