Podcast 28

The Exercise Coach Came Out of 2020 Strong, Here’s Why

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SHOW NOTES

Amy and Jesse Hudson explore the reasons the Exercise Coach saw phenomenal growth over the past 18 months while other fitness brands struggled to stay open. Learn about the key differences in the business model that make the Exercise Coach a great franchise to open, and why the community of franchisees that support one another is the secret ingredient to franchise success.

• Jesse is the National Franchise Director for the Exercise Coach. His job is to work with franchise candidates and educating them on what it means to open an Exercise Coach location and recruiting quality business owners to help continue the company’s growth.
• The last year was notoriously difficult for the fitness industry. Jesse had the opportunity to write an article last year detailing the growth of the Exercise Coach during the Covid pandemic in a national franchise journal. The number one factor that Jesse identified of the Exercise Coach brand was the one-to-one service delivery.
• Coach-led exercise environments have shown that they deliver excellent results, and this operating model has proven to be very resilient over the last year and really set the Exercise Coach apart from the traditional gyms.
• Even during restrictions, the Exercise Coach was able to train and cater to the same number of clients. The fact that it’s a personal training brand that doesn’t need as many clients in a single room has kept the Exercise Coach as a very desirable option for franchisee candidates.
• One thing that franchise candidates notice when they go through the process is the strength of the culture of the company. Without a good relationship between the franchisee and the franchisor, the brand suffers but people saw that Exercise Coach was a brand that went above and beyond to support franchisees.
• In franchise evaluation, there is a process called validation where you independently verify the information you’re receiving. This was another major factor in the growth of the Exercise Coach as existing franchisees felt well taken care of.
• The third component of the Exercise Coach’s strong growth is the franchise owners themselves. For most franchise owners, it’s their first time in business and 2020 was a time where many people questioned their decisions.
• When you go through a crisis, you can’t be certain what’s going to happen but Exercise Coach franchisees really came together to help offer each other advice and support on how to deal with the challenges over the past year.
• As unfortunate as it is to go through something like the pandemic, in some ways, it does reveal the strength or the weakness in a brand, and we can definitely say that the pandemic revealed a lot of strength within the Exercise Coach.
• The Exercise Coach is positioned for even greater growth in 2021. There are currently over 120 locations operating right now, with an additional 100 territories coming in the US. The long-term development goal is to open 50-60 territories each year going forward.
• There is a wave coming. People want to get in shape and spend money on themselves and their families again. The Exercise Coach continues to be one of the strongest fitness franchises in the industry and many investors are recognizing that.
• The high-tech and completely personalized approach is the future of fitness, and more people and investors are realizing that and coming on board.
• It’s much easier to walk into a system already in place and run with it, opening a franchise is a great way to start. Jesse believes that the Exercise Coach is going to be the best in fitness over the next three to five years.

We actually had more clients in the system at the end of 2020 than we did at the beginning, all during probably one of the most challenging times for the fitness industry. The number one thing I identified as a strong component to the brand is that one -on -one service delivery.

Welcome to the Strength Changes Everything podcast, where you get up -to -date information about living a healthy lifestyle. I’m Amy Hudson, exercise coach franchisee, along with my co -host, exercise coach, CEO, and co -founder, Brian Sagan. We are doing a very special episode today and we wanted to come on here and do this episode because the exercise coach was recently named by Entrepreneur Magazine as a top five fastest growing fitness franchise in the U . S. and number one fastest growing personal training brand in America. The exercise coach also hit the franchise 500 list due to its continued expansion even during a pandemic.

Those are some pretty major accomplishments for this brand. And so today’s episode is going to feature an interview with Jesse Hudson, director of franchise development for the exercise coach and my husband. We are also going to talk about how strength changes everything when it comes to continued strong national growth in 2020 and beyond. So Jesse, first of all, welcome to the podcast.

Thank you. It’s a pleasure to be here today.

And I want to jump right in. Would you start by telling us a little bit about who you are and what you do?

Sure.

Yeah. My name is Jesse and I am the National Franchise Director for The Exercise Coach. I actually work for a firm called Franchise Fastlane. And what we do at Franchise Fastlane is partner with phenomenal brands like The Exercise Coach to help them grow. And so our job and my job is to go out there and work with franchise candidates, business owners or potential business owners who are interested in owning a small business and are interested in looking into the exercise coach.

And all day, every day, I’m talking to folks from California all the way up to the Northeast and the Southeast and Southwest.

