S3 Ep2: How to Build a Sports Franchise Empire That Impacts A Million + Kids
Adam Geisler and John Erlandson love sports, but they also love how sports influence children’s lives for the better. That’s why they own 4 sports franchises.
Youth Athletes United is the umbrella platform for Adam and John’s 4 franchise brands: Soccer Stars, Amazing Athletes, TGA, and Little Rookies.
The Wolf, Adam, and John talk through how a passion for sports can’t be taught, but business can, how they went into partnership after working together in the boxing industry, and why more than 1 million kids are impacted by their brands every year.
If you’ve enjoyed listening to Franchise Empires, I’d be so grateful if you could drop me a 5-star review on Rate My Podcast. Thank you so much!
Transcription
Adam Geisler:
I think the biggest thing is that what we saw is that these franchisors and, and really these, the founders of these businesses, right as they grow and you see a lot of franchise systems grow, they’ll get to a peak and they have to make a decision. Either I’m gonna reinvest back in the business or I’m gonna hold onto what I have and keep my lifestyle in sub-reinvesting. And they make a decision of that’s okay and that’s where systems go or they want somebody else to take it to the next level. And I think we, we didn’t, it wasn’t just because we had a check to buy these businesses, it was because all these people, these founders looked at us and said, You can help my franchisees and my system. You can take what I built and make it so much bigger.
The Wolf of Franchises:
Welcome to Franchise Empires. Were aspiring entrepreneurs learn exactly what it takes to become a successful franchise owner from one location to 10 and beyond. I’m the wolf of franchises. Hey everyone, it’s The Wolf. Today on the show we have Adam Geisler and John Linson Adam and have built Youth Athletes United. It’s a platform franchisor, which means they own four brands all under one company. All their franchises are children’s businesses that revolve around sports. This is a unique episode and John and Adam discussed how they’re building synergies between each of their brands, why they’re stronger together with those brands versus just focusing on one and how growing their business aligns well with their social impact goals. Enjoy the episode.
Narrator:
The Wolf of Franchises is the CEO of Wolf Pack Franchising as well as a creator at Workweek Media. All opinions expressed by the Wolf and podcast guests are solely their own opinions and do not reflect the opinion of Wolf Pack franchising or Work Week. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. The Wolf Work Week and Wolf Pack franchising may maintain positions in the franchises discussed on this podcast.
The Wolf of Franchises:
Thanks to both of you for coming on. You know, with owning today for franchises, you guys are a little bit unique compared to other guests where it’s just one brand. You know, you guys are kind of sitting at the top of this franchise platform. I mean, before we get into how you acquired these brands, I’d love to hear, you know from both of you just what you were doing before you decided to set your sites on franchises.
Adam Geisler:
Yeah, so John, I kind of, we have two unique and similar kind of origin stories. We like to say. You know, for me, I always grew up in sports, grew up in Texas, love sports, love participating. So that was kind of always my passion. Got to the business side of sports pretty earlier on in my career, I spent about 10 years at Everlast, the boxing brand, going from public to private and
John Erlandson:
Hang on, he skipped the best part. We were both getting exercise physiology degrees at about the same time in the nineties, 2000 crossover year.
The Wolf of Franchises:
Okay. You guys, you guys were in college together?
John Erlandson:
No, we were at different schools. We didn’t know each other yet. Gotcha. But we at the same time roughly and we both got out realized you can’t get a job with an exercise physiology degree, <laugh>. So like Epic Journeys kind of like would meet, you know, 10 years later as we both went down, that path of
Adam Geisler:
The teachers was not our focus, but opportunity to impact kids through physical education is how we somehow miraculously ended up together. But at a sporting goods company for a long time that it was an entrepreneurial startup called Mission where had a lot of fun there, growing that business for about five years. And then we both met at what is now the second largest license company world Authentic Brands group. I was in the sports division, John was on business development for the company and the two of us, I guess kind of Kik kind of came together, had found out we had very similar passions in both life and in education and business and found we’re both really good at what we’d like to do, but we also wanted to find a way to have a real reward or social commerce really at the end of the day, we both love selling, we love building, love growing and if we can do that and have the reward of not only making money but having an impact on community and specifically kids and kind of where we ended up, we thought it would be an amazing opportunity. So that’s kind of how we came together. John will probably tell a little bit different.
John Erlandson:
No, I mean I, you know, same thing came outta college exercise physiology degree, love fitness, love sports. Could never quite put it together in a way that, you know, I woke up every morning like just feeling like I was making a really good impact. So I invented a fitness product, went on qvc, cratered, miserably. Like I think we sold like 10 units and eight minutes, you know, which was about 20,000 short of where you needed to be. But I got a job making treadmills and in product development and, and I like the aspect of the fitness industry of what you did for people, but you know, building machines is okay, right? Like there was nothing inspiring about it after you kind of did the project. And so when we got to authentic brands and we were working together, unbelievable entrepreneurial company, I think we both always really wanted to own our own business.
And in that eight years we really learned like that last set of skills of like we knew we were pretty good leaders, we had a lot of passion for what we did. We knew no one needed to push us, we could push ourselves and we knew we wanted to be in this social impact business, right? So how do you like affect other people? How do you affect kids? How do you affect franchise partners? And that business was a licensed business so it was similar. We were really good at working with third party partners and getting results, but now all of a sudden this opportunity comes up, all these sports brands were coming up for sale and it just felt like a perfect, you know, sometimes life’s timing, sometimes it’s locked, sometimes it’s seeing the luck and jumping on it and it all came together really, really nicely. And you know, for the first 12 months it was a fairy tale and then Covid hit and we’ll get into that in a little bit and we were thriving out of it now <laugh>. Yeah.
