https://www.youtube.com/watch?v=\_8olk4-VFP8

1 00:00:00.000 --\> 00:01:00.000 if you are thinking of what to do next
in your business and you're stuck and you've been plateauing at the same
space i was asked to speak to a group of seven-figure entrepreneurs one
of the questions that i was asked was how to get unstuck in this
situation this is a multi-location owner who's trying to scale and
license or franchise their business and the answer that they gave him is
probably not what you would expect and may be the reason that you are
stuck or not advancing at the speed with which you would like all right
and so if you don't know who i am my name is aux mozy i own
acquisition.com it's a portfolio of companies that is about 85 million a
year and i have nothing to sell you and so if you are new to mozy nation
welcome and enjoy the video i'll see you in the other side joy what are
the different exit strategies you recommend i think i cover that with
anu i think that i think for most people if you were trying to exit the
gym i would be looking at customer or employee um and then right now and
this is purpose because right now sba loans are just a joke to get in
like zero interest so i think that those would be and you can put a
percentage of seller financing in there to get a number that you feel
comfortable with and it also doesn't put too much cash

2 00:01:00.000 --\> 00:02:00.000 drag on the business that could be
pretty attractive for both sides yeah so kind of to clarify on the
question i guess that i was wondering like so we've looked at you know
licensing or franchising or we want to just grow as a company and then
just you know eventually sell it or what and so we haven't come up with
a clear strategy we thought we wanted to do like a franchise route until
i started to investigate and realize that it was going to be a huge
headache but i guess kind of what are your thoughts on you know in the
gym industry if you what are the different avenues you can take to exit
the company and i mean either keep it or sell it how many locations do
you have right now yeah uh three working on a fourth are they all
different markets like different states are they concentrating on market
in central california so we're not we haven't even entered into like a
metropolitan area yet um i don't know if you guys are familiar with
fresno

3 00:02:00.000 --\> 00:03:00.000 california that's probably going to be
our first uh city quote unquote that we go into uh we're technically
considered like towns the facilities do you want to stay in the fitness
industry yeah i mean i've been doing it for 14 years now and i can't
really real question that was not it's not loaded that's like kind of
top level question so if you want to stay in the fitness industry how do
i best package the skills that i have right now for making money i have
a very important question yeah how much money do the locations make this
year each location well we profited what uh a little over a hundred
thousand per no that was total between the three uh this but this year
we spent quite a bit of money we had a bunch of stuff we were going
through without getting too into it to uh so we have probably roughly 50
000 of expenses that we have that we won't next year yeah the first
thing i'm thinking is if you've proven out the

4 00:03:00.000 --\> 00:04:00.000 multiple locations and they're like as
profitable as they can be before you scale further that's what i would
be thinking just from where i set just knowing the amount of people that
i know who grow who have multiple locations grow to like you know say
double digit multiple and then they go licensing or franchise the most
important piece and this is where everyone fails is they're just not
profitable enough dude they're not the unit economics suck you know what
i mean um like i'm gonna i'm gonna do the i'm gonna do the dave dunham
throw punch even if you do the add back for the 50k that's the one-time
expense if you're doing 50 000 net per facility no one's interested in
that it might be like the the nasty medicine but it'll actually solve
the pain or solve the problem so if you've got three locations the fact
that you said we're thinking about a fourth i'm like why on god's green
earth are you thinking about a fourth location when we're profiting 30
000 per year per location like that we're like this shouldn't even be
discussion and the fact that we went from one to three with what i would
consider poor profit metrics i wouldn't have advised that either but
we're in that boat and that's fine right we're here we are

5 00:04:00.000 --\> 00:05:00.000 i would bet you dollars to donuts that
if you got rid of two of them and then focus your attention on one you
would make more money than you have from the three just straight up and
i think you need to fix the model like for the mob because like do you
know how many like and i'm going to be mean with this and it's not
directed to you but it's more direct to the industry do you like do you
know how many mom and pop \[ \_\_ \] licensing and franchises there are
of three to five location owners a \[ \_\_ \] zillion of them and you
know how many franchises never get above 30 locations because once they
open they do the unit economics that we're talking about right now most
of them and that's why most of them don't grow or go anywhere the guy
who started it feels good because he tells his family and friends that
he's a franchise and then everyone's like oh wow but they're broke and
they don't know anything and so why would you care about impressing them
and so if the goal is to make the most money it feels like you're in a
rush that's what it feels like to me hearing what you just said and so i
would lean towards and like i

