00:03 Hey, welcome back to the show. We are so excited today to have Burt with us because honestly, he's got a really fascinating business model and Burt, I'm gonna let you dive in. Who are you and what do you do?

00:16 Thank you, Todd. And thanks for having me. You can call me Bert. My full name is Bartis. I'm originally from South Africa, Cape Town. I'm the CEO and president of Jet Set Franchising. So we're the franchisor of a modern pilates concept called Jet Set Pilates. We've been around now for 15 years this year. And we started recently franchising the business around three years ago. We just hit a massive milestone of 100 units in development in our first three years of franchising. So very excited to be here.

00:24Awesome. Awesome. Wow. Wow.

00:45 We're all about health, fitness and wellness and empowering the entrepreneurial spirit from small business owners looking to get into the Pilates business to executives looking to leave their jobs. So we create a sustainable growth model for them.

00:56Right, right, right. Okay, that's crazy though. You said that within three years you've got almost 100 units going. Woo! And how many of those are franchisee owned and how many of those are corporate owned?

01:04That's right. That's right. 95 is franchise owned and then we've only got five corporate owned, which we just turned one into a training center to kind of facilitate centralized training for all of the instructors. So vast majority owned by franchise partners.

01:19Wow. That is awesome. Okay, that's not easy at all. So, so what?

01:30 Yeah, no, franchiseing is not for the faint-hearted, that's for sure.

01:34 No, no, and I'm curious with this model, you know being that it's not like I Mentioned offline you and I with you and I that you know in the food businesses It's pretty tricky to scale that fast because there's a lot of Moving parts and pieces and fresh stuff every day and things like that What's the typical franchisee look like? Are these guys? Are they owning multiple locations? Are they doing just a onesie twosie? Like what is the What is the ideal avatar you're looking for in a franchisee?

02:08 it's a bit of both, right? We have a single unit operator who's looking to be a first-time business owner and then we've got a sophisticated investor or business owner looking to add to their portfolio. On average today, our franchise partners earn 2.2 territories or studios per partner. So I know you're like, how do you own a fraction of a territory? It's just on average. So you've got three unit owners, we've got 16 unit owners and then we've got single unit owners. So

02:14 OK.

02:27 cool.

02:37 Quite a nice mix. I think the business lends itself to that. It's a very simple business. You've got your four-wall operation. You don't have those consumable concerns that you have in the food business that you mentioned. But you have the challenges of being in the people business, right? So really, if you're someone who's passionate about culture, people management, and your fitness, wellness gets you up in the morning and gets you excited about life, this is the type of business to be in.

02:45 Right, right. Right. Right, right. Yeah, yeah.

03:05 Right, now walk me through the business model a little bit because fitness is a huge industry and fitness should be top of mind for every American especially. We have a major obesity crisis going on and yet when I look out in the marketplace at the fitness industry, I see interesting trends happening. I see the giant gold gym model kind of shrinking.

03:20 Thank you.

03:32 I see Floyd Mayweathers and groups like yours popping up and really finding great success. What does that opportunity look like for someone looking at a franchise opportunity and saying, you know what, I like the idea of not a massive overhead buy where I've got to buy so much equipment that I'm leveraging my whole life versus what you're doing. Like, what does it look like for them to walk into something like this?

03:34 Easy. Easy.

03:58 That's a fantastic question, Todd. And I think it's a twofold answer on the investment side of it. Obviously, you've got a much smaller capital expenditure as a barrier to entry to starting a boutique fitness business. So that's really appealing to first time business owners. And because there's a lot of tangibility to your assets, there's actually a physical location, a lease. A lot of our franchise partners are leveraging the SBA loans. And so the SBA would finance 80 to 90 % of the project, assuming you meet that minimum requirement.

04:17 Right.

04:25 criteria and obviously you've got a sustainable, successful model and franchise offering. And then the second part to that is like, think people are looking for more personalized fitness, right? I think in the all day, put your shoes on, go run around the block and you'll be okay. People realize that's not the most effective way of training and the community aspect of fitness has become more and more important. And that's why I think small group fitness classes have become the future.