The Wolf of Franchises:
But well okay, that’s interesting. So that last company that you guys were at was a licensing business so it kind of gave you a
John Erlandson:
Taste,
Adam Geisler:
Business taste of what franchising looked like. Hundred
The Wolf of Franchises:
Percent. Okay. So did you guys both just come together and say like, hey, like let’s find a franchise or Yeah, what does that conversation as like business partners look like and then when you actually go to look for a franchise, like are you just Googling franchises?
John Erlandson:
This is my part of the story. So we’re into Japan.
Adam Geisler:
Let me get, lemme get this.
The Wolf of Franchises:
So Pam,
Adam Geisler:
So but then I think the interesting thing is, you know what we found later and I’ve heard listening to some of your podcast is we didn’t realize that we were acquisition entrepreneurs. Okay? Like when John and my great skill is is that we take great and make it greater, right? And so we had an opportunity where I heard that soccer stars was super soccer stars was for sale from our fourth partner who’s not on here, was our chief digital officer here for sale. I found out about it and it just, you know, the way life happens is you kind of, you make things happen or things happen for you. And so it was a little bit of both. John was in a head space where he was looking to move on to our other partners in that similar head space and we had a tremendous private equity group behind us that was willing to make the investment with us.
And so I think what’s really interesting is we bought an operating company and super soccer stars operating 13 states and a franchising company called Amazing Athletes. Two those things came together cuz one was for sale and then the broker that was representing the super soccer sars also representing a second franchise brand. And we said, listen, if we’ve got really smart intellectual capital behind us, we’ve got between ourselves and also our private equity group, we’ve got financial backing behind us and we’ve got this thesis and platform that if we put our resources against this eSport space and and can have a big impact, we think we can do something really big. And we didn’t know what big was at the time, right? We kind of, we kind of started to learn our way through it. But it was, we felt that there was a big opportunity to impact youth sports, both from the digital experience, the content experience and learning what we had learned between licensing and brand platforms and the power of those platforms. If we put those resources to these smaller companies that were founder led, that needed more executives to come in and give it the opportunity to really scale, that’s what we saw and was kind of our original thesis.
John Erlandson:
I would expand on that and say, you know, I think that the biggest thing for any entrepreneur and this, you kind of know it and it’s not until you get into it, you’re always building the airplane while you’re flying it. And I think when we came in, this original vision was, you know, Adam and I pretty much are yin and yang. Like I’m very sales, he’s very marketing and we work, we play off of each other really well. Cuz usually nine times out of 10 when you debate something, the right answer is somewhere in the middle. And so we’ve had this like really good working relationship of where, you know, he’ll focus really, really far on the brand side and and the pristine of the brand all push really hard on the revenue side and somewhere in the middle you achieve both. And so when we looked at the initial airplane that was taken off, there was gonna be a really big operating company and a really big franchising company because we always want to be able to look at our franchisees and go, Look, I’m never gonna tell you to do something with your money that I’m not doing with mine because there’s too many franchise orders that have exited their money taking all the risks.
So every big idea they have, they just dump on the community and if it the community can’t execute it well it’s their fault. So now you have misalignment between franchisor franchisee. What happened to us though is we were kind of, you know, flying the airplane was taken off. We realized the operating business was too big and we, we were making a lot of money there and we weren’t spending enough time on our franchisees and our franchise platform. And so slowly but surely we’ve started to realize that well we wanna operate, we’ll always operate, we’ll always be, you know, knee deep in it. We need to scale back the amount of time we’re spending on operating and take all that intellectual capital and free time and plow it into franchising to make that platform accelerate. And that’s kind of happened coming out of Covid and probably six months, you know, before Covid ended. And the acceleration has just been insane, like unbelievable. The partners, the software rollouts, the national partnerships, the growth especially of our, you know, top 50% it’s been pretty incredible.
The Wolf of Franchises:
That’s great and I definitely wanna get to that but so something you said, I, I definitely agree that there are a lot of franchisors that disproportionately put the risk on franchisees to their own benefit, but you guys have said something. So you mentioned that there’s an operating business and then your franchise business. So are you saying is that soccer stars the operating business and can you kind of just expand on what you guys mean by that?
Adam Geisler:
Yeah, yeah. So essentially soccer stars has been an operating business up until this year. We’re gonna launch it as a franchise business for first time in its 2022 year history. It’s we’re going to be taking operating territories and refranchising them amount cause we see that big opportunity to bring in fresh capital, fresh intellectual capital and allow us to focus less of our time on our core operating to do focus down to core operating territories in a few markets on the east and west. And really give all of our time and attention out to scaling the franchisees and allowing them to increase their average unit value, their ability to impact kids through sports. And that’s really where our focus is. So today we’ve got an umbrella platform, Youth Athletes United has super soccer stars, It’s operating, moving to franchising. We have amazing athletes which has been franchising for its full 19 years. And then we recently had acquired tga, Dennison Golf Athletics, which is our third big franchise platform. So those are the three core platforms that we’ve, that we are franchising today.
