From fat to fit

A Nova Scotian entrepreneur sees big opportunity in Canada's chubby children.

On a recent Saturday afternoon in the affluent Toronto neighbourhood Leaside, Holly Bond stands by the front desk of Bulldog Interactive Fitness, surveying some of her potential clients. On one side of the room, three giggling preteen girls bob and weave in front of a bank of TVs, mimicking the motions of the dancer onscreen in the popular Asian arcade game Dance Dance Revolution. Another girl perches on a stationary bike, pedalling furiously while simultaneously playing the car-racing game Burnout 3: Takedown on a Sony PlayStation. Kids playing video games on a dull Saturday afternoon–nothing odd about that. But getting them to exercise something other than their thumbs while they play? That's Holly Bond's specialty, and she hopes to turn it into a big business. Bond–who has the posture of a gym teacher and the jet-black monogrammed tracksuit to match–is the founder of Bulldog Interactive Fitness, based in Dartmouth, N.S. She was in Toronto that Saturday for the opening of Bulldog's first franchise outside Nova Scotia.

Most Canadian kids spend at least two hours a day, often much more, staring at a screen, according to Active Healthy Kids Canada and Statistics Canada. They spend more time zoned out than any previous generation, and according to the experts, it's making them fat–the fattest children, in fact, the world has ever seen. Bulldog is using a new breed of video games to lure the flabby “Xbox generation” off the couch and into the gym. And the business itself is bulking up in the process.

“I love it,” says 14-year-old Brittany Hurley, of Dartmouth, who's been going to Bulldog for nearly a year. “I've met a lot of really great friends, and I've become a lot fitter.” Hurley aspires to work for the RCMP, and has lost about 15 pounds since joining. “I've become a lot stronger, too,” she says proudly.

Holly Bond is a mother, entrepreneur and self-described “avid fitness freak.” Two years ago, she concluded that her 14-year-old son was overweight, and it had nothing to do with the food in the house. “He wasn't active. He would just play Xbox with his friends in his room, and they were no longer going outside,” she says.

Then it occurred to her: why not combine her son's love of gaming with her own daily fitness regimen? She went looking for a high-tech solution, but found no specialized equipment on the market, and few personal trainers working with youth. Bond sensed a gap and decided to capitalize on the opportunity. It was a chance to make a career change by doing, as she puts it, “something that matters.”

Bond and her husband, James, researched the global fitness-club industry for more than a year. The results were encouraging: According to a 2005 report by the International Health, Racquet & Sportsclub Association, fitness-club memberships for 18-and-unders have grown 178% since 1990 (second only to membership growth among the 55-plus crowd). Under-18s are 12% of a market worth US$17.5 billion–representing more than US$2 billion in North America alone.

The Bonds held clandestine focus groups in their basement, composed of their son's friends and hockey teammates. James, who worked in youth marketing at Coca-Cola, peppered the kids with questions about the latest fashions, sports, video games and fitness trends. They also purchased a prototype of an exercise bike they found at a trade show that could be hooked up to their son's PlayStation, and invited their teenage neighbours for a test drive. (“They went bananas for it,” she says.)

Meanwhile, Bond was using her then-position as a pharmaceutical sales representative to grill doctors about childhood obesity. They confirmed it was a large and growing problem; but beyond prescribing a leaner diet and more exercise, there was no fitness facility suitable for overweight kids. The Bonds drew up a business plan, secured financing, and Holly got her personal-trainer certification, all in secret.

“We didn't even tell our best friends what we were doing,” says Bond. “We were so afraid that someone else was going to do it first.” With startup costs of roughly $180,000, the high-concept gym opened its doors in February 2005. Based on how much they needed to earn per square foot per hour to be profitable, the Bonds decided to charge $44 a month per child to use the facility and its programs (the Toronto location charges $60). They chose a bulldog as their name and logo because it looked like a fitter version of their dog, a pug named Lily. (Each gym includes a Lily's Smoothie Hut–although health regulations mean Lily herself isn't allowed inside.) Bulldog's Dartmouth gym now has more than 300 members–not quite break-even territory but getting close.

The demographic basis for the business is clear. Over the past 25 years, the proportion of overweight or obese kids has ballooned. In the most recent Statistics Canada study, almost a third of Canadian children aged 12-17 were overweight, more than double the percentage in 1979. Of those, 9% were classified as obese, three times the 1979 number. In other words, there are more fat kids, and fatter kids, than ever before, giving Bulldog a potential market of 1.2 million overweight or obese children in Canada alone.

When the grim health effects of obesity–diabetes, hypertension and many others–started showing up in younger and younger children in recent years, the alarming trend started making headlines. Yet Bond says the issue remains off the radar for most in the fitness industry.

“I go to conventions like the Can-Fit-Pro show last August, and there were two one-hour sessions on kids. Two. And nothing that even makes a difference,” she says.

Parents can't rely on gym classes at schools to address the obesity epidemic, either. Only two provinces have mandated a daily minimum amount of physical activity for primary school children (20 minutes in Ontario; 30 in Alberta), even though Canada's Physical Activity Guidelines for Children and Youth recommends children should be exercising 90 minutes a day.

Given the ever-expanding market and relative lack of gym classes, a private high-tech workout facility tailor-made for a generation of chunky video-game-addicted teenagers sounds like, as one franchisee put it, “a winning combination.” Niche fitness franchises, especially ones like Curves, the U.S.-based chain of women-only gyms, with almost 10,000 locations, have proven that demographic-specific fitness services can tap a market that larger gyms like Bally Total Fitness and even the venerable YMCA aren't accessing. And the so-called “soccer mom tax credit” in the last federal budget allows families to deduct $500 per child for the cost of athletic activities, presents another marketing possibility–Bulldog franchisees offer a federal tax credit with every gym membership.

The response from franchisees has been enthusiastic. After an item on Bulldog ran on CTV News one weekend last spring, Bond received more than a hundred franchise requests. The Toronto location is the third franchise. Two more Canadian storefronts are on track to open before the end of the year, in Thornhill and London, Ont., and another four–in Guelph, Ont., Calgary, St. John's, Nfld., and the first U.S. location, in Wisconsin, are scheduled for early 2007. Out of roughly 150 formal franchise applications, Bond says she is considering about 25 of them.

“It was always our intention to franchise,” says Bond, “but we thought we'd do be doing that later, maybe in three or four years, once we had a few of our own open.” With requests streaming in, plus a $200,000 loan from a group of angel investors in Halifax to bankroll the franchising process, the Bonds decided to move their plans forward. “People know that there's a problem with child obesity,” Bond says. “So we said, 'Let's go for it.'”

The interest is clearly there, although the Bonds will have to see how the major metropolitan locations do to find out whether the business will scale up successfully. Choosing the right franchisees is crucial, since the core of the business is not only physically training the members, but emotionally supporting overweight kids who are often bullying victims at school.

Bond says that the newer locations will be more like the Toronto Bulldog, featuring larger square footages and more flexible layouts, so that the gym can supplement its core business with preschool programs, summer day camps and the lucrative trade in birthday parties. The Dartmouth location charges about $100 an hour to host a birthday (and more for private access to the gym after-hours), with the Toronto locations expecting to charge more. “Birthday parties are a huge revenue source,” says Bond, with some bemused wonderment in her voice. “They'll pay anything for a birthday party in Toronto.”