S4 Ep2: OHM Fitness: How to Build a Fitness Empire in a Crowded Market Place
With almost two decades together as franchise partners, Joshua Coba and Douglas Payne know franchising inside and out.
They join The Wolf to talk about owning more than 1,000 European Wax Center units, why the start of a business is the most exciting moment, and how they’ve carved out a niche in a traditionally overcrowded franchising industry.
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Episode Transcription
Joshua Coba:
I realized in my retirement, what I loved about European Wax Center was the beginning. I loved growing it. I loved learning. I loved making changes, and we could implement them tomorrow. European Wax Center got so big that simple changes took six months to make, and that started to frustrate me and stifle me, and that’s why I retired five years ago. I retired two years before my brother just because, and I explained to him the business is too slow for me and I need to move faster. And so when I got the opportunity to work with Doug, it was actually more attractive to me that he only had one location than if he would’ve had 20 or 50 or a hundred. It was more attractive to me that he had only one, and I could be a part of modifying, growing, adapting, and doing all the fun stuff that I loved about business to begin with.
The Wolf of Franchises:
Welcome to Franchise Empires where 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 Josh Coba and Doug Payne. Josh and Doug are colleagues from European Wax, which Josh founded and took public within the last few years. Meanwhile, Doug has also worked with major franchises like Orange Theory and Massage Envy, in addition to being a multi-unit franchise owner for European Wax. Under Josh today’s episode, Doug leads the show where he is recently started Om Fitness, a new boutique fitness brand that he believes has the potential to be the fastest growing franchise ever. Take a listen to both Josh and Doug and their wealth of franchise experience. Hope you enjoyed
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 Pack franchising or workweek. 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:
So between the two of you, Doug and Josh both have a ton of experience in the franchise world. I think maybe a good place to start and whoever wants to take it, feel free to jump in. Just how did you guys meet and how did this kind of personal and professional relationship begin?
Douglas Payne:
Yeah, I guess I could I can kick off. I was working at Massage Envy a long time ago. We would often go out and attend trade shows and at one of the trade shows, Josh and his brother Dave were in attendance and they were talking about franchise opportunities with European Wax Center and it was very intriguing. So I went back to Scottsdale after the trip and we had conversations. My friend Dave Long, and I had conversations about what the Coba family was doing. It was very exciting and there was an exit event that had just taken place at Massage Envy, which us the opportunity to maybe move on to other opportunities. And so we did just that. And that was in 2008, I believe, Josh, where we got started with European Wax Center first internally helping them with some franchisor systems. But then eventually about a year and a half later, my wife Jackie and I acquired licenses for European Wax center and we kind of went all in on the Coba family and the vision. And Jackie and I actually opened up the first franchise location for European Wax Center outside of the state of Florida. And we did that right in Scottsdale, Arizona. Ironically, it shares a wall with the very first own fitness that was open. So it’s a pretty neat full circle story for Jackie and I and I think for Josh
Joshua Coba:
As well. Yeah, it certainly was touching to me. Aside from my journey, obviously I wouldn’t have invested in OM if I thought that it was just next door to European Waxer, but it certainly was an additional nugget for me that made me think about it felt right, just felt right. Same shopping Plaza, same people. I’ve loved Doug. I’ve had such a great relationship with Doug over the years. It started out as professional and he was working on the corporate office then as a franchisee, but mostly as a friend. And we’ve been joking and texting and laughing with each other for now 15 years and it’s, it’s just been amazing. So when he afforded me this opportunity to invest in his company, but once I had done my diligence, I jumped right in.
The Wolf of Franchises:
Yeah, no, that’s great. And maybe Josh, right, so could you kind of give us an idea of just before the OM investment, what it was like building European wax and maybe some things you’ve learned that make you excited about om?
