Latest / Customer Service Revolution | Customer Experience & Employee Experience for Business Leaders / 240: 7,000 Locations, One World Class Culture: Dave Mortensen on Franchising the Right Way
Transcript
- 0:46Welcome, Revolutionaries, to another episode of the Customer Service Revolution Podcast.
- 0:51I am John DiJulius, Chief Revolution Officer, and today I am really excited to have Dave Mortensen on, a longtime client friend.
- 1:02Dave is the co-founder of Purpose Brands, the largest and most trusted portfolio of fitness, nutrition, and wellness franchise brands.
- 1:12The portfolio includes Orangetheory Fitness, Anytime Fitness, Waxing the City, The Bar Method, Base Camp Fitness, SUMHIIT Fitness, Stonger U Nutrition, Healthy Contributions,
- 1:25and Provision Security.
- 1:27Purpose Brands generates a combined revenue of $3.7 billion, operates more than 7,000 locations across 50 countries, and serves a total of six million members.
- 1:41Anytime Fitness has been recognized as the number one fitness franchise brand in the world.
- 1:47Dave and Chuck Runyon, his business partner, have a new book, I think it's their third, called, Fanchise Your Franchise.
- 1:56Welcome, Dave.
- 1:58Hey buddy, how you doing JD?
- 1:59Great, great.
- 2:00Where does this podcast find you?
- 2:03Well, I am at home today in the balmy weather of Minnesota with all the chaos going on in the world right now, which we don't need to dabble into, but crazy.
- 2:15have been through a lot the past five years,
- 2:19you know the good news, it'll teach the world one thing.
- 2:21It's gonna teach the world that you can look far left or far right, but the answers are typically in the middle and we need to work better together as a nation.
- 2:29Humanity is important and we're missing the boat on that, so hopefully that'll turn around.
- 2:33Well, hopefully, one of your next ventures is politics.
- 2:36That would be great.
- 2:38lord help us if I do that.
- 2:40So, listen, I want to make sure I get excited about people, but to show you that this isn't hyperbole, I've been fortunate, I think well over a decade, have worked with you and
- 2:52Chuck and Anytime Fitness, have written about what you guys have done in my last three books.
- 2:58Got to go underground behind the scenes and see what you've built.
- 3:03I've never, could truly say this, I have never found a company that built a better culture than you.
- 3:11And the incredible thing, then you and Chuck and your amazing leadership team, I know you're gonna deflect that as you're right.
- 3:20But what blows my mind,
- 3:22Dave, and you can help me with this.
- 3:24I always say when we opened our salon 33 years ago, actually like next week, we're pretty good at customer service.
- 3:31In the beginning, because 50 % of our staff was me and my wife.
- 3:36So whether you got it or you didn't, you had to work next to us all day.
- 3:41Then we started, you know, opening more locations and join
- 3:45growth and success and that experience took a nosedive because me and my wife weren't everywhere and you know, not everyone got it and we weren't able to do it.
- 3:55Now we only, you know, have a few handful of locations and they're pretty good but we own them, right?
- 4:03And there's a control factor there.
- 4:06so it's a long setup but
- 4:08you franchised, which I can't understand.
- 4:12And how many tattoos are there of AnyTime Fitness out there?
- 4:15easily over 4,000.
- 4:17Yeah, so I've been speaking at your annual conference where, you know, there's a line around the building for tattoos.
- 4:25They have to be any time fitness tattoos.
- 4:27That's the amazing thing.
- 4:29I've spoken to, you know, not only all your major markets in the US, but New Zealand, Australia.
- 4:37And these aren't your employees.
- 4:41These are employees of franchisees of yours.
- 4:46and they're the ones getting tattoos.
- 4:48And they're the ones that, I mean, just the culture is just amazing.
- 4:53you know, I wanna set that up for, I've never seen anyone and that's what I wanna get into.
- 4:59But you share a little bit about your backstory, how you got to where you are today.
- 5:05You know, luck and choice in life, right, John?
- 5:07And I've had a lot of luck in my life and I've made some good choices along the way.
- 5:12you know...
- 5:13You know, early on I was someone who just was passionate about the fitness industry in general and making a difference in people's lives.
- 5:19I was rare.
- 5:20I came out of high school wanting to be in this industry.
- 5:23I went to college and soon realized I wasn't a college kid and dropped out of college and started working in the industry at a pretty young age of 21 years old.
- 5:32And, you know, just kind of worked my way up a chain of clubs.
- 5:35from there, that's where I met Chuck.
- 5:37Chuck was doing a similar path as I was.
- 5:40And we connected, realized we
- 5:43were pretty good at what we were doing and we started a consulting firm pretty early in our years.
- 5:48We start traveling all across the US, Canada, Australia a little bit, down into Mexico, working with all different types of gyms, big box, small box, you name it, we probably
- 5:58worked them.
- 5:59Dave, I'm sorry, what was your credibility?
- 6:02Why would someone hire you?
- 6:04It sounds like you're young at this time, you and Chuck in your 20s or early 20s.
- 6:09Yeah, why are people bringing you in?
- 6:12What's your, you know.
- 6:14Bottom line is a lot of people are very passionate about, especially back then, were very passionate about the fitness business and making a difference in people's lives and they
- 6:22would open up gyms.
- 6:23But the operational components to executing a high level gym wasn't there, right?
- 6:29And Chuck and I were about driving results and driving results really means bringing in more members into your gym and developing an experience that makes a difference with those
- 6:39customers when they walk in the door.
- 6:40And that's something we were just really good at early on.
- 6:43and we were able to not only do it ourselves, but actually write it down.
- 6:48Write it down and go, what are those steps?
- 6:50What are those procedures?
- 6:51What are...
- 6:52Dave, had you owned a gym yet or worked in them only before this time?
- 7:01That's a great question.
- 7:02it started out, we just worked in them, right?
- 7:04We worked in them.
- 7:05those experiences and went to the road and start sharing those experiences with others.
- 7:11Now, it's funny you said that because during that period of time, we said to ourselves, you know, we keep telling people and as we got larger, we said we need to start showing
- 7:19people that we know how to do it.
- 7:20We were just not telling them what to do.
- 7:22So we bought our first gym in 1995.
- 7:25And actually that gym was a big box gym.
