The Best One Yet - 🚽 “Lattes & Lavatories” — Starbucks’ policy pivot. LA’s greedy landlords. Planet Fitness’s biggest risk.

Episode Date: January 15, 2025

Starbucks’ is trying to save “the 3rd place”... by ending their open doors bathroom policy.Greedy LA landlords are jacking up rents 100%... but there could be a housing market silver lining.Planet Fitness stock hit an all-time high… but its greatest risk is “a run on the gym”.Plus, Philadelphia Eagles WR AJ Brown read a book during a playoff game… now it’s #1 on Amazon.$SBUX $PLNTWant more business storytelling from us? Check out the latest episode of our new weekly deepdive show: The untold origin story of… Reese’s Peanut Butter Cups 🥜 Subscribe to The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinks to listen.“The Best Idea Yet”: The untold origin stories of the products you’re obsessed with — From the McDonald’s Happy Meal to Birkenstock’s sandal to Nintendo’s Super Mario Brothers to Sriracha. New 45-minute episodes drop weekly—-----------------------------------------------------GET ON THE POD: Submit a shoutout or fact: https://tboypod.com/shoutouts FOR MORE NICK & JACK: Newsletter: https://tboypod.com/newsletter Connect with Nick: https://www.linkedin.com/in/nicolas-martell/ Connect with Jack: https://www.linkedin.com/in/jack-crivici-kramer/ SOCIALS:Instagram: https://www.instagram.com/tboypod TikTok: https://www.tiktok.com/@tboypodYouTube: https://www.youtube.com/@tboypod Anything else: https://tboypod.com/ Subscribe to our new (2nd) show… The Best Idea Yet: Wondery.fm/TheBestIdeaYetLinksEpisodes drop weekly. It’s The Best Idea Yet. Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Wednesday, Sanchez, Wednesday, January 15th. And today's pod is the best one yet. This, and all the pods is a T-Boy. The top three pop business news stories you need to know today. Well, happy fourth quarter earning season to all those who celebrate. We celebrate. We do. I got you a little gift. It's profits. Jack, three stories for today's show. What do we got on the T-boy? For our first story, Starbucks is making a symbolically important policy reversal. No. more free bathrooms. Because Starbucks's third place is the first place that needs to be saved. For our second start, with fire still burning in Los Angeles, greedy landlords are jacking up rents as high as 100%. But yet, these, this fire also presents a historic opportunity to fix California's housing market. Not Bill baby bill. No. Cut baby cut. And our third and final story. Because of your New Year's resolution, Planet Fitness stock is at an all-time high. But Funny thing, Planet Fitness' greatest risk is that you actually show up.

Their greatest risk is a run on the gym. Dirty little secret about Planet Fitness. But Yeties, before you hit that wonderful mix of stories. Fantastic mix of stories. Love the mix, Jack. How is your inner excellence? Jack, have you achieved inner excellence today? Because Yeti's over the weekend, you may have watched the Eagles versus the Packers in an NFL playoff game.

And if you watch that game, you may have noticed the Eagles receiver, A.J. Brown, Didn't catch a ball, but he caught a book? Well, he did catch some balls, but he definitely read a book, and that went viral. He read a book. That book was Inter-Excellence. It went viral over the weekend because it was spotted on the Eagle sidelines. Right. Mid-game.

All-Pro receiver, A.J. Brown, was reading the book, Inter-Excellance on the bench. We repeat, he was not reading the playbook. He was reading a self-help book during the game. The book was Inter-Excellance, and it was self-published by a man named Jim. Murphy. And this wide receiver on the eagle says that reading the book gives him an inner piece, so he whips it out during every NFL game. After the touchdown celebration, what's it? Hey, he rereads chapter three. After he fumbles, he rereads the epigraph. You can see him with the book on TV. It was incredible free marketing for this publishing house. Jack, he's marked up the book like

it's required school reading. I think I saw a book tab in there. And here's the wildest part. This book was number 552,709 on Amazon's bestsellers list before the game. Okay, but Jack, after the game, number one on Amazon. It became a top seller. This book was seen on TV during a football game. Now it's the best-selling book on all Amazon. Apparently, AJ Brown is the new Reese Witherspoon because he's curating like the book you got to read. Oprah's favorite thing.

