Episode 32 - Culture of Success
Katie and Scott Michel are the Franchisor of Orange shoe fitness and owner of a few of the locations personally. With its colorful, and I say this with air quotes “brainwash” branding Orange shoe has grown to a 10 location franchise in the midwest with no plans on stopping. Katie and Scott tell us about that journey and surely drop a few golden nuggets of knowledge for anyone else looking to franchise.
Best way to reach them: https://www.orangeshoe.com/PersonalTrainingFranchise/Studio
Host - Dan: fitDEGREE is more than just two guys with microphones, it is the studio management software you've been looking for. For more info, reach out to me on our website at www.fitdegree.com, on Instagram at the handle fitdegree, or my email Dan.Berger, that's B-E-R-G-E-R @fitdegree.com to get the conversation started. All right, now on to the show.
Host - Dan: Hey there everyone, and welcome to another episode of Studio Savvy by fitDEGREE. Dan and Nick here, your host and co-host for the show, and today we're bringing on an exciting group of franchisers to Studio Savvy. Katie and Scott Michel are the franchisers of Orange Shoe Fitness and owner of a few locations, personally. With its colorful, and I say this in air quotes, "brainwash branding," Orange Shoe has grown to a 10 location franchise in the Midwest with no plans on stopping. Katie and Scott are here today to tell us about that journey, and surely drop a few golden nuggets of knowledge for anyone else looking to franchise. Welcome to the show, you two. How are you today?
Katie: Doing great.
Scott: Yeah, thanks for having us.
Host - Dan: Yeah, of course. Thanks for being here. First off, 10 locations, franchise, that's exciting. Was that the plan when you guys got started?
Katie: Huh. Right on. Know this? No, not really.
Host - Dan: Spoken like a true entrepreneur. "Plan?"
Katie: Yeah. We just started out as personal trainers and then our passion for helping people, we always kept it on the forefront and really what happened was a lot of people saw the model, saw the great work we were doing, and we just slowly grew after that.
Host - Dan: That had to be exciting, that it grew very organically. Kind of, I guess take us back to the beginning, wherever you want to start the story, and tell us how it happened.
Katie: Sure. Well, we might have two separate stories here, the business part I would have, but I'll start with mine real quick. Right out of college, I was actually a prior teacher, and I answered a classified ad like in the newspaper, like dinosaur age, right?
Host - Dan: Yeah.
Katie: It said "Wanted, full-time trainer." I replied and started doing some training. The long and the short was, I really found that I could help a lot more people through more of a one-on-one setting. I had already been through the whole like mic you up, jump on the fitness stage-
Host - Dan: Sure.
Katie: ... Teaching classes of 50, 60 people, and it didn't matter how hard I tried with like my verbal cues and all that loud music and all the speakers and stuff, I still wasn't able to actually like affect and help people the way that I felt like I wanted to. That's when Orange Shoe really, I guess, got connected in my heart and the prospect of the one-on-one training. From there, we trained for the first Orange Shoe as trainers for about 18 months or so before we were able to verbally say, "Hey, we're either going to own our own, or we're going to go do something on our own."
Katie: Scott and I both knew that we wanted to be entrepreneurs. We really liked the idea of working for ourselves. Then from there, we started with one. Real fast nutshell, we grew that to be one of the highest performing personal training boutiques in the nation, really.
Host - Dan: Really?
Katie: After that 10 year marker, we got really hungry for something else. That's when we went from like the one franchisee to buying out the holdings company and owning the whole franchise. At that time, there was six locations. This was two and a half years ago. From that point, we continued to grow it. We're opening up our 10th under contract and we're courting two more. Hopefully by 2020, we will be up to 12 already, hopefully doubling the company. That's like my-
Host - Dan: You really took an unorthodox approach to this.
Katie: Yeah. I think that Orange Shoe is a little bit different, where we pride ourselves off of helping people's unique abilities. Especially for myself, I have four children. Right out of the shoots, out of college, I was like, quote, unquote, nothing wrong with me. As I went through the whole changes of having kids and being a mother, I was like, "Holy cow, the last thing I want is to step in a room with all these people in tiny shorts and little tank tops, and yelling at me to go faster and harder and like trying to make me tired."