John Erlandson:
And then as kind of other brands that we have that have rolled in a jump bunch is rolled into the amazing Athletes family, very similar kind of program. They used to be number one, number two competitors. Now they’re, you know, one big platform across the country in Multisport. And then little Rookies baseball is our latest acquisition. It’s still in, its its infancy, it’s the smallest brand of all. But it takes that same concept of every other brand we have. You look at a sports industry that doesn’t understand young kids, doesn’t understand first sport experience relies on volunteers that half of ’em don’t even want to be there and half of ’em want to coach older kids that you know, that are high performance. And it basically says, this is insane, we gotta flip this on its head. The sport is a tool to teach the kid how to be a better kid, right? And how to be a better person in life and how to be a better teammate. It’s
Adam Geisler:
The gateway, right? The gateway sports.
John Erlandson:
And so it doesn’t matter if you think of every time I talk about T-ball cause it’s the best, every kid’s sitting in the grass, volunteers are hardcore baseball guys. Nobody knows how to manage young kids and nobody’s participating. One dude sitting there trying to hit and he can’t do it and everybody else is just sitting there board. And so that program we love because it did exactly what, you know, soccer stars did 20 years ago where it said there was butterfly soccer. Kids are just running around but nobody’s learning anything. So how do we take that fun and that energy and then slide learning in in a way that they don’t even realize they’re learning? And so every one of our brands has that ethos no matter what sport we’re teaching and we’re never gonna leave that, you know, content first, fun first mentality. That’s who we are.
The Wolf of Franchises:
That’s great. I, I could see how that aligns too with kind of like the social impact you’re really looking to make. Well, so for soccer stars though, was it, like you said they were operating territory, so was that a license business which you know, people listening, there’s just legal differences between like selling licenses versus everything franchising entails, but yeah, like what was the structure of that?
Adam Geisler:
It was truly operating. So we owned three territories, employed over a hundred and still do a hundred employees and have over 600 to 700 coaches w twos across the country. So we were operating all these territories and so, you know, the founders at the time had the decision of do I franchise or do I operate? And so over time they had operated in all those territories. And I think as we found, as we scale and we have more opportunities to bring this great product on superstar to more territories, it’s too difficult to manage all those territories in franchise. And at some point you have to look yourself in the mirror and say, what am I gonna be? Am I a franchise company? It’s some operating territories or operating company with franchises. Yeah. And so that’s really what we had to do and it’s been a big shift to John’s point over the last six, 12 months we’ve been feeling it, our franchise even feel on a positive way of, of taking some of your best intellectual capital, those these operating territories and giving those resources back to franchisees. The partnership has been phenomenal. Yeah,
John Erlandson:
So, so think about this, right? You go to a normal franchisor and I call my franchise guy, I’m the franchisee and I call my main contact at the franchisor. They’ve never owned the store, they’ve never run the business, they’ve never been an entrepreneur, they haven’t felt my struggles. They’ve read a manual, gone through some training and they know how to tell me what’s in the manual, right? Our staff, somebody calls and is like, I’m having problems with coaching and this great, I build a 3 million business in California from zero. I know you’re paid, let’s talk. The authenticity of that is unbelievable. And here’s the other craziest part, unlike most franchisors because we’re, we have 13 hubs in core cities, Miami, San Diego, Chicago, every big city, Austin, you name it, we have on the ground employees that are living it. So whenever I have a problem with the franchisee in that region, not only do I have the other franchise owners in the system, but I can deploy the corporate staff up there to make sure that they get the help that they need. And nine times outta 10, it’s just somebody on the ground that’s like feeling your pain of like, oh I can solve the problem like this. It’s those intangibles that aren’t in the ops manual that the conclusion I think we’ve come to is that’s what makes a franchise or really special. There’s lots of B level franchisors that basically they’ll tell you to follow the manual and then there’s the AA pluses, which they teach you how to do all the intangibles because everything is so local.
The Wolf of Franchises:
Yeah, I love that. And I think you’re right as far as the authenticity from doing it yourself, right? Like a lot of times as franchises grow and become successful, it’s hard for them to keep that right cuz the founders get so high up and so outsourced they have just management teams between them and disease and it’s staff and it’s more, it can, I’m not speaking for all big franchises, but it just can become more of, you know, sales pitches than honest, empathetic feedback. So I like the way you guys framed that. But just going back again, so you acquired soccer stars and amazing athletes at once and there’s a private equity firm involved. I mean that’s, that’s not easy for, you know, you don’t just get that. So like how did that kind of, how’d you get that back in without having kind of been a franchisor before?
Adam Geisler:
Yeah, no, it’s a good question. You know, I’d say it’s, again, we talk about kind of making your own luck. I’ve been probably pretty entrepreneurial in my life and I, I believe in networking kind of every single day and John as well. And so I’d been bending the ear of this one private equity group for probably the better part of six, seven years through who eventually became one of our board members, former CFO colleague of mine. And I just kept pitching him ideas over the years and eventually the reason why this one stick stuck is because the founder of that group, he’d been through it with his kids in Manhattan and so he experienced the product, he understood the product and said, Yeah, you know what, I can, I can see immediately that if we put yourself and some of the partners that you’re talking about in kind of if you have this vision of platform, I can get around it.