6 00:05:00.000 --\> 00:06:00.000 said this is gonna be like the sour
medicine if you really wanna do this you gotta do it right and you gotta
fix the model and the like the locations that you have have to be
corporate they got to be the best \[ \_\_ \] gyms out there for someone
to even consider buying into this either from a licensing perspective or
from a franchising perspective like these guys should be running on 30
plus margins with and if you're if we're doing you know is it a large
group small group right now we're just doing large groups so we haven't
even introduced the small group in yet uh we're working on you know our
90 day and all that stuff on the front end make sure that you're in a
smaller market which believe it or not means you should be running on
higher margins not lower margins because in the small markets your costs
are low and there's also less competition the disadvantage of small
markets is that leads are great in the beginning and then they suck
that's the that's kind of the trade-off and so um and if anything your
word of mouth and your retention has to be more

7 00:06:00.000 --\> 00:07:00.000 important in a small in a small town
than anything if you like for example if you said we've got the small
town model down it's like i wouldn't go to fresno i'd be looking at what
other small towns are there because we have that model down you go to
fresno you're competing against everyone you know i mean and the guys
you're competing against they're pulling out 250 400 a year because
their locations are rocking so i think that i think it's a it's it's a
big look inwards of like have i wanted to open more locations so that i
could say i own more locations and is my goal status or is my goal money
it's important you don't have to answer now but like it's an important
question if the goal is money then i would look a hard look at the other
two locations and think about is there one of these that i can combine
into one i can take the eft throw it into the other one maybe lose half
of it but i get all of it on the same fixed overhead make more money at
that second location and then look at that you know when my lease ends
at the other one so i can focus my attention on making this gym as
wildly profitable as humanly possible and then until this gym is growing
without me with a team that's incentivized now i have an asset on the

8 00:07:00.000 --\> 00:08:00.000 balance sheet if you have an asset on
your personal net worth balance sheet that can then be leveraged in a
number of different ways you could sell the thing you could license the
thing you could do the franchise because now you have an actual unit
itself that generates profit in in a with a high return on capital which
is what someone's going to look at from a franchise perspective a
licensing perspective or from if you crush it you could own them all the
guy who lives above me um in vegas i think i've told you guys he owns
panda express he owns them all isn't franchise \[ \_\_ \] he did he did
3.8 billion last year 26 margins got 26 he took 935 million home in
income that was his income when we asked what was the secret to success
he said do the same thing for 45 years you get really \[ \_\_ \] good at
making orange chicken i'm being real with you if it took you five years
but then you had the best damn gym model out there and then five years
after that you had 30 locations would that be

9 00:08:00.000 --\> 00:09:00.000 enough because like life's long man and
it feels like rush that's what i feel right now it feels like there's a
rush in a way i think it's just that we have a lot of people who were
members in the past and moved to fresno and we we think it'd be an easy
entry to the market and so we you kind of feel like no this thing is
easy we got three other gyms only making 30 grand a year you're going to
put your attention there and those just go flat and then all of a sudden
you're now at four locations you make no profit and then you're like \[
\_\_ \] when you were had when you had one facility just one way back
how much were you making in profit a month like 40 grand so you make
less money now and you got more locations yeah but we had kind of the at
the time we were able to there was three owners and all three of us
worked there and we had the small group and we had the personal training
and in a way we had created the system that you guys have now but
unintentionally and we just didn't even really realize it and now that
we see it we're like oh \[ \_\_ \] that's why we made so

10 00:09:00.000 --\> 00:10:00.000 much more money so uh we're getting
back to you know our roots and trying to figure out how to implement it
on a larger scale now and so that way you know once we do make it really
profitable again then we have everything ready to roll for the next one
so i would say one just final piece on this is just make it super
profitable because of pride you have in doing a good job not so that you
can do x y and z because then it makes x y and z the goal rather than
the work if you make your intention to build the best \[ \_\_ \] gym out
there not so that you can but just because it is what you take pride in
you'll have what you want but it takes a big shift like i could just you
know and if you'd asked me the franchise question originally like i
could just say like yeah man like it's fine you got three out of fourth
location and then you know talk to this guy and he'll set you up with
franchising but like you wouldn't be successful not with the perspective
that you have right now not with the unit economics if and i know this
is probably not you know as fun on a group call but i'm just being real
with you like if you really want to do this and you really want to do
this

11 00:10:00.000 --\> 00:11:00.000 fix the gym hardcore my feelings don't
get hurt man i appreciate it i said it would love it it's absolutely
desired for you to \[ \_\_ \] crush it action steps take a hard look at
the other two locations i would consider consolidating one if you can
look at when the other leases are up and then go back to making forty
thousand dollars a month and then slowly slowly it might take a year it
might take two years for you to get to that to keep forty thousand
dollars a month without you being there at all once you do that then you
can have the discussion of whatever else you want to do and if that
sounds like man that's going to take time first point i said you're in a
rush appreciate it mutual man thanks for thanks for speaking out
