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A Franchisee Gym Pumps up Profits by Going Green

It's ironic that the biggest expense at a gym--a place where people go to expend energy--is electricity. All those elliptical trainers, treadmills, TVs and bright halogen lights can work up a hefty power bill. And running a gym on New York's Long Island, home to pricey electricity rates? Fuhgeddaboudit.

Still, Russ and Amy Golan were determined to open a Retro Fitness franchise in Syosset, N.Y. After 25 years in a family-owned medical-equipment importing business, they wanted to jump to the other side of the equation--preventing illness, rather than treating it. But the possibility of racking up a $6,000 monthly electric bill held them back. That is, until Russ started looking into green energy and came up with numerous solutions to integrate into his facility to keep costs down.

"We went as green as we could without inventing a whole new system of doing things," Russ explains. He says the changes implemented have resulted in savings of more than 30 percent on their power bill, and they expect to break even in five years.

We asked Russ to step off the treadmill and tell us how he greened his gym--and his bank account.

What environmental changes did you implement?
We installed special reflective windows that keep energy in. The insulation in the roof is twice as thick as required. We have insulated flooring; in some areas there's a triple layer of insulated rubber. Some of our workout equipment is powered by the user. We took out the original lighting and replaced it all with high-efficiency LEDs. We use tankless water heaters, which heat up water on demand. All the lumber we used is sustainable, and all the metal is recycled.

But the most important thing is the electrical system. We brought a 480-amp line into the space and have a step-down transformer that delivers the electricity to the club. That alone saves us 30 percent, since that much is usually wasted with conventional power delivery.

What's with the giant ceiling fan?
It's an 18-foot-diameter fan that uses very little energy but circulates 80 percent of the air in the 15,000-square-foot club every minute. It doesn't go fast, and when I first saw it, I thought, How does this thing work? But it's so massive, it's the most efficient way to move the air around. We have 29-foot ceilings, so it prevents the heat from pooling at the ceiling. It creates a very light breeze on the floor and adds a ridiculously small cost to the energy bill.

Are there upgrades you wanted, but couldn't afford?
There were some things we just weren't able to justify financially. For example, on the second-floor access roof there's a good spot for solar panels, but for where we are, it just wouldn't make any sense. And we would have loved to have a solar heater, but the cost was too high and the payback too long. We could have doubled the insulation on the floors, but there's a point where the return is too negligible.

What did your franchisor think of your plans?
Retro Fitness approved our plan and applauded it. They understood and thought it was a great idea. They were fascinated by what we were doing, but it wouldn't matter as much in, say, Oklahoma, where electricity isn't as expensive. Here, you can do the right thing and save money. You can have your cake and eat it, too.

What was your primary goal with all this?
You want to run your business as responsibly as you can and still make money. I do care about the environment and doing the right thing, but it still has to make business sense. I pretty much did everything that made sense, and I feel great about it, and my children are proud of me.

Jason Daley lives and writes in Madison, Wisconsin. His work regularly appears in Popular Science, Outside and other magazines.

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This article was originally published in the April 2013 print edition of Entrepreneur with the headline: Bursts of Energy.

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