04:30 Right. Right.

04:36 Interesting04:43 Right, right.

04:51 You obviously have a small fraction of the industry that's still taking personal training seriously. Obviously, that's a very exclusive niche market because obviously not everyone can afford $150 per class or with a personal instructor. But a of people can afford somewhere between $15 and $25 per class in a small personal fitness setting like a Jet Set Pilates class.

05:04 Right. Right.

05:14 And is your model based off the onesie twosie classes? Do you do monthly recurring, like come do this many sessions a month or what does that look like?

05:24 A bit of both. think we've got three buckets of clients, our members who are obviously committed. They can come once a week, twice a week, unlimited times per week. The unlimited is the most popular membership option because obviously your value per class is the best. And then you also have your package clients who is a little bit irregular. They might be complementing Jet Sipilates with the other fitness regimes. They might just be in town for a short while so they could buy a three pack, a 10 pack, a 20 pack.

05:26 Cool.

05:32 Yeah. Right. I would guess.

05:52 depending on how many classes they want to purchase. And then we'll send a huge sector of our clients who's coming from ClassPass or other third party booking platforms where they can buy credits and they can use those credits across multiple fitness, beauty, wellness concepts. And that optionality is becoming more and more popular, right? It's like, I'm committing to X-ClassPass. There's a few others. WellHub is another platform. But think of it like a marketplace where you could go and buy credits through that

06:07 Interesting.

06:11 And what is that called?

06:19 Yeah.

06:22 platform and then use those credits as you wish. You can go get your nails done, you can go for a massage, can go stretch, you can come for a Pilates class. so you're not really locked into just one concept or one membership. Instead, you're acquiring a certain amount of credits and depending on how popular the concept is, that determines the amount of credits you will use for that specific offering. So that's a huge part of our business comes from those platforms. 

06:24 Right. Right.That's cool.

06:44 And so your, is it really? So your franchise is very well aligned with those types of models so that you, and is it just, you know, when they scan their past with you, you get paid out by them in some way, some fashion like that? Awesome.

06:57 Exactly right. Yeah, our system's beautifully integrated to those third party platforms. So in some of books who say class pass, effectively that comes right into our booking platform. So we know where they're coming from. They're immediately in our system. We can welcome them as a new client or repeat class pass client. And ultimately we get paid out to commission on those clients at the end of the month.

07:15 Right, right, right.

07:20 This sounds amazing because I have, I talk to people quite a bit about entrepreneurship, right? And a lot of people have this magical allure to the quote unquote entrepreneurial experience. But I've learned that through my life, I see people who really crave that, really aren't ready for a full entrepreneurial experience where they're starting from scratch, they're doing everything from nothing and they got to create everything from nothing. What you're providing is the perfect go-between of like, hey, you wanna be on your own, you kinda wanna, if you push hard, you should be rewarded high, all that kinda stuff. That part is really fun and exciting. But what are you typically seeing? Are most of your franchisees people who are, this is their first time experience in trying to start their own business, or is it more, hey, you know what?

08:14 I'm just kind of worn out doing a very complex business and this is something that's fun for me and so I'm kind of settling into this. What are you seeing?

08:23 Todd, the typical appeal of a franchise like Jet Set Pilates is a proven roadmap, a playbook, the support training that you get, and obviously the predictability that comes with that. think if you're someone that's risk adverse, you do have a tolerance to work for yourself. You believe in your own capabilities. That's the right fit for us. So obviously it's a balance between having the risk appetite to start something. Listen, No franchisees or should ever tell you that they can eliminate all the risk associated to business ownership. That's not true, right? I think

08:52 Right. Walk away. Run away as fast as you can when you hear that, right?

8:58 Exactly, no, that's exactly right. Those are the wrong signals and certainly the right questions to ask a franchisee always. What's my probability of success? And someone tells you that none, that's the starting point and we got to work our way up to earn higher probability by making the right decisions, ensuring that we follow the roadmap, we consult with each other when there's uncertainty. So yeah, I think it's just about having that coach, the roadmap and the support and then aligned interests ultimately.