I talk to people all over the country about the exercise coach from a business perspective, and I help educate them on what it means to own a location, to open a location, possibly multiple locations, and really just recruit quality business owners to help continue the growth of the Exercise Coach franchise system. That’s great. And as we know, owners make a big difference in all of the studios that are out there in the U S and the more studios we have, the more lives that can be changed through strength training. As we say all the time, that strength changes everything. Not long after this entrepreneur magazine franchise 500 ranking happened, you actually wrote an article called strength changes everything about the exercise coaches, strong national growth, even in the midst of the pandemic. And in it, you talked about several different important factors that you believe played a role in a brand like this continuing to thrive even during those uncertain times.

Can you talk to us a little bit about what those factors are? Yeah, absolutely. As some of the listeners may assume, and rightly so, last year was difficult for the fitness industry. If you had a brick and mortar fitness business, whether it was personal training like Exercise Coach or maybe a big gym where it was just a membership model, it was challenging. Most Fitness businesses had to shut down at some point last year, many businesses had capacity restrictions. And so I was given the opportunity to write an article about the brand in a national franchise journal.

And I chose to title it strength changes, everything, partly to celebrate this wonderful podcast that you all launched this year. Uh, but also to highlight the fact that the exercise coach grew last year, uh, both in unit count, meaning the number of strength changes. open at the end of 2020 was more than the beginning of 2020. So it was actually a year of growing the number of outlets in the U . S. And because of that, growing the number of lives that were changing in our studios, we actually had more clients in the system at the end of 2020 than we did at the beginning, all during probably one of the most challenging times for the fitness industry.

And so the number one thing I identified as a strong component to the brand is that one -on -one service delivery. And Amy, you own locations and make manage coaches and managers. We really emphasize in our studios across the country, the fact that one -on -one supervised exercise coach led environments can really help get results. And that happened to be very good for operating last year, because in many places there were capacity restrictions. There were requirements about scheduled appointments. There were requirements about tracking who was coming in and out of the studio.

That’s stuff that we’ve always done. For 20 years we’ve done personal service one on one by appointment only very small groups in some cases, and so our model our operating model was a strong point last year. It’s always been one of the strengths of the brand that differentiates us from the big class based businesses or the large impersonal gyms. But especially during last year, we could space, we could social distance, we could mask where we could schedule. And in many cases, we could still train the same number of total people, even after reopening last year, even during restrictions. And so the number one thing I would say is is the fact that we’re a personal training brand that doesn’t need as many clients in the room at the same time really made it a little bit easier, not easy, but a little bit easier to operate our businesses last year.

And franchise investors really took notice. What I saw was not a very big decline at all in interest. We were able to maintain relatively the same interest level in terms

of franchise candidates because people saw this things a little different. And so that was the number one strength that we had identified. Yeah, that makes a lot of sense. There’s not a lot of drastic change that has to happen within The business of running an exercise coach studio, because of even during a pandemic, we’ve always been small. We’ve always been clean. We’ve always been private.

We’ve always offered one -on -one and even small group. And I know as an owner, clients were thrilled to be able to continue coming in regularly, even during the, while the pandemic was going on and they felt safe. They felt like the studio was, was a safe place to be where precautions were taken and they could continue on with what they were wanting, wanting to do.

even when all of this was going on. So what was the next thing that you identified as a contributor to this growth? One thing that franchise candidates notice when they go through the process is the strength of the culture of the company. And when you look to buy a franchise, you’re looking at numbers, initial investment, how much money is it potentially going to be able to make for me? Those are all important. Obviously, you don’t go into a business just because you like the business.

You should want to have it be a profitable venture for you and your family and your investors. But If the culture of the company is not strong, if there is not a good relationship between the franchise team, meaning the executive leadership team, in this case, Brian and Brad and the whole team at Extra Size Coach Corporate, if there’s not a good relationship between that group and the franchise ownership group, the local franchisees like yourself, Amy, and so many others across the country, even in normal times, if that relationship isn’t strong, then that brand is going to suffer. Franchisees are not going to give their best efforts. Franchisors are not making wise decisions about what’s best for the local studio owners. And so that relationship has always been critical. Last year, especially, what I saw was franchises

were evaluating franchise brands based on how they treated their franchisees during last year. And so if you had a brand that was very contractual, that said, I don’t care, Mr. And Mrs. Franchisee that your business is closed, you still owe me your fees or you still owe me this or that. And you just read the contract back to the owner and said, too bad, we’re not going to help you out. That was a very telling sign for potential owners that are looking at the business. This company doesn’t really have a heart or doesn’t really have the franchisee’s interest in mind. They only have their own interests in mind.

