In this episode of the M&A Launchpad Podcast, hosts Feras Moussa and Casey Minshew welcome Kristie Schefflet, who shares her inspiring journey from corporate America to becoming a successful franchisee with Orange Theory Fitness.
Kristin dives into the challenges and triumphs of scaling her business to 13 locations, her experience navigating private equity, and the critical role of sales and team development in driving success. She also opens up about her post-exit chapter—new ventures in health and wellness, lessons learned, and how she’s redefining success after building and selling a thriving business.
This episode is packed with insights for entrepreneurs, franchise operators, and anyone considering private equity partnerships or planning for an eventual exit.
Key Takeaways
- It doesn’t really matter where you start; it’s how you finish.
- Sales and people development are crucial for business success.
- Pre-sales strategies can lead to profitability from day one.
- Having control over an area can provide a competitive advantage.
- Building a strong team structure is essential for scaling.
- Private equity can provide opportunities for growth and expansion.
- Understanding your numbers is key to executing a successful business strategy.
- Self-awareness is important in recognizing when to pivot or step back.
- Creating systems and processes can make a business more attractive to buyers.
- Empowering consumers with knowledge can lead to better health outcomes.
Connect with Kristin Schefflet
LinkedIn: https://www.linkedin.com/in/kristie-shifflette-0761353/
M&A Launchpad Conference
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Transcript
Speaker 3 (00:00.078)
All right, on today’s episode, we interviewed Kristin Schefflet, where we really did a deep dive into what it’s like to go from corporate America, start your first franchise, and then scale that franchise, have a big exit, and kind of what it looks like to go into private equity after that. All of the ups and downs that that brings, right? And the story, you know, Kristin kind of stumbled into it, Orange Theory, right, which is the franchise she picked, grew that first one, saw the potential, and then got really systematic about growing to 13 locations and made a big exit. So Casey, what were some of your takeaways?
You know, it doesn’t really matter where you start. It’s how you finish. you know, one of the things you can start with a franchise, you could go buy a business, you could start a business. All of these things that we talk about in our podcasts are about entrepreneurship. And so, you know, it’s not always just about acquiring a business, but you’ll hear in her journey that she dealt with just the same challenges you would if you bought a business, because ultimately she ended up acquiring businesses.
And then ultimately she dealt with private equity, is, which everybody wants to have that exit that day. She rolled in her equity. She then took that and she grew and then she had her own challenges. Right. And so that’s the life of an entrepreneur. That’s a life of an acquisition entrepreneur. It doesn’t matter who it is. And so I was completely inspired. I thought this was a very good podcast and I thought that, you know, her story is outstanding.
Yeah, I mean, I’m a high energy guy and she’s a very high energy person, right? And that’s a lot of times what it takes to be an entrepreneur, right? It’s not just about sitting back behind a keyboard, running spreadsheets about getting out there. And we kind of talked about what sales looks like and how critical they are to a business and how she kind of got ahead of that and having the big pre-sale, right? So that way, day one, she’s opening the franchise and she’s profitable within that first month, which is the big goal. And so lots of interesting takeaways in this one.
Speaker 2 (01:48.622)
Hey there, this is Casey with the &A Launchpad podcast. Want to let you know about October 25th. Put it on your calendar. This is a do not miss one day event.
There’s going to be incredible headliners, but really at the end of the day, you’re to get a chance to talk to people that have made acquisitions, learn from some of the challenges that they’ve made, because this is definitely a challenging process. But more importantly, there’s going to be people there that can help support you along the way from great vendors, quality of earnings, how to run the due diligence process, and how do I get financed? How do I raise capital? How do I structure all of these things?
October 25th in Chicago, we’re going to be gathering. It’s going to be hundreds of people that are all focused, like-minded people. And man, everyone that’s come has given us incredible feedback. So mark your calendar, October 25th in Chicago. We look forward to seeing you.
Hey Chris and welcome to the show.
Thank you so much, it’s great to be here.
Speaker 3 (02:44.366)
Likewise, you know, excited to hear about your journey. got a little bit of a sneak peek before the show, but for those listeners, you want to just give the thousand foot overview.