Katie: The one-on-ones were awesome and not just necessarily one-on-ones because I do like the camaraderie of the small groups, but I just love it when people take into account, like I've had four kids, couple C-sections, and I don't want somebody to train me like the guy over there. I really do feel like when I train for my strengths and weaknesses I become a better person, and I like to do that for others as well. I'm kind of getting a little long here. I know Scott has a different story from the beginning, so I'll let him tell you.
Host - Dan: Take it away, Scott.
Scott: Yeah. I graduated top of my class in Exercise Sports Science and then when I started applying for training positions, I felt intimidated. Even being in the industry. I remember walking into like a big box gym and seeing the trainer profiles hung up on the wall, and they had like alias names like Blaze, Thor, Abs- [crosstalk 00:05:41]
Host - Dan: It sounds like Dodgeball.
Scott: I never even put my application with that gym. Then when Orange Shoe opened up, just normal people that wanted, that knew that movement was medicine. Everybody was there to get better. There wasn't any like real egos or anything like that. Everybody was, wanted to see each other succeed for that day. It just felt like it was a natural fit.
Scott: I was able to teach still, which I have a degree in teaching as well. The people that come there, you know why they're there. We're not hoping, we're not selling 5,000 memberships and hoping that nobody shows up. If somebody doesn't show up, you run weekly reports, like we're going to reach out to you and be like, "Hey, we want to see you. Because remember, we have this objective that we're working towards accomplishing."
Host - Dan: Right, right.
Scott: That's the fun part for us, is that we really are in a people business, and helping people become better versions of themselves.
Host - Dan: I would imagine with this approach you're taking, especially not just, "We're taking this approach because we think it's right, but we're taking this people approach because when I walked into that gym and saw Blade and Laser on the wall, I said, not for me." You got to have a pretty high customer retention rate. These people have to truly feel the difference of how well you, how hard you back and practice what you preach.
Scott: Oh, absolutely. That's something that definitely differentiates us among other models is that a lot of other models, they'll look at customer retention in months. We look at customer retention in years. When people come to Orange Shoe, we're always working with them to find out the best plan that allows them to get into the gym the most frequently, for the lowest price and has the highest impact and effectiveness for them.
Host - Dan: Sure. Now out of curiosity, how often does someone go, "All right. I've been with Orange Shoe for two years. They've been personal training me. I have learned so much. I could just go to a gym on my own now, and I have a wealth of knowledge." Does that happen or do people go, "No. This experience is so great. I'm not leaving for nothing"?
Katie: Yeah. Awesome question. I'll field that one. This is fascinating and it speaks to my passion. The most amazing thing about Orange Shoe is the accountability factor. It doesn't matter how much I know as a personal trainer. You know what is amazing is accountability.
Host - Dan: Absolutely.
Katie: Even, so what we find is when our clients have all appointment-based, everything's booked into their schedules, that's some of the power of Orange Shoe, and gets you coming back. You know that you're walking into Orange Shoe, you have a team of people who have planned for you, prepared for you and they're expecting you. There's something about that that never goes away.
Katie: We work with a lot of people like yourselves, just very, very busy, amazing professionals. They just really respect and value themselves and their time and that Orange Shoe's there to meet them and hold them accountable for their health and wellness goals.
Support - Nick: When you put-
Katie: I mean, that is a great question.
Support - Nick: When you put it like that, that makes a whole lot of sense. The time. Like I know that when I, because I have a couple of certifications, I've been training for a while, but specifically, when I get hurt, I don't know what to do. I'll try to figure it out on my own and I'll be stubborn.
Host - Dan: Very stubborn.
Support - Nick: Then I'll go to a physical therapist that I made friends with, and I always avoided all of them. I looked up like 50 in the area, and I just turned them all down and I was like, "Nope, not happening." Then my buddy suggested one who's probably more stubborn than me and I was like, "Okay. I'll give this guy a chance."
Support - Nick: Now I have this relationship where it's like as soon as I get hurt or my friend gets hurt, I'm like, "Don't even worry. Go there. It's going to save you three months of time because you're going to figure it out faster," so I could imagine, like that time aspect of where it's going to keep you in the best shape constantly. You're not going to have to worry. You're like, you're taking stress off their plate.