- 7:28It was the first gym I ever worked at.
- 7:30I got a front desk job, four dollars an hour at that club.
- 7:33was the same first gym we joined, opened.
- 7:36And that had 400 members when we acquired it and we turned it into a 4,000 member, very, very successful gym.
- 7:43And we started buying existing gyms, remodeling them, and then selling them off.
- 7:47In fact, that same gym that we bought, we flipped gym.
- 7:54okay.
- 7:54would rebuild them up, flip them, and we were very successful on that.
- 7:58And during that period of time, that's how we came up with the concept of Anytime Fitness.
- 8:03So how many locations did you own before you started franchising, franchise or franchising?
- 8:11How many locations?
- 8:13We owned five different locations at one period of time that we either bought, acquired and flipped.
- 8:19The one gym that we had, which was a 40,000 square foot gym, we kept during that period of time.
- 8:25And even when we opened up Anytime Fitness, the first one in 2002, we still had that gym for probably three years prior, past that, but then sold that off along with our
- 8:35consulting firm.
- 8:36We ended up shutting down because we got so busy with Anytime.
- 8:40That's cool.
- 8:41So a couple of things you brought up there.
- 8:43I always say in a lot of industries, you tell me if this works in the fitness gym, the entrepreneur, well, someone's very talented at a chef, a hairdresser, a landscaper, and
- 8:58they may or may not get sick of making someone else rich.
- 9:02So they opened their own.
- 9:05They have the technical skills, but they didn't have the business side.
- 9:09And that's why so many struggle because, you know, and it sounds like that's kind of where you guys saw your niche was you had a lot of people that are passionate about working out
- 9:20and providing that experience, but they probably didn't know the business end of it.
- 9:25Is that safe to say?
- 9:26Yeah, there's two parts to it.
- 9:28Number one, we were as we were doing our consulting business, we worked with a lot of different gyms, right?
- 9:34And we always noticed this uniqueness of these owner operator gyms always had that passion side of the business and probably because they also were willing to invest in the most
- 9:44important asset in their life.
- 9:46And that was themselves, right?
- 9:47So entrepreneurs will invest in themselves.
- 9:50We believed in that model of franchising with people investing in themselves.
- 9:55We also learned everyone has different capabilities and skill sets.
- 9:59And we knew that if we built a solid franchise system that could have the full ecosystem of capabilities, we would be able to level up and support whatever gaps they have and
- 10:09enhance the strengths that they have.
- 10:11to make them the best operator possible for the model that we were providing.
- 10:15yeah, franchising was definitely something we believed in even before we opened our first gym.
- 10:21In fact, uniquely, our first 30 gyms opened.
- 10:24Not many people, and I'd never advise doing this, our first 30 gyms opened, were all franchisees.
- 10:29We didn't even own our own first core.
- 10:32you have a proof of concept, that's why I asked you, seven to 10 corporate owned locations, proof of concept.
- 10:39Man, how did you sell it without the proof of concept?
- 10:43Like that's hard.
- 10:45Is it called the pro forma?
- 10:47Is that kinda what, okay.
- 10:51sold it because
- 10:52The same way Chuck and I have been since we started business.
- 10:55We're very transparent, we're authentic, and we're open communicators.
- 11:00So as we were developing Anytime Fitness, like most people, think they need to hide every secret recipe.
- 11:06We were very transparent in telling people what we were doing.
- 11:08And we had so many people literally knocking on our door and saying, hey, listen, can I be one of your franchisees?
- 11:15Well, they believed in us.
- 11:16They knew the results we developed in the industry and said, you know what?
- 11:19They wanted to be a franchisee.
- 11:21yep, come on in but hey listen, we don't have this thing figured out.
- 11:25You're going to grow this thing with us.
- 11:27We're going to make mistakes together but guess what?
- 11:30If we all climb the same hill, we're going to become giants in the end and that's what we tried to accomplish.
- 11:35Yeah, get on board early now.
- 11:37There's gonna be some growing pains, but you're gonna be part of something really special.
- 11:42That's really cool.
- 11:43It's funny, you were smart enough to know that you had to own your own for the credibility purpose.
- 11:50I did the opposite thing.
- 11:51I own, obviously, know, my backstory.
- 11:54I opened John Roberts Spa and, you know, like everything, an accident, I start getting asked to speak because of our
- 12:01growth and reputation.
- 12:03And then when I started speaking, I started reducing on my bio.
- 12:09I didn't have much to put.
- 12:10I won the third grade kickball contest on there, trying to populate it with anything I can.
- 12:17But what I start doing is I start diminishing.
- 12:21And I think almost to the point where I took it off that I owned a salon because I thought,
- 12:27Who would want to hire a salon owner to come in and speak to a fitness center or an accounting firm?
- 12:33So I thought that was a detriment.
- 12:35And then this happened about five times in a row.
- 12:38The CEO that was introducing me said, he'd do whatever the bios say.
- 12:43goes, this is why I want, because this guy owns a salon.
- 12:47He's at the pointy end of the spear.
- 12:49He knows what it's like.
- 12:50And here's me in the back thinking, what an idiot.
- 12:53I thought that was a...
- 12:54a bug and it was a feature, right?
- 12:56And that's where you got.
- 12:57all right, so you go and listen, listeners, whether you're thinking about being an entrepreneur, going into franchising, if you're a leader, what Dave has to share in his
- 13:10best practices, just like I've learned so much about.
- 13:14building my brand and the culture from them.
- 13:20So, all right, so Dave, you and Chuck go at it, you build Anytime Fitness, and I don't wanna gloss over that, and then you start acquiring other brands.
- 13:33Take me to kind of where it came from 20 years later, 22 years later.
- 13:39Yeah, well, you know, we started Anytime Fitness in 2002.
- 13:45Our second brand we brought on the portfolio was in 2012.
- 13:52Waxing the City which was 10 years later.
- 13:55But really the ethos of that was four years prior to that.
- 13:59So four years prior to that.
- 14:01There were actually three of us.
- 14:02were three business partners.
- 14:05And Anytime Fitness was having great success at that point.
- 14:08We probably had about 600 units open.
- 14:10But this is where Chuck and I started to realize we were onto something that was bigger than ourselves.
- 14:15And we were passionate about that.
- 14:17And we realized this is something that's unique.