And so, you know, there’s a little bit of risk in terms of new area of territory for them and us, but I think the way our private equity group looked at it is anytime there’s founder run companies and you bring in real intellectual capital and there’s a certain size of the business that they were willing to invest in, it felt, you know, what’s our downside? Our downside is that we’ve impacted kids and maybe we get our money out, but if we’re right, oh my gosh, the impact it had did impact all these kids positively through sports, grow a platform and leave our legacy both not just as investors but just as, as in human capital. They really got behind it and you know, they took the bet on us and and our team and a tried and true product that they’d experienced themselves.
John Erlandson:
They, they’ve been phenomenal. Like you gotta find the right capital partners. Like they fit our personalities like perfectly. They know when to push, they know like we know when to push back, we know when to debate with each other like they have been and they know also when to step back and be like, look, you guys are busy. Go right. And I would funny story, we were looking for office space and we were in a WeWork and we’re in an elevator and the person that’s touring us around it’s like, Hey, what are you doing? We’re like, oh, you know, we raised millions of dollars in capital and we’re pretty excited and we’re looking to get the, the platform starting. And this guy behind me is like just deflated. And he’s like, I’ve been at this for three years, man, how did you guys do that in two weeks?
But what people don’t see is they think it’s an overnight success story. But for 20 years we’ve been building contact, building skills. I had three failed businesses that we didn’t even talk about that were like zeros. They barely even got off the ground like disasters. And so everybody seizing goes, oh it’s an overnight success story was so easy for you and this guy’s been grinding for three years. I’m thinking man, I’ve been grinding for 20. Like, and I think that’s a big part of what a lot of new entrepreneurs don’t understand and they don’t, they get into it. And even if you start a business, our business is phenomenal because you can open the store in quotes the day you get home the fastest we’ve seen it. This was great guy left training on the last week of July and you know, I pulled up his dashboard and his first revenue came in on August 15th.
So two weeks after training because it’s a mobile business, you get out there, you knock on the door, you’ve got a relationship, whatever it is, and you start booking and putting kids in classes. And so I think what we do really well is teaching entrepreneurs about that journey. Cuz we get a lot of first time entrepreneurs coming in and look, we went through it ourselves, we’ve just been through it. We were employees all these years. It doesn’t hit a home run overnight. A lot of small consistent steps will change your life and it’s three years seems like forever, but it goes by in a blink of an eye. And you talk about our other passion project beyond impacting kids. I loved and Adam loves making franchisees better, making our employee partners better. Like there is nothing better to watch this unbelievable group of talented employees that stayed with us from all the acquisitions, but it never been taught business.
And what we always tell everybody is I can’t teach you passion, so I’m not gonna talk to you a lot about passion, I assume you have that, but I can teach you business and I can put you to be better at business and to watch them go from here to here where they’re taking it on like they own it, Some of them are buying the territories out. Like it’s just been a phenomenal run. And I would tell you that to me is probably as fulfilling as I was out on the, I get out on the field about once a year, but I got out last week as watching the kids, you know, get better after class and be energized. And so it’s, it’s just a great way to wake up.
The Wolf of Franchises:
I love it man. And so I guess I have a kind of two part question. I’m curious, what was the size of amazing athletes when you acquired them? Like how many franchisees were in the system?
John Erlandson:
Yeah, so system wide or Adam you wanna take that one?
Adam Geisler:
Yeah, so Amazing Athletes was about 80 franchise owners. We’ve grown it to, and it was about 32 states. We’ve grown it to 35 states. We’re up to 88 owners. We’re up to 142 franchise units across some corporate operated as well as franchise units. And it’s about 30% of the system are multi-unit owners today on amazing assets.
The Wolf of Franchises:
Yeah. All right. So that’s a sizable transaction that I I guess from when you acquired it
John Erlandson:
System wide revenue, you know, we’ll probably be close to 10 million amazing, amazing athletes
The Wolf of Franchises:
For you guys as entrepreneurs. I mean, what gave you the crazy idea to, rather than, you know, most of the time of this podcast I’ve just had multi-unit franchisees and they do roll up and they expand their territories, but they’re the franchisee. What, what cut into you guys where you’re like, no, like we’re gonna acquire the franchisors and roll those up.
Adam Geisler:
I think the biggest thing is that what we saw is that these franchisors and, and really these, the founders of these businesses, right, as they grow and you see a lot of franchise systems grow, they’ll get to a peak and they have to make a decision either I’m gonna reinvest back in the business or I’m gonna hold onto what I have and keep my lifestyle and stop, stop reinvesting. And they make a decision of that’s okay and that’s where systems go or they want somebody else to take it to the next level. And I think we, we didn’t, it wasn’t just because we had a check to buy these businesses is because all these people, these founders looked at us and said, You can help my franchisees and my system, you can take what I built and make it so much bigger. And so I think that’s a really, really big part for us.
And so we saw all these as we kinda did our due diligence, we saw these franchise owners that, oh my gosh, if they just had some additional skills in how to grow their business, how to market their business, if they just had the technology resources, they have less administration time, we always say more green time, less green time. If we just provided them with an admin system that allowed them to put classes up on the website, book their classes, schedule, their coaches just did those basic things, yeah, they have 30% of their time back. What are they gonna do with that 30% of the time back? Well the owners that want to, they’re growing, they’re buying more units and they’re growing their kids and they’re getting more schools and the owners that say, Well that gave me a better quality of life, that’s okay too. We want both of those things for them.
The Wolf of Franchises:
Amazing.
