S4 Ep5: BODY20: The Health Franchise CEO Who Fixed His Own Problems
Physically burnt out in his early 30s, Gregory Breitbart found a solution so effective, he knew he wanted to run it as a business.
Greg is CEO of BODY20, the fitness franchise utilizing whole-body Electro-muscle stimulation to condense two hours in the gym down to 20 minutes.
The Wolf and Greg discuss Greg’s enduring business partnership with his father, how a ‘weekend warrior’ lifestyle caused more problems than it solved, and Greg’s ambitious plans to have at least 100 BODY20 franchises open by the end of 2023.
Follow Gregory:
LinkedIn: https://www.linkedin.com/in/gregbreitbart/
Twitter: https://twitter.com/gregbreitbart
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Episode Transcription
Gregory Breitbart:
Make sure you’ve got the right foundation before you go. And that’s what we did, and it’s just taken off since. We’re now just trying to grow internally our team and scale as fast as we can because it’s a big difference from opening five to six units a year to 70 or 80, and I think we’re making the right decisions and growing the team accordingly to deliver.
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, and on the show, we have Greg Breitbart, who is the CEO of Body 20. While he didn’t found the company, he did acquire it early on in its infancy, and it actually started in South Africa. But prior to Greg getting into Body 20, he was a co-founder of an electricity company that ended up getting acquired for over a hundred million dollars. This is a fascinating journey of Greg’s entrepreneurial life and how he found himself from running an electricity company to now being the CEO of and taking over a boutique fitness franchise that has over 180 locations being built around the country right now. I think you’re going to enjoy this.
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 Workweek and Wolf Pack franchising may maintain positions in the franchises discussed on this podcast.
The Wolf of Franchises:
You’ve clearly obviously had an interesting journey into franchising and we were just talking off-air about it starting with electricity slash power company. So do you want to maybe just give us a heads up of when that started and what that business was all about?
Gregory Breitbart:
Sure, I’d love to, and thanks for having me on. Excited to be here. So somewhat unique, but actually I started my career ironically in the electricity industry. So before that, I kind of bounced around mostly in real estate. My father had called me a couple months before this, and his whole career had been in the commodities industry and he had retired when I was in college. So at this point, he was retired for seven years. So that was kind of my adult life. It’s just he’s retired, living it up. And he called me one day when the market crashed. He had a lot of money in the market, a lot of money in real estate and I remember the call so vividly he’s like, I’m very unretired <laugh>.
Scary moment for him but also just for me as his son. And so he just, he’d been working for himself, had an incredible career in the commodities industry, oil and gas, and had been working for himself. Built an amazing company before that and realized he’s going to have to have a second act in his life and career and he hadn’t worked for so in a long time. So was naturally going to be entrepreneurial. And pretty soon after that we just said together, let’s start a company. Let’s just do something. We’ll figure this out together. And he still had some money that was good in the grand scheme of pretty good amount of capital. But for him and the way he was used to living, it wasn’t going to last certainly through retirement. And so we found this industry which was very nascent at the Connecticut least parts of robust energy markets. It’s how competition, so you have to buy your electricity from the utility still gets delivered by the utility through their wires, pipes and poles most of the time still bill for it but you can choose where it actually comes from the supplier. So you could do that.
The Wolf of Franchises:
So you’re like a broker almost of sorts cause since you’re not actually owning the energy, are you kind of just coming in And
Gregory Breitbart:
So there are brokers in this space, but we actually were a supplier so we actually did own it. We didn’t own the generation. We would buy it from the generators. There’s obviously a huge marketplace for this. We buy it from the generators and then essentially resell it to the end consumer. And people switch, sometimes they save money, sometimes they want hundred percent renewable, sometimes they want to lock in a price for multiple years, things like that. And so that industry was just getting started in Connecticut. It was not what he did in his past, but it was in the same, it was in the commodities industry. And so he had a lot of connections and he always says, which I think was very apropo, our experience there. We just took one step towards it and it took one step towards us just from the start.
It just always felt like it was kind of meant to be. And we worked hard. We did a lot of good things but we kind of had the winds at our back and the right industry at the right time. So we started this company North Power. My father and two other partners started it in my apartment building on a retail level and just as I said right industry, right time. We ended up figuring out who’s going to do what. I had, I was 25 at the time. I had a little bit of experience obviously can’t have much experience at. So I was naturally, I’m chief marketing officer cause I know little more than everyone else. And so I was responsible there for coming up with the name, the brand, and really how we were going to acquire customers and how we were going to build revenue. And we did a lot of clever things and right place at the right time. But we ended up bringing in customers in our first year.
Wolf of Franchises:
And that’s homeowners.
Gregory Breitbart:
Homeowners. It was residential, you could serve residential or commercial. But we focused on residential and ended up doing 23 million in revenue in our first six months and 5 million in our first 12 months. Whoa. So pretty astronomical. Just kind of rocket ship. And so for me, 25 years old is an amazing opportunity and we were just along from the ride along from the ride right from the start. And very exciting And
Wolf of Franchises:
<laugh> dive into this a bit. I’m going to guess most people listen to this have no idea the unit economics of the energy business. I sure as hell. So we’re talking about literally you were the company where I go to cook eggs on my Stovetop, the gas, you’re the one supplying me the natural gas and I guess the electricity just so when I want to watch TV that my TV turns on, it’s that, let’s just start at the basic level there.
