In this episode, Rick Mayo and Matt Helland share their strategic growth plan to elevate the franchise to a remarkable milestone: 800 locations by 2030. Their vision is more than just a numerical target; it encompasses the core values that define Alloy’s success—integrity, support for franchisees, and a steadfast commitment to preserving the existing franchise culture.

Ramping Up to Scale Growth

The road to 800 franchise locations is not a mere sprint; it’s a calculated journey. Matt and Rick recognize the significance of scaling gradually while maintaining the essence of Alloy’s brand. They emphasize that growth must align with the company’s guiding ethos, ensuring that each new location upholds the quality and service that is Alloy’s strength. It’s about fostering controlled expansion that bolsters franchisee success, rather than compromising it for the sake of rapid growth.

Equity Investment: A Partial Approach

A question that often arises in discussions of expansion involves equity investment. The duo deliberates over the idea of selling partial equity to facilitate growth. This concept isn’t just about raising funds; it’s about forging strategic partnerships with like-minded investors who understand Alloy’s mission. 

Rick’s goal is to have 100 locations open without ever having to have equity investments. Only 2% of franchises ever achieve this magic number. We would be a unicorn in the franchise world and be royalty sufficient and bring a good valuation to do a minority round of investment. The only reason we would accept minority investors is to help ramp-up operations and support services. The focus remains on securing partners who share the same commitment to maintaining Alloy’s culture and standards while fostering an environment where franchisees can thrive. 

Preserving the Alloy Franchise Culture

One of Alloy’s distinguishing features is its vibrant franchise culture. It’s the intangible thread that weaves together the diverse locations into a unified entity. Matt and Rick recognize that maintaining this culture amid rapid expansion is a challenge, but they are prepared with a strategic plan for growth. They firmly believe that meticulous hiring and nurturing the team can preserve the essence of Alloy’s culture. We select every new team member not just for their skills but for their alignment with Alloy’s values.

Integrity-Centric Growth Strategy

Alloy’s growth strategy isn’t solely focused on numbers. Matt and Rick underscore their commitment to integrity-centric growth. This means providing support and assistance to franchisees, whether they are newcomers or established partners. Alloy’s growth will never come at the expense of its franchisees’ success. Instead, the company’s intention is to ensure that each franchisee receives the guidance, resources, and support required to flourish.

Navigating Challenges and Industry Pressures

The fitness franchising industry hasn’t been without its challenges, with negative press recently casting shadows over the sector. A big franchise in Australia got into trouble with a low stock value and was in danger of being pulled off the stock market. They were taken back by private enterprises, so they could reformulate and come back. When you look at the reason for the trouble, they had an internal funding arm of that company selling franchises so fast that they were selling to unqualified individuals. When that happened to their internal funding mechanism, they lost the ability to develop these locations. Now there’s a class action lawsuit from franchisees against the franchisor.

Matt and Rick acknowledge these the reality of those challenges and it strengthens their resolve to build Alloy’s expansion on a foundation of transparency and ethical business practices.

Numbers, Progress, and Beyond

As of now, Alloy boasts around 150 franchises, with more in the pipeline. The pace is set to accelerate, targeting 50 open locations by the end of the year and over 100 by 2024. While these numbers are impressive, they’re not the sole metrics of success. Matt and Rick stress the importance of staying true to their long-term goals and values, even as Alloy climbs the ladder of success.

Balancing Growth and Culture

The delicate balance between growth and culture is a formidable challenge. Hiring new Alloy franchisee support staff while preserving the existing culture requires strategic finesse. Alloy has triggers and a ramp-up support plan to hire more internal staff as we grow and scale. 

Matt and Rick are acutely aware of this, vowing to maintain their culture and customer-centric approach while hiring team members to support franchisees who resonate with that philosophy. Their approach aligns perfectly with their belief that the success of a business stems from understanding and empathizing with its customers. 

Innovation and Future Pathways

Looking ahead, Matt and Rick contemplate Alloy’s future, including potential operational capital rounds. Their strategic planning focuses on fueling operational growth while retaining control over the franchise. Their aspiration to reach 100 locations open will put them in the upper echelons of the industry—one that only 2% of franchises achieve. They reveal their confidence in their unique business model and their determination to redefine what success in franchising truly means.

Alloy Franchise’s journey to 800 locations by 2030 isn’t just about expansion; it’s about preserving a culture, upholding integrity, and redefining success in the world of franchising. Matt and Rick’s vision is one that prioritizes franchisee success over mere numbers, and they anchored their strategy in maintaining the very essence that has fueled Alloy’s growth‌. As they navigate the challenges and opportunities that lie ahead, Alloy Franchise stands as a testament to how growth, when built on the right principles, can truly be transformative.

 

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Mentioned in this episode

Matt Helland

Rick May

Podcast Episode 204

Key Takeaways

  • Where is Alloy Franchise headed? (03:41)
  • Addressing the recent negative press around fitness franchising (06:00)
  • Alloy’s plan to support franchisees (09:40)
  • Will Alloy ever get sold? (11:42)
  • Keeping the culture intact as we scale (14:54)
  • What happens if Rick is not there (18:08)

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