I was speaking to a well-respected executive from the franchise industry today. I really enjoyed our call, and I thought I would share some of the conversation with you - it really shows the process of buying a franchise from the other side of things…..

In business, you can either let or make things happen. Successful people make things happen, and are confident in the decisions and choices that they make (both in business and in life). This conversation became especially relevant because, as the end of the year approaches, many aspiring entrepreneurs will be following their dream of owning a businesses a reality this year. And other will not… they will blame the economy, the holidays, their jobs, family, or a whole host of other factors which will cause them to procrastinate their decision making until next month.

Why is January a better month to make a decision than December? What will change between now and then? If an entrepreneur is at the point where they have collected all the information, it is very unlikely that anything will materially change within the next months. In fact, going through the notes and checklists they have developed along the process should confirm they have all the information you need to make a sound decision.

In business, it is important to identify what it is that holds you back. If it is the fear of the unknown - recognize that this is entirely normal, as with any big decision. There will always be reasons not to buy, not to invest, or not to grow, but if you are serious and have a passion for businesses, it is important to look for reasons to buy as well.

From our seat, many prospective franchisees do not realize that delaying their decision without good reasons sending the wrong message to the franchisors, who are evaluating you as a potential Developer. Franchisors (your partners) are looking for passion for the model and business savvy which includes decisiveness.

As an entrepreneur, you want to be in the position of having options. In other words, you want to be awarded the franchise and have the option of saying No. Delaying in decisions often removes that option for the candidate. As December approaches, elements will be announcing several great new club locations, and new Regional Developers - we are proud that our new partners understand that success comes from within, and possess the drive and determination that come hand-in-hand with success.

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]]> http://chrispalumbo.com/happen/feed/ http://chrispalumbo.com/happen/ http://feeds.feedburner.com/~r/HealthCeo/~3/468031011/ http://chrispalumbo.com/leisure-growth-fund-2/#comments Wed, 26 Nov 2008 05:36:25 +0000 admin http://chrispalumbo.com/?p=371

elements group began a limited sale stock in our parent company last month, allowing outside investors, franchisees, as well as our own members to share in the impressive growth of the international fitness and lifestyle brand. A private stock offering is different from the publicly traded kind, each investor must meet certain financial criterion, and receive a several hundred page prospectus, which details the brands extensive growth strategy over the next 5 years. An integral part of the worldwide expansion of elements involves acquisitions as well as the development of company-owned locations, strategically creating one of the strongest fitness brands to date. We have also created (to my knowledge) the only fitness-oriented investment fund, with our Leisure Growth Fund product.

Over the past 4 years, we have positioned elements as a lifestyle - more than just a fitness club, elements is about a healthy, balanced way of life. The brand offers a complete experience to consumers, including popular fitness centers, diet and weight loss centers (BalanceD), acclaimed online magazine and media channel, All Star Fitness Advisory Board, and supplement /product line. Each quarter these offerings get further developed, and new additional announced, such as our soon to be launch “elements Broadcast Network” and “Channel Fit” launching in all club locations in 2009.

Our position as a lifestyle brand, and leading franchisor allows us to always be monitoring acitivities within the fitness industry, and give us a unique advantage in acquisitions - as we can carefully select only the best most qualified location to acquire and convert to elements clubs.

The stock offering and Leisure Growth Fund allow elements and our partner companies to pursue an aggressive acquisition and “rollup” strategy. One unique advantage we hold in this arena, is the value of the company-owned locations to further strengthen the performance of our franchised locations, using our core “hub and spoke” development approach. The far reaching effects of this model allow the company to be significantly stronger in operations than many others in the space, and allow a diverse scope of opportunities for our investors and partners.

We were very pleased to read today that elements for women was named “Best of Alpharetta.” Our growing presence in Southern markets such as Atlanta has really started to create a buzz. Consumers are frequently seeking the best health club, the newest innovations, or the best franchise to join. With our stylish clubs, convenience locations, and exclusive features such as smartcard workouts and customized coaching, it was really no surprise that our clubs are really gaining popularity… it is however, a very nice surprise to read the growing number of customer feedback, testimonials, stories and awards we are beginning to receive.

Elements Diet & Fitness Receives 2008 Best of Alpharetta Award

U.S. Local Business Association’s Award Plaque Honors the Achievement

WASHINGTON D.C., November 19, 2008 — Elements Diet & Fitness has been selected for the 2008 Best of Alpharetta Award in the Health Clubs & Gyms category by the U.S. Local Business Association (USLBA).

The USLBA “Best of Local Business” Award Program recognizes outstanding local businesses throughout the country. Each year, the USLBA identifies companies that they believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and community.