Scott: Oh absolutely. You look at it from a standpoint of it's interesting how people process and think about things because, if my car isn't sounding right, I don't tinker with it, I take it to the mechanic.
Host - Dan: "I don't want to think about it."
Scott: Yeah. If our kids have done some extravagant plumbing scenario at home, I call the plumber. I'm not going to try to figure that stuff out. Then people, for some reason, think that if they need professional help with their health and wellness, that's a sign of weakness. I look at it from a standpoint of the strongest people, they call it a SEAL team because it's not one person, it's a team.
Support - Nick: Right.
Scott: We look at it as that when people have a team surrounding them and supporting them for their health and wellness, they're going to be a lot stronger and a lot more successful, versus if they're just trying to figure it out on their own.
Host - Dan: Yeah, yeah, I absolutely agree. I've worked with a Division 1 rugby team. I helped do some of their strength conditioning and coaching. The head coach, I respect him so much for when the program was growing it started out, Nick was a little familiar with this. It started out with a bunch of guys that liked beer and found out they could run into each other on a field and it was acceptable, and it grew into ...
Host - Dan: It grew into a Division 1 program. The coach looked at this at first and said, "This is what I have to work with to grow it." He really focused on the team and the process aspect of it. He would occasionally get phenomenal athletes or kids that played in high school, which for a team of drunk kids running into each other is like a godsend. He would occasionally say, "You're not playing because you're not part of the team. You showed up and you think you're better than everyone, and there's no community here."
Host - Dan: As Nick likes to say, "Alone, you'll go fast, together you'll go far." I really think there's a huge testament to how far that coaching staff that I got to be a part of has grown this team in a short number of years to a Division 1, nationally ranking team because of that community, that accountability, and not just pound the results in your head and yell at you, "Why aren't you performing?"
Katie: Mm-hmm (affirmative), yeah. Right on. It sounds like a great culture.
Support - Nick: I think that's where a lot of this comes from, is it's got to be the culture and the mindset of when someone comes in, there is no culture of once you learned, you're leaving. It's, you guys said you built up a strong accountability factor there. Has that always been an Orange Shoe thing? Because you guys said that you-
Host - Dan: That's exactly what I was going to ask. Was it like that when you got it, or did you have to do some remodeling?
Katie: Yeah. No, I do remember there was a turning point, like at around like their second or third year, we'd have people come in and they would say something to Scott or I, "Hey, I don't really want a personal trainer full-time. Could you just write me a workout?" At first, we would waffle a little bit. "Okay, we'll help you out," but at a point, we came to find out that if we weren't working with people at least a minimum of two times a week in our house, we weren't helping them get results.
Katie: It's kind of like physical therapy where the physical therapist meets you and they hand you some workouts. I don't know what the stat is but-
Host - Dan: Nobody wants to do them.
Katie: A lot of people don't actually do it, and so that's where we started, when people came in and they're like, "Oh, well these personal trainers down the road said they'll write me a program and I can do it all on my own." I said, "Awesome. If that's what you're looking for, I want you to go to them." I said, "If you're going to come here, we're going to take real good care of you, and I cannot do that unless I see you, or somebody on my team can see you at least two days a week," and I'm really thinking, "It has to be three."
Support - Nick: Just for that mindset.
Katie: Yeah, because otherwise it's like a falsehood. It's like selling personal training that like, "Oh, yeah. You can personal train one day a week and see great results." I don't think that's truth and it didn't hold, so yeah. So ...
Scott: One of the things that we ... It's a cultural thing with the teams, but it's also, it spills over to the clients as well is that, the biggest differentiator between Orange Shoe is that we don't try to do things, we do them. Because you think about when you go to the bathroom, and you try to dry your hands with an air dryer, you're just disappointed every single time.
Scott: People try things every year for health and wellness, and when we first onboard a new person, that's the first thing we want to understand is, "What have you tried? This is how this is going to be different this time. Because we're not going to try this, we won't even start unless we can get commitment from you," with a game plan, and it's a partnership. It's not a membership. We don't close anybody. We begin a partnerships with people when they start at Orange Shoe.
Support - Nick: I like that language, and I would imagine that helps with the prospecting a lot more is that you're weeding these people out in the initial interview of, "You're either committed, or you're not." That helps you guys, because you don't want to go through that whole onboarding process, and a month or two later, find out they're just not ready for it.