Sure. you know, my story is I started as an Orange Theory fitness franchisee and area developer, meaning I had the rights to a territory and my sort of my mandate was to grow and open a certain number of locations within a certain time period. And I could choose to do those myself or I could sort of sub-franchise them out to other
I know another owner. so I, you know, not having any experience in business ownership or, you know, business operations in my previous life was corporate America. I opened one. It was the hardest thing I ever did. The first store opened in January of 2014. And I quickly realized, OK, this is profitable from day one. Let’s let’s keep doing this.
I’ll you really quick. So you came from corporate America. You got this crazy idea at the time to go start a franchise. You did the franchise seminar. I think Oranger’s Theory 2014. When were they founded?
So they were like 2010, 2011, and then they paused on development and then started again. I my first was maybe number 70.
Speaker 3 (04:10.766)
It’s very new, right?
Speaker 3 (04:16.349)
Yeah. So how did you find out about it? And then, you you went to clearly the franchise meeting where they kind of walk you through it and how many locations, right? For those listeners that don’t know a lot about franchises, you really sign up for locations that are very well defined upfront. And there’s certain agreement around how many you can buy and how quickly you have to set them up. And so was how did you find out about Orange Theory and kind of how did that intro franchise meeting go? And, you know, did they, you know, what did you do at the beginning? Right. You sign up for one, you sign up for 10, right? What did that look?
Well, so yeah, so it’s funny. I was saying that during my time at corporate executive board, I had this entrepreneurial itch and I went through essentially a two year journey after I had, you know, I had two kids back to back really, and knew that I wanted something more. I wanted to build something and I didn’t know whether it was a brick and mortar, a virtual business. Did I have to invent something? I wasn’t sure, but.
I went through some personality assessments. met with a franchise consultant, is somebody that basically connects potential franchisees with a franchisor. So going through that process helps me identify the types of businesses I would be a good fit for and those that I wouldn’t. And although he did not introduce me to Orange Theory, I had learned about what the franchising world was like. Fast forward.
I was close to signing with a different, massage, a membership based massage concept. And I went to a bachelorette party in New York city where one of my former college roommates was developing orange theory with her then boyfriend. And so I am now at the finish line of trying to figure out what I’m doing next. She tells me all about orange theory. And within 20 minutes I had decided
This is what I have been looking for. This is exactly what I need. This is what it is. So I went on my way to the airport to leave this to leave New York. I called my husband. said, I found the business that we’re going to invest in. I need to get down to the headquarters and make sure that I get this territory. I don’t know what it means to be an area developer, but I need to have it. So I went down to Orange Theory.
Speaker 1 (06:36.598)
different from the other franchise experiences where I had been courted and sort of wined and dined and you should come into this system. I felt like it was the opposite where I was going down. I was not going to take no for an answer. I didn’t exactly know what I was signing up for other than I wanted it all and I wanted a big territory. And so I went down there and had them shake hands saying, all right, you’ve got the area developer rights to half the state of North Carolina. And so that’s how it started.
the half of the state or to have?
Half of the state. They divided the state into the Charlotte Metro and then basically the rest of the state.
which is, I mean, in hindsight, that’s a great opportunity, right? Because now you probably, if you start an orange theory, you’re getting a very micro specific five mile radius kind of thing, right?
So that’s kind of the advantage of being early to a franchise, right? Is to be able to take on that area opposed to just one location or two locations.
Speaker 1 (07:32.482)
That was what was important to me. I needed to have control over an area. I did not want to be a me too product like a membership massage where you had lots of different ideas and brands already in the market. 10, 12 years ago when I started with Orange Theory, boutique fitness was really new. And so that appealed to me. I wanted something that was different. And like I said, that I had control over the development.
and that it wasn’t going to fracture the market by having multiple owners in a small space.
So you got the entire territory. How quickly did you have to open up stores? What was kind of the deal upfront?
The development schedule, if I’m remembering correctly, was maybe five locations in 10 years. And so I think that they might have done that differently looking back, but I blew past that. So, you know, got got too open in the first 12 months and kind of quickly went from there.
Very loud.
Speaker 3 (08:30.958)
Did you do them, I guess really quick, did you do them in tandem or did you do the first one, saw that, this is profitable day one, it’s kind of a no brainer, and you quickly did the second one? Or did you roll the dice and just say, I’m gonna do two up front?