Gregory Breitbart:
It’s so similar to telecom. I haven’t told story in a while actually similar to telecom. One company owns wires, the pipes, the poles, the billing, everything. And so it was a monopoly essentially. And they had complete pricing power and they essentially broke up way back in the day. They broke that up and they deregulated telecom and that’s where you sprint and all that sudden about cost per minute for long distance calls and things like that. Cause the competition drove down price and also created a lot of innovation obviously the cellular industry and smartphones and all that. So it was a really successful deregulation. The airlines went through the same thing a long time. And so the same concept with electricity and where you had back in the day or still in STEM states, you have one company that owns a generation. They own the transmission lines and they own the local distribution.
They have a complete monopoly. And so you really have no choice. You can’t. And how do create competition? Obviously, you don’t want power companies putting power lines down you’re not going to create competition on the delivery side. You don’t want multiple transmission lines so you’re not going to have competition there. Where you can have competition is on the generation and on the supply of the power and how it’s sourced. And so that’s essentially what they deregulated and they force the utilities to sell their power plants and get out of that business. So they essentially didn’t care, they didn’t care who was delivering it. If you didn’t switch to somebody else, they’ll supply you on standard service. But if you switch somebody else for essentially power local, well very unique industry haven’t talked about in a long time.
Wolf of Franchises:
I mean I have no idea margins like you said you did 23 million in the first six months. I mean is it groceries where it’s like 2% profits? I mean cause it’s the definition of a commodity business that you’re in.
Gregory Breitbart:
Sure. We’re serving residential customers. Your electric bill, I think you live in Texas it sounds like you know probably have a bigger bill than the average consumer, especially in the summers depending on the state, half to two-thirds of your bill is the supply. So you’re charged separately for the supply cost and the delivery cost. And so all that revenue on the supply cost would’ve been our revenue. So if we were serving a hundred thousand customers, that’s a hundred customers who are essentially paying two thirds of their electric bill that’s going to us now the margins on that would change dramatically depending on seasonality. Literally changed by the minute in the electricity markets. So it really varied but it was a pretty lucrative industry and from a revenue standpoint with the growth we had in households, the revenue could grow really quickly. And over the seven years, we ended up bringing in over a million customers and had about 3000 when we sold.
Wolf of Franchises:
And as I assume your father’s experience with commodities trading, maybe you had some really high-level access to pricing and forecasting and I don’t know if you can lock in deals like to prevent risk against fluctuations. Was that part of your advantage?
Gregory Breitbart:
It was and it was all part of it. It’s so funny thinking back on this company, but the commodity industry in general is very volatile. The electricity industry is the most volatile commodity. So it literally changes minute to minute. So you always want to be marrying up. If I’m guaranteeing a customer’s price for 12 months, I need to be hedging, need, buy, advance or hedge way that can know that, deliver on that the consumer. And so that’s what we did. But even with that, you can only hedge <laugh> getting technical, but you can only hedge for a hundred percent. So you’re expected to use this much power this summer. You’re our customer, I bought that for you, I’ve hedged that, but now it’s a heat wave in Texas and so now all of a sudden you’re actually using 30, 40% more. So we don’t have that extra power cause it would’ve been irresponsible to buy it cause we couldn’t predict it.
So now we have to go into the real-time market, which is priced by the minute and we have to go in and we have to buy all that extra power that you’re using. We have to buy that as it’s happening. And basic supply and demand. The way that market works is that price can go through the roof sometimes as you’ve experienced less in Austin but more outside of Austin and Texas. You know can just have some wild swings in price. So highly volatile. One of the things, parts of that story that got me into franchising and me involved with 20 was kind of the stress that I lived with over those seven years at North American Power building that business one because it was so volatile. There was actually a point during the polar vortex, there was a stretch in January where we lost over a million dollars a day, seven days in a row and had no idea if it would stop.
Is this weird weather event may not have affected you as much in Texas but in the northeast it was just frigidly cold and we had hedged and done everything we’re supposed to do but we didn’t have enough power cause people were using more and prices through the roof and literally losing a million dollars a day, which is hard to even fathom and just didn’t know if we were going to make it. So I remember having a conversation with my father where we both ended it with I love you father, I love you son <laugh>, just acknowledging that this ride might be over. But fortunately, we weren’t, it’s funny that industry, you’re almost like a farmer. The sun came back out and the weather got better and we stopped losing that money and we made it through, which was great. So that was good. But yeah, it was a very incredible opportunity for me to be given that chance.
So I definitely acknowledge that. But ship we still almost lost it all at multiple points that combined with my father put his last penny into the business and we actually borrowed a million from my mother, his ex-wife who is very kind and generous to loan it back to him. And so for me, I had really my whole family’s kind future on the line for most of the time we had that business including in moments where we thought we might lose it all and I was responsible for revenue building the business and making sure that we grew and made money and incredible opportunity but its toll. And we ended up selling the company years, started it, a large company at the time called Calpine, Texas based as well in Houston. And I stayed on as part of the deal is I had to stay on and my team stayed on, which was good.
But a couple years into that I just like selling your company somebody and it’s very uncomfortable when you start something, you sell somebody you’re not anymore. It’s very uncomfortable. I equate it to being awake for your own surgery. It’s not fun to watch and sometimes you have to actually do the not fun stuff yourself. And so that was taking a toll too. Knew was time to had some incentive to stay. So was keeping me there. Then the company actually went private, they got bought by a big P firm, took private and my incentives got accelerated. So I think I lasted one day after the stock options and just said I’m going to do something. I’m of the main motivations I had for kind of outcompete industry and I thought I was going to stay in the electricity industry. So I’m looking at this one-year non-compete as somewhat of a hindrance cause I want to do something else.