And what people saw with Exercise Coach was a brand that went above and beyond. Helped out the franchisees in numerous ways, both financially and relationally. Amy, you were part of the effort last spring to post Facebook live videos and do chats and put out content and stay connected with our clients across the country. There was tons of guidance given by the brand on recommendations for how to present your business and your relationships with your coaches and with your clients. And my candidates, the people who are looking at the brand came back. To me in franchise evaluation, there’s a process called validation where you validate.

So let’s say you’re looking at buying a business, a franchise, and the franchise salesperson like me is telling you all these great things, but you want to make sure that it’s true. You want to make sure you want to independently verify or validate that the information that you’re receiving is correct. And so people would go out and call our franchisees and their franchisees are very happy to talk to candidates and we’ll come back and say, man, they all say they love you guys. And it was. such a blessing to have a leadership team that saw that relationship was critical.

So I would say the number two component to the strength of the system in all years, but especially last year, was the fact that the franchisees felt well taken care of and that the culture was cooperative, collaborative, and really caring during a time where everybody was uncertain, a little fearful and had some struggles. Absolutely. As a franchisee, I definitely, I definitely felt all of the support from the corporate team and the relational strength there that was provided during a tough time. And as a business owner, all you want to do is you want to do right. You want to do the right thing.

And the leadership of this brand definitely gave. the owners in the system, plenty of tools and support when it came to how to handle things and how to navigate this time. And it was definitely a feeling like we were all in it together and you could reach out to anybody for help and support when you needed it. And I definitely felt stronger together in that time as personally speaking. So glad to see that other owners also are sharing that experience with with prospective owners in the future as well.

All right, so we’ve covered the first two that you had to save. And what was the third? What was the third component that you said contributed to the strong national growth in the midst of a pandemic? So I think going back to validation, when people reach out to local owners and ask them questions about their ownership experience, that’s the third component to a strong system is and the strength of this system is the franchise owners themselves. Most of our franchisees are people who are coming into this business as their first business. And a lot of people don’t realize that most franchise owners across all industries, this is the first time in local business.

And for many of them, it’s the first time in this industry. So most of our franchisees are people who come from many times, impressive corporate backgrounds or military backgrounds or educational backgrounds. These are people who were executives or teachers or leaders in for -profit or nonprofit industries who have always wanted to own their own business. And imagine signing on for a fitness franchise like this. That’s super cool. that has great technology that you’re real excited about, and you sign your agreements in 2019, and you open up January of 2020, and then What happens?

OK, it could be a very challenging time. It could cause you to second guess potentially that decision or the timing of that decision. And what we saw, and it’s hard to not get somewhat emotional at this point, what we saw were franchisees who absolutely worked hard and stayed the course. And last summer, when a lot of our locations did reopen with restrictions and whatever, but in summer of 2020, We saw franchisees go out there and market their business and sign up new clients and bring coaches back and get excited about opening their locations again. And the strength of the ownership team, the people who have signed an agreement with us, signed a lease with the landlord, bought equipment, done a build out. There’s a lot that goes into opening a local business.

Exercise Coach is known as a relatively simple business to open and operate, but there’s still. hundreds of thousands of dollars of financial commitment that each of these owners has made to open a location and then to have a challenging year and then to still operate your business and happily market and grow your business when you’re given the opportunity to do was just incredible. And I don’t think anybody really knew how resilient everybody was going to be when you go through a crisis. When you go through a crisis, you’re always like, I think I’m going to be fine, but I hope my friends or family or neighbors or the other owners in the system. And what we saw was just an incredible connection. across the system.

Franchisees were calling one another, talking to one another, people in the same states were talking about, how are you planning to do this or do that? And so it was just a really neat example of the power of a franchise system that you have. In our case, there’s over 100 locations open. There’s about 120 locations open in the US. And those 120 locations are owned by 70, 80 different owners. And then there’s 20 or 30 owners that have signed on, but are not currently open.

So there’s always some franchisees that are signed on that aren’t open yet. And then a bunch of people that are signed on that have already opened their location. And so we have over 100 franchisees in the system. When you’re in a system like that with a bunch of other people, you have a lot of folks you can call or text or reach out to or get on a Zoom call and connect with and share struggles and share wins and successes. And I know, Amy, we’ve been able to give guidance and assistance to people.

And I’ve reached out and called other franchisees in the past when we’ve had questions or wondered what to do about different things in the business. And what I would tell people is when you’re looking at a franchise, Many of my candidates have heard me say this. When you’re looking at a franchise, you want to validate right away. Do the franchisees like the franchise or do they respect them? Do they trust them? Is there a connection between the franchisees?