Joshua Coba:
Well, certainly European Wax Center was an ongoing learning experience. Both my brother and I are high school graduates. Neither of us went to college, we didn’t have franchise experience. But something that we did that I think is really special that probably a lot of franchises don’t do is my brother and I, the first year we were franchising in 2003, we purposely only awarded five locations and we spent time with that trying to learn our new business, which was franchising. We were in the wax business, and that’s an individual business, but Franchising’s a whole new business no matter what you’re franchising, that’s a business in itself. So we purposely only franchised five locations and spent almost three, four years determining what the needs of the franchisees were. What do they need to get the store open? What is it called? What is it to train them?
What’s the ongoing support? How do we put together the marketing systems to make sure that all ads are approved? And we spent three years working with five franchisees, literally learning every single thing we needed to do. Then right about the time that we met Doug, that was actually my first trade show. I had never gone to a trade show. It was my first trade show. We did that and we met Dave Long. And like Doug said, it slowly went from there. In terms of lessons learned, I tell my friends all the time, I didn’t go to college, but my education was very expensive because when you take a business from zero to over a thousand locations and you don’t have any experience to do that, there’s a lot of learnings along the way. That said, I’m pretty confident that we can avoid 98% of those challenges that we faced at European Wax Center.
We know what to do to be ahead of those things already. So I think that’s the one and a half decades of franchisor expertise that I bring to the table to help Doug to avoid all those mistakes out of the gate. That’s my intention. Will we make mistakes along the way? Of course. But the beauty of it is, is that we’re going to adapt and make the changes. Now, what got me into own fitness had to do with me being in retirement and wanting something bigger for my family. I wanted my children to see me working. I wanted them to see what it is to build something and be a part of something. And so when Home Fitness presented and I felt good about the concept, was excited about, I said, okay, I’m ready to go. I had one last box to check, and that was that my wife had to be excited about it too, because this time I wanted to do something with my wife.
Last time I did it with my brother, and this time I wanted to do something with my wife. And so we did the workout and she loved it as well. I was like, all right, let’s do it. Let’s just go full speed ahead. And even to your question, just to answer a little further, European Wax Center, I realized in my retirement, what I loved about European Wax Center was the beginning. I loved growing it, I loved learning, I loved making changes, and we can implement them tomorrow. European Wax Center got so big that simple changes took six months to make, and that started to frustrate me and stifle me. And that’s why I retired five years ago. I retired two years before my brother just because, and I explained to him the business too slow for me and I need to move faster. And so when I got the opportunity to work with Doug, it was actually more attractive to me that he only had one location than if he would’ve had 20 or 50 or a hundred. It was more attractive to me that he had only one, and I could be a part of modifying, growing, adapting and doing all the fun stuff that I loved about business to be.
The Wolf of Franchises:
That’s fantastic. And before we kind of really focus and hone in on Om, for people who maybe aren’t super familiar with some of the brands being thrown around mean, so Doug has worked as an executive effectively at Orange Theory and Massage Envy, which both 1100 plus unit systems, so tons of growth experience there, and Josh European Wax, right, that’s a public company that it’s on the still traded publicly on the stock exchange.
Joshua Coba:
Correct. It’s a publicly traded company on the nasdaq. Last year in August, we went public, we are about 900 and something locations open with another 300 and something licenses under development. So we’re also another brand north of a thousand locations for Doug to put under his belt.
The Wolf of Franchises:
Yeah, yeah. So I say that just so folks have an understanding that, you know guys have taken brands from really A to Z so it’s not the first time around the block for either of you when it comes to om. So looking at Om, I mean, maybe I obviously write with my newsletter and stuff, cover a lot of franchises and especially emerging ones, and Boutique Fitness is a hot area of franchising. You know, got Exponential Fitness, always buying up newer brands. And then you have I mean, even though they’ve won’t been around for really 10 to 12 years, but you have your Orange theories and F 45 s that are probably the blue chip type franchises in this space. So yeah, I guess just as a starting point, as an industry, how did you look to differentiate from the get-go in what is becoming a bit of a crowded space?