09:08 Right. Love it.

09:28 I it's really rare. think what empowers the franchise model is exactly that. You have micro owners of your brand in their communities who care and is committed and have skin in the game. And then you have the franchise all that's invested significantly in developing the brand, the system, the training programs. And so that line interest means that you can focus on what you need to do to succeed at a unit level while the franchise all can focus on developing the system, the brand to support you at scale.

09:28 I love it.

09:35 Yeah. Yeah.

09:44 Yeah, yeah.Right.

09:54 Right, right, I love it. All right, so let's take a step back. We now understand the business model. And for those of you listening, if you are the type of person that's already got a business going and you're listening for the next section of this interview, which is what did you do to get this thing to pop and what did you do to get this thing to go, we're gonna get into that. But for those that are struggling to find out like, what is my thing? What do I want to do?I highly suggest you look at this opportunity because, and I'm not, this isn't a marketing piece for you, but it is, because I think this is just a beautiful way to introduce yourself to this entrepreneurial journey. And it's a safer way than coming up with everything on your own. And now you have someone to guide you and direct you and kind of help you through the SBA process, help you through all those little things that otherwise get frustrating and stressful and it doesn't always work out. Is that fair?

10:52 That's absolutely fair, Todd. And I think it's For certain people, that's the right, if you're like the independent on execution, so you understand you still need to operate, succeed and take extreme ownership of the business. You're also dependent on the system, proven roadmap, that's the right fit for you. The easiest way to know this is not the right fit for you is if you're independent, independent. So you wanna execute, you understand that the business relies on you to drive it, but you also don't like rules and you wanna create something for yourself beyond the guard rails of a franchise system.

11:00 Right.

11:05 Right.

11:15 Yeah.Yeah.

11:24 then maybe franchising isn't for you. And then you also get, I guess, the third personality persona is kind of a dependent-dependent who ultimately they need the guardrails, they need the proven plan, the system, but also need someone to do the work for them. And they end up advocating their success to the franchisees, or their team. And that's also not a successful personality trait for a good franchisee. But certainly I think the reason that people are interested in the model is, first of all, you've got to identify what's important to you in...

11:25 Right. Smart, smart.

11:44 Yep. I love it.

11:53 your own life. for me, I think there's the hedgehog concept. I'm not sure if you're familiar with, I think it's Jim Collins who writes a book from good to great. And he also has another one, Built to Last, and speaks so beautifully about this concept of finding something that you're really good at, combining that with something you're really passionate about. But then most importantly, finding a sustainable economic engine that can drive all those things in a successful way.

12:04 Yeah, Yep.

12:22 And really, if you're missing any one of those three pieces, it's going to be difficult to persevere as a business owner because again, if you're not passionate about it, you're going to run out of steam very quickly. If you're not good at it, you're never going to really be at a competitive advantage. And of course, if it's not a sustainable economic engine, then you're not in the business of charity either, right? So you've got to find something that meets all three of those little intersections.

12:22 Right  Love it. Love it.

12:41 Yeah  Totally, totally. Thank you, you describe it very well. I can see why you went from zero to 103 years. This is a really great thing. So your ability to describe this is really, really fascinating to me because when I talk to people who have done the business on their own or in maybe just a couple of their own locations, I'm guessing is how you did it, for 11, 12 years, you were building and growing your model and just probably, and I'm gonna let you describe it, but. You you probably got into this because you like to work out, you like to be fit, you're in Miami, what a beautiful place to open a gym, right? And after 11 years or 10 years, what made you think, okay, I think I'm to franchise this thing? Like, what was that trigger?

13:36 But I wish I could take the credit for starting this brand. The founder started it 15 years ago and she's got such a beautiful story in how she sacrificed so much to start a reformer ployist concept before anyone else did it. And there was a big need in the Miami market. For me, I came along a little bit later in helping her develop the franchise system, which is the growth engine of this specific business. But the concept itself has been in existence for a long time. So for me,

13:49 Awesome. Yeah.