But it also gave me time to figure out what that was going to be. And most importantly I had over the seven years developed a lot of what I would describe as workplace injuries from sitting all day from the stress just hunch over bad drinking too much, I hate to say cause I’m in the fitness industry now smoking, just doing all the bad stuff but then also running five miles year too. So it was just weekend warrior-type mode And it caught up to me about halfway through the company initially with some really bad low back issues. And then those same issues which kind of stemmed from a weak and some imbalances in my core turned into tennis elbow in my right arm. I eventually got it my left arm because I started playing lefthanded <laugh>. So I got tennis elbow in both arms, I got Achilles tendonitis in both ankles and I got plantar fasciitis on both feet all within a two to three year period.
So was everything in life is great. I’ve set my family up for life. My father’s retired, sailed off in the sunset and South Florida so life is good but I feel like shit. And my friends, I was like 32 at the time. My friends are making fun of me. I’m a 80 year old man. So I just said I’m going to take a off, I can’t work in this industry anyway and I’m just going to literally go physical therapy every day until I, and I even what was, I just didn’t have the time so I was so busy to really commit to it in pt and so I was just like, alright, you’re off. I’m going to get a PT every day. I don’t care if I have to pay out of pocket, I’m not going to live like this. And that’s kind of the first step in me getting connected into franchising and into 20.
Wolf of Franchises:
Cool. I mean dude, that’s a wild story. And folks, it’s a public transaction. Am I right? I’m on Google. It’s saying you the acquisition was like 111 million. Is that in the realms of the deal?
Gregory Breitbart:
If it’s public then yeah, that sounds
Wolf of Franchises:
<laugh>. Yeah, I mean it’s first result in Google, north American Power acquired by Houston-based Calpine. Yeah. So wow. All right. So Big exit. That’s pretty sick band. Yeah man. I mean it’s funny when you’re talking about just the health woes, I mean thankfully it’s not like wasn’t su on the scale of what can happen health-wise. It wasn’t super serious. But there’s that quote of a healthy man has a thousand wishes, a sick man only has one. So yeah, it just kind of goes to show you if your body, you’re not physically well, I mean nothing else matters. Even if you are set for life financially, it’s like I’m miserable all the time
Gregory Breitbart:
And it could have been so much worse of course, but nagging anyone that has nagging injuries and those types of things that it can just every day and it makes everything a little bittersweet.
Wolf of Franchises:
The quality of life goes down. Sure. So you sell in 2017, you take that year off to get your fitness back. Can you maybe walk us through, I guess that year off to you discover Body 20, and I don’t want to spoil it for listeners, but Greg, you didn’t found it meaning starting the company, but you did discover Body 20 in its infancy and ended up buying it from the founder. So yeah, you want to just walk us through how you get from getting your health back to being the c e O of an emerging franchise?
Gregory Breitbart:
I like that play on words not the founder, but I did find it later on one of the best and worst days of my life. Last day of work at that company. It was just bittersweet. But I was also kind of happy to take some time off and last, I think we went on a vacation the first couple weeks, did the whole Pacific Coast Highway, which was awesome. Sick, really fun and really loving life. I would say probably one of the happiest of my life. Was it any founders listening to this or business owners, there’s so many ups and downs that feeling when you saw your business, I mean there’s just nothing better and it’s not even the money, it’s the satisfaction and just the pot of gold but not the gold. It’s the rainbow. But what happened very quickly was I just started feeling like less smart when you stop working and so last enjoy started.
Wolf of Franchises:
So you weren’t golfing every day and he got bored
Gregory Breitbart:
And there’s a quote, have you seen the show succession?
Wolf of Franchises:
Yeah, I love succession. Yeah,
Gregory Breitbart:
Yeah. So there’s a quote on there, you’re talking about money and I think it was an inheritance and it was a certain amount of money. I won’t say the amount. He goes, that’s the worst amount of money to have. Oh
Wolf of Franchises:
Yeah, five. It was 5 million. Yeah, I remember scene. Yeah, I’m a junkie of succession,
Gregory Breitbart:
It’s not enough to retire but you’re also not going to be as motivated. So there’s a little bit of that going on too. But what am I going to do? But I could also do nothing for a long time. It was interesting. So around that time I started going to pt, went to a new hospital for special surgery, great hospital that had great PT program. And I went in there. At this point I knew it exactly what had happened to me. For some reason my gluteus on my right side just kind of stopped working. I lost that kind of mind muscle connection to my gluteus. And your gluteus is essentially your side of your butt, your butt and it holds your hips in. So if you have one that’s not activating and not working, your hips kind of jut out. And what happens with that is when your hip jus out that it actually makes your hips uneven, which makes one leg artificially longer than the other.
And so I was running one’s longer than the other. If you’re moving a lot running whatever, its your body does not, doesn’t take your body. That’s kind of how the initial issue started and actually how each of the other industries came to be the and all that stemmed from that kind of core issue. And I knew what it was and they, they’d always give you, okay, you need to isolate the muscle and try, we need to it. But it was so disconnected from my brain that I literally could not do it. And so every time I try to do isolation exercises, I’d use other muscles and my IT bands would tighten up and I’d get sciatica and stuff like that. And that was my experience up and at that point, so I go to the new PT and I’d tell ’em this is what’s wrong with me.