Douglas Payne:
So this idea for home fitness is extremely unique when you look at the conversation and real quick Own Fitness is an EMS franchise, and that stands for electro muscle stimulation, which in America, if you were to pull Americans coast to coast, there’s probably 1% of the population, and that’s probably being a bit generous. There’s probably 1% that understands what E EMS is, but even then, they might not have an understanding of how it can be used the way Home Fitness is using it. And so we’re really a niche within a niche. And so yes, the space for boutique fitness is crowded, but what we really love is that our offer is so unique, it has an ability to kind of punch through that noise. And electro muscle stimulation we believe is the next generation of fitness. I think it will reshape the way people view their involvement in a fitness conversation. And so we love being in the boutique fitness space. We think that we punched through the noise and we’ve got a really powerful office.
The Wolf of Franchises:
Yeah. All right. Well, let’s dive into I guess E M S, because for myself I am definitely not in the 1% that understands that I did have an athletic background, played soccer growing up and then when I played in college, had access to better facilities. If you got injured, they’d put, we just called it stem. It was some machine patched you up and it made your muscles twitch, but it apparently helped you heal quicker. So that’s what I think of when you say electro electro muscle stimulation is that the kind of technology being used or am I totally off there?
Douglas Payne:
So the underlying concept is that right, we’re using technology to stimulate your muscle tissue, to contract your muscle tissue more efficiently than you can do on your own, right? And what’s great is own fitness has just leveraged technology that’s been around for 60 years now. EMS is very popular in Eastern Europe, and you you’ll see EMS studios in Europe. So there’s some interesting parallels between European Wax center and own fitness in that these were things that existed out in the universe. They were just brought stateside, refined and organized in a way that people hadn’t done before. So electro muscle stimulation we have what we call the empower body suit. And within this body there are 20 plus electrical pads that rest upon about 90% of your major muscle groups. And typically when you’re in a gym and you’re doing a bicep curl, it’s your brain that is sending the signal through your central nervous system and then it reaches your muscle and causes your muscle to contract.
But what’s causing your muscle to contract is a small electrical pulse. And so all we’re doing with the Empowered Body suit is we’re taking what the brain normally does and we’re doing it more efficiently. If you’re in the gym, you can do about one contraction per second. The Empowered Body suit delivers about 85 pulses per second. And the second thing that’s very interesting is when you’re in the gym, you’re doing a bicep curl, you’re really thoroughly activating maybe 55% of that muscle compound. Well, when the Empower bodysuit fires, it’s firing 95%. So in a 25 minute session, you’re able to work your muscles as if you were really focusing hard and concentrating in a gym for about three hours. So 25 minutes is the equivalent, about three hours of intense workout, not the TikTok video kind of workout where you’re kind of goofing off, but if you were really heads down focused for three hours, you can check that box in 25 minutes with own fitness. So it’s really interesting. Yes, it’s like stem, but it’s like an all over body stem.
Joshua Coba:
I would just add the, aside from all the benefits that Doug just talked about, the time value and the benefit, the true benefit is that you’re able to get these results without wear and tear to your body, your joints, your ligaments, you’re not destroying your body. And back to your point about boutique fitness being crowded, one of the things that got me really excited about is that I saw this as a disruptor, and I do see it as the future of fitness. And what’s so special about it is that if you really do think about boutique fitness as a whole, you name some amazing brands, orange Theory, F 45, there’s Rumble, there’s Mayweather Boxing, there’s Rise Nation if you can do a climber for an hour. But when I really started looking at this crowded boutique space, first I had two thoughts. One is how do I feel about my ability to compete in a crowded boutique space?