13:57 Cool.

14:04 I can talk from my own experience. What I saw in the brand was, I think there are five important things for a brand to be franchisable, if you want to put it like that. I'm not even sure if that's a word, but if it was, then you

14:12 Yeah. Yeah. No, it's totally. It's a very active verb. Franchisable.

4:18 It is. And so I think that you need to establish brand that has shown to last over a sustained period of time. So brand, when I found the brand and the founder, they were around for 12 years at the time already. And the second thing you want is success over multiple units in different markets. So you can know the model is proven not just in a small community, but perhaps across more of diverse community, multiple demographics. And then

14:43 Right. Right.

14:45 I think one of the most important aspects is strong unit economics. So ensuring that the financial health of those existing businesses supports the fact that, first of all, a franchisee isn't the founder. So they're gonna wanna start from a place of, don't know anything versus, I've failed my way forward as a founder, paid the school fees, got the bloody nose, and now I know how to do it right. So you've gotta be able to give that recipe from day one.

14:49 Okay.

14:57 Yeah.

15:04 Right.

15:09 Right. Right.

15:12 and ensure that there's enough margin in the business to take a royalty. And I think most importantly beyond that, think is making sure that you have some proprietary application or technology, something that gives you a sustainable competitive advantage. Ultimately, that's why someone is licensing the franchising the business from you is not just for the support, the training, but the unique concept. And hopefully there's something within your unique application that is protectable or proprietary.

15:32 Yeah, totally.

15:42 So I think for us, it's always been the modern approach to traditional Pilates and our reformer. So the equipment combined with the application is a really unique element that I resonated with, combined with how healthy the financial economics of the business, that's what attracted me. And then meeting the founder, the founder expressed an interest to develop a franchise business on top of the business. And that's what excited me about

15:59 Love it.

16:05 Gotcha.I love it, I love it. Well, it sounds like an amazing opportunity. Now, as you look at the growth you've experienced in three years, and if you were to pinpoint a couple of things that you did to go from zero to 100 that fast, what would it be? mean, is it just operational excellence in terms of systems? I mean, what did you do to really nail into this?

16:32 Todd, I think for me, it's just stumbling across the right people at the right time. That's as simple as it is, I think. And through that, you develop better strategy. And so I think as a young entrepreneur myself, I've had many businesses that have, some have succeeded, some have failed. And one thing I take out of it is that effort alone is not good enough. You've got to have effort and strategy to have success. And so in exposing yourself to the right coaches, mentors,

16:37Awesome. Yeah.

16:49 Right, right.

6:54 Yeah. Yeah.

17:01 right partners. think, by the way, your partners are probably the most valuable assets you can have in your business. They could be equity partner, they could be your life partner, they can be your franchise partner in our ecosystem. But I've learned so much from franchisees. And so through that, I've developed my strategy, surround myself with smarter people. And then I think also reading the right books that's relevant to your business is under well, I don't know if it's underrated, but

17:12 Right. Right.

17:31 Maybe people don't want to admit that those things have been solved already and it's your job to find the answers to them instead of developing the answer yourself. So that's been incredibly valuable to me in my journey.

17:35 Yeah. Well, I really appreciate that because the never ending theme on this show is generally, it's people, processes and tools, and you just kind of nailed all three in your response there. And when I talk to people about their growth strategy, to your point, it's impossible for any one person to know all the parts that they need to have in position to grow their business. It is way more possible and it's way more executable from your perspective to have people aligned with you in your little micro ecosystem of your business who specialize in these different parts that you need to take the business at next level. Is that fair to say?

18:29 I couldn't have said it better.

18:32 Awesome. Well, I'm gonna pretend like you said that then, because I feel like I just recapped what you said. And honestly, you get it. And that's why you're at 100 locations already. How do you get to 1,000? Because going from 100 to 1,000 is a different animal than going from zero to 100. What is your game plan and how do you look at that challenge?

18:36 Yeah.