Katie: Yeah, yup.
Support - Nick: Is that something, we're going back to this again, because I'm just so amazed that you joined Orange Shoe as employees, then got a location, and then took over the whole franchise as a whole. How much of this was instituted, before you and after you, of like these cultural differences? Or even if they were differences, maybe they were at Orange Shoe the whole time.
Katie: Well, my answer to that is in the beginning, we didn't know what the heck we were doing. I actually, we kind of jumped around. We bought our first business in 2007, right before, actually we were really grateful to get our business loan in '07, because '08, '09 time, you couldn't even get a business loan if you tried, and so we were grateful for that adverse start.
Katie: Our first few years, it was just really tough getting our footing, finding ourselves, finding our posture as trainers and as business owners. What, I guess, is really cool is you go through all those adversities, you figure out really well what's going to make you better as an owner and what's not. We had one night, Scott still jokes about it, where we were allowing people to accept excuses for losing clients.
Katie: At some point, we were gently losing clients after excuse, after excuse, and after excuse. We had one night with our team of like, "It's never going to happen again." It really stopped the bleed. It really, I guess, created a culture of, "No matter what happens, you don't lose a client." I know that sounds crazy, but after that night, it was just like a huge turning point of never looking back.
Katie: Let me give you an example so I'm explaining myself better. Let's say somebody comes into the gym and they're like, "Hey, I rolled my ankle this weekend, I can't work out this week." That sounds legit, right?
Support - Nick: Right.
Host - Dan: Mm-hmm (affirmative).
Katie: Right. Well, so at Orange Shoe-
Support - Nick: But you have upper-body.
Katie: Exactly. Well, and then this is my go-to. I'm like, "Hey, have you guys ever heard of Joseph H. Pilates? He actually created Pilates quite some time ago." A lot of times they'll be like, "No, I didn't know that." I'll be like, "Yeah. Well, how he got his start is in World War I. When guys, soldiers, they got their arms shot off, missing legs, nothing left. Guess what they had to do? They had to exercise, so I'm sorry to hear about your ankle, but you're coming to the gym, and I'm going to take really good care of you." That little mentality, like it rose. Then all of a sudden, your people at your gym become hardcore, your trainers do, but in a good way, not like-
Support - Nick: In a camaraderie aspect, yeah.
Support - Nick: Not like, "You're too soft, get out of here."
Support - Nick: It's like, "Well, what can give you me? You can absolutely give me something," short of like the flu, and your immune system is low, it's just like, "No. You can do something." Even then, "Your homework is to get fluids. I want an IV in you with a selfie."
Support - Nick: Okay, great. Now, you bought, let's take it back to the point where you bought the franchise and now it's kind of in your hands. What does the day-to-day look like? Because we've always, we've had conversations on the podcast about going from a new business owner, where you're coaching all, you're teaching all of the classes or you're coaching all of the clients.
Support - Nick: Then you got to take a step back and you have to recruit and build your team so that you work on the business instead of being in the business. Now, you guys took that even one step farther, and now you're setting up franchises. What is your, how has your day-to-day kind of changed from day one to the middle of it, where you owned your own, to now, you're in charge of it?
Scott: Yeah. That's a great question. When we first owned our one location, we ran that to the, it was a top performing location in all the studios. There was a lot of things that we just kind of took for granted, because we reinforced them daily by being owner-operators. The team really bought into it. Then when we tried to expand those things out, they didn't happen by accident. We've really been working on developing the, just the culture and now taking it for advantage across 10 locations and more. We have weekly virtual training that we do across the organization with our five core values. Then the owners follow up with team members on how they integrated that core value.
Scott: Then we interview the top performing trainers that have the best examples of how they actually practice the core values. We want to start the charge, but we want the teams to actually follow-through with that culture and the core values that allow us to be successful, and really deliver a consistent service across 10-plus locations. I don't know if that makes sense or not, but that's kind of what I'm in charge of.
Scott: Katie does an amazing job with getting the site locations, getting the leases negotiated, getting the build-outs so every square inch is utilized, that we're not wasting any space. It's always funny because when we go into meetings, everybody's like, "Where's the boss man?" I'm like, "Oh, she's right here." She really does a great job with that, and then I work more with the teams and the owners.
