Rick Mayo: How Alloy Became A Scalable Franchise

In a 2022 and 2023 podcast, Jim Fitzpatrick, CEO & Founder of Atlanta Small Business Network (ASBN) interviews Rick Mayo, the CEO, and Founder of Alloy Personal Training. They talk about the Alloy Personal Training history and how they became a scalable franchise. They have become one of the leading fitness franchises in the nation.

If you want to start a business, but are not really sure of the logistics, franchising may be a great option for you as it offers many people a path to business ownership. On today’s show, Rick joins Jim in the studio to share his journey to becoming a franchisor and scaling his business.

ASBN 2023 Interview – Scaling Your Business

Alloy Franchises are growing like wildfire right now. The Alloy headquarters is in Atlanta, in the original Alloy Personal Training location. In the 2023 ASBN interview, Rick shares what franchisees should look for in a scalable franchise.

Tips To Finding The Right Franchisees To Scale Franchises

1. Find the Right Franchisee

Mayo explains he looks for franchise holders that can “attract outgoing, energetic, fun talent that’s going to be the face of their business.”

2. Franchisees Interested in Multiple Locations

Mayo explains that franchise holders who open more than one storefront in the same zip code typically see the greatest success.

3. Investors Mentality

Mayo notes that many of his franchise holders are people who work full time in another industry. “90% plus of our franchisees don’t plan on quitting their day job,” he comments. Instead, they view their purchase only through lens of increasing their lines of income, or diversifying their portfolio, and will hire others to take care of operations.

2022 ASBN Interview – How Rick Mayo Turned Alloy into Nationwide Franchise

We started out as a one-on-one personal training business in 1992, then in 2000 we landed on this really interesting model where we learned how to scale personal training. One-on-one personal training can be a pretty expensive service at $80 – $100 per hour. The key is guidance and accountability.Rick Mayo – CEO Alloy Personal Training FranchiseIn the 2022 ASBN interview, Rick shares the history of how they learned to scale the business with small group personal training. We make it more affordable to put a few people together, but still offer the personal guidance and accountability of personal training. As a result, we created one of the highest revenue per square foot facilities in the country. It also created a lot of opportunities for public speaking gigs and business consulting.

The next step was people wanted to know how they could buy our sales system, workouts, and other systems we had in place. We then licensed the Alloy model to about 2,500 facilities worldwide, but it was more a “powered by” concept and not nearly as robust as a franchise concept.

In 2019, we decided to make our own franchise instead of powering everyone else’s franchise. So we pivoted to full on franchising in 2020. Now we have grown to 50 locations all over the U.S. Everywhere from Utah, Montana, in 2 years. In reality, with COVID shutdown happening in 2020, we really got started probably mid-2021. Then we kicked it back up after COVID. So in reality it is 50 locations in the last year.

It’s certainly been an evolution, not only in the business model, but in Rick’s skill set starting as an exercise gym guy at 22 years old. He then had to learn business, licensing and franchising over the next 30 years.

When you decide to become a franchisor, there’s a lot that goes into creating a franchise from an accounting standpoint and legal standpoint. Every state has their own requirements, and the FTC has strict guidelines on what a franchise can and can’t do.

Because we’re personal training, even though it’s a great value for that service, it trends more expensive than other things. So our average member spends $300 a month. That’s not chump change. We’re talking about somebody’s body and their future, and their fitness. It sounds like a lot, but there’s nobody that doesn’t agree you throw away $300 a month on so many other things that aren’t good for your fitness or your health or your longevity. Here we are at $300 a month and have a comprehensive health program.

At the end of the day, when you compare it to the costs of health care, let’s say with a heart attack. When you are laying in the hospital, you don’t say, “Quick, get me the cheapest cardiologist you can find.” You shouldn’t think of the price of your health in dollars with preventive health care.

Rick goes into more depth about how Alloy franchises became scalable. You don’t have to be a fitness expert to own one. We control all the systems, processes, products, and programming, so you don’t even have to be a straight up expert to work in the business.

It is also possible to acquire multi-unit Alloy Franchises, where you could own maybe 10 of your Alloy franchises. You might handle the payroll, bills, marketing and rent, but you don’t need to step inside the gyms to work training clients. You don’t have to be in your facility servicing revenue because you hire the right people, and we have all the mechanisms in place to help you with that. It is possible to be an investor and offer moral support, but also to handle the back office functions that are easy to scale. Economies of scale are available in multiple locations.

The great thing about personal training is you don’t need as many members at that high price threshold to be successful. So at 130 to 150 members, you’re sitting on a very healthy business model. We help you get to the recommended number in our presale, so you open with a completely full facility.

“The emotional return on investment for becoming an entrepreneur is even greater than the financial return.”

Rick Mayo

We coach how important that time period is to return on investment and the emotional return on investment as we talked about for the owner. Our systems include shared dashboards we coach with every single week. If we see some red, we review the situation and coach to help through those situations. We coach down to the granular club itself and what the operators in that club are doing well or not.

It’s more than handholding. We are a full partner in that deal, like a fractional partnership.