They’re like, yep, that sounds about right. And they said, we’re actually doing this new thing, we think it can be really helpful. And so they ended up hooking me up to, they’re putting a bunch of acupuncture needles in my glu and then hooking those up to electric stimulation. So in there, and they said, you’re just going to lay here for 10 minutes. We’re contract your muscle and what it’s going to do is it’s going to start retraining your brain, that muscle’s there, it’s going to start reminding your brain because we’re going to contract it directly, that muscle’s still there. And then after we do this, then we’re going to do those same isolation exercises you’ve been doing and we’re going to see if you can contract it yourself, use it yourself. And so sure enough, 10 minutes you, it’s contracting the bump hump. And after that I go do the same exercise I’ve been doing.
I can feel it for the first time. And so I do that, I go home, wake up the next day, it’s super, super sore, which is good. And I think maybe went twice before I had no back pain and I’ve been living with it for two years. So this was like so life-changing for me. This experience and the timing and the serendipity of what happened next is really just weird. But my father, we sold the business, he moved to Florida, retired hopefully this time and bought a yacht and life well and he calls and he says, Greg, I and did this 68 years years old at the time, hates working out. It’s a funny call to get from him. And he goes, and it’s amazing, I’m thinking about investing, you wear this full body suit, it’s got electrodes and it’s 20 minutes and it’s amazing and I think we should invest in this.
And normally I’m very ying and yang with him because he’s such an amazing visionary but often isn’t in the details. And so I was the one that kind of had to figure out the details. And so usually I’m more skeptical in these situations are more focused on the due diligence where he just saw it and to it. So I’d normally you knowledge or slowly, literally had this experience. And I told him, I said Dad, I was like, it’s so weird cause I literally just had this life-changing experience with not that but electric stem physical therapy. So I was like, I’m not going to tell you not do it. And that’s what happened. He had gone to the first body location 20 is a boutique fitness franchise. We do a 20 minute workout with personal trainer and what’s really unique and awesome about it is that personal trainer and the client is wearing a full body electro muscle stimulation suit.
So while they’re doing that workout, it’s contracting directly all their major muscles and you’re essentially doing a 20 minute workout. All isometric movements, basic movements, low impact, no weights, no resistance, you’re essentially fighting your own muscle contraction that we’re creating artificial. And we always say train our franchisees and team don’t even talk about it too much, just tell someone come in for a free demo. You have to feel it to understand. So I’d say that now, but virtually most people can’t do that yet. But its just absolutely incredible to, it’s shocked at the of just 20 minutes. So he tries this, the first location in the United States was in Wilton Mans, which is in Fort Lauderdale. Loves it networks into the US partner Chris Penia and then networks in or connects through that to the original founding partner in South Africa, which is actually where the company started and ends up partnering.
And then at that point I mentioned he’s retired at this point and so it, it’s kind of full court press now on me to get involved and it fit really what I was looking for. I’d gotten out of that industry further away from it, the less back in. I really wanted to do something personal for and I been thinking about it for a while. There’s got to be this space between I just got out of physical therapy but I’m not ready to go do CrossFit yet. And I think there’s this big gap there of low impact but effective workouts and that this just kind of fell into our lap and he saw it and I saw it because of my experience. I ended up getting involved and ultimately kind of long story short, yada yada, we ended up buying out the original South African founders and partnering with their US partner to take what they had, which at that point was just their single corporate location. A couple franchise units and start turning it into what we had today, which we kind 22 point cause we ended up changing really almost all it.
Wolf of Franchises:
Okay, that’s a fascinating story. So without getting into the specifics of the details but so you guys, you’re not a master franchisee, you actually bought out so the South African person or entity?
Gregory Breitbart:
Yes, exactly. So they still have a body 20 in South Africa they have about 50 units I think there, which is really good. That’s a lot in South Africa just demographically. And I think that business does quite well there. But the body 20 here today, we ended up buying them out fully separating entirely. So it’s not a master or licensee license situation. We own the IP in the brand and really we ended up changing everything anyways. So it was a unique story. We have a very unique founding story. I think we have almost three founders. We have the original founder in South Africa that started it in his garage which is awesome. We’ve got our US founder, which is Chris and his wife Kenzie who opened the first body 20 here and helped start franchising the brand and then not the founder, I’m the one that found it I guess <laugh> who’s come in and I think helped take it from where it was to where it’s today.
And it was an interesting experience cause for me it was my first time buying a business. It was my first time being a ceo. It was my first time in franchising, my first time in fitness. I knew nothing about electric muscle stimulation. So really it was pretty daunting. But we thought we had a business that was really kind of ready to go and ready to scale. And after the acquisition when I came in and I started digging in more and more, we just realized there was a lot more work here than we initially thought. It was pretty terrifying to be honest. We just weren’t there on the unit economics standpoint. We had some franchisees at the time that were questionable and I had literally just read all the franchising books on how to franchise a business and all this and everyone says number one, unit economics, number two, sure franchisees that screwed that one out.
I’m like oh boy. Yeah. So it was a moment of terror and I think there’s a great quote in Hawk Redemption, you know, get busy living or get busy dying and is a long way and we a lot work ahead of but we’re choice. And I say that to our franchisees every training we do. I said if there was a red magic red button in business and you could just hit that button and it would all go away just disappear. You didn’t do it, you’re out. And it never happen. No business would ever get passed like a year at some point. At some point you’re going to hit that button and eject. But that’s not what owning a business is. You know, don’t have that choice. And thank God we didn’t have that choice. Cause to be honest, there was times where I wanted to hit the button and I’m sure for everyone listen this franchisee you know’s moment where you either have or you hit that button, it’s good thing.
