No pain, no gain for gym empire founder

By Ben Chapman-Smith

A book on wealth creation set Paul Richards on the path to building the Club Physical chain, but he says it's not about the money

Paul Richards' Club Physical chain has 10 Auckland locations, employs 250 staff and has about 13,000 members. Photo / Brett Phibbs
Paul Richards' Club Physical chain has 10 Auckland locations, employs 250 staff and has about 13,000 members. Photo / Brett Phibbs

Paul Richards was 25 years old when he read a book for the first time. It was strictly comics and magazines before that. He'd dropped out of Kelston Boys High after scraping through his School Certificate and was on his 38th job when he picked up Napoleon Hill's Think and Grow Rich.

"I got halfway through the book and I was so motivated that I started a business before even finishing it."

Although his first venture - essentially a jazzercise class - crashed and burned after a year, he soon founded what has become one of the country's largest privately-owned gym chains.

Club Physical exists in 10 Auckland locations, employs 250 staff and has about 13,000 members.

Since opening the first branch in 1981, Richards has had his share of time in the media. The devout Christian sparked outrage in 2010 with an "interesting" link in one of his weekly newsletters to an article declaring that soy milk turns young boys gay.

On another occasion, he slipped flyers into new members' packs for a dating agency called Two's Company. He also ran an advertisement which depicted aliens shooting fat people, with the slogan, "Quick, get the fat ones first".

This year, he faced off in the High Court against one of his franchise owners who suddenly broke away and rebranded three branches without any warning.

Richards, who turns 60 next month, says he's made "heaps" of mistakes along the way but has learned from all of them. Inspirational stories about other people who have tried and failed, tried again and succeeded, have played a key part in his business growth.

"Since I read that first book I've become a book fanatic. I don't like fiction because I don't want to waste my time, but I'm reading all the time."

His first inspiration came from Hill's advice that: "You will be a success if you start a business you'd be happy to work for for nothing, because you love it so much."

"I was working out at a gym at the time and I just loved it, I was there six days a week. I talked about it all the time."

After his jazzercise venture failed to take off Richards drew up a rough plan of what he thought a gym should look like and pinned it on his toilet door. He then looked in the phone book to find suburbs without a gym.

"There were none in Henderson so I drove out that weekend and found a site in three minutes."

With $800 in his pocket and no chance of securing a loan, Richards set about renovating the dilapidated Waitemata Athletic Club. "I just took a huge risk," he said.

He convinced the landlord to give him two months' rent free, traded life memberships with plumbers for their services, got a credit account with the local paint shop, and persuaded his dad to take time off work to build the showers.

A friend knew how to make gym equipment from old exhaust pipes and he paid creditors as the memberships started trickling in.

Richards worked seven days a week with low wages, living out of a small bedroom he built beside the men's locker room and toilets. "Every day was like a marathon," he says.

The gym quickly became a hit with Auckland bodybuilders. "We had a gym full of them." But Richards soon realised bodybuilders shouldn't be his target market.

"They tended to want free memberships after they won contests. And they were intimidating to other customers," he says. "They'd walk around in their little singlets and I realised our true passion was for helping the average person get fit."

Over the years, Richards has only become more determined that Club Physical is a place for everyday people who simply want "wellness and longevity".

This new approach worked. Club Physical soon started attracting more members with its class format and more staff were hired, including a new instructor called Tina.

The gym moved to Lincoln Rd and Richards was free to start a side business as a concreter with former Mr New Zealand Barry Davies.

These earnings helped subsidise the gym's wages for a period. But Richards was later forced to make his entire staff redundant during lean times and to become the sole staff member.

"I made the mistake of doing two things at once. I learned that if you want to be successful you've got to stay focused."

Richards manned the reception, took classes and cleaned the gym by himself. As income improved, Tina was rehired, the two grew close and were later married.

It was about this time Richards thought about establishing a franchise system. "I read this book that talked about systems and getting outside the box," he says.

"A lot of people work in their businesses and they're so busy with their day-to-day work they never step back and think about how to systematise it so that someone else can do it.

"As soon as we started thinking about that, Tina and I realised we could have more than one branch. We started expanding."

Over the past three decades, Richards has gone on to build the business up to 10 clubs - three sold to franchisees and another seven still in his hands.

Everything was ticking over nicely until earlier this year, when an unpleasant turn appeared in the road.

"I've been through quite a few big battles over the years but this has been different. I had to fight for my life."

On Friday, February 8, Richards received an email notifying him that one of his franchisees, Stuart Holder, was severing his three agreements and going it alone.

Staff at those gyms - in Three Kings, Botany and Westgate - were fitted with new uniforms, class timetables were overhauled and existing instructors were dropped.

Holder's decision to rebrand the club as Jolt Fitness left Richards stunned.