Those are the two relational questions that you’re going to want to ask. And then all the business questions are obvious. Is there a marketing plan? Is there a staffing model? Are we able to find real estate? All that kind of good stuff is important.

But if the franchisee and franchisor relationship is strong and the franchisees relationships together are strong, then that’s going to show that you have a very strong business system that you could walk into potentially and have great success. And I was very proud, especially given the fact that our franchisees, many of them were very new in the business.

And then I saw the veteran franchisees step up, people who’ve been in it for years and years, who came alongside some of the newer owners and helped them through a difficult time. Now, we’re talking a lot about 2020, because the article was about you know, how strong we were during the pandemic and a very challenging year. But what I’m really excited to talk about as well is the strength that we have carrying into 2021 and beyond, and some of the daylight that we’re seeing already across the system as well. Yeah, I would love for you to talk about that. And one thought I had while you were talking is just that as unfortunate as it is to have to go through something hard like a pandemic, and this collective sense that of us had to go through this.

In some ways, it does reveal the strength or weakness in people and in a group of people or in a brand.

And we can definitely say that this hard time this pandemic did reveal lots and lots of strength within this brand and within this culture. So that is super cool to see. But yes, I would love for you to talk about beyond now we’ve talked about 2020, but where do you feel like the brand is headed in the future? Yeah, this is my favorite thing, because obviously we’re talking about the future. When I have candidates on the phone, they ask me, what are the one and three and five year goals for the brand? They want to know that they’re buying into a system that’s growing, that has goals, that has future looking aspirations.

And so right now, and when I say right now, this is June of 2021. And in franchising, the numbers always change. How many stores do you have open? How many units do you have sold? So I’m just date stamping, time stamping. Second week of June in 2021, we have just at or slightly under 120 locations open.

It might be one or two under that, but let’s just say we’re at 120 locations open across the U S over 30 locations in Japan. I’m responsible for national development for us development. So I’ll just talk about domestic development. We have at this time over 100 additional territories awarded, but not open. And so just really quick franchise language, a territory awarded, but not open means somebody has committed to opening a location contractually, and they’re working on it. They’re either working on signing a lease or ordering equipment or doing a build out or something like that.

So we have 120 locations open over a hundred additional units sold, but not yet open of those, um, about 30 of them are in process of imminently opening. So sometime in the next six to 12 months. going to have at least 30 of those locations open. So the goal, the target is 140 locations open by the end of 2021. That would be adding another 20 this year. I know, Amy, that you and I have a third one on the way here in the Twin Cities, which is exciting.

So we’re part of those locations that are going to open this year. So from a unit count perspective, we’re going to hit 140 locations by the end of this year. Our development goal is to continually award 50 to 60 territories a year. That’s our development goal. Now, I always want to beat goal. So hopefully we can come in above that this year and next year.

But if we continue to award 50 to 60 new development territories to new franchisees or existing franchisees who come back and say, Hey, I’d like to acquire another territory, which has happened already this year, by the way, it’s always exciting to see somebody come back and reinvest in another territory. location. If we continue to sell at that pace or award at that pace and Exercise Coach continues to get stores open like they’ve shown, we have a very good chance by the end of 2023 to have over 200 locations open in the U .

S.

and that’s just a really exciting milestone. I’ve been working with or for or partnered with Brian and Jerry -Ann and the rest of the team for 10 years. This is my 10th anniversary is I think this week at some point. Congratulations. Thank you. Of working with or for Brian and his team started in June of 2011 and we started, there were five units open.

And sometimes when you’re in the middle of growing something, there’s fast times and there’s slow times, there’s times of challenge and there’s times of success. And we got through a challenging time last year and now it is largely blue sky. The excitement I’m seeing from franchise candidates to sign agreements, sign leases and get open, they realize that there’s a wave coming and it’s already started. People want to get in shape. They want to get their nails painted and their hair done and they want to get new clothes and they want to go out for dinner. We’ve been kept from those.

things for so long that there is going to be and there already has started to be. If you read economic reports or the news or just look around, people are spending money on themselves, their family, their friends, their pets, their travel, all those things that maybe we didn’t last year for obvious reasons. And smart business investors have already started to look for opportunities to capitalize on that. And. Exercise Coach continues to be the most unique and, I think, strongest fitness franchise opportunity in the industry because of the differentiation. The target audience being people that are a little bit older than the average boutique studio.

The fact that the real estate isn’t that large, it’s a small space relative to larger studios. The fact that you don’t need a huge staff in order to operate a location. And the fact that the franchisor has exclusive rights within the industry to use a technology like xRobotics that is so impressive, those are elements that no other brand has.