Cause most of the time it works out and works out really well. So we didn’t have that button, the magic buttons, we had to figure it out and we just put a plan in place between myself and my partner Chris. And he got empowered when I came in cause the original wasn’t there and he had lot of ideas on needed to, which had no idea was I just said, I was like look, I was like, you better know what you you’re doing cause I’m going to trust you here. And so he had some great ideas on things we could do to improve the performance in the units, which was really most critical. And for me, my experience was really it was in scaling business and so I knew I could do that but we weren’t there yet. We needed to get there first. And so I focused on something we always want to do when we bought the brand we knew we were going to do, which is the brand was created in South Africa, probably on a shoestring, did a great job but it was created for South Africa and also was just created on a budget.
And I come from world where you invest heavily in brand. So we did that. We ended up partnering with an awesome agency in New York City, Pearl Fisher. They actually just did McDonald’s new packaging. They had an awesome program for early stage companies. They really wanted fitness clients. They gave us a really good and we worked with them to rebrand needed a brand that fit consumer more in our workout. It’s 20 minutes a week, it’s amazing. But the reality of it is it’s in a retail setting like an orange theory, like a soul cycle. It’s boutique fitness, it’s with a personal trainer and it’s one to one. It’s one to one. And we use an medical device. So we knew our values. Incredible. Your personal training sessions are between 37 and I think 50 a session. So less than really any personal training out there and more effective.
But it’s still not inexpensive, it’s not a 20 membership. So we know that brand consumer is expecting lot and boutique fitness market in the United States. We looked at it very much more established around the world and the consumer expectation is higher, especially with things like SoulCycle and Cycle Bar and Rumble and all these really cool experiential brands. We knew we needed the brand to fit the consumer. And so worked with Pearl Fisher to rebrand the business. They did a fantastic job and then partnered with a really incredible architecture firm, bright Architecture who actually helped create Rumble boxing, which is a brand that we really liked to take that brand and make it come to life. So while I’m doing this part, Chris is working with the units trying to improve performance, improve sales. We weren’t doing pre at the time, which for listening that knows boutique fitness, like presales, one of the most important aspects of how this all works.
And so we weren’t even doing before that, Chris in a individual we hired, came in and helped us build out our pre program. And so we kind of tackled it from the two angles which was we’re flying in this airplane and we know it’s potentially, I usually say it’s going down but I’m going to be softer, it’s not going the right direction and we’re up in the air and we know that we may not be able to save it. We need to make sure we’ve got another airplane but we’re in the air. So we basically had to fly the plane, try to save it and then build our new airplane and hopefully put everyone in it and fly off and take off before we land or crash. And so that’s what we did. And he worked with the existing franchisees to increase the performance and drive up the economics while we basically created a whole new business, new brand new footprint, completely new experience, new training methodologies and then literally changed every single system tool, everything about what we did.
And that was all starting to come together in, you’ll laugh when I say the date but January 20 <laugh> was we just were rolling out the brand first pre you our studio opened any of our other studios that just did our first presale and we were like for the first time we’re seeing light at the end of the tunnel and then Global Pandemic and obviously everyone is impacted, not just us but really bad timing for us or least we thought it was a life lesson of you know, really never know what something is until you die. Until it’s all over you dunno why something happened or even what the impact long term is. And for us when we bought the business at the time, man did I wish it was doing better but I’m actually glad it wasn’t because it forced us to do things we did And man, when the pandemic started I was like this just can’t be like we’re just getting some momentum.
But when I look back on it, of course I wish the pandemic didn’t happen but it ended up being such a blessing in disguise for us cause it gave us and for anyone at a startup, at a startup you’re always behind. It gave us this opportunity to catch up. We just said again we can get busy living, get busy dying, all our locations are closed. We just turned off all our royalties, all our fees, we got no revenue coming in. But we also don’t have any phone calls coming in all everyone basically doing. And so we said is opportunity all the right foundation and to finish all these projects and all these systems and tools and things that we knew we needed to do. And we just set out with a goal that, and at that point was an if cause we didn’t know if we can reopen or when we can reopen.
The one thing we know is that we’re going to have better opportunity for our franchise when And so we were able to get seven key projects all impacting our franchisees, all making their businesses easier for them to operate all across the finish line during that time so that when our location started opening that summer, a lot of ours were in Florida, which was helpful for us when they started reopening, we just started doing better than we ever have from the start. I think we were a little bit benefited for sure cause our workouts one on one and so there a lot of people that weren’t willing to go back to group that would do a one-on-one workout. But it was really the addition of all these systems and tools that made our franchise jobs easier, better marketing vendors, really awesome customer, automated customer system and just all sort of automated texting and messaging and all this stuff.
The line that last Business Wei then like hey these unit economics and where we’re at as a business, the scalability of what we have is really in a great place and now is really the time to grow again. And we’d actually stopped selling franchises for about a year cause we just didn’t feel like we had something that was worth it. And we let in a couple people that had tremendous experience that basically convinced us we really no advertising, no outreach for franchise sales. And we just said we want to make sure that we’re in a really good place before we really the gasoline on the hit that ourselves and you’re franchise are in a really good direction and we think it’s time to grow. And so we ended up bringing in another partner to the business and our chief development officer Bob McQuillan, like a legend in the franchise world.