John Erlandson:
I think one of the other things is we were doing the diligence in closing the deal took a really long time and one of the conclusions we kind of came to is there’s a real shortfall in software in this industry to support it because it’s, it’s not the leak. So the leaks are billions upon billions of dollars. And so there’s all kinds of software platforms for those guys. When you get into the class business, there’s a lot of platforms that are out there but not one that does what you would think it would do. And as we research some other early m and a opportunities, cuz there was just decks flying around, we noticed the same thing. People that had gotten over 5 million in any system wide revenue had spent a bunch on software along the way. Now their software systems were 20 years outdated cuz they had started building P So we then came to our next thesis of, okay, on the consumer side and the franchisee side, we always wanted to build a platform of brands.
You know, it’s, it’s you’ve got an initial vision and then you know, you get on the field and you realize you gotta change the game plan a little bit. And we did that along the way but one of the driving factors was no one of these systems was big enough to invest in software the way you needed to to go next level. Like we don’t want to compare ourselves against the other sports programs. I don’t compare myself against, you know, Amazon and how efficient they are because by the way, that’s what mom compares you to, right? And so why don’t we hold ourselves to that same standard and you go, okay, I’ve got Amazon taste in technology with you know, our budget down here. So how do you bridge that gap? Well you put a lot of these brands together and it becomes stone soup, right?
We’re in a kid’s business, kid’s book, everybody chips a little bit into the pot and now all of a sudden they’re using the exact same software platform but the budget becomes big and media to the point of now our third partner got with a degree in from mit, you know here that much in used sports, right? He’s driving the software business and he literally is launching new features every three weeks with his team, which is operating on three continents. And so nobody is doing that. I mean we’ve met with a, a lot of different partners in the industry and they’ve been shocked to kind of just like the boldness of like, wow, I can’t believe you guys are taking this.
Adam Geisler:
And I think we had this vision of we want the parent, we want the kid number one, we want kids to this again we’ve talked, this is my first sport experience, right? Whether it’s your first soccer experience that’s, and it’s the first sport you’ve ever you’ve ever played. We want that to be an amazing experience. If it’s your first multi-sport experience with amazing athletes, we want you to try a bunch of different sports and feel all those things then you use, as you start to make sports specific decisions, you come back to soccer but you can also go to tennis and golf and some of our other brands that we start to build. But we want the parent to have one trusted platform where they know the coaches are gonna be great, the curriculum’s gonna be great, it’s a seamless experience. All the notifications and that expectation of when a parent goes and buys something today, it’s a click of one button and they get all the information, it’s in their calendar to get that service.
We wanna provide that service to the parent so there’s no barrier to entry and they can keep these kids enrolling in brands and programs that they trust. And so that’s what we ultimately see. It’ll probably take us about another year or two to get there but that was the vision as we started to build this thing. And if we can do that, you know, we can impact a million kids a year through this platform and that’s why we said we wanna be on the franchise or side take these brands and put ’em together versus being in a single brand platform or just even being franchise owners.
The Wolf of Franchises:
Well it’s interesting, I wanna key in on that, that multi-brand aspect of it and John it sounded like you kind of mentioned how that’s been really important in being able to actually affording to invest in the software because you kind of have, you know, all these different franchisees from different brands but you can invest in one central software that applies to all of them. Cuz it sounds like, you know, there’re similar enough businesses, right? The sports are different that they’re providing training on for the kids. But yeah I guess just can you guys talk about that? Like, cuz one of my questions was gonna be, you know, are you doing it the wrong way, right? Like why not just go all in on one brand, make that as big as possible versus this multi-brand play and you know, do you have one franchise sales team that handles it for every brand? Like you know, are there efficiencies or is it actually more complicated? Like what’s that been like?
John Erlandson:
Here’s what’s been really fascinating, right? Every sword has two edges <laugh>. And so if you have one brand, the backside of the sword is hey you only have one brand. So someone calls you and eh, I don’t really love multi-sport and I don’t love preschools. Well guess what? They’re going to buy something else, right? Yep. Now the flip side is as the ship gets bigger turning it becomes slower. So when you’re only one brand and you go, Hey, I would love to just tweak this in marketing, I don’t have to go through the guy who’s working on six other brands, right? And so there’s ups and downs to both, but you know in life nothing is perfect, everything’s weighing scale. So you put all those onto the scale and you say which one is gonna get us to where we need to be. If I’m a franchisee and you know, my business can only be so big in one brand, any franchise e that you’ve had on your podcast in the prior things, they can only go so far from their house, right?
The further you manage, you’re one person, right? That’s driving your local vision. So the further you gotta travel the harder it is. So a lot of entrepreneurs for us say, look, I wanna do more with you guys, I don’t wanna go buy another business, but what if we only have one brand? Then it can only get so big. So now they stack another brand, the kids stay with them longer, the kids move left to right in the pathway and they move north to south in terms of age. And so now that customer lifetime has been expanded, the franchise ease income has been expanded, the variety of what they’re doing. We had a lot of amazing athletes, franchise owners that have been in for 10 years that when we came in they were like, I’m gonna retire. And then they saw the energy of what we were doing and the platform, they’re like dude, I never thought I’d own a soccer business but I can go to all my schools and attack my soccer competitor now cuz I have it and I have the trust, they love me, they love my program, I just didn’t have the content.