Why the receiver's favorite thing, Jack? So, yeties, we wanted to read you an excerpt from inner excellence. to help you achieve performance today. All right, here we go, Jack. When you're fully present, you don't need to worry about the future or the past. In that moment, you're free to bring your best to act with purpose. The future will take care of itself if you learn to master the present. Okay, Yetis, now you're going to catch a touchdown pass today.

Jack, I feel innerly excellent, baby. Let's sit on three stories. 15 years before this song, two boys from the Northeast met in the dawn. They had an idea to cause a cultural storm It's the best one yet But the best is an norm Jack Nick, that's it I don't even think they need to practice

50% that's a fat tip Tea boy city on your at list If you know you know because we're ready to go We can't wait no more so just start the show Start the show First a quick word from our sponsor For our first story After seven years

Starbucks is ending its open doors policy The bathrooms are for paying customers only. Sorry. This story shows many things, including the error of overcorrection. Jack, honestly, it's one of the great terms in business. The third place. The third place. Starbucks's longtime CEO, Howard Schultz, wanted Starbucks to become the third place.

Place, it's a place between work and between home where you could just hang out, be yourself. Everybody knows your name, Jack. You could write the next great American novel? Yeah. Or you could strike up a conversation. conversation with the cutie sipping that latte. I never have to pay a dime to buy anything there.

There's one dude who loved the third place so much. He's actually been to 20,000 Starbucks location. True story, this guy's been to 20,000. They spelled his name wrong on every single coffee cup, but he still visited all 20,000 of them. The third place, you get free Wi-Fi, free bathrooms, cozy couches, and that Coffee Shop V's playlist on Spotify we've all listened to. It's on repeat.

You could brush your teeth there. I've done it too, but Jack, it was before a big. meeting. We had a big meeting. Dude, I love public brushing of my teeth. I keep a toothbrush and toothpaste in my man bag every day. No, I've seen you. I've seen it's intense. It's impressive. It is intense. I'm not sure it's socially appropriate, but it's a story for another pod. But back in 2018, Starbucks put a legal definition on that hazy term third place. They had to because they were kind of in a crisis. Yeah, here's the context, Yeti. Starbucks was criticized when two black men were arrested in Philadelphia and the barista had kicked them out of a Starbucks for loitering. So Starbucks brought

clarity on who can and who can't use the third place. They announced that anyone can use a Starbucks cafe or a bathroom even if they're not paying customers. But here's the news. Seven years later, that experiment is over. Basically, Starbucks just announced no more Mr. Nice Guy. If you want to write the next great American novel, you're going to have to do it in the comfort of your own home. Or buy a venti first. Now, yeties, here's the goal of this new Starbucks policy. What is it, Jack? Starbucks says they need to reset expectations for how our spaces should be used and who uses them. Because the reality is that Starbucks's generosity on anyone using the bathrooms, it kind of backfired on them. Starbucks locations have become inundated with people just using it for cell phone charging and for the free bathrooms.

And now we should point out that vision of anyone using the Starbucks bathroom, it was a noble policy, a noble open doors policy. But no single private company should be expected to provide basic human services like that, to the non-paying public. Right. We do have someone who does provide that, and that would be the government or non-profits. Or Jack and I are also thinking, maybe this Starbucks switcheroo, it shows that there's a business opportunity here. There could be a chain of paying customer-only bathrooms and showers in big cities. We've got a coffee chain Starbucks. Why not have a bathroom chain called Starbats? You pay $2, Jack. You could brush your teeth in there and it would probably be a lot more fun. Either way, Starbucks attempted to serve everyone by letting anyone in, and it's resulted in the

deterioration of their business. Starbucks sales have shrank for three straight quarters. So here are the new rules. You must be a paying customer to be in a Starbucks. And baristas, they're ordered to call the police if they think someone's laundering. Jack, it kind of looks like the pendulum is swinging back in the totally other direction. Starbucks over cracked out in 2018. But our takeaway is right on point. So Jack, what's the takeaway for our buddies over at Starbucks? We Without premium stores, you can't charge premium prices. Yet is Starbucks has 40 million app users. They become great for digital orders, but they become terrible in person.