Well, the way it worked was really based on real estate availability. I knew that for this concept, I needed an A plus location. I needed to be in a center that had great daily use and good co-tenancy and easy parking, good accessibility, great customer demographics in that radius. And so as I was going through the real estate searching process,
I found a few, I kind of had a pipeline built up. And so as a good location became available, it was a bit of a gamble. Like I, that’s a great location. I’m maybe not quite ready for it, but I can’t let that location go. And so my personality is more like, let’s do it and we’ll figure out the hard part later. so what’s that? Exactly.
It’s ready fire in.
That’s how that’s think that being an entrepreneur, that’s sort of you have to be comfortable with that. And that was one of the things that I learned early on. It’s like, all right, if this is what I’m doing, this is that we’re going to go for it.
Speaker 3 (09:44.278)
Got it. then so you got them opened. Right. How did marketing look like? Because now everybody knows what Orange Theory is. It kind of self markets. Right. How do how was it early on? You have to explain this boutique concept that nobody probably knew. And so was it pretty easy to get traction in the stores early on? Or were you having to really spend a lot of time to get that going?
It was not easy. There was nothing about this that was easy, I will say. So people heard orange theory and they thought it was an ice cream store, maybe orange juice.
First time I heard about it, I was like, it’s an ice cream place, yeah.
Exactly. That’s what people so or they thought it was a cell phone company or something like that. And so what the way that it really was successful out of the gates was a very cohesive pre-sales process. so part of the playbook and this is, know, I think franchises, there’s pros and cons. One of the benefits that I just subscribed to was I have this operational playbook. I’m just going to execute it.
better than anybody. I don’t need to reinvent the wheel. I don’t need to say, oh, I can do it better. I can do it differently. Let me just take this playbook and let me run with it. And so there was a 12 week pre-sale process that basically went in conjunction with the build out of the store. So while the contractors are getting the thing polished and open and built, I was in the parking lot with a tent, with wearing an orange suit, bouncing orange balls and approaching people
Speaker 1 (11:15.182)
And I think since I’m a girl, it wasn’t quite as creepy, but I would run up to people in the parking lot and say, hey, what do you do for fitness? Hey, have you heard of Orange Theory? And so I was able to get people to commit and sign up as pre-sales founding members so that by day one, the credit cards all ran and you’re profitable. So big fan on the pre-sales process. Yes.
sales before?
That skill sets probably on the personality style to be able to do that. That takes somebody that has been in sales,
Well, I think it doesn’t hurt and it also just takes this little bit of swallowing your pride, swallowing your ego, knowing you look silly, knowing you’re going to get rejected and being okay with that. You’re going to get some no’s and for a salesperson a no just means not yet or you haven’t quite convinced me, but I’ll come right back to you. So there was a lot of that. was,
It wasn’t easy and I didn’t really look forward to it, but I knew this is how I’m gonna be successful. And that I had that desire just a little bit more than the ick and going through that process.
Speaker 3 (12:28.688)
And how many people did you have on day one signed up?
So the goal was to get 300 on day one. Now, in a 12 week process, right, you might get all these people to sign up, but then when you go to run the credit cards, there’s a lot that decline or people move or people get mad that you charge them, you know? So when the dust settles, it’s sort of like, what is that break even? And I think that I was just shy of 300 in that first opening.
And then within the 30 days, I was able to recover all those and get past, you know, maybe like 350 or so. Whereas in the second location, I achieved what was the sort of this, the celebrated 500 club where you have 500 paying recurring members 30 days post opening. And that’s really the trajectory that, you know, it’s like a rocket ship and sets you up for.
Those are about 150, 175 a month. Is that about what the memberships ran? I know when I did F45 in 18, that was about my monthly, about 150, 175.
Yeah, so we had like the premier, the unlimited membership and then two levels down, right? And so that unlimited membership, I think when we first started was 159 a month, but the benefit to a pre-sales member is it’s down to like 129 and that you get that as a lifetime, you know, benefit for as long as you stay a member.
Speaker 2 (13:55.142)
I mean, that’s just a great recurring right off the bat, right? So by the time you’re done with construction, doors open that you’ve got 500 people, at least in your second location. So now you’re go forward from there.
Exactly.
You know, back then, I would say less than 300. So.