Host - Dan: It sounds, and totally correct me if I'm wrong, it sounds like you, as an owner, are treating your staff the way your staff would treat the-
Support - Nick: Their staff.
Host - Dan: Well, not just their staff but the customers. You create that accountability with them. You, as the upper team, create accountability with the lower team. Just like those teams then create accountability with your members and your clients.
Katie: Yeah. With, this is fun for me, because not only are Scott and I business partners but we're also life partners too, and so I'll joke with him. I'm like, "Dude. I think it is amazing how well you treat your employees." Because how he treats his employees is, to me, like heavenly. When he treats them like that, his employees, they treat the clients like that. It really is amazing. I kind of joke with Scott that, "If I was in charge, everyone would have been fired three weeks ago."
Host - Dan: It's like trickle down economics, but it actually works.
Katie: Yeah. That's why I get to treat ... I am good at it. That's why I get to do it is, all of our business tactics of negotiation, and when we're shopping around for new services for our company, I'm usually, Scott will bring somebody around, he'll figure it out. Then he says, "Okay, Katie. Go get them."
Support - Nick: And that-
Host - Dan: Good cop, bad cop.
Support - Nick: Yeah. Off topic, that's exactly what happened with the beginning of our relationship is that I met Scott, he was really laid back. I was like, "Ah, this great." Then he's like, "Okay. Now it's Katie." There was something in his eye or his tone of voice that I was like, "Oh, okay." Not that the meeting with Scott meant nothing, but it's definitely like I'm only 25% of the way there, when I thought I was 75%, so I saw it first-hand. It's real, and you guys do a great job of complementing each other.
Katie: Oh, well, thank you. Hope it stays.
Scott: Thanks, we work on it every day.
Support - Nick: Well, you got plenty of time. That's really cool. I mean, how did that ... I mean, business partners kind of, it almost seems like everything happens for a reason, but it's almost like it happens on accident. At what point did you guys realize of being life partners that you would be perfect complementary business partners? I mean that's not-
Host - Dan: Because that doesn't always happen.
Support - Nick: No, no. Let's talk a little bit about what's it ... Your future plan's that you want to have two more locations by 2020, or by the end of 2020?
Scott: Oh, yeah. We'll have two to three new locations by the end of 2020, for sure. The way we can speak so confidently with that is we have extremely talented people in the organization right now. Unfortunately, the game of ownership seems to only let the big dogs play, which is kind of like our battle cry.
Scott: Because we didn't have tons of money and we didn't have business degrees or anything like that, but we got a chance to play, and the team members that are excelling, the ones that want to take that next step, we will partner with them. We'll make sure that their goal of owning their own studio becomes a reality. We've done that already. Like out of the team of six people that we had in our original location, four of them own their own studios now.
Host - Dan: Wow, wow.
Scott: The other two help us on a corporate headquarters standpoint. We know, with 10 locations that, I mean, you could do the math. I mean, we have really talented people, and now it's just making sure that we find the right locations for them, and there's a transition plan for them to move up into an ownership role.
Support - Nick: That speaks really highly to your recruiting and training. That's really cool. Do you find your new locations, so far, have been people in the business? Like people always talk about hiring or promoting internally. Do you find that you're finding franchisee owners internally more often than not?
Scott: Yeah. That's 90% of our growth right now.
Support - Nick: That's awesome.
Scott: Then the other 10% are people who are, they're training at other facilities and they're just tired of hitting their head on the ceiling. There's no more room to grow as a professional, and they'll seek us out. We'll have coffee, and we just want to make sure it's the right fit for them. It's a slower process that way, just because you have to kind of vet them out. Just because somebody wants to do more doesn't mean that it's going to be the right fit for the culture.
Support - Nick: Oh, for sure. Yeah.
Scott: That probably tacks on another three months of just getting to know each other and making sure that, hey, like it's going to be the right long-term decision for them.
Support - Nick: Now, do you have them work for you, or work at an Orange Shoe location before they start one?
Scott: It's typically about six months that they're in the trenches with me.
Support - Nick: Okay, cool. Yeah.