- 14:20It's special.
- 14:21And it's something we want to start.
- 14:23We wanted to double down on what we were doing.
- 14:25At the time, we had a
- 14:26a third partner who was really, really good at the startup side, but didn't like the scalability, didn't like the human capital that was needed, didn't like the development
- 14:36and evolution of the business.
- 14:38And we had to make some tough decisions.
- 14:40And at that time is when we bought that partner out.
- 14:44And I'll tell you, this isn't a worst time you could think of.
- 14:48This was in the recession in 08, 09.
- 14:51John, at that time, we had to take out a $26 million loan.
- 14:55at 16 % interest at that time because we obviously, the only credit we had was the business we owned and operated, right?
- 15:03So if we didn't succeed in that work, we're out of business.
- 15:08We're gonna hand this business over to...
- 15:10our debtors if we could continue to grow it.
- 15:13Luckily for us, we bet on the right thing, just like I say to entrepreneurs.
- 15:17People you have to bet on first are yourself.
- 15:18And we bet on ourselves and we bet on our team and we bet on the business.
- 15:22Those three properties helped us develop our culture.
- 15:25And really that's when we defined who we were, what we were, and what we wanted to be.
- 15:30And that's where you saw us really double down on the self-esteem of the world and really wanted to make a difference with every shareholder that was touched by our uniqueness.
- 15:39And then we wanted to be able to develop our pillars around the four Ps of people, purpose, profits, and play.
- 15:45And really turn what culture, so many people put on a wall and signs, but we wanted to live it, eat it.
- 15:51breathe it and add it to our strategy year over year to evolve it because it's going to change over time.
- 15:57It changes every year and you've got to be able to grow with your culture as your business grows and as things change.
- 16:04Well, you know, that's the thing, you know, Dave, if you listen to a lot of entrepreneurs, CEOs, they'll talk about these things.
- 16:10They'll talk about their mission and purpose.
- 16:12But I've never seen someone bring it to life.
- 16:16And again, you know, you know, I, you know, my first business, John Roberts Spa we have such an easier business model because we own them all.
- 16:24We have total control.
- 16:26There's, you know, if you're not familiar with the franchise or franchisee business,
- 16:30There's a lot of things you can't tell them that they have to do and you're not there.
- 16:36This is the secret sauce and I know you write about it, but how did you build a culture that everyone talks about, but you guys were relentless and people were bleeding anytime
- 16:50fitness purple.
- 16:52I have purple shoes.
- 16:54I have purple handkerchiefs.
- 16:56from speaking at your event and I get into it and like, know, it's a, you know, the purple whatever, you know, is all over and the tattoos.
- 17:05You know, one time I spoke, I don't know if I told you this before, at your big conference and one of my last messages was give more, right?
- 17:13You give more in every situation.
- 17:15Provide surplus value, give more to your company, blah, blah.
- 17:19Next year I come back to speak and a woman comes up to me
- 17:22from Anytime Fitness and she shows me her wrist and it had a give more with an Anytime Fitness logo.
- 17:29Man, that's a lot of pressure like to realize that people are going to go out and, you know, drink the Kool-Aid, right?
- 17:36It's just, I can't do it justice.
- 17:38How do you guys build that?
- 17:41Your corporate office, I understand.
- 17:43They work with you.
- 17:43Again, that goes back to they gotta be around you.
- 17:46The Libby's of the world and Stacey's, Anderson and all the people there.
- 17:51But how do you get that to 50 countries and franchisees to their employees?
- 17:59You know, Chuck and I talk about this often, but this is where you need to know how to connect the dots.
- 18:04And there's a path we travel.
- 18:07It's 36 inches.
- 18:08I don't know if you've ever heard this, but it's the longest 36 inches we'll ever travel in our lives.
- 18:14And it's between our head and our heart, right?
- 18:17And what Chuck and I have always done well.
- 18:19is understand how to make that travel.
- 18:21It's literally 18 inches from your head to your heart, but traveling you got to go both ways.
- 18:25You need to make it bilingual and they got to be able to speak together and you have to know how to reach people through their head or their heart.
- 18:32Now what you don't know is half of America is headfirst.
- 18:37Meaning everything that travels in there, the way they consume information, in fact, Chuck is this way, he's very head first person.
- 18:43It's gonna hit his head first and he's gonna process it where he will cause failure in his own world is when he starts to overthink things and he never allows it to connect the
- 18:53dots.
- 18:54Me, I'm opposite.
- 18:55I cry before I Exactly.
- 18:58Analysis by paralysis will happen for people.
- 19:01Me, I'm opposite.
- 19:02I'm, I literally, hits my heart first.
- 19:04And if I get emotional about something or sensitive about something, it won't travel to where I need it to.
- 19:10So what we have done a good job is helping people connect their heart and their mind.
- 19:15And we speak in bilingual ways to be able to make sure that we're hitting both sides of those.
- 19:21incoming information and help them process the whole because what that 36 inch creates is wisdom and when you create wisdom in people's souls what they deliver from that point will
- 19:33be massive and that's what we've been able to attribute our success in is always helping people make that that 36 inch travel.
- 19:42That's amazing.
- 19:43That's amazing.
- 19:44And you do it so well.
- 19:45And like I said, you can go to, you know, a franchisee, know, thousands of franchisees, but you can go to one of their employees and they, you know, I feel like I'm talking to a
- 19:56Dave Mortensen or a Chuck Runyon.
- 19:58I mean, you know, it's just the passion they have.
- 20:01How is franchising different from being an entrepreneur?
- 20:06explained, know, listen,
- 20:07I believe entrepreneur is one of the toughest jobs in the world.
- 20:10you know, if you need certainty, don't be an entrepreneur.
- 20:16But franchisees take it to a completely different level, which you went from obviously being an entrepreneur of both a consulting company and a gym to, you know, what today is,
- 20:28you know, the number one fitness franchise in the world.
- 20:32Well, the biggest difference is in what you have to one, you have to be able to make sure that people coming into franchising is different than being a sole operator and
- 20:42entrepreneur.
- 20:43You are giving up certain freedoms as an entrepreneur in a franchise system.
- 20:48And what you're giving up are some of the things that you are really giving up your own ego because as an entrepreneur, when you start a business, everything is on you.
- 20:57Every decision is on you.