Various sources of information were gathered and analyzed to choose the winners in each category. The 2008 USLBA Award Program focused on quality, not quantity. Winners are determined based on the information gathered both internally by the USLBA and data provided by third parties.

I like reading interviews… for me they provide a great insight into the mind of the subject. While an article is generally the opinion of the writer, an interviewer is almost like having an actual conversation with the person. I was interviewed for a fitness business magazine several months ago (I remember it being extremely warm that day). I thought it might be nice to re-publish the interview here, as these are questions which are asked of me frequently…

Catching up with elements brand director Chris Palumbo

Chris Palumbo, founder of elements fitness | diet | lifestyle has a compelling startup story. From humble beginnings in an NYC office, the brand has since transformed into an international sensation and the leading fitness brand for women. elements currently includes 54 upscale health clubs under development, an online magazine and media channel, a multi-million dollar interactive online diet portal, and an All-Star Fitness Advisory Board.

We caught up with Palumbo in his Miami Beach home to discuss the rapid success of the elements brand, his take on franchising, and general tips for startups.

How did you get started with elements?

The idea for an upscale, national women’s fitness brand began with some consumer research we were doing in the fitness industry, back in 2003. We noticed that there was a void in the important full-service women’s gym category. As a student of branding, I began to assemble a small think tank to discuss what a new, international fitness brand for women might look like, and how we would be different from current offerings. Once we felt that we had a solid concept with much growth potential, I began to recruit industry experts to help engineer the operations and software platform, the back office of the system. Putting the pieces together, complimented by a very slick consumer marketing presentation, and elements was born! We began with one club in Atlanta, and have grown steadily and quickly for the past 4 years.

Did you ever envision the brand growing the way it has?

The simple answer is yes. And no. Every entrepreneur has aspirations and dreams for their idea to thrive and grow, and many entrepreneurs even plan for this. However, the doing part is the toughest, as we know. Truly getting ahead in startup business is always 5 parts hard work, and one part luck.

Why did you decide to launch elements from Miami?

There is a saying that “geography builds credibility” with a brand. Having a Miami Beach base allows us to infuse more culture and credibility to our fitness and lifestyle offerings. We set up our headquarters on the busy and very stylish Lincoln Road, amidst restaurants, shops, and theaters. It is a great, very friendly pedestrian atmosphere which is great for hosting meetings and potential franchisee visits.

Miami is also an important gateway market to Latin America, where we plan heavy expansion. We are one of the few fitness brands to maintain a multi-lingual staff.

How much travel do you log in a year?

I am very lucky to be surrounded by a great team. Many brand directors travel far more than I do. I mostly toggle between Miami and NYC, and have frequent stops in Chicago and LA. Most of the work I do is with higher-level strategy ideas, small group training, and media relations so I am lucky to be able to focus purely on those areas.

Our team logs in thousands of miles, traversing the country (and now the world). We are very hands-on with the brand and locations.

You recently hired Nike/Warner Bros Executive Bruce Fabel to be the CEO of elements. Was it a tough decision to give up the reins of your company?

You know, I am a true believer in team building. My vision was never to sit on top of a mountain and direct the company. My style is much more organic, and I love working directly with all team members and mentoring. Bruce brought a top-level corporate background and structure to the company, including our much-coveted “human resource planning” model. I also believe having a Nike Exec on the team has opened many doors for our lifestyle brand.

The fitness and weight loss marketplace is pretty crowded. How do you make your brand stand out from the others?

elements for women started as the only full-service fitness brand for women. We still remain the only full-service fitness brand, meaning members can get a variety of amenities such as workouts, personal training, diet coaching, classes such as yoga and Pilates, and much more, all in one location.

A brand is distinct when it offers a unique consumer experience. The experience is the cornerstone of any business, and any brand that doesn’t engineer its systems from the consumer upwards is going to have a tough time with sustainability. elements has a full-time team to do consumer modeling and testing, prior to us rolling out a program at the clubs. It definitely translates into a better consumer experience and a distinct fitness brand.

One of the things which really defines elements is your All Star Fitness Advisory Board. How have you been able to attract such a high level of fitness and health celebrities to the company?

I think people know a good thing when they see it. Not only have we attracted great experts, but we have been successful in attracting and hiring real leaders, such as our CEO, a former VP from Nike and Warner Bros, as well as top executives from other fitness brands, such as Gold’s Gym corporate. We have also had great success with attracting experienced, highly-qualified franchisees who add tremendous value to our operations and training with the insight and experience they bring to the system.

We have created a very organic brand, which by its very architecture fosters interaction, creativity, and celebrity. The elements brand itself is becoming a movement.

Can you elaborate on that point?