And so just to watch that has been, and when we first came in they’re like, soccer’s our enemy, you know, we can’t believe, you know, we’re merging with a soccer company and now they’re like, soccer’s our best friend. It’s another tool in the toolbox to make kids lives better.
Adam Geisler:
Yeah. Yeah. And we have probably 35% of the system is already multi-brand owners, which is pretty impressive. So it’s happening pretty quickly. We’ve got, we have our first three brand owner already. And so, you know, again, I think the opportunity to do more of what you love, make more money doing what you love and also do it in a single territory versus having to expand out to multiple territories, that’s really attracted to a lot of franchisees.
The Wolf of Franchises:
Now definitely, especially like with brick and mortar brands, it’s obviously takes a sophisticated operator, but it is of course doable, right? You know, I’ve had people who own locations all over the country when they’re usually PE backed at that point. But it is possible. But with a non brick and mortar, a home based mobile style business, yeah you’re right. Like you’re kind of limited to geography. Well
John Erlandson:
You say that, look we still run, right? We have these operating territories in all these different cities and that’s, you know, a 20 plus million dollar business and we do it. Yeah. All things are possible. Not all things are smart, right? And so
The Wolf of Franchises:
<Laugh>,
John Erlandson:
There’s that, there’s the we always use it saying like return on investment per unit to brain damage. And so like you really gotta think through that sometimes of like, hey, there are so many better ways to jack up the quality for the consumer then for us to try and control every aspect of it and run it as a natural opco. You
Adam Geisler:
Know? And I think going back to your first question, it definitively would’ve been easier to have one brand and grows from one brand and that other brand. But I don’t know, you kind of get to know John A. Little bit over John. I it’s probably, we don’t like to do anything that’s easy and also like this isn’t a job for us anymore. It’s a lifestyle. And so like I think there, the franchisees and our employees and our team, everybody respects it cuz like if we’re gonna do this, let’s go big and let’s have a big impact. And not that one brand is important, but like we can do a lot more with more. And so let’s go after the big opportunity with everybody.
The Wolf of Franchises:
Yeah, I can definitely see like, I mean for you guys, right? Cuz that caught my teeth in the franchise world at a franchise development firm. So we had three brands, right? And just like you said, John, if one of the three brands wasn’t interesting and honestly like our brands were totally separate industries, so there was no synergies. Like you guys have, you know, that was it that you get off the phone and we lost them. So I, it definitely makes sense from your perspective. But yeah, I can also see now too, one of my first podcast guests, he was in the auto industry and he owned you know, like a maintenance shop, some type of decaling shop and also an auto supplier shop. So for him it made sense, right? Like he had that kind of ability to pivot with his customers. And I could see that your franchisees are getting that too, and it’s probably why 35% of them right are multi-brand owners. You said,
John Erlandson:
Look, it’s this business. If you, I use a lot of analogies, I also make up a lot of words, but it’s just a little <laugh>. But
Adam Geisler:
Me too,
John Erlandson:
The, the interesting thing is it’s like laying railroad tracks. It takes a long time to clear the forest and lay the railroad track for us. That’s knocking on doors and making partnerships and that’s what our franchise owners are doing. But once the track’s there, you can change the train any which rate you want and just drive it right into the station. So we find that of like, wow, I did all the work, Hey John, and we have franchise owners, we always, we are in the sell and then ask for forgiveness business and our franchise owners know that about us. So the call up, hey I’m interested in, you know, little rookies and they start kind of negotiating and looking at like the deal and meanwhile they’re like, Hey, can you send me a flyer? I need to know a little bit more about it. They’ve called all their schools, they booked 26 classes and then they’re like, All right, I’m ready to sign. Right <laugh>. And so, and look, they know we’re, the type of owners will laugh about that cuz you’ll never get a slap on the wrist from us for going out and getting kids in classes and making them better, right? And like that’s our north star.
Adam Geisler:
Yeah. Yeah. And I think about it like you use your automotive analogy. So if you’ve already built a database of kids and you’ve already built a database of locations of open and location parks and rec, you’ve already been a database of schools, well we’ve got two or three additional brands and opportunities to sell to those sa same customers because our thesis is you want kids playing multiple different sports, trying multiple sports at a young age. So like you already know how to acquire those customers. You have all those customers. So layering on is actually the easiest part cuz it’s the same industry but it’s not cannibalizing, it’s just giving people more optionality to do soccer, multi sport, tennis and golf. And that’s really where we want to gravitate them towards.
The Wolf of Franchises:
Definitely. What’s like the type of entrepreneur that you think is either the best fit or, or just that you guys see because I think Kevin you said it right, like you can’t teach passion but you can teach business. So you know, when I look at maybe one of these more mobile based brands, like one of the benefits right, is that it’s a lower investment like, you know, amazing athletes I think tops out a little over $50,000 as the investment range, which is really low. But then when I compare that to say like, you know, I had a 20 location Wingstop owner on this podcast, part of his desire, right, is the financial outcomes that you can get by owning a lot of brick and mortars. But like still when you see like a one franchisee if in their local market they scale to three or four of your brands. I mean, is there enough being on the bone from a financial perspective, do you think, like do you think savvy operator who could do 20 W stops actually has a path to solid money within your platform?