I feel pretty confident in my ability to compete against anyone in any space so that I ruled that out as a concern. Second concern, how does this business different than the other boutique fitnesses in the space? How is it different? Well, in addition to everything Doug just said, I started realizing because I feel like I’m an average American, I’m not super strong, I’m not super weak. I’m not fast, I’m not slow. I don’t have a lot of stamina, but I don’t have no stamina. I’m in the middle and I look through the window of a Barry’s bootcamp and Orange Theory and F 45, and I say, there’s no way I can do that workout. I won’t even walk in and I think I represent the majority of Americans. And so then I started thinking, wait a minute, all of these boutique fitnesses are geared towards a very, very small percentage of Americans in through my own assessment.
Basically 18 to 38 year in peak shape. And if you’re not 18 to 38 year old in peak shape, even if you’re 40 years old in peak shape after 40 years old, your body’s less forgiving. I dunno how old you are as the host, but I can tell you once you hit 40, you look under 40, or once you hit 40, your back’s going to bother you, your shoulder’s going to bother you, your knees going to bother you. And the bottom line is, I have friends who are in impeccable shape in their 40 fives, and they love F 45 and they love Orangery and they keep using it and they keep getting injured. So either people can’t do it or they get injured. And that got me thinking, wow, with E M S therapy, like you mentioned earlier, they use it for therapy, they use it for rehab. So we can have, our exercise program is open to everyone. And even if you’re someone in that peak group, 18 to 38 in peak shape, you can go into our facility and push yourself very hard and get an incredible, incredible workout without the damage to your ligaments, your bones, and your body.
The Wolf of Franchises:
Yeah, I will say I saw on the website, I think it’s a 25 minute workout class, which yeah, I think the shortest I’ve seen is a half hour. And actually I don’t even think I’ve seen a half hour. It’s typically at least 45 minutes. So it’s definitely more palatable from a workout perspective. So is the technology effectively making, you’re exerting the same amount of energy, but it’s just a more efficient workout because of the stimulation that’s going on and basically giving you more bank for your buck out of whatever workout you’re doing?
Douglas Payne:
Yeah, absolutely. I mean, keep in mind it’s 85 pulses per second and you’re spreading that out over a 25 minute period so it doesn’t feel like you’re working for three hours in the gym. You leave there, you’re feeling invigorated, energized, but you wake up the next morning and even the day after and you fully appreciate the intensity of the workout you went through. It is intense. And so from a caloric burn and from a general results standpoint, everything is on par with these traditional forms of fitness that you were talking about except the wear and tear on the body. And another thing I’ll add is when you go to a 60 minute hit class, you’re in fight or flight for the full 60 minutes and your body’s pumping cortisol. And we all know cortisol’s good for keeping you alive when the tiger’s chasing you, but it’s not good for daily consumption. And so we get the same results, but without the cortisol spike. So it’s much easier on the body, not just on the bones, the ligaments, but from a hormone standpoint as well, you’re not trashing your body with cortisol injections.
The Wolf of Franchises:
Yeah. How’d you kind of come up with this? I think you mentioned earlier it’s somewhat prevalent in Eastern Europe. So can you give us the origin story of, I’m going to assume that between your successes with Massage mb, orange Theory, et cetera, maybe you were just like, Hey, it’s time to found my own brand. How how’d you eventually discover this technology and get it launched?
Douglas Payne:
So we established the European Wax Center connection. And so my wife and I were multi-unit operators. We had 10 European wax center locations, but I had a partner in those locations, Steve. And so Steve takes me to lunch in May of 21, and we’re going through the general agenda of things that you would talk about in the franchise. And he says, Hey, I’ve got something for, and he talks me through this thing called E ems. And I have to be honest with you, I was dubious in the beginning. I was a little skeptical, how is this possible? And what he had explained to me was EMS as it existed at that time, which was different than what we are going to market with. And what exists in the EMS space traditionally is a wired suit that is typically more of a personal training type of experience where you would put on a suit you would wet down your undergarment and then put on cuffs around your biceps, a vest around your chest, a waist belt, and then cuffs for your legs.