At some point, you want your brand to become “sticky” with consumers. Our tagline for elements is “Make it Happen!” This can relate to everyone associated with the brand – consumers can make it happen with a new outlook, a new diet, or a new body, franchisees and team members can make it happen with a new career, new opportunities. It’s a strong message of empowerment that works to create a robust community, one that continues to grow each day.

I notice elements gets quite a bit of media attention in almost every fitness trade magazine. How does your team generate so much media placement?

It’s true, we do generate a lot of buzz. I learned the power and importance of the media early on in my career, and it is something we teach to each team member in the brand. We are always looking to create unique experiences, classes, programs – and the press likes that. We have had several of our trainers nationwide showcased in top women’s lifestyle publications such as Woman’s World, and the investor community has taken note also with a recent article in Investor’s Business Daily.

Neutrogena founder Cristin Bardin has recently been invited to join your Board of Directors. Can you tell us more about this?

I can say that our mission is to have the best team in the industry, bar none. A brand is only as great as its people, and this holds true for our corporate team as well as our franchisees and local club staff. We have been very lucky to be positioned as a category-leading brand in the fitness and wellness industries, and have certainly caught the attention of the right people.

What do you think are the most important factors in the relationship between a franchisee and franchisor?

Trust and confidence.

How do you think franchising has changed over the past 20 years?

Overall there is a greater push for credibility. Federal regulations, disclosure laws, and UFDD revisions have really made the industry stronger by weeding out the franchisors who were undermining the industry. I feel the industry now has the freedom to be a little less sales-oriented. I think a good system will sell itself…investors are always watching and researching.

What questions should potential franchise buyers ask when shopping for a franchise?

A good franchisor should be your partner, your coach, and your cheerleader. Track record is important. So is personality and flexibility. Potential franchisees are investing into the benefit of the years of experience, research, and forecasting that the brand should have built. Make sure you “click” with the team. Ask yourself the hard questions early on. Most franchise agreements last 10 years… Are these the people you want to do business with for that period of time? Where will the brand be in 10 years? Does that add value or detract value from what you are building today?

How do you train your franchisees?

We believe training, education, and growth is a continual process for a business owners, not a one-week gig. I would encourage any potential franchisee to really pay close attention to the training and ongoing support provided by your prospective franchisor. Site selection, construction advice, budgeting and building pro-formas are all vital for your early success. elements has one of the most robust training platforms that I know of. We begin with pre-training (concept, must-reads, meeting other owners, getting familiar with the vendors) then schedule owners or operators to come for our ELI (elements leadership institute), a 5-day hands-on workshop training.

We focus our initial training on teaching how to hire and staff correctly, how to run a business by the numbers, and community building/marketing. Once an owner has attended the initial training, they are assigned a personal business coach, and given a full set of 8 training manuals. The coach meets with them weekly (over the phone) to help guide the process of opening along, and to assess what other assistance might be needed. We find that this really helps to keep our projects on time and budget, and provides a complete support option for owners. Of course, there are other training tools, such as our owners online information library, intranet, ordering websites, and Advanced Phone Training conducted bi-weekly.

In both the short- and long-term, higher training and support levels directly translate to higher revenues and profits for a business.

What is your opinion of using Regional Developers to build a brand?

I think, if done properly, Regional Developers can be critical partners that can help support and foster total growth. Unfortunately, this industry has seen more than its fair share of franchisors who were not properly qualifying their developers, rather selling to anyone who came forward with a checkbook. RD development has to be done right. elements has a strict policy that each Regional Developer must first begin as a franchisee and develop a showcase club in their market prior to being named as the RD.

Are you concerned that the ramp up time might be too long to attract experienced developers?

We haven’t seen this to be an issue. elements has a great real estate and design team, and we are able to get units open fairly quickly. If we have a very experienced, qualified group who our Board feels very comfortable with, we might allow them to purchase an option which will hold those rights for a period until their club is open.

How much working capital do you recommend a franchisee to set aside for their new venture?

The general rule of thumb is to take your monthly rent and multiply by 7 to 10, depending on the level of competition in your market. This is a good measure to go by. We make sure each franchisee has funds set aside for working capital.

Does elements offer assistance with financing to its franchisees?

As a franchisor, I believe that you have to. I have seen many cases of people eager to get into business, and making poor financial decisions as a result. It is important to develop the business plan and the project costs with a franchisee, and then to provide them with a way to obtain the capital needed at a reasonable rate. elements has established a relationship with 2 private banks who handle the majority of the business loans for the brand. The banks are very comfortable with our model, and know the team is active with site selection and lease negotiation, which gives lenders a higher comfort level. In many cases we are able to offer a 90% loan to value, including working capital.

What do you see in the future for elements?

Given the momentum we have had, and the infrastructure that has been built, we are well positioned to dominate the women’s lifestyle category. We have built an exclusive platform of multimillion dollar web portals, magazines, and experts, complimented by well-placed, highly developed bricks-and-mortar locations.