As Starbucks has optimized phone orders for their grab-and-go business, the third place of Starbucks has suffered. Well, we now know the new CEO Brian Nichols' turnaround plan, and it's got a real focus. The focus is the stores. Brian Nichol is prioritizing the in-person experience. He's bringing back the comfy seats and the porcel. and mugs for when you want to have a coffee in a Starbucks. Even if all of this means a lower sales

in the short term, he's still willing to do it. It's like Starbucks spent the last couple of decades too focused on the phone. They got addicted to the digital side of their business. Yeah, like all of us, they got addicted to their screens. Yeah, they got too focused on the screens and not what was happening right in front of them. The reality is that Starbucks has lost its brand as being a premium place to get a coffee. And if it's not premium, then Starbucks can't charge a premium price. For our second story, the Los Angeles fires are bringing out the worst in one very powerful group, greedy landlords. Some Los Angeles landlords are jacking up the rent by 100% right now. 100%. But we think this story could have a silver lining. Now, Yetis, yesterday on this show,

we shouted out some companies and organizations helping people during the L.A. Wildfires. There are a few gray ones out there. The L.A. fires are still burning. The Palisades fires only 11. percent contained. A hundred thousand Angelinos have been displaced from their homes. It is so nice to see so many people trying to help, but there is one group we found that is doing the opposite at the worst possible time. And the credit goes to Jason Oppenheim, famous realtor from the TV show, Selling Sunset. Selling Sunset, I went on a bench on that two summers ago, Jack, honestly, before you know you've gone through like three seasons at once. Because of Jason Oppenheim, the celebrity realtor and his brother, who are famous for the

Netflix reality real estate drama, Selling Sunset. And right now, right now, now, they're not battling over who's getting the commission on that oceanside property. They're calling out greedy landlords. Jason Oppenheim says that landlords are taking advantage of this natural disaster to jack up rents across the city. And here's the wildest part. We got the receipts on those greedy landlords. Now first, let's provide some context. Let's sprinkle it on. What do we got, Jack? Last year, the city of Los Angeles issued permits for 10,000 new housing units. Yeah, Los Angeles was adding to its housing supply. But in just the last week, the city lost the same number of homes because of these awful wildfires. We repeat, these fires have already wiped out all of

2024's new housing supply. That means the Los Angeles fires are going to exacerbate the already brutal housing crisis in Los Angeles. Well, besties, get this, with fires still burning. Greedy Los Angeles landlords are jacking up prices already. One Oppenheim client was looking to rent a house for $13,000 a month. Pretty expensive house, but not crazy in Los Angeles, actually. And that was the price last month when they were looking. Well, now the landlord is asking for 23 grand. That's almost a 100% increase in the price.

And it's not just these realities they are noticing this. If you go on Zillow right now, you can see this happening for yourself. Because Zillow tracks price changes. So there's a whole bunch of apartments that were listed for one price in December, but this week, they're listed for like 50% more. We just looked at one, which is in Santa Monica right now. It's up 50% in just the last two weeks. That's the price change.

California law says it's illegal to price gouge during an emergency. That's right. Good point, Jack. The price may not increase by more than 10% from pre-disaster levels. But landlords know that there are people whose houses burned and they are willing to pay to get any sense of normalcy back, like immediately. So landlords are breaking the law to jack up their short-term profits at the expense of people whose house has burned. And it took a selling sunset reality star to notice it. Oh, and those who can't afford

those home prices, they're going to have to wait to rebuild their homes, which could take years. Unless our takeaway. So Jack, what's the takeaway for our buddies who are everyone in the housing market? A positive legacy of these fires could be less red tape in housing. Yeties never let a tragedy go to waste. And honestly, there is still an opportunity right now to fix the housing crisis. We've said many times our country needs more houses. We've said many times, build baby build. We said build baby build. Well, the new solution after these fires is cut baby cut, as in cut red tape. One of the biggest challenges in housing across the country is regulations that have made building new homes a lot harder. Oh, maybe you face this. We're talking permits, fees,

bureaucracy, all that is red tape that causes building costs and building times too sore. Unless you're a builder, you probably haven't noticed that red tape. But if you're a buyer of a home, you've noticed it because houses are so much more expensive. Yeah. Now, some red tape ensures safety and quality housing. You've got to have a little bit of red tape. But too much red tape, builders don't even bother to build. So Jack and I hope that one opportunity in this tragedy is that the government eliminates some real estate red tape. Angelino's urgently need to rebuild. That's why this is a historic opportunity to cut red tape.