"That night when I went home I said, 'Tina, I think we should just turn the cheek. I don't want to spend any money on lawyers or get in a big fight, I just want to be happy'." But Richards sought advice from close friends and each told him to fight. "So I spent two months fighting, seven days a week."

In the High Court, Holder claimed Richards had failed to provide business support promised under the franchise agreements.

His lawyer said the three clubs were haemorrhaging money but Holder's cries for help were going unanswered, and this was putting the clubs' futures in jeopardy.

He said Richards' marketing approach offended some members, citing the dating flyers and aliens shooting fat people poster as examples.

Richards alleged Holder's actions were a breach of franchise agreements that had "years to run on them".

Any reasons Holder had for wanting to cancel the franchise agreements should have been discussed before he took such sudden action, Richards' lawyer said.

Justice Helen Winkelmann ruled in favour of Club Physical and granted an interim injunction preventing Jolt Fitness from operating. Richards took over the three branches and returned them to their original state in late March, and says he's still recovering from the ordeal.

"I've got signs of stress - itches and rashes all over me. My doctor thinks it's from the stress. But that's better than having a heart attack."

Apart from Tina's support and a few good books, Richards says his faith got him through the Jolt Fitness feud. He and Tina are up before sunrise every morning to pray and read the Bible together, something they learned from Brian Tamaki.

"We went to his church just for a bit of fun, just to see what he was like because he was always in the media. And he taught us how to pray in the morning as a husband and wife."

His evangelical stance has got him into trouble at times. For years, Richards has sent out a weekly newsletter to members. In January 2010, he included a link to an article by conservative American writer Jim Rutz which says "homosexuality is always deviant".

Rutz claims in the article: "Soy is feminising and leads to a decrease in the size of the penis, sexual confusion and homosexuality."

"I was writing this newsletter, every week and always like to include things that are different and fun," Richards says. "I saw this article that said soy milk makes you gay. So I put that in our newsletter and asked members, 'What do you think?'."

Within a few hours he was receiving phone calls from radio stations and a Facebook page was set up in protest, accusing him of homophobia. News media jumped on the story.

Richards apologised but faced strong criticism and was accused of using the newsletter as a platform for his conservative Christian views. Richards says it was just a bit of fun and his actions were nothing to do with his faith.

Nevertheless, he has decided to be less public about his personal beliefs.

"I think it's better to live by example, rather than have people thinking you're supposed to be like this or that because you're a Christian."

Richards has for the last seven years offered a 10-week exercise programme for cancer patients. Every 10 weeks he enrolls "as many people as possible" with the disease.

Each of his branches sponsors a child living in Burma and the company is actively involved in fundraising and supporting projects with World Vision.

The company also sponsors a large number of community groups each year and has created an Olympic Wrestling Club for boys.

For all his apparent drive and passion, Richards admits he struggles to get up for his 5:45am swim and morning prayers every morning. "Sometimes I feel tired and don't want to get out of bed.

"But as soon as I start thinking about meetings I've got planned, I suddenly wake up and think, 'I better get going'. I don't like to ever quit because I'm scared about losing that momentum. I suppose I'm a bit fanatical really."

He and Tina have one son and five daughters, three who work for the family business. All except Tina are martial arts black belts. Home is a 4ha farm in Whenuapai where they live off the land as much as possible. Richards says he has "play stock" - alpacas, horses and chickens.

He and Tina very rarely take a holiday - their last was to Fiji just before the Jolt episode - but they love attending seminars. "You meet heaps of inspiring people and find out what they've been through. To me it's like Christmas, like opening up presents."

Apart from exercising twice a day, Richards is also a committed member of two Toastmasters clubs.

He says his determination and stubbornness are his greatest strengths. He's good at coping with stress, is willing to learn, and doesn't like to hold grudges. His weaknesses include a tendency to be "a bit hard" on his wife and kids and a dislike for legal documents.

"It bores the heck out of me. I get someone else to do it, like lawyers."

Club Physical's revenue last year was about $8 million and Richards' goal is to open another 10 Auckland clubs in the next five years.

"These will be big gyms. This Jolt thing woke me up. It sort of got us off track, and now we're free of it it's refired us. We're much more enthusiastic about what we're doing."

Richards says if he'd put the same amount of effort into a property business he'd probably be "a lot wealthier". But first and foremost, it's always been about doing something positive, he says.

"I'm not in it for the money. I believe that if we do what people are looking for then the money will come," he says.

"I enjoy nothing more than to walk in the gym and see people laughing and exercising. It's how I get a sense of success. As you get older you realise it's not all about you. I want to make a mark and do something good."

Paul Richards

• Age 59.
• Founder, chief executive of Club Physical gym chain.
• Educated at Avondale College, Kelston Boys.
• Married to Tina, the couple have five daughters, one son.
• Lives on a 4ha hobby farm in Whenuapai.

- NZ Herald

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