- 20:58Every mistake is on you.
- 21:00Right.
- 21:00Your brand is your brand your your people are your people when you start in a franchise system many of those things are in place and you are relying on a franchise or who's
- 21:12willing to consume the full value of that ecosystem to develop a brand and properties and technologies and all the systems and solution that are going to be the betterment for the
- 21:24product itself.
- 21:25And that always won't align with what, who you are.
- 21:28You know, there are going to be times.
- 21:30Dave, tell me if I'm right, an entrepreneur, probably by nature, is a control freak.
- 21:37Well, an entrepreneur, I will say they have control freak likenesses and many entrepreneurs never get out of that level.
- 21:45that's what I mean.
- 21:46Now you go to franchise model and you are giving up a lot of control, which is opposite of probably what made the entrepreneur successful in the, he's licking stamps, stuffing
- 21:59envelopes, to do the big stuff.
- 22:02I had to learn the hard way.
- 22:04Listen, I could pay someone $15 an hour to lick stamps and stuff envelopes, which frees me up.
- 22:11to bring in more money to the company.
- 22:13But that was hard at first, but now, you know, when you go into the franchise model, you're taking it to a completely different, you know, level.
- 22:21And I would say anything you get to bring to scale needs kind of, Chuck and I always talk about certain properties you need and properties you need to bring something to scale are
- 22:30really simple.
- 22:31Number one, you have to have a stakeholder mindset.
- 22:34Every stakeholder part of the business, I don't care if they're your customer, I don't care if they're your franchisee, your employee, if it is a vendor, every one of them have
- 22:44a position in your business and you have to care about every one of their successes.
- 22:50So when we make decisions, the last thing we do in anything we do when we build our strategy is build a stakeholder map at the end of the strategy.
- 22:59During that time, we will lay out those strategies and go, how do they impact every stakeholder?
- 23:04And listen, you're never going to create a win, win, win, win, win scenario.
- 23:07You can't do that.
- 23:08It'd be impossible.
- 23:09But what you can make sure is that you don't create a losing scenario for any of those stakeholders.
- 23:14Because every so often, you might put something out that's beneficial for your customer.
- 23:18But if it doesn't have value to your employees, it doesn't have value to your vendors, it doesn't have value to the business or the financial metrics of your business, guess what?
- 23:29Then you're creating more problems for yourself.
- 23:31So you have to create a stakeholder mindset first.
- 23:33If you do that right, then really the next thing is you've got to be the reason it works.
- 23:38You have to buy whatever you're going to put out there.
- 23:42You have to be the example of.
- 23:43I'm sorry Dave, when you're saying you, who are we talking about?
- 23:46We still talking about the franchisor or the franchisee?
- 23:50starts with you as the founder of your business and it has to resonate throughout your whole business, right?
- 23:56If you're not willing to walk the walk, it's kind of like franchises make big mistakes like when they'll they go out and they'll tell their franchisees to do a bunch of things
- 24:04but they're not making their own corporate stores do them, then that then you're not being the reason.
- 24:10We lead with reason.
- 24:11We will start with our corporate stores and make sure whatever we are doing, we are willing to invest in it first.
- 24:17test it, pilot it, and make sure it's successful before we put it up.
- 24:21Absolutely!
- 24:22So important!
- 24:24Yep!
- 24:26the largest franchise in the world and they were trying to roll out, they called it the experience of the future.
- 24:33it was kiosks and trying to get people to order and not go up to the counter.
- 24:38It was really good concept.
- 24:40And they were chasing
- 24:41Chick-fil-A model because they had gone out with that.
- 24:44So I had gone to their headquarters in Chicago and went to their corporate owned store that's in the building, in their headquarters, you know, at the bottom.
- 24:55And they weren't doing it there.
- 24:57Like, how can you tell, you know, the rest of, you know, your franchisees that this is the,
- 25:03where they have to go and invest, because you know, it's a significant investment when you want to go into that direction.
- 25:11And yet they weren't doing it.
- 25:12They couldn't figure it out themselves.
- 25:14So yeah, you know.
- 25:16Yeah when you're building building all of your answers from the top down and then you're not even willing to bet on it yourself you've created some massive problems with the right
- 25:26way to do it is actually build it from the bottom up in other words what i mean by that is work within your systems cuz the real gold in our system is being you gotta be curious you
- 25:36have to be humble and you have to go out listen to a lot of noise eighty percent of what you hear on the network is noisy right because everyone only has this much
- 25:44vantage point of the business.
- 25:45They only see what's in front of them.
- 25:47But guess what?
- 25:48If you're willing to work through the 80 % of noise, there's 20 % of value there and inside that 20 % of value is gold.
- 25:55And if you look for gold, you'll be able to build some pretty incredible things.
- 25:59But even when you build it, after you gain that information, then you have to test it, pilot it, make sure it's executable before you put it back out in the field.
- 26:08to go run with and sometimes we skip those steps and we've done that ourselves.
- 26:12Hey, we didn't come up with this.
- 26:13We made a lot of mistakes along the way that taught us a different way to do it.
- 26:17So we're evolving every day too.
- 26:19You gotta have a learning mindset always.
- 26:22The day you stop learning is the day you need to retire.
- 26:25And obviously the benefits, maybe it's not obvious, to franchise or franchisee model is you're basically providing entrepreneurs that become franchisees a turnkey model that they
- 26:38don't have to go out and reinvent the model and with a brand recognition versus John's gym that no one knows of.
- 26:47I'm
- 26:48you know, again, reinventing the model stepping on all the landmines that you've already stepped on.
- 26:53Is that safe to say that's one of the biggest benefits?
- 26:56It's one of the biggest benefits.
- 26:57It could also be one of the biggest failures because what ends up happening if you build a franchise system and you have franchisees that are now executing and delivering a little
- 27:05bit different model as you've created and you've built, there's no way to iterate that model to make it great.
- 27:12So one of the things is making sure you create consistency within that product right or wrong and making sure that you have testable information coming back at you so you can
- 27:21improve it year over year over year.
- 27:24where mistakes happen in franchise systems, sometimes franchise systems will allow franchisees, not because the franchisee has great ideas, they'll go let them run wild, but
- 27:36the problem is if you have five different flavors of your business out there, you don't know what the trueness of that business will be to go to scale.