He was a hand stone, helped grow hand stone from 20 units to and just an awesome guy, great partner. He came in and we paired exciting concept obviously very unique and differentiated that had strong performance and we paired it with a legend in the franchise sales space, particularly in the consultant world. And that combination has led us to where we’re today where by the end of this month we’ll have over 20 locations open. We have I think about 30 additional leases signed. And our goal is to have by the end of this year close to hundred open either a hundred open or a hundred open plus lease signed. So we’re trying to do something. And then on top of that we’ve got about 80 total development. So we didn’t grow much for a couple years. We focused on the foundation, focused on making sure we had good unit economics, the right team in place, a scalable business and systems. And this would be my advice, FraNChiS listening, don’t try to sell through it all. Make sure you’ve got, you can catch up really fast when you get it and just make sure you’ve got the right foundation before you go. And that’s what we, it’s off and we’re now trying grow internally our team and scale as fast as we can. Cause it’s, it’s a big difference going from opening five, six units a year to 70 or 80. But I think we’re making the right decisions and growing the team accordingly to be able to deliver.
Wolf of Franchises:
That’s fascinating. I mean I wish more franchise did it, but just sometimes emerging franchises, the name of the game seems to be growth and if you don’t have a solid concept that as the foundation then you know, end up hurting yourself in the long run. Which sounds like you realized okay, this actually isn’t ready for growth. We got to tighten things up, get the union economics. And it sounds like you also built infrastructure at a tech level, people operating the business and obviously now you’re reaping the rewards for it, which is awesome to hear
Gregory Breitbart:
A little of the tortoise in the, I guess but we turned into at the end and caught back up. But yeah, it’s exactly what happened. Franchising, franchising is mechanism and that’s one of the best parts about franchising is that oftentimes you don’t need outside financing. Cause if you’re growing at the right pace you can finance the business, the right investments through your franchise sales and development. But what often happens is that because of that there isn’t another financing source and so you’re forced to just sell franchises. And for us, I think the advantage we had and just I think was a good decision was we had capital outside of the business that we could invest. So we can sell franchises to people that we shouldn’t and sell something at a time. We’re still figuring things out too much or we just put own money in the case of somebody else, maybe outside money.
But for us it was all internal. And that’s what we did. We built, we rebranded, did all this stuff and all that work was on our dime. We had very little royalty at the time, almost no franchise sales but it was worth it to do it that way. And allowed us to make a very conscious decision when is the time for growth? And I’ll say once we made that decision we didn’t slow it down and we haven’t slowed it down within reason. And so now we’re in the mode we’re going to scale and as fast as we do think bit speed market, certainly with what we’re doing know we do competitors and so that’s important. But I have a good plan for plan. Plan ended up being kind of serendipity too, which is when the pandemic happened, we had an office in Florida headquarters, we all went home as everyone did for me home Connecticut actually move back Connecticut and we all worked remote and back to where we could go back to the office and we just started thinking about it and it was our best year ever.
We’re crushing it, we’re super efficient. And we just said to ourselves, does this even make sense? What makes us, that makes sense, we best we’re doing great. So the idea training, so actually remote then that was happening. The business started scaling from a development standpoint and we just had to scale the team. And so what ended up happening is we started hiring, not in place but we hire around and what we needed of fast, we’re scaling, we need extreme expertise, we need the best of the best to do what we’re doing and there’s no way that I could have or that we could have hired the team we have today, which I would consider a dream team in franchising. And the experience is really just incredible. If they all either needed to already live in one city or all needed to be relocated to one city. And that is true 10 years ago when people actually moved for jobs, it’s like a hundred times more true now. Cause no one wants to move for a job. No one, everyone is realizing don’t have to do that. So it really has allowed to do what’re doing scale.
My head of real estate lives in Santa Barbara, my head of marketing lives in San Francisco, I live in Connecticut. My head of operation lives in Pittsburgh and he left his last company because they wanted him to move and he didn’t want to move. And so it’s just been, for us, it’s made it all possible to find this dream team to help us scale but also been a great opportunity for our key employees and to be able to work where they want to work
Wolf of Franchises:
For sure. I mean I think remote work’s definitely changed the game and the status quo that companies have to abide by as far as the requirements for employees and it’s definitely a positive if you embrace it, it’s a positive for both sides. So and you’re clearly reaping the benefits there. I’m curious though, so for Body 20, just from, if I’m a customer, I have a gym that I go to, I try to four or five times a week at least. I like to do Orange theory, which I got into right before I left New York. But basically is Body 20, is it more for someone? Is it for someone trying to lose weight? Is it someone trying to build cardiovascular endurance? Is it strength building? Where do you see it fitting in for someone who’s either in shape or trying to get into shape?
Gregory Breitbart:
So we’re pretty unique when it comes to that. So when we did our rebranding, rebranding is easier than branding cause you actually know about yourself. And so we went to Pearl Fisher and we knew so much about who we were already. We knew who our members were and they’re going to change, there’s some selection bias there cause of the old brand. But generally we knew who was coming in the door and who was liking it. And what was so unique when we looked at that, which my background is marketing and branding and so this is such a no-no. But what was so unique is that our customers were like everybody, they range from a five year old athlete that was using this for performance gains to a 80 year old that needs to build strength but can’t lift weights and can’t do traditional fitness but needs to build muscle mass.