And then a wiring harness would be plugged into a laptop and you would get a workout. It was a great workout, it’s an EMS workout, but what I couldn’t see is how that could be a viable franchise. And so I left the meeting a little skeptical, but very intrigued, very interested, and just kind of set out on a journey to investigate the space. And what I saw after my investigation, after my due diligence was there was some emerging technology that allowed EMS to be used in a wireless capacity. And once I saw that, I realized that we had something that was very, very unique. You could capture the benefits and the efficiency of electro muscle stimulation, but do it in a group setting and group training captures energy. You’ve got the spirit of collaboration with your teammates. And to couple that with EMS seemed like just a no-brainer for me and for the team.
And so that was probably late May, 2021, and we branded this thing Home Fitness, and we’ve been off to the races. We opened up the very first pilot studio in August of 2022. So there was a tremendous amount of work. And we always said from the beginning that Home Fitness was going to open its first location and be ready for franchising on day one. And so that was the endeavor. And while we were picking out the lighting structure and the branding strategy, we were also moving through F D D and all of the documentation process and standing up ops manuals so that we were ready for what we knew would be a tidal wave. And what it was a great call. Cause this thing seems to be a rocket ship ride and certainly with Josh’s involvement it’s heating up exponentially.
The Wolf of Franchises:
I’m catching you guys this early in the journeys. This will be fun to look back on if it’s F D D approved and all that. How many units have you sold and is there any specific region that you’ve been targeting?
Douglas Payne:
So we’re pursuing the area rep model, and so far we’ve sold Arizona, San Diego, south Florida. Congratulations, Josh. And that’s all the way from Miami up to Stewart and just closed New Jersey. So if you take a look at those deals and we’ve got another fives and DC and dc, yes. And so if you take a look at those deals, there’s over 50 locations in a development pipeline. These are now standing up their territories and actively moving deals through the pipeline. We just closed a three pack here in Arizona about a week and a half, two weeks ago. And then we’ve got some activity happening in New Jersey. So this thing is starting to build, it’s like a flywheel right in the beginning the momentum is slow and grindy, but once it catches fire, it becomes unstoppable force. And that’s kind of where we’re at right now.
Joshua Coba:
And not to get, again, I think it would fall on the lines of earnings claims, but I don’t want to get into the specifics, but there are a lot of the area reps that are in legal right now. We have a couple other deals that are in legal right now and then we would have more potential, but we’re also have some blackout or unregistered areas that we’re not registering yet that we’re working through. Then once we get that out of the way, I’m sure we’ll see even more growth
The Wolf of Franchises:
When it comes to the area rep model. Can you give folks an idea of just what that looks like? Cause it’s not used by every franchise. I think the standard franchise model, it would be just you got your franchisor, they’ll sell to franchisees and maybe there’ll be building out multiple units within a defined territory. But that’s the hierarchy. It’s franchisor, franchisee. Whereas this area rep model puts someone in between that per se.
Joshua Coba:
So the area rep model has been deployed by many brands, subway, orange Theory, massage Envy, all the ones we mentioned, European Wax Center. But essentially that this particular model works is we award territory to different area reps. Very different than an area developer. An area rep is someone who represents corporate in that particular area. So they would purchase in a typical environment, let’s just use an easy number. Let’s say we think an area like New Jersey, for example, let’s say we think it holds 20 locations. We would award that territory for $200,000 and then the area rep shares in the royalties and the franchise fees from that point forward. So every time they sell a franchise, we split the franchise fee 50 50 and our royalty stream, which is a 6%, six points two and a quarter points, go to the area rep and three and three quarter points go to corporate.
And essentially the area rep becomes the sales force in that particular area. And they’re the support structure. So we work directly with the area reps to train them how to open, well first of all, they have to open their own locations first, but once they’re up and running, then they’re start awarding licenses to qualified franchisees. We teach ’em how to go through our site selection process, how to support the franchisees through their grand opening, how to do ongoing support and all those other facets that franchisor would have. The franchisee is our franchisee and the franchisee follows our system and the area rep follows the system that we put in place for them to represent us in. And that’s basically how it works. So once we put these area reps in place, they’re all opening their own studios. And then they’re also in process of selling awarding licenses to qualified franchisees to open more studios within their territory.