- 27:44Yeah.
- 27:44There's a lot to learn as you build a franchise system or any business as you want to scale it past one, two, three, three units.
- 27:52Yeah, yeah, yeah.
- 27:53All right, so let's transition here.
- 27:56You and Chuck sold, I know you're still on the board of purpose brands, but you sold.
- 28:03you're in transition.
- 28:05You've written a new book, Fanchise Your Franchise, love that.
- 28:13Tell us about what that means.
- 28:15What does Fanchise mean?
- 28:18Well, let me me first take back one thing.
- 28:21One thing he said, we didn't actually sell.
- 28:23What we did do is we doubled down.
- 28:25And what I say we doubled down is we actually partnered with another great brand called Orange Theory Fitness.
- 28:31We brought those brands together along with all of our other brands, Waxing the City, Basecamp Fitness, The Bar Method and everything and put it under one portfolio.
- 28:40Now, why I say we didn't sell, didn't know one.
- 28:43There was no money exchange.
- 28:44This was an interchange to bring two businesses together.
- 28:48So we actually doubled down on what we believe will be the future of franchising in the fitness and wellness space.
- 28:54And we believe in the power of multiple.
- 28:57And if we can bring two great brands together, which we did, and incorporate the best of the best of those businesses together, you become more powerful, more stronger, more
- 29:07valuable to your franchise and ecosystem.
- 29:10and then it gave us the time to level up our rules as board members and as evangelists for the brands itself.
- 29:18We're still actively involved in the...
- 29:20properties and strategies of the business.
- 29:23But then it also gave us the ability to do some of the things that we love to do, like share the stories of building a Fanchise And what is a Fanchise?
- 29:32I'll answer that.
- 29:33A Fanchise is real simple.
- 29:35And Chuck does it best answering this because he's a big, lot of people are music aficionados, love music.
- 29:42In fact, you can almost create what's called a fandom if you've ever heard a fandom in the music industry or whatever passion it could be.
- 29:49You could be passionate.
- 29:50about cars, you can be passionate about music.
- 29:53What we believe, if this is going to be the most, one of the busiest things you do every day in your life, is be a part of your business, why not make it a
- 30:00rather than just a franchise, why not make it a Fanchise And whatever business you're in, why not make it something that you are that passionate about, that you wake up on a Sunday
- 30:10looking forward to going to work on a Monday, right?
- 30:13And that is what we wanted to create, is that kind of compassion for the business that you are in.
- 30:19And we look for people that are like-minded that want to be a part of that.
- 30:23kind of industry.
- 30:24It's when you really look at everyone talks about ROI in their business.
- 30:27You've heard me say this before.
- 30:29Everyone talks about return on investment.
- 30:31You know, how much do I have to invest versus I'm going to get a return, but no one talks about the return on emotional investment.
- 30:37We call it ROEI.
- 30:39And if I'm going to put all of my, if I'm going to buy myself an 80 hour a week job, why am I not going to buy something that I want to be a part of, that I love to do, that I
- 30:46believe in, and that I want to deliver?
- 30:48And that's what we look for.
- 30:50And when you look to create that type of excitement in your business, and it's really, John, this is all about really evolving, embedding on your relationships, embedding on the
- 30:59people of your business.
- 31:01A lot of people spend a lot more time on their product, which happens naturally for all of us.
- 31:07We love our product.
- 31:08We want it to be the best in class.
- 31:10But if you don't have the best in class people delivering it, that product is mud in the water.
- 31:16And so with that, real quick, what you just said, how important is it that you, what are you looking for when, and this could be, it doesn't have to be necessarily a franchisee or
- 31:31a Libby, Jessica Schneider, great people you've had working with you for a long time.
- 31:38A person that loves your mission, totally buys in, but lacks today.
- 31:46the skill and experience or wicked smart people
- 31:51Yeah.
- 31:52But maybe they're not drinking the Kool-Aid.
- 31:56Yeah.
- 31:57In fact, wicked smart people that are in your business that don't align with your culture, we call them cancer in your business.
- 32:03They're the most dangerous people in your business.
- 32:05Highly talented people that don't have the passion for what they're doing are very dangerous for the business.
- 32:11But I'll tell you how to solve that.
- 32:13You first got to figure out who are you as an organization, you know, and who are you as a business?
- 32:20What are your human traits that you are looking for in people?
- 32:23So an example for
- 32:25Us, we have five traits that we look for in people and where we, can tell you when we failed on people, normally it's because they lacked most of these traits.
- 32:34Some of the traits were highly competitive.
- 32:37So for Chuck and I, they're five, I'll give them to you.
- 32:39We're highly competitive, right?
- 32:41We want to win and we want to win.
- 32:43We want to be with a winning mindset team.
- 32:45So having a highly competitive, gritty team was really important for us.
- 32:50Our leaders and our people also have to have self-awareness.
- 32:54Self-awareness, that's number two.
- 32:57Number two for us is you have to have self-awareness and you've got to be able to know who you are, what your strengths are, what your weaknesses are because the only way to create
- 33:08a learning mindset with people is they have to be self-aware of their strengths and their weaknesses.
- 33:12So we look for people that are very, very self-aware.
- 33:15So that is something for us that is very important.
- 33:18Passion you talk about passion you've got to be able to feel them and not just hear them If you can feel people and feel their passion They're more likely going to be brought in
- 33:29because I'd rather have someone that has low talent high culture and passion Because I can develop those people and create something that we want.
- 33:38They have to be selfless in the franchise business and in our business.
- 33:43They have to be others first not me first
- 33:47type of people, it's just our business.
- 33:48Now other businesses are gonna have different traits.
- 33:51And the last one for Chuck and I that were really important for us, they have to have a sense of humor.
- 33:56Listen, at the end of the day, Chuck and I believe in a gut-belly laugh, we believe in having fun.
- 34:01And if, you know, in a world where things are so chaotic and serious, if you don't have a sense of humor about things, you're probably in the wrong business working with us.
- 34:10And when we find those people,
- 34:13All those other things will work itself out.
- 34:15So if they have enough talent, but they have those five traits, telling you they're gonna be rock stars in our business.
- 34:21Yeah, I love it.
- 34:22I like to say, hire for the heart, train for the part.
- 34:25Like, I think anything can be taught.