So now you’ve got, you know, so kind of like flash forward, right? As you start to scale this business, you get two locations, they’re cash flowing, right? So now are you self-funding the next development? Are you able to take that cash and open or do you have to go get financing? How does that trigger work to start scaling?
So the first location, I used an SBA loan, which was the most horrific process. And I was just committed to never have to go through that again. The second location was so soon after the first that I didn’t have time to really self-fund it. I had the fortunate friends and family situation that helped fund that second one. And then by the time the third one came around about a year later, both the proceeds from those first two were funding the third.
Speaker 1 (15:00.534)
And then from then on, there was no more debt required and was able to pay back that loan as well.
That’s beautiful. I have a friend of mine that did the eyelash, you all the eyelashes, they did that. And he said, within six months of opening their first location, they were able to start opening other locations off that cashflow. He said it was just, it’s amazing how these franchises that have a good concept, that have that monthly recurring, man, they can scale quickly if you’ve got the skills, if you’ve got the go to do it.
The monthly recurring is the way to go. And also I would say the best sort of aha that I had was that Orange Theory Fitness, and I would argue any business, any franchise, any business, number one, it’s a sales business. Number two, it’s a people development business. Number three, it’s a fitness product. And so where I saw my peers struggle and those that succeeded sort of
either reverse those orders and really focus strictly on the fitness without women and we’re a little short-sighted on the sales process. And I found that if I could really focus on sales and developing the people that were interacting with my customers, with my members, then that would fuel everything else. The fitness product was great. Let that happen. We just need to get the people in to experience it.
It’s a common dilemma, right? mean, my background is software and I had a software company and it failed because as good as you might think the product is, we didn’t really understand the sales and marketing strategy and plan to really get customers. And I wholeheartedly believe that most businesses need to start with sales first, right? And how does that work? Because you can give a mediocre product if you can sell it correctly and build the culture correctly, right? People will accept the mediocre product and then you can improve the product later, right?
Speaker 1 (16:55.656)
That’s exactly right.
All right, so flash forward. So we go from two locations in one year, right? In 2014. In 2014. And then you’ve scaled them over to 40. You had over 40 locations before you exited. Is that correct?
24.
Speaker 1 (17:10.945)
I had 13, I was opening up 11, 12 and 13 when I sold the majority of the business to private equity.
Okay, so when the private equity.
Yeah, what year was that?
- we started the process in early. Yep. Yeah. So, so we, we scaled pretty quickly in those, right. That four, four or five years. Four, four years, wasn’t it? Yeah. And so I did acquire one of the locations of that 13 from a franchisee who, who I had sold the one he had opened it and then wanted out. So I ended up buying that one.
And so, but, you know, it was when I was after, you know, after having eight or nine, and I was at a fortunate conversation with a friend of mine who was also an entrepreneur and had built and scaled a big business. And, you he said, you know, I think you guys are onto something here. I had been so laser focused just on one foot in front of the other, get the store open, get the presales, sell the memberships, get the next store open.
Speaker 1 (18:20.844)
I hadn’t picked my head up to see like, wow, this is actually a pretty magical thing we have here. We have, you know, profitable studios from day one. They’re all self-funded. There’s no debt on the business. And so that was where the idea came. Let’s sell. I had all my eggs in one basket, right? And my husband joined in at studio number six. So he left his job and we were in this together and thought, you know, if we can take some chips off the table.
Maybe now’s a good time.
It sounded like you were just hyper focused on finding the location and getting the pre-sales in. Who was running these things? How involved were you on that side? Did you have a trusted lieutenant that was handling the operations or was that your husband?
It was all of the above. was none of the above. It was hard. was hard to get a good system. But it was at about studio number six where I realized I need some layers between if I’m going to keep growing, I can’t be doing all of this. And the studios were suffering. My team was suffering.
I couldn’t do a good job at anything without having some key support. So did bring in some regional managers who then oversaw the studio. Each studio had a manager and a head coach and those studio managers needed guidance, they needed support, they needed development, they needed all that. And so there had to be a layer in between.
Speaker 3 (19:58.83)
Was that structure taught to you by Orange Theory, or were you one of the bigger franchisors at the time?
