Interview: Freedom Boat Club
The LIPG Marina Team is excited to have interviewed John Giglio, President and CEO of Freedom Boat Club. This interview dives into the leading boat club company’s outlook on the marina industry, sentiment towards the rental boat market and FBC’s strategy moving forward. We thank John for his participation.
Since John assumed the helm, the company has doubled its growth since 2012 and has continued to receive multiple recognitions both within and outside the marine industry. It has been named to the Entrepreneur’s Magazine “Top 500 Franchisees” for the past five years; the Gulf Coast Business Review’s “Top 500 Companies;” and Inc. Magazine’s “Top 5000 Fastest Growing Companies.” Boating Industry Magazine named John to its roster of “Top 16 Movers and Shakers” in 2013.
John: Freedom Boat Club has had a profound effect on the marina and boating business. Early on in your business, what did you see in the market that convinced you that the boating club was a viable business plan?
- I was fortunate to work for Freedom Boat Club for 7 years before I had the opportunity to purchase the company. Over that period, I learned the nuances of the boat club business and became very familiar with our members and their motivations for joining the club. When you combine the exceptional service and value the club provides to the consumer, with the secure recurring revenue model for the business, and the explosion of the global sharing economy, we have a very strong recipe for success.
What are some of the more interesting changes you have seen in the marina business in the last 5-10 years?
- The industry has seen an incredible appetite for institutional properties by some of the larger marina operators as they seek to roll up large portfolios for IPO’s or REITs. They prefer properties with many revenue sources and overall it has created a very fluid market for sales and acquisitions. As marinas invest in infrastructure, the marinas themselves are changing as well, catering to bigger and wider slips to accommodate growing segments of boats such as large outboards and catamarans.
You provide many different types of boats to your members. Have you noticed a change in the types of boats your members are asking for in the last 5 years? What changes have you responded to?
The demand for pontoons has mirrored industry trends and have a strong preference among our members. We’ve also seen a growing base of fishermen among our members. One of the big benefits to be a member of Freedom Boat club is the fact you can choose from all the boats in our fleet, so you can go boating on several styles of boats in addition to the pontoons, such as runabouts, deck boats and skiffs.
- You have clubs in both salt and lake marinas. Is there a difference in the type of boats your members request on lakes as opposed to saltwater?
- The only real difference we see is that on freshwater lakes, many of our members will prefer an I/O because of the larger swim platforms that give easy access to the water. Also, shallow water operation and concerns over draft are not as common on lakes compared to coastal areas.
- For any marina operator that may read this, what type of storage do you prefer? Slips, racks, or surface?
- We will always prefer in-water slips but do operate from racks or surface storage in several marinas. Compared to the average boat kept in rack, the high frequency of our boats going in and out of the water put more cycles on the forklift and other dock operations and can be a little more work for the marina staff, but we make it work.
- What would you consider your main competition? What are our differences?
- Large boat builders who are expanding into boat clubs. While this is only announced at this point, we expect the Brunswick Corporation to invest heavily in the boat club model. We aren’t yet sure what exactly they will offer or how they will differentiate.
- Boat dealers. Many boat dealers or marina owners will start up their own local boat club. While many of these are run very well, others are not. Additionally, even those run very well are local only – without the reciprocal access afforded to members of the Freedom Boat Club. These clubs tend to be attractive for those who truly don’t intend to boat outside their local marina.
- Other clubs (both marine and non-marine related)
- Early in your business history, how did you convince marina owners that the club as a tenant was good for business?
- Over the years that has been a challenge and to this day not all marina owners believe in this model. I have always believed that business breeds business and an active marina is going to attract customers. Unlike typical single owner boats, our boats get used almost every day. The marina will benefit with increased fuel sales, restaurant traffic, bait and ship store sales and more support for all other businesses based at that marina. If we are given a chance to come into a partner marina, we know the benefits to that marina far outweigh the negatives and we will prove that in a very short period. What advantages does Freedom offer the operator in exchange for committing spaces to Freedom instead of leasing to individuals.
- Increased foot traffic to the marina with many members taking boats out each day.
- Increased fuel sales for many members vs. one boat owner.
- Increased patronage at marina-based restaurant and ship store.
- Growth opportunities for more slip usage.
- We pay for all our slips on time, and with one check. Some marina operators love to see us expand knowing that it only makes their job easier!
- Because you are located all over the country, are marina operators calling you now?
- Yes, Freedom Boat Club has a relatively steady influx of inquiries from marina owners who are interested in starting boat clubs at their facilities.
- Do you see operators offering to lease more spaces to Freedom after seeing increased activity that Freedom brings to the marina?
- Yes, without a doubt. We are a great tenant and partner to a marina. Our clubs help the marina become a destination for a larger number of people. We increase revenue for the marina on all levels and are a significant and growing part of the boating landscape.
- Are certain types of marinas a better fit for your model, like resort lake vs saltwater non-resort?
- With over 170 successful boat club locations in operation today, FBC has pretty much all scenarios covered at least once! The best fit is a marina that has a few key aspects:
- a) space for many boat club boats (as our clubs are successful and tend to grow rapidly);
- b) enough convenient parking for members;
- c) fuel availability – which enables the FBC staff to quickly refuel club boats;
- d) restaurant on premises – as these tend to be well used by boat club members after their day on the water.
- Are there any demographics that are not currently using boat clubs that you think may change?
- The FBC member demographics match the boating community in the area of the club. So, we certainly see increases in women boaters, minority boating, etc., but these tend to mimic the general boating community in the area more than specifically the boat club model.
- How often do you find yourself leasing additional slips or downsizing, and how does location play a part?
- Opening a boat club location requires a serious dedication of resources. We do our homework before opening a location, so we see ourselves growing at that location.
- We are interested in demographic changes that may be taking place in the marina and boating business. Are you noticing any changes in the type of members you are attracting?
- Around the country, we have seen an uptick in the number of millennials joining the club. Because of their interest in the sharing economy model, many of them would prefer to not own their own boat and deal with the hassles.
- Is there a demographic that seems to be attracted to the boating club more than others?
- Our membership data suggests that the demographic of the clubs matches the boating demographic in the surrounding area. The boat club model enables both younger/millennial boating as well as older individuals to enjoy boating after they have passed the age where caring for the boat themselves may be possible or desirable.
- During the recession how did that affect your business?
- Our business grew very rapidly during the depth of the recession. In many instances people were forced to give up their boats but did not want to give up boating. Additionally, as marina occupancy decreased around the country, that presented exceptional expansions opportunities for the club.