- 34:27Me and you are examples of that.
- 34:30But, but, but passion and, and think.
- 34:33So let me repeat the five traits.
- 34:34What do you call those five traits too?
- 34:37Five traits of the human traits that you look for in someone being a part of your team.
- 34:42Okay, highly competitive, number two, self-aware, number three, passionate, number four, selfless, and number five, sense of humor.
- 34:52Love it, love it.
- 34:53In your book, Fanchise Your Franchise you talk about the three golden rules for partnership.
- 34:58Can you share a little bit about that?
- 35:00I can.
- 35:01know, one, three golden rules for us are really, simple.
- 35:03Number one in our partnership, have to, we have to check our egos at the door.
- 35:08Chuck and I always talk about checking our egos at the door and making sure that it is, it is about what we're doing more than what we think.
- 35:16So, you know, examples of talking about our egos, I I would talk about
- 35:21No matter what idea, we don't care whose idea it is, we care about how we execute it.
- 35:27And I'll tell you that is probably the most important thing in the world is we're ego-less when it comes to great ideas.
- 35:34In fact, rarely is it our idea.
- 35:36What we want to do is capture the greatest ideas.
- 35:39And even if I'm against an idea, and I'll give you an example on this, John, let's say you and I are working together and you have an idea and I have an idea and we decide to go to
- 35:47your idea.
- 35:49My job isn't just to support you.
- 35:51My job is to execute and deliver it.
- 35:54Because 90 % of a great idea is how you execute it, not necessarily the idea itself.
- 36:01There's very rare where there's a bad idea in a business.
- 36:05It's how you execute it is where you failed.
- 36:08And Chuck and I have never in our 20-some, well, our 35-plus years in business together have never spent one day looking at each other and said, I told you so.
- 36:18What we have done is sat down and said, what are the things we did to not execute that very, well?
- 36:25Communication in our business is really important.
- 36:28So think about no egos.
- 36:29is number one, no egos or leave the ego at the door?
- 36:34Number two is communication?
- 36:37Okay.
- 36:38I really believe, and this is in franchising in general and partnerships, we've got to be able to partner in a why, right?
- 36:45Not just tell people what to do, but explain why we are doing it.
- 36:49Because when you have a high level of communication, we call it communication alignment and trust.
- 36:55the rest of this business comes very easy, but you have to have that relational side of the business very valuable and it has to be something that is succinct within you.
- 37:04You've got to be able to trust one another.
- 37:07So if you're not communicating and aligning yourself on a daily basis, Chuck and I did it by coffee chat every morning.
- 37:13We literally would sit down every morning and we could be talking about business for five minutes, personal for five minutes, but having a strong relationship and a strong
- 37:21communication line.
- 37:22is really, really important in the business, right?
- 37:26So now we have, we've checked our egos at the door.
- 37:29We have a strong communication where we're working collectively together.
- 37:33And then, you know, third in our relationship that has worked really well for us, and we believe it will work well with everyone else, is we have an all in hands, our hands are
- 37:43all in, right?
- 37:44We are all in together on everything that we do together.
- 37:48And we really want people to have that same mindset.
- 37:52So we have a driver's mindset.
- 37:54don't, we just want to work collectively together to move the business forward.
- 38:00So that community of practice and that collaboration for us, we are in one, we are as one.
- 38:06That's why Chuck and I never defined who is going to be this guy and who is going to be this guy.
- 38:10We actually do everything together.
- 38:12Meaning that
- 38:13I needed to know everything he was working on.
- 38:15He needed to know we didn't separate what we were doing.
- 38:17We may have worked on different things, but I could walk away from that today and in true partnership he could step in and take over tomorrow.
- 38:25Vice versa, I could do the same thing for him.
- 38:29And how we were able to do that over the years is being able to make sure we kept our egos at the door, making sure that we had a great relationship and making sure that we were all
- 38:39hands in on everything that we were.
- 38:40I love it, I love it.
- 38:41Couple more questions.
- 38:43I could talk to you all day.
- 38:44And I'm sure you figured this out a long time ago, but the decade plus that you were my client, you were the client of The DiJulius Group, I learned way more than I taught you.
- 38:53So I'd probably owe you some money, but hopefully it's a...
- 38:57That's not true.
- 38:59This is a big one.
- 39:00And I visited a little bit in my last book, but not to the degree that you do, you know, leading during a crisis.
- 39:08And again, this is not just for entrepreneurs, franchisers, franchisee.
- 39:14If you're a leader, if you're a parent, right, you are going to have, and unfortunately we don't have a lack of examples, right, you know, from, you know, the great recession.
- 39:27to a pandemic, to your personal.
- 39:30It doesn't have to be a world thing.
- 39:34Your company could be going through something, or you could be going through something.
- 39:38And these are all crisis-es.
- 39:40And they're critical because what I think of and what I try, when I want to go into that fetal position and woe is me is,
- 39:48I think of in my world, there's 150 employees that gave up other opportunities elsewhere and bought my promise, my vision.
- 39:59And I can't bail on them now just because it got hard, you know?
- 40:04And I knew that when I got in this, I wanted to be the guy, the person, not when was the economy's booming and the busy bus.
- 40:14pulled up out front and it's great.
- 40:16It's January in the gym or it's the holidays in the salons, right?
- 40:23Those are good times.
- 40:25It's when shit hits the fan.
- 40:28I wanted to be the person that stepped up, figured it out.
- 40:32And that's what I, as hard as that, that's why I always had to remind myself during those times is this is why I went into this.
- 40:40So,
- 40:40Yeah, you know, your leadership during a crisis.
- 40:44Well, I tell you, in any business, in any world, have anywhere from many to massive crisis.
- 40:50And everyone likes to talk about the major crisis when COVID happened.
- 40:53And I will touch on that.
- 40:54But I'll tell you, over the years, I think we were trained to challenge ourselves in crisis.
- 41:01tell you, I told you about the Great Recession in 08.
- 41:04That was one of many.
- 41:05Try a tsunami.
- 41:07in a market that we were growing in at the time in Louisiana was our largest growing year when that's the time he came in.
- 41:14can't tell you we thought the whole brand was going to bring up that was Katrina at the time and I'll tell you on the contrary because of some of the things that we do every time
- 41:25in crisis make a big difference in COVID.