So, yeah, so the idea of each store having a head coach and a studio manager was the recommended approach. There were some stores that had a dual head coach and studio manager. There was a lot of playing around or maybe one manager could cover two studios. so, you know, early days, it wasn’t necessarily tried and true, but we quickly realized each store needed a manager.
that person, I hired that person to be an owner of the store. I was looking for ownership mentality because I knew that I wasn’t able to be there physically or even, you know, remotely as much as that store would need. And so that was how I hired for the studio managers. And then we were also, to answer your question, one of the…
quicker to grow and scale. And so there was a lot of phone calls with my peers in the system and the Orange Theory system to say, well, how are you managing this? How are you building your team? What does your infrastructure look like? And so it was a lot of trial and error, but finding, you know, getting that regional manager layer in and like a regional coach layer was really what we needed in order to continue that growth.
And I would also say it also probably led for you when you exited, for them to be like, hey, it’s not just you doing the business, right? You’ve built a team. So when we buy you, we can continue that on, right? That was probably a big selling point of what you did.
Speaker 1 (21:40.686)
Big selling point, right? So this is not a business that’s dependent on me. No ego involved, right? If I can just create a system that is repeatable and that works and I can show that my team is capable of executing that with a little bit of leadership, then that I think is seen as valuable to a potential buyer and shows them that there’s meat on the bone for the continued growth going forward.
Yeah, and that plays out in all these businesses. And so for a lot of our listeners, you know, you could say, hey, I’m not interested in a franchise. I’m trying to buy a company. you you’re going to find that, you know, if you’re buying a business or starting a business and you want to eventually have an exit, they are not trying to buy you. They want to buy a system. They want to buy a business. They want that recurring revenue, whatever that is. And so having that mindset of, hey, I’m getting the ego out of the way. I’m going put in systems and process. I’m going to develop great people.
And I’m to put this business where, you know, obviously I can get it in a place to sell it.
That’s exactly right. Yeah. And not wanting to be beholden, right? Where you’re signing up for, you know, years and years and years because it is so dependent on you. That was another one of my motivators. I wanted to have some more free time. had been spending a lot of time, a lot of hours. And so I was like, I got it.
be what four five six seven eight in that range
Speaker 1 (23:05.56)
So young, yes.
at it. right. It’s also about how that cell conversation went, right? Who, you mentioned you were talking to a friend, they come back and say, Hey, what do think about us buying the whole thing? I mean, kind of how did that go? And ultimately, whenever it came down to valuations, how’d you guys start talking?
like, where’s mom?
Speaker 1 (23:22.584)
So we hired and we interviewed investment bankers to run a process. So we decided to run a formal process, interviewed a bunch of bankers. We ended up with an amazing partner in Fifth Third. And so they were so professional. were just people you wanted to have a drink with. And they really got us. And they really saw the value. so once I trusted them in running that process, it was probably the most fun part of
of the journey was that year where we went through, you know, we put the book together and the sim and all that. And we had management meetings. We had seven or eight different potential suitors come in and sit with us. And we got to share this is what we’ve done. This is our vision. This is what we think the business is capable of. Here’s the trajectory. And it was it was just so much fun. And so it was during that time that we
started to see, who could we really see ourselves partnering with? And then, and so, you know, they, they, the bank, Fifth Third, received the IOIs and the LOIs and from a valuation standpoint, it far exceeded that engagement letter that we first signed with Fifth Third. so it was beyond anything that I even dreamed of when I
marched myself down to Fort Lauderdale to sign on as the area developer. I didn’t know what the future was going to be or how the exit would look, but it was very rewarding to see. There’s a lot of really smart guys out there that are willing to pay big money for what we’ve done.
Perfect timing too because private equity had entered into the fitness because they saw the recurring models. Great timing because obviously you had COVID coming in the few years ahead of you. You wouldn’t have known that, but it was like man, at a great time.
Speaker 1 (25:17.41)
That worked out well in hindsight. Yes.
So 13 location, what was your EBITDA? Did you even track EBITDA? Did you know what EBITDA was? And then at same time, what was the bank thinking the multiple would be versus kind of where it ended up going? How much was that discrepancy?