The Wolf of Franchises:
It’s a great model. I feel like it allows you as a franchisor to do more with less as assuming you’re picking kind of experienced and just top performing area reps, right? Because they’re kind of taking on that development and franchisee empowerment in all these different local markets.
Joshua Coba:
Well, to Stu, yes, yes. You need to find seasoned qualified area reps to take on that role. And that goes back to your original question about lessons learned. I have a whole Rolodex of people that I worked with in the past that since they found out I was a part of home fitness, have almost literally, I’ve gotten so much response from previous franchisees that have such a good experience with me in the past. They’re like, Hey, if you’re doing something new, I want to learn about it. I want to be a part of it. Okay, well that’s fantastic. But your question earlier, what’s something I learned early on that I might be able to apply? Well, I’ve worked with all the people who are asking me and some of them I don’t want to work with again. And so some of them are not being invited to be part of OM because my experience with them was not stellar and I don’t want to go down that road again. So I do have the benefit of this large Rolodex of people want to work with me and being able to cherry pick the best ones.
The Wolf of Franchises:
I’m curious too and this comes more from my development experience where we worked with emerging franchisors and none of them were doing area rep models, but we had a, which probably wasn’t the best strategy, but we are a small startup, so limited resources. So we did our best. But when we were trying to find franchise operators for any one of our brands we used a lot of digital tactics, just Instagram ads, Facebook ads select websites where we felt targeted our potential franchisees the best. But when it comes to an area rep model, since the area reps are then almost taking on behalf that sales and marketing efforts to find franchisees, are they kind of going out pounding the pavement in an old school kind of way to find franchisees? Or are there ways you guys can geotarget say for the New Jersey area rep,
Joshua Coba:
I don’t know the specific way that all area reps go about in the world of franchise, there’s a lot of area reps out there. I dunno the way they all specifically go about it. The ones that I’m bringing on board, they already have their own Rolodex of people that they’ve brought on to other brands that have had successful and great experiences with them over decades. And so when I bring on area rep a, I’m pretty confident he has three or four people or five or six people below him that those people are coming on automatically right after as well. And I just want to reiterate because you mentioned something about your startup and cash issues and capital. The area rep model is an amazing growth model, but it also yields a lot of cash flow to franchisor to further invest in the brand. So a quality franchisor, when my brother and I were growing European Wax center, I tell this story all the time. We had a hundred locations open, we had 250 licenses in development and my brother and I were still sharing a one-bedroom apartment.
The Wolf of Franchises:
Oh boy.
Joshua Coba:
And that is because I had planned to get to a thousand locations or more, and I knew that the business’ needs came before mine. And so it’s just the same thing with this area rep model is that if a good franchisor is in place, a bad franchisor will take all this area rep money and who knows what they do with it. A good franchisor takes this area of money and invests in improving the brand, improving the model, improving the equipment, improving the inventory, improving the products that we offer our customers. And so that’s what Doug and the guys are doing. That’s what we’re doing. So we’ll, every dollar that comes in, it’ll put it right back out into improving the brand. And that’s what European waxer did. And you got to keep pushing the train and keep pushing the momentum and then it catches up. But in the beginning, you got to put all you have into it. It’s the
The Wolf of Franchises:
Scrappy founder mindset.
Joshua Coba:
Well, I’m an entrepreneur, my dad was a hair stylist who owned his own hair salon and I remember being literally five years old and my dad would walk us around the block. My dad would be like, what do you want to do when you grow up? I’m like, I dunno. Well what do you like? I’m like, candy. He goes, good. So you’re going to own a candy store. Never sell the candy. You have to own the candy store. I’m like, okay, five years old. But I grew up in a mindset of like, you got to be the boss. You got to do whatever it takes. My dad grew, we grew up. My dad, the business came before everything. And I had nights where my brother and I shared spaghetti with no red sauce because the red sauce was just too expensive and we still had a hundred locations. I was still in that one bedroom. I’m like, yeah, red sauce tonight, whatever. No red sauce butter with salt and pepper. Let’s do it.
