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Entrepreneur Insight

How to Build a Successful Franchise Business

January 18, 2016
Practicing pilates at DEFINE body & mind studio
Practicing pilates at DEFINE body & mind studio

A Pilates studio owner finds the right strategy to franchise his business.

Franchising your first business might appear to be the holy grail for many entrepreneurs, but Henry Richardson was extremely hesitant at first. After he opened his third Pilates studio in Houston, he was inundated with offers from his own clients and small-business owners.

He held back initially because he was worried that the quality of the classes would diminish or would not be consistent everywhere. After conducting research, Richardson revised his business plan and now the concept has grown to 12 studios, including nine franchises in three different states, with several more in the works.

The challenges of developing a successful franchise vary across the board, depending on the market and the location of your business, but maintaining the following principles will help a business owner to find the right approach and strategies.

Developing a Franchising Model

In 2009, Richardson opened his first DEFINE body & mind studio, which combines Pilates with strengthening, barre work and cardio. Requests from entrepreneurs to franchise his studio kept emerging, but Richardson had misgivings. He wanted to ensure that each studio would resemble the others.

Luckily, the first three franchise owners were staff members whom Richardson knew well, so his decision and leap of faith to expand to two suburbs in Houston and Midland, Texas, turned out to be fortuitous.

“We grew organically, but what separates us from our competitors is that we have great instructors and a good training program,” he said. “Our biggest challenge was finding people who are really strong at teaching.”

With the success of the initial franchises, DEFINE expanded to Cincinnati in 2014 and in 2015 the Austin, Texas, and Atlanta franchise locations opened, along with another studio in Houston. Next, the concept will expand to Denver and Dubai.

Training and Hiring the Right Employees

Richardson quickly learned that his biggest challenges were hiring the right instructors, managing his staff and maintaining consistency in all of his classes.

“The instructors are the face of the brand, but it’s more important to have a strong team rather than strong individuals,” Richardson said.

Keeping up with all the franchises is critical because if Richardson introduces a new program or concept, the instructors at all of the 12 locations have to learn and adapt to it.

His saving graces include the fact that more than 50 percent of his staff has been involved since 2011 and some of his customers have become instructors. Their careers span the spectrum and include photographers, engineers, attorneys and even doctors who have opted to teach part-time because they have found the classes create a sense of purpose, Richardson said.

“They are teaching the classes because they find it to be meaningful and they feel amazing when they are finished with this other ‘work,’” he said.

Knowing the Right Time to Expand

The success of the first studio gave Richardson the confidence to launch the opening of a second and larger two-story studio in Houston. The change from managing one store to two stores was a “tough time,” he admitted.

Richardson found that he needed to devote a majority of his time to developing an operations system in addition to his instructor training program “if we were going to make it.” He wrote policies, procedures and scripts on: how to call prospective clients back; how to deal with various situations, including unhappy customers; and even how to sell and order retail products.

The business headed into a different direction after the third Houston location opened in 2012. DEFINE added cycling as an option and Richardson continued to revise his business plans.

By keeping the classes innovative and offering more options, Richardson has been able to avoid raising prices for the past six years.

“We cannot do the same thing over and over, because it becomes boring,” he said.

Since all fitness programs can turn out to be a mere fad, staying ahead of the pack is not easy. All of the classes are geared for people of all ages and fitness levels, ranging from individuals who have never taken a Pilates or strengthening class before to those who go to the gym daily.

“We promote long-term health and our classes are good for anyone,” Richardson said. “Exercise classes are recession-resilient and, although people might back off a little bit, they want to feel good and don’t want to give them up, even when they are experiencing financial issues.”

Starting a small business can be challenging, since the issues you have to combat daily are plentiful. Focusing and prioritizing are paramount, said Desmond Lim, founder and CEO of startup QuikForce, a Boston on-demand company that uses algorithms to connect its customers with moving companies. Today his focus is on hiring and training good employees and increasing sales.

“It is very important to hire the right people and to nurture and train them,” he said. “Focusing initially on hiring the right people by spending time interviewing them, and even working together for a couple of days, will be a good strategy to recruit the best talent for your company.”

Another temptation he encountered was not becoming distracted from his initial goals. Expanding too quickly can spell trouble for many small businesses.

“When I started QuikForce, there were many things I could have done in expanding into different services, growing into new cities or trying out new offerings,” Lim said. “However, I recognize that it is important for a small business to be focused on its core product and to do it really well.”

Being an owner and managing people is a daily challenge, but Richardson believes that staying true to his core values of continuing consistent customer service, such as learning the names of his customers, hiring good instructors and creating a sense of community, is a strategy that will lead to being successful.

“We want to get to know them as human beings so we can be part of their path in health and wellness,” he said.

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