18:58 I think I'll reference something that's interesting to me, but I think all companies go through different evolutions, which is optimizing their processes. Your first stage of growth is always through creativity. So your growth comes from wearing all the different hats, being willing to do everything. And then the next phase of growth is going to be growth through leadership and ensuring that there's clear direction to the team.

19:11 Right, right.

19:24 inevitably you're going to run into some revolution or crisis again. And so it's just this ongoing theme of constant and evident improvement and hopefully you solving the problems when they need to be solved and you're not kicking the can down the road. So that's how we get there. We get there by acknowledging that we're not perfect. Wake up as advanced beginners and not as experts. Because advanced beginners, there's a lot of room to ask every morning, how can I become better versus think...

19:29 Right.

19:42 Right.

19:51 I like that, advanced beginners, that's perfect.

19:54 Right, we speak about that part of it as a team is, you know, making sure that we leave enough room for humility. And with that, it means there's things we don't even know that we don't know. And only humility can drive you to recognize that. And part of that is like labeling yourself correctly, because I think as a franchisee, the impression is that you know everything, right? And that you've got a button up. And hopefully you do have the important things in your scope.

20:05 Yeah.

20:17 Right. Right.

20:22 But certainly I've yet to meet a perfect franchise team. And so I think it's just all about the approach ultimately to constant and never ending improvement. That's how we get there.

20:28 Right.

20:34 Now, and you personally though, Bert, when you came into this opportunity with the founder, have you operated franchises in the past? mean, is this something that you were able to, skill set you brought to the table?

20:48 It was, that's right Todd. I've been involved now with four different franchise systems, one which I founded myself and I can resonate with the founders vision and challenges because I've been there myself. And so being in her shoes and I think it makes it easier for me to understand how to get it from A to B and hopefully from B to Z.

20:50 Perfect.

20:57 Awesome. Yeah, yeah.

21:07 Yeah. Right, right, right. Well, there's no doubt that for most people, becoming a franchisor is a huge hurdle. Becoming a franchisee is a great place to start. What are some common challenges that you see each of your franchisees kind of walking into when they open the store, when they open a location, or even going from a single owner into a multi-owner situation?

What are some of the common things that you can share with us that you're constantly training on that might help our audience?

21:43 Well, I think building the right financial plan from the day one is critically important. I think that I'll speak broadly about other franchise systems and there are three main reasons I think franchisees fail in franchising in general. And those are the things we're trying to ensure that our franchise partners avoid. The number one reason is being under-capitalized. And so you might say, well, didn't someone exactly know what this will cost them?

21:50 Yeah. Yeah.

21:59 Yeah.

22:07 Interesting.

22:10 Well, the answer is no, there are variables and you've got to identify those broad variables early on. The broadest ones is always going to relate in the brick and mortar business to construction permitting. There's so many unknowns when it comes to securing the right site. And so I think most of franchise partners, when they get into the business, there's an assumption that it's going to cost me X and it's always cost you X plus Y. And so

22:15 Right.

22:21 Yes contract link, all that stuff, right?

22:37 Right.

22:38 It's really understanding that why exists from day one. And question is, how do we manage why carefully? Some of it you can overcome by ensuring you do conceptual budgeting with local GCs before you commit to a lease. Once you commit to a lease, you can't get out of it. so it's about being slow as smooth, smooth as fast, we like to say. And so when it comes to leasing the right premises, you can get very emotional very quickly and make a bad decision without really

22:42 Yeah.

22:51 Yeah. Yep.

23:03 Yeah. Yeah.

23:05 23:19 Totally.

23:28 Right.

23:35 I'll repeat myself for the second one because it's certainly a combination of both.

23:41 That's actually really funny. I believe that to be true, especially those who are trying to be a first time entrepreneur, they're pretty determined they know better than you and that their market is different than your market and that our people behave differently than your people. the reality is that's totally bogus, right? I mean, especially when you're coming from a place where you have literally a hundred locations actively running. It's pretty consistent across the country, right? mean, the same things that work here are gonna similarly work in most places, barring a few minor exceptions.