And so we kind of realized we can try to get really single focused on one persona, but really let’s just do branding no number and let’s actually build this brand for everybody tagline for everybody unleashed. And it really, I don’t say that lightly. It really is an incredible workout for anybody. It’s an equalizing workout. And how that works essentially is when you go to Orange Theory, you know gym, you’re, let’s say you’re in good shape but you’re not a professional athlete. You’re going to go and you’re going to lift weights. And when you lift those weights or you go down and do a squat, your body is recruiting your muscle, your brain is essentially recruiting the muscles and its able to recruit for you person maybe muscle as an person want to call you average. But let’s just say, yeah,
Wolf of Franchises:
Come on man, I, I’m the wolf baby.
Gregory Breitbart:
But then let’s say a professional running back goes in and goes to do a squat. He can probably, he’s so well he’s so welled one, his muscles are bigger. But two, he’s so welled, he has the ability to recruit a higher percentage of his muscle fiber. He can actually use more of it and he can trigger it faster. And so when he goes down, he’s recruiting percent of his muscle fiber, he’s actually doing more work. He can lift more cause it’s bigger cause using more of it. And he’s actually burnings, he’s using more of his muscle. And it’s the same reason the running back would not a good marathon runner because he’s just burning too many calories with how big his muscles are and how much of it he’s recruiting. And so that’s when you do kind of a traditional workout, what happens about 20 and our workout is 20 minutes, it’s one to two times a week, that’s it.
Mostly strength training but we do cardio as well. And that same squat, you go down to do a squat and stimulation turns on, it’s on 10 seconds on 10 seconds off. But while it’s on, you’re going down and doing let’s say one or two squats. It’s recruiting no matter whether it’s you the professional running back or an 85 year old person, it’s recruiting 90, 95% of that muscle. Because it doesn’t matter how well conditioned your brain is, we’re going directly to the muscle sending the same kind of mirroring the same signals that your brain would send and it’s recruiting it directly. So the same way for me, when I had the injury I had where I couldn’t get my glu fire, that’s essentially my brain kind of lost that connection. Acupuncture, needle glut, care, care, the ability of my brain to recruit it, it can recruit it fully on its own.
And so that’s essentially what we do. And so over those 20 minutes you’ve minutes under muscles being by essentially. So you’re going down, doing a squat, coming up, going down, doing a squat all while it’s contracted the entire time, which creates resistance. So let’s say you’re doing a bicep curl while this is going on, it actually is going to feel like you have weights in your hands. And the reason it’s equalizing the workout is that if you are jacked and you’ve got huge biceps and then next to you is a 70 year old woman or man that does not have a lot of muscle fiber, maybe a little overweight too, that person next to you, you might be on the exact same settings doing the exact same workout, the exact everything. And both exhausted by the end of it both struggling. Cause it’s essentially using your own muscle for resistance.
So the bigger your muscles are and actually the less body fat covering them, the more you’re going to struggle. And so we can take a professional athlete put on the same settings as his grandmother do the exact same workout and he’s going to be sweating, he’s going to be sore the next day. And so is his grandmother grandfather next to him. And so it’s this incredible workout. It’s used for years. Industry started in Europe, Germany, all fitness facilities are electric muscle stimulation studios. It’s like Pilates there. So it’s really just come to United States in the last few years. Cause the device FDA clearance, it’s incredible customers, they love it. We measure across alls individually, they’re incredible stories and fitness stories. The most common one is we build lean muscle mass and that is the one that is almost, I don’t want to over here, but that’s the one we’re going to see the most we do.
Every time you get on device, which is amped tool, thats body composition tracking all of this, which is important. So you’re seeing the results that you’re getting. That’s the thing we’re going to see the most of, which is you’re going to start building your lean muscle mass, which is going to help your body composition. So that the fitness story is just really exciting. But the thing that excites me the most and ifi fitness stories too, cause the technology we use originally is from physical therapy and we don’t train injured people, we don’t fix injuries. So I have to say that, but there’s some therapeutic benefits of electric stimulation on the body muscles. For my personal issues, it was very helpful. And those for me as a CEO or for our franchisees as business owners that see their customers every day or most of ’em are semi absentee, but they know their customers, it’s such a rewarding business cause we’ve got all those great fitness stories gaining muscle toning, looking good, losing weight. But we also have these stories outside of the fitness world that more therapeutic in nature that really just sometimes brings tear to our eye.
Wolf of Franchises:
It’s fascinating man. I played soccer through college and maybe diehard listeners would’ve heard that a few times, but division one athlete through college, so definitely was big into fitness and had a few injuries that required, we just called it stem, but I guess it’s probably the same foundational technology. But that was more just laying on whatever, a table of sorts and just having this, the patches applied to our hamstring and you just feel it twitch basically. And it was kind of uncomfortable when they turned it up cause it felt like, it didn’t feel like a burn. I don’t even know how to describe. It was just like tingly feeling getting shot into your muscles and the efficiency of it is sounds like it could be a game changer. Cause I mean, let’s face facts. The average person isn’t looking to do a super long tough workout. So if this can be effective in 20 minutes, that sets a huge game changer.
Gregory Breitbart:
Yeah, it is. And it’s actually interesting cause that’s a double edge store in the fitness space. Some of our consumers love Body 20, I mean many of them, it’s actually the number reason we did survey is the number you’re working out 20 minutes to 30 in 30 minutes. So just extremely efficient. And you’re getting results in that extremely short period of time, which you could do 20 minutes of any other type of exercise. And if we held ourselves to that standard, we are the best and most efficient, get a good workout. But we don’t hold ourselves to standard comparing to minutes of something else. We compare ourselves to doing something else for longer. We compare extremely favorably to that. There’s a study in 20 minutes of EMS compared sessions with comparable and results of the ways that 40 20, I’ve mentioned earlier in the podcast, you working out for 20 minutes, your muscles are under tension or stimulation for 10 of those minutes. But in that 10 minutes it’s extremely, you’re deserting yourself significantly. And so it’s just very different than traditional thinness.