Scott: That way, they see everything that they watch on video. They see and feel it in person and that allows us a chance to be able to really have like higher level conversations. There's learning experiences along the way, but it just doesn't happen watching, or taking a test, or watching a lesson online.
Host - Dan: I'm sure you get to audit them. You get to see how they respond under stress, in the theater of the real.
Scott: Oh, yeah. Life's the, life will always teach us lessons, it's just are we willing to learn?
Host - Dan: Have you ever had someone, they seem great, you met, everything was going well, and then they're in the trenches with you, they're going and you see how they respond and handle things and you just have to go, "This is not going to work"?
Scott: I'm knocking on wood right now, so no, it hasn't happened yet.
Katie: To answer like a tough spot question, when we took over the organization, there was one owner who we poured all of our time, all of our effort and energy into his organization, and we, after about 18 months of that, literally trying with our whole hearts, there was a day where I called him up and I said, "You know what? This isn't working." I said, "Do you want out?"
Host - Dan: Yeah, sure. Because you can't fire an owner.
Katie: Right. He just, politely he said, "Yes." I go, "Perfect. I can tell. Because we can't just keep doing what we're doing." Then we walked through a tough buyout plan, because in order for us to release him from his contract, we had to be happy and vice-versa. We walked through it but culturally, he just was not the right fit for our company. After trying very hard to be able to encourage him to leave, ended up, I think, being the best decision for everybody in the organization.
Host - Dan: Sure. [crosstalk 00:26:45]
Scott: One thing ... Oh, go ahead.
Support - Nick: No, you're good.
Scott: One thing that we do is, we do run characteristic assessments on everybody prior to employing them, prior to talking deeper about franchise. There's one thing, there's a lot of characteristics that we value highly, like teaching and not being dogmatic, and being empathetic and things of that nature, but like there's one value that if you're not, if you don't have good self-acceptance, if you don't feel comfortable with who you are as a person, anybody who scored low on that, they don't last longer than six months.
Scott: That's like one non-negotiable score that we look at, is if someone's not confident in themselves and the way there, then that's not going to, they're not going to be able to instill confidence in other people.
Support - Nick: No, that makes a lot of sense. Is there any last golden nugget you'd like to leave our listeners with? What's the best thing you've learned along your journey so far?
Katie: I guess for me it is, it doesn't matter who you're working with or what you're working on, is that you should never, ever take the answer, "No," when you definitely need, you need a, "Yes." Like year-after-year, week-after-week being an entrepreneur, if you always remember what you want and you go get it, you're going to be fine.
Support - Nick: I like that a lot. How about you, Scott? What's the best thing you've learned and the most actionable thing you've learned so far?
Scott: I know that the path of least resistance will never make you proud, and that could be with your business, how you interact with your team members, having patience with them, spending the extra time investing in them. How you interact with your spouse or your kids. The easy way out just doesn't, you know you took the easy way out instead of rolling up your sleeves and getting to work. That kind of, it's something I always tell myself quite a bit.
Host - Dan: Wow, those are two great answers that you guys just had ready to go.
Support - Nick: This is the first time we've had four people on the show, in total. We might have to do this more often.
Host - Dan: Hope it works out.
Support - Nick: I like that a lot. All right, cool. If someone wanted to keep the conversation going with you guys to ask any follow-up questions, whether that's about running one location or opening up to multiple locations, what's the best way to reach you?
Katie: Yeah. Just go to OrangeShoe.com. Check us out. We love it when people play around with our website. We're really proud of it. They could go right to the franchise submission form. That will send us their email information, and we just start it out with a phone call.
Support - Nick: Fantastic, and that, all that will be on our website. Thank you so much for being on the show today, guys. We really appreciate it.
Katie: Well, thank you guys. We appreciate you. Have a great day.
Host - Dan: Thank you, guys. It's been great. See you later.
Katie: Okay, bye.
Host - Dan: If you liked this episode, be sure to go and leave us a review. Your feedback helps us make better episodes every week. If you're a studio fitness owner who wants to streamline processes with a studio management software that's actually affordable, check out fitDEGREE. Go and find us at fitdegree.com, that's F-I-T-D-E-G-R-E-E.com, and talk with a team member today. We'll see you back here next week, same day, same time for another podcast episode featuring amazing studio fitness owners. See you later, everyone.