Why 90% of Gyms Are Designed to Fail

Here's a dirty secret about the gym industry: the business model is designed around people NOT showing up. Traditional gyms oversell memberships by 10x their actual capacity, hoping most members will pay but never come. It's a business built on broken New Year's resolutions and guilt-funded monthly payments. Anish Menon thinks that's fundamentally broken, and he built LIFTR to prove there's a better way.

Anish is a software engineer from India who moved to Sydney, fell in love with fitness, and ended up building a gym chain that now operates 8 locations across 3 countries - Australia, Thailand, and India. All bootstrapped. No external funding. He went from writing code to designing workout programs, and somewhere in between, he figured out that the real problem with gyms isn't equipment or location. It's that nobody teaches beginners how to actually train.

LIFTR's approach is counterintuitive: instead of signing up as many members as possible, they start every new member with a mandatory 6-week foundation program. They have an AI meal planner that adapts to local cuisines. They build community through events, challenges, and group training. And their retention numbers prove the model works - in an industry where 50% of members quit within 6 months, LIFTR keeps people coming back.

This episode breaks down why the gym business model is broken, how Alex Hormozi's content changed Anish's thinking about offers and pricing, and why the future of fitness is community plus technology, not one or the other.

Key Takeaways: Fixing the Broken Gym Business Model

Why Gyms Fail by Design:

• Traditional gyms oversell capacity by 10x - they need members to NOT show up to stay profitable
• The industry average for member retention is abysmal - 50% churn within 6 months
• Most gyms compete on price, creating a race to the bottom that kills service quality
• Equipment is a commodity - anyone can buy machines, so competing on equipment alone doesn't work

The Foundation Program Model:

• Every LIFTR member starts with a mandatory 6-week foundation program
• Beginners learn proper form, basic nutrition, and build habits before entering the main gym floor
• This upfront investment in education dramatically improves long-term retention
• It also creates a premium positioning - you're not just selling access, you're selling transformation

AI Plus Community:

• LIFTR built an AI meal planner that adapts recipes to local cuisines across their 3 countries
• The meal planner isn't a replacement for coaching - it handles the tedious work so coaches can focus on motivation and accountability
• Community events (challenges, social nights, group workouts) drive retention more than any app feature
• Technology handles scale, community handles loyalty - you need both

Q: You were a software engineer in India, then moved to Sydney. How did you end up building gyms?

Anish Menon: I moved to Sydney for work and started going to the gym for the first time seriously. Like most beginners, I had no idea what I was doing. I was that guy watching YouTube videos between sets trying to figure out if my form was right.

I hired a personal trainer and the transformation was night and day. Not just physically - mentally, I became a different person. More disciplined, more confident, more structured in how I approached everything. That's when it hit me: fitness changed my life, but I got lucky because I could afford a personal trainer. Most people can't, and that's why they fail.

I started helping friends at the gym for free, then friends of friends. Eventually someone said, "You should do this professionally." I got certified, started training people, and realized the gym model itself was the problem. The gym didn't care if people showed up. They actively designed it so people wouldn't show up. I thought, what if you built a gym that was designed for people to actually succeed?

🔥 ChaiNet's Hot Take: Most gyms profit from failure. LIFTR profits from transformation. That's not just a different business model - it's a different moral framework.

Q: What's fundamentally broken about the traditional gym business model?

Anish Menon: The math is simple and honestly kind of disgusting. A typical gym might have capacity for 300 people training at any given time. But they'll sell 3,000 memberships. They're banking on the fact that 90% of members will pay their monthly fee and never show up. If all 3,000 members actually came, the gym physically couldn't handle it.

So the entire business model incentivizes member failure. They don't want you to show up. They don't invest in coaching or community because that would make people show up more, which would break their capacity model. They invest in making it easy to sign up and hard to cancel.

The low-cost gym model makes this even worse. When you're charging 999 rupees a month, you can't afford trainers, you can't afford programming, you can't afford to actually help people. So you end up with a room full of equipment and a room full of confused beginners who quit in three months. And the gym is totally fine with that because the next batch of New Year's resolution members is already signing up.

🔥 ChaiNet's Hot Take: If your gym business model depends on customers failing, you don't have a fitness business. You have a guilt subscription.

Q: How did Alex Hormozi's content change your thinking?

Anish Menon: Hormozi was a game-changer. Before I discovered his content, I was thinking about gyms the way everyone else does - location, equipment, marketing. But Hormozi talks about the offer. He says, "Make an offer so good people feel stupid saying no."

That completely reframed how I thought about LIFTR. Instead of selling gym access, what if I sold a guaranteed transformation? Instead of competing on price per month, what if I competed on value of the outcome? That's how the 6-week foundation program was born.

Hormozi also talks about front-end offers versus back-end revenue. The foundation program is our front-end - it's a premium, high-touch experience that gets people results fast. Once they've transformed, they stay for the community and the ongoing programming. Our retention on members who complete the foundation program is dramatically higher than industry average.

The other thing I took from Hormozi is the concept of not discounting. A lot of gyms run promotions - "Join for 499 this month!" That attracts price-sensitive members who are the first to leave. We never discount. We add value instead. More coaching, more nutrition support, more community events.