Yeah, so we did track our, got really into the numbers and to me that was how I could really execute on the sales is to see how each store performed and how it all worked. So yeah, we were tracking, we, know, top line, we were, you know, over eight figures and really our margins were solid, like just shy of maybe
between 35 and 40 % four wall EBITDA. So, it was working. Now, not every store was performing the same, but on the whole to show that that’s what the business could do. And so, the multiple for these individual stores is obviously different from what having the rights to a larger area and having that white space that increased the multiple.
So gosh, I’m trying to remember exactly what it was, but I think we were maybe seven to eight times EBITDA was what it was kind of that target. we exceeded that just a bit and came out far better.
Speaker 2 (26:50.814)
I’m sorry.
Well, also, it’s actually that the, you know, 13 locations in the grand scheme of things in a big market like, you know, the one you mentioned, I mean, you could probably stick 50 stores in there at a full capacity. And so I think they’re running the numbers of, well, hey, you know, here’s how we scale it. you know, you have a system to support them being able to just fund the build out to all the rest. And that’s that’s the opportunity for them.
Well, not only that, so yes, indeed. So opening up new locations within our footprint was one way to grow it. But the other that they saw that I hadn’t even entertained yet was through &A, through acquiring other areas. So people that were also developers the way that I was, but maybe were a little smaller or didn’t want to stay on and build a platform.
That was where the fun started because I had some great relationships within the Orange Theory system. My husband is 17 times more likable than I am. So he helps with having some really amazing relationships too. And so when we got the green light and we had all this dry powder, it was so much fun to go to some of my friends, frankly, in the system and say, hey, do you wanna pitch your…
know, horse to our wagon, like we look at what we can do. And so we were able to grow pretty quickly that way by signing on some other areas and acquiring so that we then had, you know, the acquisition of existing studios, but also the additional white space within those regions as well.
Speaker 2 (28:31.854)
So I take it just in your sale process you had to stay on did you roll in some equity is that kind of head is you got your purchase price you rolled in some equity
that are an earn out or both, know, kind of what did the post cell process, you know, what did the deal look like and what happened after the sale.
Yeah, so we had a small earn out and I want to say it was like maybe a million, a million five was the earn out. And yes, so I went, I started the sales process, whole, you know, thinking like, I won’t be offended, right? If somebody wants to buy this business and thinks they’ve got a better operator, that’s cool. I can be okay with that.
But as we were going through the conversations through management meetings and through this, you know, six, seven month process, I realized the value that I would bring and that that actually we would get a greater valuation if I stayed on. And so then we pivoted our vision, our story to say, hey, we can I can lead this platform and I can help grow it, scale it really quickly. And so that
it was sort of, all right, I guess this is what I’m doing. And so that’s how that all happened.
Speaker 2 (29:50.026)
Nice, because now all of sudden, they want you. So you built the management team, you’ve got scalability, you’ve got systems and processes. But now that icing on the cake is that they get you to help them continue building and scaling the business. So it became a very nice package. from the time of closing with the new private equity group, you all went from 13 stores, what did you all end up going to in that growth?
Yeah, so we went to 40 locations. We got four states. So we acquired three additional areas and we continued to open up a few other stores within our existing footprint, but really grew more through acquisitions. out a true infrastructure for like the management company. So, you know, as many of your listeners probably
understand that private equity involvement means they really want a very sophisticated finance function and not like the duct tape and chewing gum spreadsheets that we were using as a bootstrap sort of business. Like, I don’t know, it’s making money and it’s, don’t know, it just somehow is. So, you know, that was my, of my first, my first mandates really was let’s build out, let’s build out the team, let’s build out an infrastructure. So we hired a CFO.
and we got into a regular cadence of board meetings and whatnot. got a salary, a proper salary for the first time. That was pretty fun. And then got some money to play with. And so that was how we really started approaching these other area developers to say, hey, let’s see if this would work for you to.
to be part of the, our company was OT Growth Partners. And so we were able to get a few signed on right away. One came a little bit later and then as COVID was happening, we were moments away from signing a really transformative deal and we’re already starting our process to sell again. So the idea was before the election in 2020, we were gonna be sold and
Speaker 1 (32:08.14)
have that second bite of the apple and run right off into the sunset. But things changed that year.
Got it. And so it sounds like you did get to keep equity in the new company, right? So you did get to roll some of the equity as well.
