Romp ‘n Roll founders don’t regret spurning Shark Tank
At left, Michael and Babz Barnett pose with a Romp ‘n Roll mascot and a colleague at a franchise in China, where the kids’ gym has around 85 units.
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. “300 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 Ph.D. 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 early on. “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” develop 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.
The concept started with a gut feeling, as well, or rather that feeling of exhaustion that every young parent gets. Babz Barnett was a typical mother at home with two little kids years ago, and she was dragging them to one place for music class, then another for gymnastics, and rinse and repeat.
She thought: If I could put all these activities in one place. A few years later and a slump at a corporate job for her husband, and Romp ‘n Roll gym was born.
“One day I have a bad day at work and I came home and said, ‘Let’s start that kids’ gym we’ve been talking about,” Barnett said.
Romp ‘n Roll has a large variety of programs, not just tumbling or cooking or art, as some children’s franchises offer. “It’s almost like a one-stop shop for a parent of a young child,” he said. A brand new app allows for a flexible membership program, so now people can come any time, for about $80 a month to bring a child as often as every day, or about $60 for five classes.
In China, parents choose Romp ‘n Roll precisely because they want their kids to have the U.S. experience, and they want to get them started very early. “Our program is only three months to five years. One of the highest barriers in the U.S. is getting people to bring their babies to a program like Romp ‘n Roll,” Barnett said. He’ll also face competing franchises that do the exact opposite from his—specialize, which attracts parents who want budding scientists or artists.
The best part for the Barnetts: Whatever it becomes, so far they own the whole pie. “We have not brought in any outside capital so far. I own the whole thing,” at least for now. “So far we’ve done pretty well without it.”