The Wolf of Franchises:
Oh boy.
Joshua Coba:
But Doug, even though he’s not like his work ethic is it’s there. That’s where his mindset is. That was part of my investment was like, Hey, where’s your head? Are you liking slow? Are we moving fast? Are we going to get things done? You’re going to a 24 7, this is a non-slip job. Yes, I’m committed. I’m done. I’m ready. I’m trying to do something for myself and for my family, for our future. And I said, okay, I love it. Let’s do it.
The Wolf of Franchises:
Go bigger, go home. I like it.
Joshua Coba:
There’s plenty of benefit. There’s plenty of reward down the road. It’s probably not even discussed enough that the success of European Wax Center probably really lied most on my brothers and i’s ability not to take things for ourselves and to put the business first. Most people in our position would’ve already been living in their lifestyle for sure. That’s right. But we delayed,
The Wolf of Franchises:
I, I’m torn on the impact of say, a show Shark Tank, which I love and I watch, but I do think it probably contributes to a success bias because you really only see the entrepreneurs that end up getting funded. But anyway, there’s a good clip of Robert Hive talking about how as a founder you really have to, cash is the lifeblood of a business. A business is a living, breathing entity. And every dollar you take out that is something that could have gone to the business to help it grow. So yeah, when you were talking about that, that’s just where my head was going. But do you have specific ambitions for the brand? I know we’re not even six months in to since this first studio has opened, but long term you’ve seen brands between your time with European wax, massage envy, orange Theory grow rapidly take on investments from private equity or in the case of E W C, go public, do you have a specific ambition for om long-term, right? Do you see this as something you want to run for as long as possible? Is there exits in mind? Have you thought that far through it yet?
Joshua Coba:
Well, I’m a minority shareholder and honestly speaking, I don’t ever need to sell. So I leave it to Doug this is his baby, he’s the founder. I try to give him the same respect and courtesy that I wanted as a founder when I brought on my first partner and whatever, so to call. But for me, I’d like to hold it forever, but I <laugh> leave to Doug.
Douglas Payne:
Well, for us, I mean the only job that we’re focused on right now is getting this right, building a brand that takes care of our franchisees. One of the cool things that I’ve been able to witness throughout my career is franchisors changing the lives of their communities. There are folks that have come in to invest the franchisees, the area reps. John Ncio at Massage Envy used to talk about all the millionaires he created. And it’s true, he was very proud of that. And so for me, that’s job number one. We got to get this right. We got to build the network that is successful and really getting their return on their investment and having a good time while doing it. We want this to be a fun, energetic brand. There’s so much about home fitness that is next level, the energy, the technology, it’s all new. And I think our community is going to vibrate that. And that’s what my number one focus is. Now, having said that, I know that in the life cycle of these concepts, exits happen. And so we’re no different than anybody else that down the road provided we get all those things. There’s a conversation about an exit and I think that’s natural and that’s something that we’d be open to. But right now, man, it’s all hands on deck to get this thing right.
Joshua Coba:
Yeah. You can’t even be thinking about an exit until you get it right. Yeah. With European Wax Center, honestly, when we finally did our private equity deal where we gave over control, my brother and I talked to each other and we’re like, yeah, they can’t mess it up at this point. There’s still three years worth of licenses sold that have to open. So the company’s going to continue to grow at the pace that it’s been growing. We’ve built such a solid group of franchisees, we feel like they can’t mess it up. It can only grow for three more years. And we felt financially stable that even if they somehow turn the business down to zero, we were fine. So I think making sure that the people you’ve brought on and that they’re kind of taken care of and that things are going right before you walk away is important. It was for me anyway, yeah,
The Wolf of Franchises:
It’s almost like just building that strong team to prevent and lower, I guess, as much as possible, the chance of failure, even if there is a change of control.