Yes. So 30 % we kept and then the rest was the private equity.
So in that, we’ll just recap here before we jump on to your next what you’re doing, in that, you’re saying in COVID, what happened? Did it all fall apart? Was it a smaller exit? What don’t need to happen?
It largely fell apart, unfortunately. you know, every state handled things differently, as you probably remember, we were forced to be closed in North Carolina, where the majority of our studios were for an exorbitant amount of time. So, you know, six, seven months where people’s habits change, their, their exercise habits change, there’s this new proliferation of other boutique fitness. And so all the,
Speaker 1 (33:11.832)
competition that existed before, which were little like ankle biters, they were legit, but they weren’t enough to really, you know, derail our, our model suddenly did, right. And so then it was just as we were able to reopen, it was this idea of recovery of how can we try to get back, you know, get back those members that we lost. And, and it was, it was, it was a couple years in where we finally saw
this is not recovering. And I don’t want to use this time to point fingers, but there are limitations when you are part of a franchise. You are somewhat limited in what you can and can’t do. There weren’t ways to be creative. There weren’t a lot of ways we could do our own marketing. So we were a bit hamstrung in that sense. And so after a couple of years, I decided, you know what?
This business is no longer growth partners. That was me. was the CEO that was growing the business. What this business needs now is somebody that has different skills, different interests, and is able to really handle keeping the business afloat, having lots of processes, being able to support 500 employees in all these different locations. But if there’s no growth, I’m ready to go on to something else.
found a CEO to replace me and they kept going.
Awesome.
Speaker 2 (34:43.766)
Hey, that’s good to know who you are and what you are. And it kind of brings to the point for our listeners, there is a growth mentality in a business. run a growth, growth is hard, growth is stressful, growth is all of these things. But there’s also that personality type that knows how to come in and maintain, cut cost, start getting into that other side, which isn’t as fun.
It is really, know, man, we’ve got to squeeze this thing. It’s we got to squeeze this turnip to get it out. And so you got to have all those personalities in a growth of a business because it sounds like, hey, we grew to the extent we could. knocked us down. Now we’ve got to rebuild, but we’ve got to cut cost and we got to get this thing. And that is for a growth CEO. That was a painful conversation.
Very painful and also to not be in control of my own destiny in the way that I had been to date was very challenging for me. And I started to just not be a person that I was liking. I was like, this is not how I want to be. I’m angry all the time. I’m bitter and I’m resentful and this isn’t what my business needs. And I want to go on to something else. so I think that having that
self-awareness served me well in that instance to say, you know, I could keep holding on and fighting and clawing. But again, I was okay with letting go. I was afraid my equity would probably maybe not even be worth much. And unfortunately, it really is so far buried at this point. And so I thought, you know, if we find a great CEO, I will entrust that person to handle
my equity and my investment better than I would and I’m ready to do different things.
Speaker 2 (36:35.534)
So did you need to take some time off? Did you take like a year or did you take six months? And then what’s the next journey?
So six months traveled the world. pulled our kids out of school and we, it was, think my way of saying, okay, I can control something. And also F you to the world who kept us down and closed our stores. We’re going to go and enjoy life because we’ve worked our asses off. We’ve worked so hard. Let’s go and enjoy the fruits of our labor. And so we had an amazing experience with our kids traveling 23 countries in six months.
And so that was an experience of a lifetime. And so coming back from that is really where chapter two is starting. And a lot of that was unknown to me and it still is a work in progress, but there are a few things I’m working on.
Nice.
Share with the listeners just to know what you’re up to.
Speaker 1 (37:29.472)
Absolutely. So I actually had to engage with an executive coach because I thought that miraculously on this six month journey, something would fall from the sky and tell me this is Christie, what your next chapter is meant to be. And for better or worse, it didn’t. I was too busy enjoying things abroad. But so came back and through some work with an executive coach, discovered that my real passion is in helping empower Americans. And maybe there’s a little
little learning that I had from being abroad and seeing how the rest of the world eats and lives in a much more healthful way. And I wanted to come back and say, you know, the American consumer is more empowered than we think when it comes to managing our own health, but we’re overloaded. are, it is very difficult. So how can I help empower that?
consumer and that fellow American to say, all right, let’s cut through this information overload. Let’s cut through the noise. What are some tools that in a system that actually works to have true vitality, to have health and clarity and confidence about what we’re doing going forward in this world of noise. And so there’s two things I’m working on. One is I’m creating a clean sports drink for kids.