Cut baby cut. Now a quick word from our sponsor. And one, and two, and for our third story, Planet Fitness stock, hit in all time high this week just as you head back to the gym. Okay, Ron Burgundy. You should have said 1001, 1002. My first wraps. My warm-up reps, Jack.

We want to tell you, yet he's the dirty little stuff. secret about Planet Fitness' business model. Oh, yet is, Jack and I have told you about planuary. We plan the whole year in January as part of our New Year's resolution. Yeah, that's what we do. But the number one most popular New Year's resolution for the rest of America, dieting, working out. Basically, you want to have biceps by beach season. That's the resolution. That's why January is the biggest month for gyms. Memberships pop 50% in the first two weeks of every year. Well, perfect timing, Jack, because Planet Fitness' stock heat in all-time high this week. In fact, Planet Fitness, since the CEO left, has seen their stock rise 125%. Nobody has put up those kinds

of weights before. They need a spotter. And Planet Fitness plans to now double its size to over 5,000 clubs just in the U.S. This New Hampshire-based company is enormous right now. Get this, Besties, the number one fitness app in the app store right now, Jack, what is it? It's not Nike or Peloton. It's Planet Fitness. Someone give Planet Fitness a P-Test. These guys are juicing over there. But we haven't even told you the wildest, most unholy thing that Planet Fitness did in these past two weeks. This is what we found fascinating about this story. Planet Fitness messed with its holiest number, and that is unholy. If there's one thing you know about Planet Fitness, it's that membership start at just $10 a month.

They're the lowest price in fitness by far. I think the YMCA costs more than Planet Fitness. Our podcast is free and it costs more than the Planet Fitness. For 33 years, $10 a month, that's all you've heard about Planet Fitness in the ads and the marketing and the signs, even on the membership cards. It was like the subway $5 foot long. We called it a sacred cow price because it protects the profit puppy. Like Costco has the $1.50 cent cot dog combo and Planet Fitness has the $10 gym. But this year, for the first time since 19, They jacked that price up. In fact, they increased the membership price to 15 bucks a month, which is a 50% increase. Now, that is a huge, huge risk. Planet Fitness built their entire brand on $10 a month. So now they're breaking that psychological barrier for new members. And Jack, what were the results? So far, seems things are going well. There's no mass revolt against Planet Fitness. Like we said, Planet Fitness' stock is at an all-time high. And yeah, they may be juicing. the P-Test Planet Fitness is worried about most is our people using Ozempic. That's an existential threat for this brand. Good point, Jack. You could go and do 500 sit-ups or you could get a prescription from your doctor.

For $500. But there's actually a greater risk than just prices facing Planet Fitness. And that risk is our takeaway. So Jack, what's the takeaway for our buddies over at three and four? Planet Fitness. If everyone comes to Planet Fitness, the business actually breaks. Funny thing, Yetis, but having too many members more than they can handle, that's actually part of Planet Fitness' whole business model. 15 bucks a month is so low that they must sell lots of memberships to be profitable. Yeah. It's a low price, high-volume business model.

But, interesting thing. Planet Fitness factors in the fact that 80% of January gymgoers will quit within three months. That's the average. Planet Fitness can afford to set the price so low because they're not. know so many of us don't actually show up to the gyms. It's kind of a magical price jack, because it's just enough to feel like you did something, but not enough to care if you don't do that thing. Nobody's in a rush to cancel their Planet Fitness before it hits their credit card statement.

Honestly, it's actually the same business model as airplanes that oversell seats. You know, they factor in a percentage that's not going to make the flight. But if every Planet Fitness member did show up to the gym one day, there would be a line out the door and around the block waiting to use those dumbbells. It's actually a funny insight into Planet Fitness' whole business model. If everyone uses it, then the whole business breaks. Banks fear that there's going to be a run on the bank one day. Jim's fear there's going to be a run on the gym one day.

