Romp n' Roll Founders Don't Regret 'Shark Tank' Snub
Michael and Babz Barnett, left, are founders of Romp n' Roll.
Michael and Babz Barnett had their 15 minutes of fame six years ago on the hit TV show "Shark Tank." Like other contestants, they pitched their concept—a modernized kids’ gym called Romp ‘n Roll—to high-powered celebrity judges, and got the coveted offer.
Then they promptly turned it down.
“We went in offering 10 percent of the company for $300,000, and they offered that amount of money for 50 percent of the company. We had eight units at the time,” recalls Michael Barnett, the husband half of the founding duo. “Three hundred grand is 300 grand. In some ways it would have been helpful but it was too much equity.”
Fast-forward to today, and Romp ‘n Roll’s growth rate justifies the alternative path they followed. The year after the show aired, they signed a master franchise agreement in China and now have 85 units there.
When they started to franchise in 2010, foreign investors started calling, much to Barnett’s surprise. “There were resourceful entrepreneurs all over the world looking for the next thing coming out of the U.S. I wasn’t thinking that would be the direction we would go, but we got a lot of interest in Asia, and China in particular.”
One man, Luyin Zhao, had a PhD from Rutgers and was the owner of a tech company in New Jersey, and he had a “life plan” to acquire a U.S. children’s brand and take it to China. He called up Barnett to make a deal. “We plotted out how it would work. It made sense,” Barnett says.
Meanwhile, franchising in the U.S. was slow coming out of the recession, and the Barnetts had 10 domestic units. So they decided to take the unusual step of pouring resources into franchising abroad. “A lot of my franchising friends thought I was nuts. They thought: too young, too early, too small, all that. But I went with my gut, which was sort of the same thing as turning down the investment with the Sharks.”
As CEO of China operations and the master franchisee there, Zhao owns three units himself and the rest are franchised. He brought in some outside funding, about a year ago, but was able to get 65 to 70 units without outside investors. Barnett believes Romp ‘n Roll will “certainly” get into 300 to 400 units in China over time.
Barnett, meanwhile, will now turn his attention back to the United States. Romp ‘n Roll is based in Richmond, Virginia, where they have three corporate stores. The franchise fee is $39,500 and the cost to get a gym going is $198,000 to $300,000.
And the best part for the Barnetts and their young franchise? “We have not brought in any outside capital so far. I own the whole thing,” at least for now.