- 41:28I always tell people this story in 2019 Chuck and I were on a boat in Antarctica celebrating in December of 2019 we were literally celebrating being on the seventh
- 41:40continent being the only franchise system to be on all seven continents and we're pretty proud of ourselves knowing that we were going to go into our best quarter ever in 2020
- 41:50Literally, the stage was already set.
- 41:53Meaning we were gonna have more stores open, more revenue coming in, more success within the business than we'd ever seen.
- 41:58And by March of 2020, we closed every store in all seven continents.
- 42:04And when you start to think of that impact point and how that impacts your ecosystem, you really, you find out who you are as a human.
- 42:12And for Chuck and I, it was really simple.
- 42:14It was, we have this four-letter word that actually,
- 42:17Matters and it's a word called care one you have to care you have to really give a damn about everybody else first And we just did and and so did our team, you know, so when we
- 42:28ran into that situation we cared We we we doubled down on our C.A.T.
- 42:34which is our communication and alignment and trust and we talked about that and that sounds like small But we start but there's a thing in C.A.T.
- 42:40We don't talk about a lot and that's a trait called listening
- 42:44and really hearing people out and understanding where their challenges are.
- 42:48Because in a crisis, the thing you need to do is get rid of the noise.
- 42:52And you got to filter everything out and help people focus on what is most important at that moment in time.
- 43:00control the narrative and be in the certainty business?
- 43:02Is that?
- 43:03It is so and you know what I'll tell you John it's different for people.
- 43:06You could have an organizational focus which will share but when you get down to the individual sometimes you got to look at some people and say hey listen don't worry about
- 43:15the club today go take care of grandma might be her last breath she's taking and you you sometimes have to tell people that's okay your business will be there tomorrow because
- 43:26when people are focusing on the wrong thing for themselves at that moment in time.
- 43:31The executable of what they're doing is failing.
- 43:35And during that time, we were able to help people really make sure that they were in that, in our own internal team, in the operations of our business.
- 43:43And you start to narrow down, get rid of the noise, get rid of whatever it is.
- 43:47This is that 80-20 rule again, okay?
- 43:4980 % of what you're normally doing, that shouldn't even make it.
- 43:54Take that 20 % you're focusing on and then really prioritize that 20%.
- 43:59The other 80 % is gone at this point.
- 44:01Because in a crisis, you need to double down on that and then rally together and it's a community.
- 44:07And when you get your community of practice working together and everyone working on the same thing, it's amazing what you can create.
- 44:16Listen, in 2020, we're one of the only franchise systems that grew in 2020.
- 44:21With all of our businesses shut down, we still opened more stores than we closed while other brands completely dissolved.
- 44:30and never reopened again, we actually grew during that period of time.
- 44:34But it's because we were able to share with people, this is a moment in time, don't panic, right?
- 44:41Here's the things you need to really be focusing on and as we start to come out of this, know that we're behind you and we're support you and we're gonna be there for you.
- 44:49Let's do this together.
- 44:50And that's...
- 44:51you weaponized adversity.
- 44:55You weaponized, you know, and I always say this is, you know, I don't prefer, I never want to say I prefer, you know, I think there's golden opportunity in adversity, when
- 45:06everyone's sharing, not just personal adversity, but even in a recession.
- 45:11I say, you know, that's when we're going to really, you know, differentiate ourselves.
- 45:15And none of my businesses I've started do better in a recession.
- 45:19Some do, right?
- 45:20That's not it.
- 45:21But I know our competitors will do so much worse.
- 45:25They're just not, you know, they didn't create the Fanchise They didn't create the loyalty.
- 45:30You know, they're not in a position to handle.
- 45:33Even a turkey can fly in a tornado.
- 45:35When that tornado stops flying,
- 45:37turkeys start dropping, you know?
- 45:39That's good for the good businesses because there's a lot of poor brands in every industry that are giving us all a bad reputation because you go there and you're like, this is a
- 45:49ripoff.
- 45:49Why would I ever trust any brand in this industry?
- 45:53we have it.
- 45:53I love that.
- 45:54I share with my team and I want my leaders to share with them.
- 45:59One of them definitely came from you.
- 46:01The first one, I think I got this from the owners of Nemacolin and 84 Lumber, same owners.
- 46:09They say, I'll be disappointed to their employees.
- 46:12I'll be disappointed if you're ever going through tough times and don't let us know.
- 46:17Not because we're nosy, but we wanna.
- 46:20help you, be there for you, whatever that may look like.
- 46:22The second thing I want articulated to my employees, and I believe I got this from you and Chuck, is I'll be disappointed if you ever miss a important family event.
- 46:32And I love that, I love that.
- 46:34mean, nothing is more important than that.
- 46:37And nothing goes further than your employees knowing that.
- 46:40And I got that from you.
- 46:42I got a lot of other stuff I don't give you credit for, but I love those.
- 46:46I love the leadership.
- 46:48I think that's so important.
- 46:49I think we need to be prepared because it's coming.
- 46:51It may come next week.
- 46:52It may come in six months.
- 46:54I think we need to prepare.
- 46:56like anything, I think we need to be a lot of stuff I have found to personally get through as a leader a crisis.
- 47:04is really stuff we should be always doing, right?
- 47:07It's the healthy eating.
- 47:08It's who you surround yourself with.
- 47:10It's not doom scrolling and saying, oh my God, everyone's going out of business.
- 47:15You know, we're gonna go out of business.
- 47:16It's not getting sucked into the, you know, those things.
- 47:21You know, it's all that.
- 47:23Something else I wanna ask you to be brought up is you hear two different people out there, you know, experts say.
- 47:31One is,
- 47:33you advice to college graduate, find your passion and follow it.
- 47:38And then other people say, no, no, no, that's a bunch of BS.
- 47:41Find what you're really good at and you'll become passionate.
- 47:46Where do you fall on that?
- 47:48It's funny.
- 47:49this is, this is back to one way or the other, and there's no, no right answer.
- 47:53This is, and it really is both.
- 47:56You have to have a passion and you, you need to know you have the capability, right?
- 48:01You know, I may have a passion for basketball, John, but I'll never be an NBA player for an example.
- 48:07play shortstop for the Cleveland Guardians.
- 48:11It's not gonna happen.
- 48:13but there is a balance between the two.