I have been very dissatisfied. with the options that exist and have kids that say they’re sick and they need Gatorade or mom, bring snacks for soccer, make sure you get Powerade. And I’m like, I’m not getting that junk. And so there’s nothing out there. So I’m in formulation now with it’s a clean food is medicine, gut healing, electrolyte hydrating and real fruit, real food.
low sugar stick pack, a powder stick pack for kids. So that’s in the works. And then the second thing is more of a platform for some education and tools and community for fellow midlife, badass women who want to crush it in life and just need a little bit of a guide to help them navigate. So I’m going to use the seven, eight years of functional medicine experience that I’ve had and
Speaker 1 (39:45.57)
the $100,000 that I’ve spent on self-experimentation and all these things to hopefully help save people the time and the heartache and the cost, frankly, of trying to figure that all out and using the system that I’ve built.
Awesome. Yeah, that’s powerful stuff and it makes a big difference in people’s lives. will. That’s awesome. It will. It will. All right, so we’re going to jump into our rocket round and this is where we’re going to ask Christy three very important questions. So first, when was the first one?
and what it like to do in your free time.
I love to travel. I love sharing experiences with the people that I love. So if I can’t travel, then it’s go over a meal. We love cooking, dining, eating out with friends and family, really creating those memories through those experiences.
All right, well, we’ll in a dinner next time we’re down near neck of the woods.
Speaker 2 (40:45.262)
I’m on over. Sure have, not bound. All right, next question. What’s your most memorable moment in your business journey?
selling the business that day when we were, we had just had our third child, we were moving our moving houses and trying to close. Of course, we engineered everything so that none of that would all happen at the same time. And it literally all happened the same day. And so on November 8th, 2018, we have pictures of us with the moving truck and being on the closing call and seeing that money hit the account.
was the best day. And so we were, we had a bottle of grocery store Dom Perignon ordered takeout Indian food and the best day of that journey.
that’s amazing.
All right. The last question, favorite tool or resource?
Speaker 1 (41:37.464)
I would say hands down, it’s YPO. I’m part of this global networking group called Young Presidents Organization, YPO. And it has been such a powerful source of growth for me from business and personal family dynamics. So whether it was negotiating a deal or navigating these different leadership challenges, or even in now figuring out what I want to do next in life, just having that trusted.
peer-to-peer insight and that kind of confidential network, it’s truly been unmatched.
I mean, most entrepreneurs, right, you face a lot of challenges that your typical friends don’t have. And it’s good to have kind of a support network to just bounce ideas off of. Hey, how’d you solve this problem? And how’d you do that? I mean, actually, my partner and I, we were finalists for Entrepreneur of the Year. And it was just amazing to be in the room with some of the other guys. And one of them was basically suing, I forget, the California Electric Company that started the big fire, right? Because that company owed them like $50 million.
Yeah.
Speaker 3 (42:36.418)
So how do you go through bankruptcy proceedings in a government backed institution? These like really weird things that none of your friends are to be able to help you solve, but being in a room with the right people can help you move the needle forward. So I’m a big proponent of those groups.
So, so important. How do you start a beverage company? Help.
Well, Kristi, it’s been absolutely amazing hanging out with you today. If our listeners wanted to get a hold of you or find out more about your new business, how can they do that?
The best place right now would be email or LinkedIn. So I think they can find me there and hopefully some proper websites will be up in the near future.
and we’ll put those in the show notes for people.
Speaker 1 (43:21.528)
Wonderful.
That is great. Well, thank you so much for spending time with us today. This was a great story and excited about your next venture.
Likewise, get you on once you get going, we’ll get you on another year or two and see how it’s gone.
Thank you so much.
Speaker 1 (43:33.163)
Exactly. We’ll have another conversation. I’ll be back. Thank you guys so much for having me.
Thank you. Thank you. Thank you for listening to the M &A Launchpad podcast. If you’ve enjoyed today’s podcast and would like to support us, please leave us a rating and a review after you listen. I’m Casey Minshew and I look forward to talking with you next week.