Besties, the greatest risk to Planet Fitness, it's that you actually use the product. If you're a regular gymgoer and you can't stand these New Year's resolution newbies in the gym, leave us a comment about what you think about them. Jack, can you whip up the takeaways for us for Saviche Wednesday? Starbucks is trying to save the third place by ending their open doors bathroom policy. Because without premium stores, you can't charge premium prices. For our second story, some landlords in Los Angeles are responding to the fires by jacking up rents.

So we hope one legacy of these fires is to cut red tape so that L.A. can rebuild faster. Cut, baby cut. And our third and final story is Planet Fitness. They're bringing in record revenues this January with 50% higher membership prices. But remember, if everyone shows up at the same time, then the bench press actually breaks. Literally. They don't have enough benches, not expecting it. They like, well, I want two of you to show up. But yeties, this pod's not over yet. Here's what else you need to know today. First, big news for our buddies over at the big banks. Bonus update.

According to Bloomberg, the average bonus on Wall Street is expected to rise 10% this year. With the Trump administration, there are big expectations. There will be more deals, so they want to give you a little payday ahead of time. And we'll get more details as big bank earnings kickoff this week. And second, Spain wants to introduce the biggest real estate tax that we have ever seen. Get this. A 100% tax on non-EU home buyers. If foreigners want to buy a home in Barcelona, the tax they'd pay on buying that home is the same as the price of the home itself.

That is a 100% tax. Remember, tourists were being sprayed with squirt guns last summer. Like, there is a lot of tourist situation going on. It's all part of the backlash against investors and Airbnbs who are hurting the housing supply. And eating all the tapas. And finally, the stubbornest part of inflation, it's still being stubborn. It's egg prices. Egg prices just hit a new all-time high.

They're up 40% compared to last year. In fact, eggs are up 25% in the last two months. The average price of a dozen eggs in California is $8. Or if you go to a farmer's market, $50. Blame it on the bird flu. The scary thing I keep seeing headlines about, but I'm too afraid to read the details on. Bird flutes creating a photata fiasco. Oh, my omelet.

Eggflation situation. Now time for the best fact yet. This one sent in by legendary Yetty Savannah Westwood from lovely Orlando, Florida. Nick, what's a polysemi? Jack, I'm so glad you asked because I had to look it up in the dictionary. It is a word that, according to the dictionary, has multiple definitions in the the dictionary. For example, the English word set, it has the most meanings of any word in the English language. Like, think about this. A set could be a collection of items, a television,

it's something in tennis, it's something you do at the gym. Oh, like three sets of five reps? That's another definition jack. Like, I just did 500 reps. And according to the Oxford English dictionary, the word set has over 430 distinct definitions. Making it the most versatile word in the English language. Jack, now that I think about it, your and my names are also both verbs. Like, we've got it. We're kind of poly semis too.

There's actually a nick on my table I just made. I'm kind of annoyed by it. And that's so funny, Jack, because when I was on the bench press, I was getting jacked. Yeties, you look fantastic over there. And remember, if you want to channel your inner excellence today,

tell your buddies to listen to today's show, H-Y-H-D-B-O-I. Have you had the best one yet? Apparently, you'll beat the Green Bay Packers, if you do. If you do, you will be better than an NFL player. Jack and I will see you and your buddies tomorrow. And before we go, a happy birthday to legendary engineer William Nut down in lovely North Carolina. The dash. The dash. And Terrence Ogby in Jersey City, New Jersey is crushing it as a dad with a birthday just outside Manhattan. Happy birthday to Will Shane in Rio

DiGenaro, Brazil. And Tara Whitmore over in Charlotte, North Carolina is celebrating the best birthday yet. Happy birthday to Wynne Jones, who's celebrating a birthday somewhere fantastic. Probably in Rio. And Acuncha is turning 40 years old over in the Bay Area. Happy birthday Acconcia. Happy birthday to Alma Madrigo in Montclair, California, just outside Boston. A little far, but still outside. And Lindsay Drager in New York City, her brother can't wait to ski with her in Colorado because they're going to be celebrating a T-boy birthday. And welcome to this world to the beautiful Declan Bernards in Portland, in Portland, And a huge shout out to his mom, Stephanie, after 72 hours of labor.

What a legend. Celebrate that epic win. This is Jack. I own stock in Amazon. Nick own stock in Nike. And we both own stock in Zillow and Peloton.