- 48:15You never gonna have, you know, it's never gonna be probably the thing you're most passionate about.
- 48:19It's never gonna be the thing you're most talented about.
- 48:21But when you find the, the, 36 inch travel again, and on the balance between your talent and your passion, you just found your career.
- 48:30And that
- 48:31you more passionate back in the day about being an entrepreneur or the fitness center?
- 48:38I'm sorry, fitness industry.
- 48:40You opened up with you love the fitness.
- 48:43Was that the first thing and then everything else kind of fell into place after?
- 48:47Is that how yours went?
- 48:48So for me, I was passionate about the fitness and I would say this where Chuck and I were absolutely different.
- 48:54Chuck was passionate about the business.
- 48:55I was passionate about fitness.
- 48:58But then as I got into the fitness industry, I found out I was really talented at some things in the business.
- 49:04In fact, here's a funny story.
- 49:06The one thing I wanted to be in the fitness industry is the only thing I've never done.
- 49:10So there you go.
- 49:11I thought I was going to be a trainer.
- 49:13I thought I was going to be a trainer and that was going to be my career in fitness when I got into this industry.
- 49:19But then I found out I was really good at this thing called business and leadership and sales and all the operational things to do this business.
- 49:27And as I found my passion, I started to get passionate about the businesses and the skills that I had within it.
- 49:33And that's what made me be where I am today.
- 49:36That's so funny.
- 49:37So when I was in college, on my seventh year of the four year degree, I just became obsessed with I wanted to own my own business, right?
- 49:47And I didn't know what that was gonna be.
- 49:48And the only two plus two, probably like you, the only two plus two was I love sports and I wanted to be entrepreneur.
- 49:55So this is in the eighties.
- 49:56I'm like, I'm gonna open a sporting goods store.
- 49:59That was the only way I could find.
- 50:00wasn't going to be an athlete.
- 50:02You know, it wasn't, you know, all that.
- 50:03So that's what I thought I was going to do.
- 50:05And then met my wife and, know, was not interested in, in she was in the salons and, and, I opened it with her, for her thinking that it took off.
- 50:16I could then go open my sporting goods store.
- 50:19And, and, but, but my first thing was I wanted to be an entrepreneur.
- 50:23And then when I started dabbling with her and
- 50:26you kind of like you and Chuck, she had the artistic end, unbelievable hairdresser, blah, blah.
- 50:32I had the business customer service and all of a sudden, you know, the pendulum was in the middle, which in both, most industries, it's all either technical or all, you know, and
- 50:42that's what took off.
- 50:43I don't know.
- 50:44So I don't even know the answer.
- 50:45This is probably a therapy session I'm trying to figure out.
- 50:48But yeah, I had the passion, not necessarily for an industry, but then I love the industry, you know, and that.
- 50:56All right, last question.
- 50:57Well, what are you focusing on today?
- 50:59You have a best-selling book that just came out.
- 51:03where can people get that?
- 51:05And where can they find out more about what you're doing today?
- 51:08So first, what are you focusing on today?
- 51:10Maybe with the book and helping other businesses.
- 51:14Well, it's funny, helping other business create their own Fanchise within what they do.
- 51:19I mean, that is really what we want to help businesses do.
- 51:22One of the things I'm very passionate about, John, is the relationships that I've been able to develop over the years have created who I am today.
- 51:30No different than the relationship that I had when we met you and you helped us evolve our customer revolution, right?
- 51:37You literally did.
- 51:38Our revolution became into our please standards.
- 51:41which are the customer service standards that we deliver today and act on and have created as an action word in our business to please every customer and every person that we touch,
- 51:52right?
- 51:52So those...
- 51:53uh
- 51:53say, if you didn't meet me and I didn't help you, you probably would only have 6,999 locations.
- 52:01That last one really got you over.
- 52:04No, go on, I'm sorry.
- 52:05But those relationships, many relationships that have been created, you're one of 50 to 100 that we've created over the years.
- 52:16If we can help others just a little bit more and help them get to their next one, their next two, their next evolution of who they want to be, we want to help them create
- 52:27something that we've been so lucky to be able to be a part of for 35 years in business.
- 52:33And I've got
- 52:35one of the most incredible business partners, right?
- 52:37I'm happily married, I've got great kids, and I've got a business that is thriving.
- 52:42If I can help people find that within themselves, that's a passion for me because I love to see other people succeed in life, not just in business, but in life.
- 52:53And we believe we can do that with some of the properties that we've created.
- 52:57Where do our listeners learn more about your book and how to engage with you?
- 53:04It's real simple.
- 53:05It's the 4P guys.
- 53:06So 4P and guys, guys.com.
- 53:10Number four.
- 53:13Yep.
- 53:15You go to 4P guys.
- 53:18Yep.
- 53:18where they can get the book, Fanchise Your Franchise and learn more about how to engage with you and Chuck.
- 53:26to engage with us, anyone wants us to help them reach out.
- 53:30One thing we say in life and in leadership, create availability for people to find you and it'll make it a lot easier to be able to make an impact.
- 53:38So we're available.
- 53:39someone have to be in the franchise world to engage you?
- 53:43Because I mean, obviously you could teach corporate world, you could teach anyone.
- 53:47Are you just looking at that market?
- 53:50Or if someone is listening from KeyBank or whatever and wants to create the culture that you guys have created, could they explore you?
- 54:00Good.
- 54:00wants to develop a culture, especially anyone that's developed wants to develop a culture that is scalable and that they can scale within their system is something that we can be a
- 54:10part of.
- 54:11I have had the pleasure of not only working with you and your organization for over a decade, you and Chuck have spoken at our conferences, highest rated.
- 54:22This is the third or fourth time I've had one of you on my podcast.
- 54:27I truly mean this, Dave.
- 54:29I've learned more than I could ever have shared with you guys and
- 54:34Yeah, the person you are.
- 54:36I truly mean that.
- 54:38If we never did business again, would stay in contact.
- 54:43You are a genuine person with a huge heart, and none of this is a shock to me of your incredible, incredible success.
- 54:52Thank you so much.
- 54:54John you are a one of a kind yourself and I'm just honored to know you.
- 54:57Thank you, buddy.
- 54:59Thank you, revolutionaries.
- 55:00We'll be right back after this.