For Locally Based Boat Club, Smoother Sailing
VENICE – John Giglio was in the right place at the right time when he began working at Freedom Boat Club’s headquarters a decade ago.
Though the company had been through a number of ownership changes over the years, Giglio was learning the ropes from a series of industry veterans, including Freedom Boat executive Bob Daley.
But his big break came in 2010, when the Cincinnati-based investment group that owned Freedom Boat Club — itself weary from a recession that took the wind out of the sails of a number of nautical ventures — decided it wanted out.
Giglio and Daley, who has since retired, made the investment group an offer that was ultimately accepted.
“It wasn’t ideal timing. We hit all the big banks,” Giglio said recently. “Finally, Bank United took a flyer on us and gave us the loan.”
It’s been relatively smooth sailing since.
At 39, Giglio is now president, chief executive and owner of Freedom Boat Club, a company that has 270 members and 270 boats at 13 company-owned locations from Bradenton to Naples.
Giglio also oversees an even larger network of 65 franchisees that stretches from Portsmouth, N.H., to San Diego.
Starting from a base of $4.8 million in 2010, the company has grown its revenue each year since 2010 and expects to hit $10.35 million this year.
But Freedom Boat’s maintenance-free boat-borrowing concept has had to contend with competition and other challenges.
One competitor came from the progeny of Jim Ellis, a former Freedom Boat owner who ran the place for a decade beginning in 1989.
“He is the one who actually turned it into a profitable business,” said Carissa Dressel, Ellis’ daughter.
Carissa Dressel learned so much hanging around the company’s Island of Venice offices that, in 2005, she opened her own boat club — Sarasota-based Waves Boat & Social Club.
Like Giglio, she feels like she is riding a wave because people increasingly say they want to enjoy boating but don’t want the hassle of owning a boat.
“We are growing like crazy and Freedom is our competition now,” Dressel said.
Part of that growth stems from general acceptance of the concept. Years ago, boat clubs that allowed members access to multiple boats without the hassle of cleaning and maintaining them were a novelty. Today is different.
“They are popping up all over the country,” Dressel said, adding that Waves Boat also is considering franchising nationwide.
“We’ve had 10 years to grow with the technology,” she said.
But with 800 boats in its extended national fleet, Freedom Boat is far ahead of Dressel and other competitors.
By comparison, Waves Boat has a total of about 500 members and 38 boats at its disposal.
A PRICING SHIFT
And while many boat builders and sellers suffered during the Great Recession, Freedom Boat survived — and thrived — during the economic downturn, thanks to a shift in its fee strategy.
Beginning in mid-2007, just as the nation’s boomtime economy was showing signs of unraveling, Freedom Boat elected to eliminate the hefty up-front fee it had charged since its creation in 1989 in favor of a monthly dues structure.
Whereas members once had to pay $15,000 for a five-year membership, these days new members pay a third of that amount — $5,500 up front for access to a wide range of vessels, from runabouts to pontoon party boats to vessels designed for offshore fishing.
Members pay an additional $1,400 to $3,000 per year, paid in monthly installments.
Giglio says the switch has been a very lucrative one.
“The last five years have been the most profitable in the company’s history,” he said.
Just as importantly, the fee structure shift prompted Waves Boat, at least, to follow suit, Dressel said.
“We changed over in January 2008,” she said. “It is very hard to sell a $15,000 membership against a $5,000 membership.”
Waves Boat’s sign-up fee is now $2,900, and members pay an additional $800 to $2,400 a year, depending on the level of access they want.
Both operations focus primarily on medium-sized power boats, from 18 to 25 feet long, with up-to-date, four-stroke outboard engines.
“You want to have in-shore and offshore fishing boats, a dual-console that you can do water-sports on. Your party boats are good, and then a sailboat is always nice to have,” Dressel said.
As the sun set on a recent weekday, Rick Cabana tooled back into the docks at Freedom Boat’s Venice marina, which the company owns and where it berths 20 of its boats.
Another seven boats are kept at MarineMax, at the southern end of Venice, because Freedom Boat’s space is maxed out.
A resident of Alberta, Canada, Cabana and his extended family spend four or five months a year in Venice. As such, he signed up for six months of access annually, paying $179 a month all year.
Cabana has been a member for more than five years.
To go fishing with his son and grandchildren, he opted for a pontoon boat, spending three hours or so on the water catching sheepshead before returning to the dock with a quick stop for gas along the way.
While most boat owners dread the trip back to the dock, where chores like washing down decks and flushing motors await, Cabana could only smile at the pleasant memories of his trip. Back on land, he handed the boat’s keys to the dock-master, unloaded his poles, stuffed the grandkids and the water’s bounty into his car, and headed home.
For Locally Based Boat Club, Smoother Sailing