MEET A ZEE

Gavin McConnon: F45

This conversation with Gavin was an especially fun one, as F45 is one of the fastest growing franchises ever. They were founded in 2011, started franchising in 2013, and today they’re a public company on the NYSE with a market cap over $1 Billion!

Not only was it awesome to speak with someone who got to be in the F45 system during periods of rapid growth, he also was the first franchise owner to bring the brand to his home country of Ireland.

Here’s what I learned:

1. You Don’t Need To Be A Unicorn

Gavin has had tons of entrepreneurial ventures throughout his career. In the 90’s he ran a successful business selling ringtones for cell phone users. Later on he began a mail-order DVD business that competed directly with Netflix in Ireland and England.

Gavin saw the writing on the wall that it’d be an incredibly difficult journey to beat out Netflix in online streaming. While the reward for potentially winning could’ve meant a massive pay day, he ultimately opted for sustainable forms of income via a franchise.

He may not ever be a billionaire, but ten F45’s will go a long way!

2. Nailing The Pre-Launch

Since F45 was a new concept to Ireland, Gavin wanted to do the best job he could to educate the population in Dublin on what he was bringing to them.

This resulted in an amazing combination of local and digital marketing before the launch of his first location.

He ran ads via facebook to build up a large email list, and also had class trainers walk around to local lunch spots to hand out flyers and build awareness.

The boots on the ground marketing gave F45 a local feel of sorts, while the digital marketing has been a gift that keeps on giving: Gavin is continuously building his email list, and uses it to share stories of his customers who have made amazing physical improvements through F45 training sessions. 

Remember, when it comes to content marketing, the goal isn’t to plug your service or special promos with every email or instagram. It’s to create good content that keeps your brand top of mind.

Gavin is doing this well with his inspirational customer success stories!

3. Outsourcing As You Scale

The biggest question multi-unit owners face is how to build your team as you grow locations. From what I’ve learned, it varies by owner and the brand they are building.

In Gavin’s case, the first location was the hardest as everything was new for him – hiring, construction, etc. However he says in our conversation that it gets easier and easier as you build 2, 3, and beyond.

The challenge is scaling the team to oversee the gyms, so that Gavin can continue to focus on the organization as a whole, and building locations 7-10.

What he’s been able to do is make 2 strategic decisions to free up his time:

1. Hire an operations manager to look over 3 locations
2. Outsource the digital marketing to an agency

Both of these have freed up a ton of time for Gavin – as he now only has to look over 3 locations while his operations manager handles the other 3. In regards to marketing, instead of doing the digital marketing for six entire locations, the agency now does it all for him!

These are the decisions you have to make as you build your empire, but the good news is that when you have multiple locations, you typically have the cash flow to be able to do this without a problem.

If you want to listen to the conversation in full, click here!

FRANCHISE OF THE DAY

Koala Insulation

Fast Facts

Background

• Founded in 2018, franchising since 2020
• Based in Florida; 213 territories 
• An insulation service franchise for home and business owners

Fees + Investment

• Royalty: 6.5% of gross sales
• Brand Fund: 1% of gross sales
• Franchise Fee: $49,500
• Initial investment: $127,327 – $165,110

Financial Performance

• The below information is based on 2 franchisees performance for the full year 2020

The Wolf’s Take

Growth

Koala Insulation has been an absolute rocket ship in the service niche of franchises.

Founded in 2018 and only franchising since 2020, they already have 200+ territories open and operating 

I’ll be eagerly awaiting their financials for 2021, but as of 2020 we see a brand that returned $191,000 from at most a $165,000 investment. This is a fantastic return for any business!

Service Business Benefits

As with any service business, no lease or office space is required, which is a big reason why the initial investment is far lower. As far as Koala specifically, insulation installs are a much simpler service than HVAC, plumbing, roofing, etc. 

You also can provide the service to a variety of customer types:

• Homeowners
• Contractors
• Restoration companies
• Property managers
• Business owners

This is effectively 3 separate sales segments: residential, commercial, and industrial!

Differentiators

The reality for most service businesses is that it’s highly trainable labor. If you’re looking for proprietary tech as a moat, you’re never going to find it in these businesses, including Koala Insulation.

Based on Koala’s website, they focus on their customer service and modern marketing to differentiate from the competition. I’ve seen it first-hand from connections I’ve made on twitter – you can dominate your local market just from answering the phone and having a modern website.

While it may not be true in every market – many service businesses that exist today are run by owners that haven’t kept up with changes in technology .

Some are still using fax machines on a daily basis! 

As I’ve said before, service businesses can be a great launch pad into entrepreneurship due to their low cost and fairly quick ramp up time. If you think a service biz could be for you, I’d check out this brand sooner rather than later!

Resources

• Koala Franchise Website