Adam Geisler:
A hundred percent. I mean, absolutely. I mean just think about the, think about, you know, what’s gone on in life, right? Like if, if we’ve watched consumer behavior change, you know, do the pandemic and a lot of other things that are happening in a macro level, kids are always playing sports and they’re, and parents are always having more kids and more kids and kids are always getting more involved. And so there’s really an infinite opportunity for us to constantly have that life cycle and also the lifetime value of the parent, the kid, their brothers, their sisters, whoever they may be. And so there is a ton of opportunity to really scale. And again, as you build the infrastructure, we will have, and again, as we grow the system, we’ll have owners very similar to Wingstop. They might, they will be private equity backed and they will be able to be semi absentee owners because the base businesses will be so strong and they’ll be able to see the same times a half, a million, million plus returns that you see in brick and mortar. But they’re gonna love, love, love what they’re doing.
John Erlandson:
Yeah, I think the big, we’ve seen an evolution like, so I think what we’ve found is, and similar I think to your Wingstop guy and I and the, I was the Anytime Fitness I believe was the other gentleman that was on
The Wolf of Franchises:
Yeah, Anytime Fitness and Orange Theory, maybe the one you’re thinking of there was a big orange theory on it.
John Erlandson:
Yeah, I mean it’s, if you look at any of those people that have grown, they generally don’t start from zero, right? Like they find one they can buy or, and so what we’ve seen is the people that wanna just go knock on doors first business, big investment is probably, you know, 50% of their life savings and they’re ready to knock on doors, meet preschool directors, meet elementary, meet parks and rec, all those types of things. They tend to be the first business they ever buy and they build a nice space. The people that are more better capitalized. What we’re seeing is they want to come in and buy our operating territories, which come with the management team a solid base and then they want to bring next level kind of skills to it. And so we’re, we’re seeing a little bit of a bifurcation in owners and then there’s this bucket in the middle like Jared Taylor who you talk to, yeah, who’s found a way to go from startup, you know, that first he knocked on that first door, got that first kid in the class, coached it and now he’s got five territories and he just continues to expand.
And so that’s kind of like our ABC of the types of people we see. And what is really interesting is when you talk about like an archetype of who that person is. So we’ll get, you know, as it a salesperson is a person who loves kids, is a person who loves sports. I think the best way to sum it up, it’s a relentlessly dynamic personality that just loves getting out of bed every day and just going like they love the interaction with the kids. They love the vision they present to their coaches. They love stopping and having a cup of coffee with their partner at the school or you know, at the park and rec they love just moving, right? Like they’re just moving, they like sports. Those, if you have that, you don’t have to be a greatest sales person. It definitely helps if you have skills of selling, but really like you’re a, remember your community, you’re making an impact on community. Oh I, I know Johnny owns the local sports business, right? Yeah. And all those parents, they all know you too. And so it, the backgrounds are unbelievable. We have everybody from like writers to, you know, retired PE teachers to people who just got out of college and it’s just, they all share that same profile just like,
Adam Geisler:
And I think, I think what’s important is we always want to have that person that literally they’ll, they’ll just be owner operator every single day and they will be known by Coach Joe or Coach Jill. We want that people and we want those people in our system. There are the bread and butter, but you also want to have the opportunity for that growth. And we think both are really, really important. But we do say, and you know, we’re about to launch soccer stars here as a franchise business the middle of next month with one of the largest FSOs out there. And you know, the, the conversation we had with them is, you know, to go out to broker networks and we start to get some different types of owned investors is if you’re looking for money, if you’re looking for an a financial opportunity, that’s great, but the first answer to the question is, I wanna have a positive impact on kids in the community. If you wanna do that in make money, we’ll find a way and there’s a good opportunity. But if you’re just looking this, this financial reward, it’s not that we don’t want, it’s just, it’s not the right fit cuz you’re gonna let the kid down, the coach down to the community. Yeah.
The Wolf of Franchises:
Yeah. I love that. You guys put that first. So would I be wrong in thinking like, given the lower financial barrier, there is someone who has that passion, maybe they don’t, you know, they didn’t grow up thinking, I, I wanna like, you know, run a kid’s business but they say I do wanna be a business owner. I wanna learn the ropes and like yeah I would love to make an impact on my community. You know, like I don’t know who, who wouldn’t think that sounds fun. Is this a good stop for them or like a good first step at a minimum? And you know, you see where it goes. But do you welcome those kinds of people who are just like, Hey I wanna be a business owner. I haven’t done it before. I’m not going for one of these big franchises cause it’s too scary and too risky.
John Erlandson:
I would tell you those are our favorite type of people. Cause we start all not talking about the franchise. Like lemme tell you about my journey, right? Like yeah, yeah. I took this huge risk. I was a very successful employee for 20 years and my wife said to me, Hey look, you think you’re ever gonna not be a successful employee? And I was like, no, why do you ask? And she goes, Well can’t you always go back to that if this doesn’t work out? I’m like, yeah, guess she’s like, so like when you die are you gonna really look back and be like, man I wish I kept doing something I really wasn’t that passionate about and wasn’t mine. And even if you failed, do you think you’re gonna look back and regret it? Now we put a big portion of our life savings into this. So when Covid hit or definitely some moments where I’m like, man, it’s
The Wolf of Franchises:
Yeah that might regret this
John Erlandson:
Of the day. I gotta tell you, let the bridges you burn light your way. Cuz once the bridge was burned, there was no choice but to keep charging forward And it made us so much better. It wasn’t even funny. And the the craziest thing that came out of it, all the mom and pops competition just disappeared. So we tell our franchisees now look, you are in a once in a lifetime opportunity of just a speed race to grab land and build railroad tracks because yeah, all these locations were open people that had a foothold for 20 years because Coach Joe was in there and had had it since 2000 Coach Joe’s old retired and didn’t make it through Covid. And now it’s wide open for us to go put professional content in there with our systems and impact those kids. And so from a franchisee opportunity, you know, we love those first time people cuz they get excited and we like helping ’em, we like watching people grow. It’s awesome.