Our 6 year growth objective is for 800 units nationally, and another 800 units internationally. Our recent stock offering has opened up several important investment channels, allowing us to own and grow more corporate owned showcase locations, and to fund expansion programs including our new online marketplace and consumer review blogs that compliment the consumer experience in the clubs.

What tips do you have for an aspiring entrepreneur?

Surround yourself with great people, listen to what they have to say – but make your own decisions. Just because something has not been done yet does not mean that it cannot be done.

Pre/Postnatal Fitness Expert Corry Matthews Joins elements for women Advisory Board

MIAMI BEACH, FL – 10/31/08 – elements for women, the upscale Miami Beach based fitness brand, announces an exciting new addition to their All-Star Fitness Advisory Board: pre/postnatal fitness expert, Corry Matthews. She joins the comprehensive lineup of experts from the areas of diet, fitness, lifestyle and beauty that make up the Fitness Board, including syndicated columnists Dr. Fab and the Nutrition Twins, and Nike All-Star Trainer, Lisa Gaylord.

As founder of Corry Matthews Enterprises, Inc. and Strength & Grace Fitness, Corry has coached hundreds of clients in the areas of  pre/postnatal fitness, personal training, corporate wellness program design, government/military fitness programming and group fitness instruction and nutrition.

elements All-Star Fitness Advisory Board was created to complement the brand’s in-club diet and fitness offerings, online magazine and media channel. The lifestyle brand invited Corry to join the board to provide support to consumers and professionals in the highly-popular area of pre/postnatal fitness.

“The best thing about prenatal fitness is that it is fun and rewarding. We know pregnant women are going to gain weight, so the worry about losing weight is not there.  Pregnant women exercise because it feels good, reduces discomfort and, most important for many women, helps them regain their pre-pregnancy body much faster!” Corry states.

Corry is a professional figure athlete and fitness model, and has represented Gold’s Gym International as their Pre/Postnatal Fitness Institute Expert since 2003. She is Executive Director of the non-profit Fit & Healthy Schools, Co-Founder of the non-profit Fitness for Warriors, Health and Wellness Business Council Chair  for the Prince William Regional Chamber of Commerce, and Board of Directors member and Regional Director for Max Muscle Sports Nutrition.

Corry has been featured in media outlets including: NBC News Channel 4, Body Fitness Magazine (UK), Flex, Max Sport and Fitness, and Oxygen. She holds a Master’s Degree in Sports Medicine from the United States Sports Academy and a Bachelor’s Degree in Kinesiology from the University of Colorado, as well as a wide variety of health and fitness certifications from the ACE, AFPA, NESTA, and ENW.

For more information about elements™ or the Fitness Advisory Board, please call our Central Offices at (305) 535-1525 or click here.

Samples of suggested club interior furnishingsAt our owners roundtable event

The development of a truly great brand requires you to get feedback from your consumers and partners. This is something that we at elements for women do frequently, from our prospects, from our members, from our franchise partners, stockholders, and team members.

One good example of this is our philosophy on creative materials. In our effort to prevent internal brand and design documents from getting into the wrong hands, we had taken a high degree of precaution and security measures. Documents were distributed directly from our central offices to each club, and recorded. We have been receiving feedback that this process is cumbersome, and has resulted in fewer branded items being used at some locations. More concerning, was that staff members at locations were not aware of any of the resources, graphics, or tools available to them

As a solution to improve performance, tt was decided in our most recent brand roundtable to place all of these items, 12 Gigabytes in all, onto a central web server with open access for all franchise partners. Although we will still be able to monitor who is using what piece, partners and team members will have full visual access to the depth of materials available to them, and more importantly instant access (depending on their access level).

The result was an immediate increase in staff involvement, and in some locations an immediate increase in branded products and designs. I think this change will most greatly benefit new elements for women clubs (there are over 50 locations announced), as their designers, contractors, and team will be able to quickly survey and access a wide variety of graphical resources to build, market, and sell.

It was a nice surprise this week to see Demi Moore visiting elements Alpharetta  on a recent film shoot in Atlanta.

We were holding an franchisee training event at the opulent 10,000 square foot spa/fitness club. As a full service salon, spa, and fitness club, the facility is able to deliver world-class services to a discerning clientele. In the beauty industry, it’s important to do it right - I frequently encourage fitness club owners to NOT include these amenities in their clubs, because our concern is quality control. In my 10 years as a health club owner and executive, we have taken the philosophy that clubs should only offer an amenity when they will be the best at it in their community. That philosophy has allowed elements for women to enjoy far greater success in the depth and revenue from our additional offerings.

elements and Moda spa come together to create a welcome presentation… from facials to fitness, it’s all there!