Franchising is rife with stories of sacrifice by entrepreneurs who believed the general public needed their products or services long before the general public ever suspected it.
Fitness Together's CEO Rick Sikorski started his one-on-one personal training company in 1982 to fill a void in a "broken model." "Lots of people going to gyms don't get the results (they want)," says Kevin Betts, Fitness Together's president.
Sikorski sold his car to finance the equipment needed for training. He opened a facility, sleeping in the backroom in a sleeping bag and microwaving his food to meet expenses.
On his Web site, Sikorski states that as a trainer for 14 years, he trained from 5:30 a.m. to 8:30 p.m. for years until he decided he wanted to be a leader. "As a producer I was able to train 2,500 sessions per year with no time off. As a leader, I owned four studios, and by leveraging my time with these systems and employees, I was able to produce over 30,000 sessions in a year."
And that's his business opportunity for personal trainers – or other high-energy people.
For years Sikorski and Betts, who originally signed on as a trainer while
attending Arizona State University, operated the company out of Sikorski's basement. Betts moved up the ladder quickly, "which wasn't hard because it wasn't a particularly tall ladder," he says.
Both are hard-chargers. "We wanted to be in control," Betts admits. "We were workaholics, as our wives liked to remind us."
The sacrifice paid off. Today Fitness Together has 406 franchises open and operating in 43 states and four foreign countries. All together they have sold 586 franchises. In 2003, the pair moved out of the basement into an official office building. "It was a lot like the basement without the children running around," Betts quips.
They now have an 11,000-square-foot office building in Highlands Ranch, Colorado, and have added a second concept, Elements Therapeutic Massage, which has 47 offices open.
When Fitness Together opened its first location in 1996, the industry was in its infancy. The public perception was that personal training was for Hollywood stars. Clientele didn't need movie-star looks, but they did need their money – the average client spends about $600 a month on training.
They had challenges along the way, especially once they decided to grow using franchising.
"We had systems developed, but not on paper," Betts says. "We hired a consultant to translate the knowledge in our minds and put it on paper (into a manual)."
They also learned their training facilities were too large. While the original studios had six private training rooms, newer ones have two to three – in order for rooms to be in constant use.
They also discovered that while "management by committee" worked for a small, entrepreneurial company, it didn't for a franchise. They closed the office for three days, and wrote standard operating procedures for each person in the office. Because everyone was multi-tasking, they needed to create an organizational chart and then fill any neglected positions.
When they looked at their growth, it was twofold: horizontal ("home-grown growth" of franchisees, such as employees or customers buying more units) and vertical (growth attracted from outside the organization). By 2000, the horizontal growth had run its course. They established a program, "Producer to Leader," to help trainers become franchisees, but existing franchisees were hesitant to endorse it because they didn't want to lose their best trainers, he says.
"We were approached by customers with money who wanted to invest, but not run (the concept), so we paired them up with highly motivated trainers," Betts says. "We're built on onesies and twosies – the largest franchisee is seven units."
To accommodate the rapid expansion, they hired a high-growth CFO – "He gave us the correct (financial) terms to use," Betts says – engaged legal counsel and established a marketing budget.
They are in the process of hiring a CEO with 1,000-unit experience, Betts says. But even though they have professional management and the advice and capital of a private equity group – Enhanced Equity Fund LP, which bought a piece of the company in 2006 – the company will stay true to its roots. "The entrepreneurial spirit has to remain active," Betts says. "That's what the franchisees are buying."