🍟 6/27/2022 – Fantasy Franchise Portfolio!
Fantasy Franchise: SweatHouz & Clean Eatz
Fantasy Franchise Portfolio will be an ongoing series where I pair two franchises that would be great to own together.
It’s reported that ~50% of franchise owners own either multiple units or multiple brands – so why not come up with some ideas for you legendary operators out there?
Even if the brands aren’t of serious interest to you, it provides a fun way to look at two separate industries, competitive dynamics, and strategy.
Before diving in – let me be clear – there’s no wrong or right strategy when it comes to multi-unit ownership. I’ve seen franchise owners succeed via horizontal integration, vertical integration, and even by buying brands with no synergies whatsoever (but are independently successful).
Heck, one of my favorite follows on twitter is @girdley, who owns a SaaS business, a retail firework shop, a drive-thru coffee chain, and 7 other random businesses.
But for most franchisees, targeting businesses with synergies that create efficiencies over time is the most doable strategy.
So for the first edition of Fantasy Franchise, let’s look at SweatHouz and Clean Eatz.
SweatHouz is the recently founded franchise from the world’s largest OrangeTheory franchisee, Jamie Weeks. It has 8 corporate locations open thus far and only within the last month or so has been franchising.
Note: Stay tuned for a financial breakdown of SweatHouz this Thursday!
SweatHouz is a wellness concept that’s designed to maximize health for anyone, but will likely catch the eye of health + exercise enthusiasts due to its benefits on off-days and post-workouts.
The core services you can take advantage of at SweatHouz are:
- Cold plunges
- Infrared saunas
- Vitamin C showers
There’s a variety of benefits these services provide, including detoxing, muscle recovery, boosted metabolism, clearer skin, improved circulation, etc.
The best part is you can do it all from the comfort of your own private suite!
Clean Eatz is a restaurant franchise I covered back in week 24 of this newsletter. It has 80+ locations open, a $116K-$565k investment range (low for QSR’s), and has been franchising since 2015.
Not only does it offer the upside of a QSR restaurant, they also specialize in offering meal-plan selections and pre-packaged food via their “grab N’ go” program.
Their cafe menu is health-focused with options from salads, wraps, smoothies, and protein focused meals for muscle recovery.
The meal-plan, balances out protein, carbs, and fats, and offers new meals on a weekly basis with the goal of eliminating the guessing, temptation, and lack of being prepared due to a busy lifestyle.
Overall, Clean Eatz is looking to be a healthy option for customers in both the QSR format as well as meal prep + take-home segment.
So Why These 2 Brands?
Said simply..they both go after the same customer base!
Not only does SweatHouz and Clean Eatz both target consumers that take their health seriously, they both positioned for the higher-end of the market i.e. budget-conscious consumers aren’t their core customer.
Let’s be real – we’d all love a membership to a sauna with our own private Vitamin-C shower, followed by going home to a meal that is already prepped for us by Clean Eatz.
But the reality is that’s not in the budget for everyone. Both services are nice-to-haves, not need-to-haves.
However, the wealthy suburbs and upscale urban areas where customers do have the money for these services, you can make a killing in.
SweatHouz optimizes a healthy routine that would pair beautifully as a post-workout to an exercise session, and Clean Eatz can be the meal that maintains your healthy lifestyle and promotes further muscle recovery.
As a multi-unit owner, you can leverage efficiencies across the marketing for both brands.
Since you know Clean Eatz customers would likely be interested in SweatHouz (and vice versa), you can re-market customers to the other brand.
What does this look like in practice? Two quick ideas:
1. In-store promotions
With every Clean Eatz customer order, provide a small piece of marketing collateral that advertises a discount to your first session at SweatHouz.
For SweatHouz customers, provide the same, except advertise a discount to the Clean Eatz meal prep program.
Set a campaign duration, track your results, and decide what to tweak based on the level of success.
This can also be done via email lists that you build with each brand!
2. Direct Mail
Contrary to popular belief, direct mail isn’t dead. There are marketing agencies with hundreds of employees that solely focus on direct-mail campaigns.
For some small business owners, particularly in the home-service sector, direct mail is the lifeblood to their businesses’ awareness.
When you own two brands however, you can promote both with 1 piece of collateral, AND target the same demographic group.
This not only would count as local marketing for each brand, but it should generate lower customer acquisition costs than if you owned 1 brand or 2 brands with zero customer overlap.
Over time, the goal of any business (from a capitalistic perspective) is to maximize the life-time value of each customer, and acquire them at the lowest possible cost.
Owning synergistic brands like SweatHouz and Clean Eatz can help maximize LTV while decreasing CAC.
There are secondary benefits to synergistic multi-brand ownership, such as more opportunities for employee growth and upward mobility. I’ll dive deeper into those in a separate post, but for the time being, hope you enjoyed the first fantasy franchise!
McDonald’s Announces New Franchisee Terms
“Receiving a new franchise term is earned, not given”.
For the first time in decades, McDonald’s is tightening ownership rules with their franchisees. Although a franchise agreement renews only once every 20 years, Mickey D’s exec’s are making it clear that if your stores aren’t performing well, you may not be given a new term.
Krispy Kreme Adds Ice Cream To The Menu
Krispy Kreme is adding milkshakes + ice cream cones & cups to all their stores. The Chief Marketing Office mentioned their goal is “to be the most loved sweet treat brand in the world”. Given the pictures…I think they’re heading in the right direction 🤤
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