🔥 ChaiNet's Hot Take: Hormozi's lesson in one line: stop selling access and start selling outcomes. The price conversation disappears when the result is guaranteed.

Q: Walk me through the 6-week foundation program. What happens?

Anish Menon: When someone joins LIFTR, they don't get a membership card and get thrown onto the gym floor. Day one, they sit down with a coach for a full assessment - fitness level, injuries, goals, nutrition habits, lifestyle. Everything.

Then for six weeks, they train in small groups of 6-8 people with a dedicated coach. The first two weeks are purely about movement patterns - squat, hinge, push, pull. No heavy weights, no complex exercises. Just learning how to move properly. Because here's the thing most gyms won't tell you: if a beginner doesn't learn proper form in the first month, they either get injured or they develop bad habits that limit their progress forever.

Weeks three and four, we introduce progressive overload. They start adding weight, learning how to track their workouts, understanding sets and reps and rest periods. And alongside this, they're getting nutrition coaching through our AI meal planner plus weekly check-ins with their coach.

Weeks five and six are about integration - they start training in the main gym environment, but with the confidence and knowledge to actually know what they're doing. By the end of six weeks, they're not beginners anymore. They understand their bodies, they have a nutrition plan, and most importantly, they're part of a community of people who started the program together.

🔥 ChaiNet's Hot Take: Six weeks of structured onboarding costs LIFTR more upfront but pays back in years of retention. The best investment a gym can make is in a member's first month.

Q: You built an AI meal planner. Why, and how does it work?

Anish Menon: Nutrition is the biggest bottleneck in fitness. You can have the best workout program in the world, but if someone's eating poorly, they won't see results. And when people don't see results, they quit.

The problem with most meal plans is they're generic. A trainer gives you a PDF with chicken breast, broccoli, and brown rice. But our members are in Australia, Thailand, and India. An Indian member doesn't want to eat chicken breast and broccoli every day - they want dal, roti, sabzi. A Thai member wants their local cuisine. So we needed something that could adapt.

Our AI meal planner takes your macronutrient targets based on your goals and creates meal plans using local cuisines. If you're in India, it'll suggest paneer bhurji for protein or chana dal for your carbs and protein. If you're in Thailand, it might suggest pad gra pao with adjustments. It even factors in vegetarian preferences, allergies, and religious dietary restrictions.

But here's the important part - the AI handles the tedious calculation work. It's not replacing coaches. The coach still checks in weekly, reviews progress, adjusts targets. The AI just makes it so the coach isn't spending hours building meal plans from scratch for 50 different clients.

🔥 ChaiNet's Hot Take: AI in fitness isn't about replacing trainers. It's about freeing trainers to do what AI can't: motivate, empathize, and hold someone accountable at 6 AM.

Q: 8 locations across 3 countries, all bootstrapped. How?

Anish Menon: The first gym in Sydney was funded from my personal training income. I'd been training clients for two years and saved aggressively. The first location was small - maybe 2,000 square feet. Nothing fancy. Good equipment, good coaches, good programming.

When that worked, we opened a second location in Sydney. Revenue from location one funded location two. Same model for location three. Each gym funds the next one. We've never taken outside money.

Thailand happened because one of our members was Thai and kept telling me, "You need to come to Bangkok, the fitness market is booming." I visited, saw the opportunity, and we opened there. India was personal - I always wanted to bring it back home.

The key to bootstrapping multiple locations is unit economics. Each location has to be profitable on its own within 6 months. We have a very clear formula: minimum X members at Y average revenue per member, with Z fixed costs. If the math doesn't work for a potential location, we don't open it. Simple as that.

🔥 ChaiNet's Hot Take: Bootstrapping 8 locations means each gym had to prove itself before the next one could exist. That's not a constraint - that's quality control.

Q: How does community drive retention in a way that apps and technology can't?

Anish Menon: We run monthly challenges - could be a strength challenge, a step challenge, a nutrition challenge. These aren't just leaderboards in an app. People form teams, they train together, they hold each other accountable. We've had members who were about to cancel and then their challenge team convinced them to stay.

We also do social events. Movie nights, potluck dinners, outdoor group workouts in parks. Sounds simple, maybe even silly for a gym. But when your gym friends become your real friends, canceling your membership means losing your social circle. That's a much stronger retention lever than any discount or contract.

The foundation program groups are especially powerful. Those 6-8 people who spent six weeks learning together? They form bonds. They become gym buddies. Years later, some of our strongest communities are people who went through foundation together.

I've seen tech-first fitness apps spend millions trying to crack retention with gamification, streaks, notifications. None of it works as well as a human being who says, "Hey, I didn't see you at the gym today. Everything okay?"

🔥 ChaiNet's Hot Take: The strongest retention tool in fitness isn't an algorithm. It's a friend who notices when you don't show up.

Q: You operate in very different markets - Australia, Thailand, India. How different is the fitness business across countries?

Anish Menon: Wildly different. In Australia, fitness culture is mature. People understand that gym memberships cost money and good coaching is worth paying for. The competition is intense but the market is educated. You're competing on quality, not explaining why fitness matters.