Joshua Coba:
And it was very family and it still is a very family oriented thing for me. I made relationships that’ll last my whole lifetime in that European wax center. Like Doug said, I didn’t really think of it in terms like that, but people came in one financial situation are leaving much, much wealthier because of it. And we have changed people’s lives and that that’s probably why there’s such good goodwill with me with a new concept, people are like, Hey, I want to see what’s going on. You know, changed my life once, let’s change it again. And I’m excited to work with people again. I was telling Doug I thought I was going to get involved with him on a 10% of my time type of thing. Like a minority <laugh>, like I don’t know that I can come out of retirement and work. I used to, but I was telling another friend of mine, I guess I don’t really have a dimmer switch. I’m just on or I’m off. I <laugh>, I dunno how to do 10%. I tried I for a half an hour and I was like, okay, it doesn’t work. And so now I’m texting Doug at he’s three hours behind me. I accidentally text him at two in the morning, three in the morning sometimes because, cause I’m up at six and my brain is going crazy of all the things I went. So I moved the email. Now though,
Douglas Payne:
The sad thing is I’m answering him
Joshua Coba:
Well, I was known for that in European wax center. People will be like, you send me a message at two in the morning, three in the morning, four in the morning. I’m like, I don’t stop, man, if I’m up, I do it. I get it done. I don’t care. Yeah, my digital leash has rung me.
The Wolf of Franchises:
Alright, well look kind of to wrap up here and I mean if there is a specific franchisee that you’re looking for, we have a pretty decent audience that this goes out to. What kind of if you have a Target franchisee have you kind of drilled down that demographic of maybe ideal level of experience or anything else?
Douglas Payne:
Yeah, we’re really looking at, for folks that have experience, first and foremost, multi-unit experience is a major plus. Plus, we want folks that can hit the ground running that don’t have to learn what franchising is all about. And so that’s why my Rolodex, Josh’s Rolodex, Steve’s Rolodex, it’s so powerful because we’re in league with folks that have been there, done that. And so we’re looking for more of those types of folks that can come in and really take home fitness to the next level and execute on the vision. And so we want folks that are excited about that.
Joshua Coba:
And to that point, just further to that point, and even back to a learning lesson from your original question, we’re awarding three minimum to qualified individuals. Because I found in the European wax center system that the individual franchisees that own just one location end up what Doug just said. They don’t have the experience, blah, blah, blah. They end up being the most work. So then you find yourself allocating your and all efforts to these individual unit owners and the ones who have 3, 4, 5, 10, 20, they don’t need half of your attention. They don’t even need half of that much of attention. So with om, we’re trying to limit that mistake and get more seasoned people with franchise experience and get people who are financially stable to open at least three.
The Wolf of Franchises:
Yeah, it’s a smart strategy. And I think especially early on, right, it’s so critical to get those set that foundation strong for your first franchisees. So yeah. Look guys W wishing you all the best with Om. It sounds like you’re off to a fantastic start. Thank you. But yeah, I guess Doug, is there anywhere online where people can follow along your journey or just the home fitness brand?
Douglas Payne:
Yeah, we’re across all major socials as you can imagine. But check [email protected]. That’s our main site. HomeFit Studios on Instagram is another great place to catch us as well and stay tuned.
The Wolf of Franchises:
Awesome. All right. Yeah. Well look folks, we’ll plug the Instagram and the website and the show notes if you want to check it out. And if you’re a multi-unit franchisee, definitely don’t hesitate to get in touch with these guys. Well yeah. Look, Doug and Josh, thanks again for coming on the show and we’ll talk soon.
Joshua Coba:
Thank you.
Douglas Payne:
Thanks Wolf, appreciate it.
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.