And so when you’re out there and you’re a fitness concept looking for investors and there’s lots of other fitness concepts looking for investors having strong differentiation.

21 years of operations, 11 years of franchising and over a hundred units open in the U S and then all those awards that we’ve gotten from entrepreneur magazine makes my job a little bit easier. So I’m really excited for the next few years to fill out that map, to turn every market into an exercise coach market.

And if any of our listeners who are clients or coaches, or just people that are interested in fitness or wellness or want to learn more about what it.

it takes to be an owner, I would obviously love to be able to speak with them at any point as well. Yeah. And if somebody is interested in learning more about franchising with the exercise coach, what would be the best route for them to go? Where can they learn more? Yeah. So there’s, uh, I would say go to exercise coach .

com and just the website to the brand. And there is a contact form where you can reach out and just say, Hey, we don’t ask for attention. application or your any information right up front. We will obviously collect important information on our candidates to make sure that, that, that they’re the right investors, but it’s a very simple, send us an email. There’s a link to send an email to myself and say, Hey, my name is, this is the market I’m in. And I’m really loving this market.

The podcast or the brand, or I’m a client or whatever. And I’d love to learn more. Just reach out through the website, exercise coach .

com. There should be like an own the studio button or a franchising button somewhere on the main page there. And that email will go to my inbox personally. I’ll make sure that our team at Fastlane gets to you right away. What they’re going to do first is they’re going to check to make sure there’s. territory available or av Sometimes you’re in a sta out in or we’re not targ is available real estate, That’s really exciting.

Yeah. So that was an exercise coach . com own a studio. And then, yeah, I was actually going to mention, it’s so fun for us as owners and as real big exercise coach fans that we are to see that map fill up across the U S with more and more locations. There’s a, if you are a client at an exercise coach, it’s We, we often have clients ask, is there a location in this state? Is there a location in this town?

And you can find that on exercisecoach . com by clicking on find a studio. And that map is full of, we, we color these States in orange when that locations are there. And so the map is filling up quickly in the U S and that just makes us overjoyed to see that. And we often say within our own studios that this is the future of fitness. This high tech enabled coach lab.

20 minute program designed for real results for those people who aren’t engaging in sufficient exercise because of a variety of reasons. This is the future of fitness.

we are going collectively as the fitness industry is the high tech personalized approach. And nobody does it better than the exercise coach. And so it’s fun to own this brand and to be a part of its expansion. And Jesse, we really just appreciate you coming on. You shared a lot with us today about where we’ve been and the strength of who we are and then where we are going. So really appreciate that.

And hopefully we can have you back on in the future. Well, I’d love to, and thanks so much for your time and for allowing me to spotlight the business opportunity. In closing, I would just like to say that if you are interested in owning your own business, if you’re interested in getting into business for yourself, I highly encourage you to start looking. into franchising. Obvious I think is one of the bes We own multiple studios, I represent the brand. Bu dynamic industry.

It’s so a lot of people’s lives o your own local business a calendar and potentially it is a sacrifice sometim but it can bring with it as well. I believe in the businesses. I believe in if it’s a good system, ex is one of the best systems out there and would encourage you to take a look at that and would encourage you if you have a heart and a passion for business ownership to at least give franchising a look because the franchise industry allows you to get into a business with systems, processes, procedures, tools, pricing, products all built out. When you buy an exercise coach franchise, you know what the real estate should be like, what the posters are going to look like on the wall, how many coaches to hire, what the pricing of the services should be. What all that allows you to do as an owner of an exercise coach franchise is to simply operate and shine as a local business owner, to take over the people piece by hiring good coaches and managers and empowering them to train great clients.

But it’s so much easier to walk into a system with proven operations and leadership and execute than it is to try to come up with your own gym or your own food concept or whatever it is. So if you are what I call entrepreneurial -ish, You’d like to own your own business, but you’re not tinkering with a new app in your garage or some robotics in your basement. You don’t have a big idea you can execute. Franchising is a phenomenal place for people who’ve been successful in other industries and want to take a shot at making money for themselves versus their bosses. And Exercise Coach is one of the best brands out there, especially in the fitness industry. And I would encourage anybody to reach out, start researching franchising in general.

But again, I think Exercise Coach is poised to probably be the best bet in fitness in the next three to five years. entrepreneur rankings tell us anything, I would agree with you. Thanks so much, Jessi, for coming on the show today. We will see you next week on the podcast. And remember, strength changes everything.