Thailand is interesting because there's a massive expat community that drives premium fitness spending, but the local market is very price-sensitive. We've had to create different pricing tiers and offerings. The gym culture is growing fast though - Thai millennials are very fitness-conscious.

India is the toughest market honestly. The price sensitivity is extreme. People will compare your 5,000-rupee membership to a 999-rupee gym down the road and not understand why yours is different. You have to over-communicate the value. Also, the concept of paying for coaching separately from gym access is relatively new. People expect everything included. So our model had to adapt - in India, coaching is built into the membership, whereas in Australia it's a premium add-on.

🔥 ChaiNet's Hot Take: Same brand, three countries, three completely different businesses. Fitness is universal, but how people buy fitness is deeply local.

Q: What's the biggest mistake new gym owners make?

Anish Menon: Spending too much on equipment and space, not enough on coaching and programming. I've seen gyms open with 5,000 square feet of space, premium equipment, beautiful interiors - and they go broke in 18 months because nobody's helping members get results.

The second biggest mistake is competing on price. The moment you drop your price to match the budget gym, you've lost. Because now you can't afford good coaches, you can't afford programming, you can't afford community events. Your service quality drops, members leave, you drop prices further. It's a death spiral.

Start small. 1,500 to 2,000 square feet is plenty. Invest in great coaches and great programming. Charge what your service is worth. If you can't fill a small space at a premium price, a bigger space won't fix that problem.

🔥 ChaiNet's Hot Take: A 2,000 square foot gym with great coaches will outperform a 5,000 square foot gym with great equipment every single time.

Q: What's next for LIFTR?

Anish Menon: We're expanding the AI side of things. The meal planner is just the beginning. We're working on AI-driven workout programming that adapts based on your progress, recovery data, and preferences. Imagine a program that knows you slept badly last night and automatically adjusts today's workout intensity.

We're also looking at new locations. There are a few cities in India where we see strong demand, and Southeast Asia has huge potential beyond Thailand. But we'll only expand when the unit economics make sense. No vanity expansion.

The long-term vision is a fitness ecosystem where technology handles personalization at scale and human coaches handle motivation and accountability. Neither can work alone. AI without humans is a fancy app nobody uses. Humans without AI is a model that doesn't scale. The magic is in the combination.

🔥 ChaiNet's Hot Take: The future of fitness isn't AI replacing trainers or trainers ignoring AI. It's AI doing the math while humans do the motivation.

Q: If a software engineer wanted to transition into fitness, what would you tell them?

Anish Menon: Get certified first. Not because certifications make you a great trainer, but because they give you the foundational knowledge. Then train people for free for at least six months. Your friends, family, anyone who'll let you. You need reps.

The engineering mindset actually helps a lot in fitness. You understand systems, you understand data, you understand progressive iteration. Fitness programming is basically algorithms - you're programming the human body with progressive overload, tracking data, iterating based on results.

But also know that fitness is an emotional business, not a logical one. People don't quit gyms because the programming is bad. They quit because they feel lost, embarrassed, or unmotivated. An engineer's instinct is to optimize the system. In fitness, you need to optimize the experience. Those are very different things.

🔥 ChaiNet's Hot Take: Engineers optimize systems. Gym owners optimize feelings. The best fitness founders learn to do both.

Final Thoughts: Designing Gyms for Success, Not Failure

Anish's core principle: "If your business model depends on customers failing, you don't have a business. You have a scam with good marketing."

The bottom line: Anish Menon has built something the gym industry says shouldn't work. A premium, community-driven, coaching-first gym chain that's bootstrapped, profitable across 8 locations, and operates in 3 countries with completely different fitness cultures. No VC funding, no franchise model, no cutting corners.

The LIFTR model challenges the fundamental assumption of the gym industry - that profit comes from members who don't show up. Instead, LIFTR makes money from members who show up, get results, and stay for years. The 6-week foundation program, the AI meal planner, the community events, the refusal to discount - it all points to the same philosophy: invest in member success and the business takes care of itself.

For founders in any industry, the lesson extends beyond fitness. If your business model is designed around customer failure, it will eventually fail too. The brands that survive long-term are the ones where the customer winning and the business winning are the same thing.

Q: How can people connect with you and try LIFTR?

Anish Menon: Check out LIFTR on Instagram or our website. We have locations in Sydney, Bangkok, and India. If you're thinking about starting a gym, feel free to reach out to me on LinkedIn - I'm always happy to chat with aspiring gym owners about the model. And if you're a software engineer considering a career shift into fitness, honestly, just start.

Final words: The gym industry has operated on a broken model for decades - one that profits from your failure and hopes you never show up after January. Anish Menon looked at that model from a software engineer's perspective and asked the obvious question: why would you design a system where user failure is a feature? LIFTR is his answer. Eight locations, three countries, zero external funding, and a simple bet that if you actually help people succeed, they'll keep paying you. In a world of 999-rupee gym memberships and equipment nobody knows how to use, LIFTR proves that the most valuable thing a gym can offer isn't a treadmill. It's someone who teaches you how to use it.