24:21That's right. I think it's the same human body, right? And we have the privilege of having, I think if you sell food, can vary significantly from one market to the next or from one country to the next. Physical fitness, our arms and legs works similarly. Sure, you've got to adjust and modify the workout, amplify it for the fitness level and the strength of the client, but that you do within a studio, not just across the nation.

24:29 Yes, it can. Right.

24:44 Right, right.

24:45 And then in terms of how we attract clients, there's certainly adaptation necessary in terms of the messaging. I know Todd, you're very, very well seeded in terms of marketing, messaging, and ensuring that you adapt the message for that market and for that geography. And so you're going to be just mindful of that and not assume that the same way people resonate with how we position ourselves in Miami is going to be the same way somewhere in Bismarck.

25:01 Right. Certainly.

25:13 Dallas, yeah, North Dakota, yeah, yeah, yeah, No, very true, very true. Well, this is so fascinating. I mentioned offline, I've never operated a franchise, but I have recently been involved in helping a franchise be able to build and develop some local marketing things, all of which are relevant to most of our audience listening to this show.

25:14 You know, or in Dallas, Texas, right? Yeah.

25:37If there was one thing that you would say is the most common frequent mistake people make in local marketing, because that's primarily the flow of your traffic in a business like this, what would you say that common mistake is?

25:52 That's an excellent question. I think I would put it down to not being willing to do what others aren't willing to do. And what that means to me is I think guerrilla marketing is something pre-COVID that was popular. People went out there, they were doing the trade shows, they were willing to be at the farmers market, they were willing to shake people's hands. And post-COVID, particularly in fitness, think people are relying too heavily just on digital marketing and...

26:11Totally.

26:19 So what's happened is that they've lost touch with the community. They're not building those partnerships with other wellness, fitness, beauty concepts in the community. And that's where we as Jets at Pilates gets, we get a lot of value from those partnerships. We partner with other fitness brands and you might say, well, aren't they a direct competitor? The reality is they're not, unless they literally give you reformer Pilates, people can go to a spinning class and come to Pilates. People can go to yoga and come to Pilates. So there's a lot of cross pollination opportunities. And I think the common mistake is assuming that

26:23 I love it. I love it.

26:37 Yeah.

26:43 I love it.

6:47.having a strong digital, you know, through Google search or through meta, you have a good digital ad strategy. That's just one touch point to many different touch points. So if you get into the community, shake hands, meet people, it's not very rewarding in terms of return on marketing expense because it's hard to measure and attribute leads to that effort. But I think what you're missing is that it makes a significant impact and it creates a much higher conversion on the other touch points that you have.

26:53 Right. Right.

26:59 I love it.

27:05 Sure. Sure.

27:15 Yeah.

27:17 Yeah, sure. Can you be without digital marketing? You can't, but you need to make sure that you are positioning yourself to be more competitive than others by having those other touch points that they're not willing to have themselves.

27:24 in the community.

27:29 I love it. I 100 % agree with you. And if you're running a local business like this where you rely on local walk-in traffic and being a member of a community, I can't emphasize enough these best practices that Bert just described. So important, it is so critical and you can't just pretend like we're okay doing digital only. I love it. Bert, this has been so fun. I love this conversation, I love the business model. We're putting details of how to participate in this

and see the opportunity of what Burt's built and what they're doing with Jet Set Pilates. So check it out in the comments below, really dive in deep and understand for yourself, am I going to start something scratch or do I need to be looking for an opportunity like this for my first go at building and growing a business? So Burt, thank you so much for taking the time to be here.

28:20 Thank you, Fadly Todd.

28:23 Awesome. Bert, how did that feel, man?

28:27 Good. No, I thought it went fabulously, Todd. I hope it met your expectations as well.

28:32 No, it was great. It was such a easy conversation. Like really, really easy. I feel like that, you know, the way you've come into that business and the way you've been able to help the founder do what she needed to do, I love it. I think it's fascinating.

28:47 Thank you, Todd. Appreciate that.