Adam Geisler:
And, and, and one interesting thing that I think we can kind of digs is this kind of culture, right? And so we’ve bought these businesses during Covid. I think we really built an amazing culture cuz we were always there for our franchisees. We were always listening, we always gave, we gave everybody support. You know, this wasn’t about the money that we could attract for them, it’s about how do they keep their business going And you know, we were cheerleaders, we were mental health support but also we were operating business and like we kept finding ways to be successful and every single time we found a way to be successful, man we passed it on to our franchisees. But what’s been really interesting that I think we have real clarity on now, you know, four and a half, five years in this is, you know, acquiring three different big franchise platforms.
One operating the two franchise is you have three different cultures, right? And they were all built by owner operators, you know, all built by founders. And now you’ve got new, you know, new people that are private equity backed and you know, we’re Darth Vader coming into a lot of these things. You know, we are at the dark side and so, you know, you have to build a lot of good will and then you also have to like, how do you merge three different cultures together? Well the good thing is all of us can look each other in the face and say we’re doing this cause we wanna positively impact kids through sports. So we have that unified principle and even though they all operate a little bit differently and they all have some differences, that similarity really binds us. And so, you know, where we’re really gonna see it come together, we’re having our first multi-brand conference this December.
We’re bringing everybody together and we’re starting mixing those cultures, you know, to make it one culture and the different systems and the different brands, personalities kind of all coming together and everybody’s seeing like how similar we all are through what we do. And so it’s what I think, you know, not to pat ourselves in the back but give us credit for is we pride ourselves on culture, right? These franchisees have to come into the system and feel that they’re getting more than they ever have and there’s nothing John and I or any else on our team won’t do. We’ll go coach a class. If you need to coach a class, you needs to run balls to a class or whatever it needs to do, we will do it, but we’ll be in it with you every single day. And so that’s built a really big trust within our franchisees.
It’s taken a little while to do, but that is the intangible. And then also to have private equity founders private equity investors gives me who support that and make sure that, listen, you guys need to build that culture and we here to support you and we know the end game. Like you hear various core stories of, of private equity back getting into these franchise systems and listen, we are att testament to the exact opposite. And you can talk to any franchisee that will tell you the same. And that culture is everything to what we try to do.
John Erlandson:
The other, I’ll expand on that a little bit. Just the interesting thing is when a small business owner hears its private equity, they think well, you know, you’re just trying to take money outta the business. And what they don’t realize is, is the acts opposite. Private equity guys don’t want more cash. They want you to take a hundred percent of the money and dump it back into the business. But if I’m a single owner where I own a hundred percent of the business, I need to live off of the cash flows coming in and I get big bonuses if I take it. And so what we would see on these systems is anytime we look at buying a business there ends up being misaligned where the franchisees feel like the owner is extracting more than their their fair share with private equity every dollar’s going back into the business and we’re hypergrowth that’s our mindset too. And so once they realize that and they start seeing the results, you know, you look at our FBR scores and they’re off the charts and it’s because it’s all going back into the business.
The Wolf of Franchises:
Yeah, no, that makes sense. They bring the capital where you guys can live at a good level, right? And reinvesting to grow that business. So, and I also, John you said this a few minutes ago, <laugh> let the bridges you burn light your way. I’ve never heard that one. That’s
John Erlandson:
Gonna, that’s gonna be,
The Wolf of Franchises:
That’s that’s gonna be a quote. That’s
Adam Geisler:
Good. The wall that go on the wall.
The Wolf of Franchises:
Yeah. That, that’s pretty funny. Well look guys this has been awesome conversation. A super cool platform that you’re building out. I’m pumped to share it with everyone when this gets released, but yeah, just for listeners who maybe wanna take a stab and possibly explore one of your brands or just follow along with what you guys are doing, is there any good place to follow along online?
Adam Geisler:
Yeah, so go to youth athletes united.com. You get to see all of our brands. Every single one of the platform will be there with if anybody’s interested. And then I think the best way is follow us on LinkedIn, dms, on LinkedIn, Adam Geisler, John Nason, we’re both on there. We’re very active on LinkedIn and I think it’s the best way to follow us and kind of see what we do, how we promote our culture, our franchisees, and the positive impact we’re having just on the community through sports.
The Wolf of Franchises:
Awesome guys, we’ll we’ll plug both of those in the show notes so you can access them and send ’em a request on LinkedIn. But yeah, Adam, John, thanks a lot for coming on. We we’ll talk soon.
John Erlandson:
Hey, thanks Brad.
Adam Geisler:
Thanks will. Take care.
The Wolf of Franchises:
Thanks for listening to Franchise Empires. We’re coming to you soon with actionable insights to take the next step on your franchise journey. So make sure to subscribe on Apple, Spotify, Google, or wherever you listen.
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Linkedin: linkedin.com/in/adam-geisler-1442697
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LinkedIn: linkedin.com/in/john-erlandson-62409b4
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