Wolf of Franchises:
And it sounds like you’re off to a killer start. Mean we did have, I guess it’ll air by the time this episode airs a company called Omfi, O H M, which just a little different than yours and it’s way newer. You guys are further along. But yeah, it’s fascinating. Some of the best franchises just historically were kind of trends or innovations that started outside of America. And then obviously America’s a fantastic market, so it can really take off. Excited to see what you guys do. Honestly saw you have one in Austin, I think I want to go and just try this out for myself as a fitness enthusiast that the best way to just see what it’s like is to do it. So I’m going to do that.
Gregory Breitbart:
I’d make you feel like I’m giving you a deal here, but saying you’re going to try it completely free. But that’s actually our offer for everyone in all of our studios across the country is the first session is completely free. And that’s the nature of you’re pioneering something, doing something completely new is we don’t want to, you’ll share the number, but really impressive conversion ratio from people that try that free demo and people that buy it. It actually blew my mind when I came in how high it was because it’s really compelling going to, at the end of it, then the next days you’ll definitely feel it’s biased, but behind it most effective workout, you know, can possibly do.
Wolf of Franchises:
It’s fascinating. Well, alright, if anyone follows me on Twitter, I will do this workout. We’ll see how gassed I am. I’m sure it’ll be pretty rough.
Gregory Breitbart:
I think we need a YouTube of it. Yeah,
Wolf of Franchises:
<laugh>. Okay, we can do that. We’ll see what the content can put together. All right, well look La last question here to wrap things up. Have you thought about mean fitness Franchises can be massive, right? I mean, planet Fitness obviously has been around for a while and it’s a different value prop. It’s a big box gym. But even F 45 and Orange Theory Boutique Fitness companies, or Orange Theory’s private, but valued over a billion dollars. F 45 already went public. And they have not, the public markets haven’t been kind to them from evaluation standpoint.
Gregory Breitbart:
They’ve been up and down.
Wolf of Franchises:
But regardless, I mean the point is here is most people think the only public franchises are the big fast food brands like McDonald’s and Wendy’s and all those guys. But Domino’s too. Yeah. What’s their goal here? I mean, you’ve already had a business acquired. Are you kind of settling in for the long term here and seeing what happens? Or do you got Exponential Fitness, who’s big and acquiring brands? So yeah, what’s the vision?
Gregory Breitbart:
So it’s nice and franchising to be a little more open and honest about this. Our franchisees, the end of the day, we’re here to make money and that’s what they’re here to do. And so we get to talk to them about that. And obviously we’re all here for that purpose or we happen to do it in a way that changes people’s lives and from a health standpoint. And then Withing franchisees from a financial standpoint. But for us, the main focus I have as ceo, you know, I’ll say being a CEO of a franchise brand is a’s pretty heavy job because my investors are not, it’s not some hedge fund or VC firm and it’s individual people. We have some really successful franchisees, very wealthy franchisees that are more successful than us. But it’s a lot of people that are investing and trusting us. And so I take that really seriously.
So first and foremost, and this is just beautiful alignment here. Cause what is important to them is the way we drive the most value. But what I think about every day, and then the rest will take care of itself, is we need to provide an investment for our franchisees. And so it’s cost open. We want to have our franchisees is we want to be the best return on that investment in the fitness franchise space and we think we can do it. And that’s what I think about every day. And what’s, how that connects to your question, beautiful alignment here is that drives most value franchising brand. And there’s a reason that Orange is so valuable. We have a lot, I think three team members from Hand Stone, which is a really great brand, 600 locations they sold recently for close to billion. Whereas then you have you some other multiunit franchise brands that have thousands and thousands of units that don’t have that valuation.
And the difference is the more successful your franchisees are, the better the unit economics, the more valuable the brand. So that’s what we focus on as far as exit, it’s impossible to know for us, but we’re not even close to done. We think in point A to point B here. So we’ve got a long-term vision, of course, for what this can be, and it can expand a lot beyond what we’re even doing today. But our Shortterm vision is getting hundred units open, which we think we can do early next year. Also that return on investment for our franchisees, which we can to industry leading within this year.
Wolf of Franchises:
Definitely. I mean, well, I think your head’s in the right spot, and that’s the Beatles thing about the franchise model is that the incentives really are aligned. If the franchisees are doing well, then that means the franchisor is doing well. And yeah, so I’m pumped to see what you guys do. And it’s also just exciting to see a boutique fitness, which is a bit of a crowded area in franchising, to see one with a bit of a more differentiated value prop and a service that maybe Orange Theory started kind of the hit trend, at least as I remember it. And obviously now there’s a lot more brands out there kind of offering similar workouts, but this is totally different. So yeah, we’ll be fun to watch you guys grow and yeah, man, look, this has been a fun conversation. Where can folks who want to follow or discu learn more about Body 20 and you? Any good places online that you’d want to point them to?
Gregory Breitbart:
Sure. Www body twenty.com. That’s Body 20 and add Body 20, Facebook, Instagram. I think this is the best way.
Wolf of Franchises:
Okay, cool. Yeah, folks, we’ll plug it in, show notes, so where you can just find it yourself. But yeah, Greg, thanks again. This was fun to run through.
Gregory Breitbart:
Great, thanks. Happy to be here.
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.