#155: StretchMed – Starting a Franchise During a Pandemic

The Empire Builders Podcast

Brian Cook is a force to be reckoned with and figured out how to redefine in-person service during a pandemic.

Dave Young:

Welcome to the Empire Builders podcast, teaching business owners the not-So-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.

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Stephen Semple:

Hey, it’s Stephen Semple, and we’ve got a special episode for you today. Once again, boy, Dave seems to be getting a lot of time off lately. I hope he’s enjoying it. But who I have with me today is a special entrepreneur, Brian Cook, who he’s got a couple of really interesting things to share with us today. So Brian founded a company called MedStretch. He’s a franchisee of this program. They’ve had a bunch of success, and there’s definitely a few really cool things that he shared with me that I think are going to be awesome lessons for everybody. So Brian, starting off, correct me, I couldn’t remember, because I had a bunch of different notes from when we spoke. When did you found MedStretch? How long ago was it now?

Brian Cook:

So we founded StretchMed in November 2019. That’s we opened the first location.

Stephen Semple:

Right, because I remember it was pre-pandemic and I couldn’t remember how close. So you open up this thing that is in-person exercise in November of 2019, and I think something special happened in 2020? Like holy crap.

Brian Cook:

Yeah, definitely. We had a blistering success, sold a few franchises right off the bat. Actually, one of our first customers came in and loved the program so much, he bought three franchises. We got a few open, and then COVID shut us down, and then we had to do that whole thing. And it definitely took some wind out of the sails, but after a year or so, maybe even two years, we kind of get back on track and things are going great now.

Stephen Semple:

So you almost had a start and then almost a reset start again when the world tried its best to get back to normal and if you do any travel these days, whatever the heck normal is.

Brian Cook:

Yeah, definitely. And it did force us to get really deep into digital marketing, where we hadn’t done that yet. We were mostly doing pop-up events and kind of in-person things, which is frankly a lot of work. Effective, but a lot of work, where COVID really forced us to get real granular in the digital marketing. Organic posting in some ways did us a favor where now we do really, really well with the marketing.

Stephen Semple:

It’s amazing how many businesses that I’ve talked to and researched where they actually sit back and said not that they would ever want to go through it again, and not that they would ever wish it upon the world, but surprisingly they really improved their businesses during COVID. It’s like, it’s amazing the things that we all said was impossible. Like, oh, you can never sell this remotely, suddenly became possible.

I remember with one customer, I had a conversation with them because they were in the home renovation business and saying, “Hey, you know what? You always have to be in the home.” Three weeks later we’re doing online selling via Zoom. It’s amazing how all of a sudden it became possible and now that’s how they’re doing it. And it’s not like we went a hundred percent back. It’s really quite incredible. One of the things that you shared with me that was also interesting is how many franchises do you have now? I know you’re on track to get to a hundred pretty quickly, but how many are you at right now?

Brian Cook:

Yeah, so we’ve got 30 open and we’ve got 25 more in the queue. So 25 more that are purchased in the process of site selection, in the queue essentially. Eight of them are opening in the next two months. And then the plan is just to keep adding more and more into the queue and then we’ll continue to staff up as we scale up.

Stephen Semple:

And the thing that I find astounding, you talk about 20 and most franchise systems don’t make it to 20. It’s amazing again, how many of them are very tiny and very small. So good for you in terms of the fact that in a heartbeat’s time, you’re going to be at 50, which puts you really in the top probably 25% of franchises out there. And in fact, in pretty short period of time, although 2019 was the technical opening five years ago, it really wasn’t. It’s really probably more like three years ago that you really got going and rolling. So well done. Really, really well done.

Brian Cook:

Thank you.

Stephen Semple:

To me, it was also really interesting when you shared with me what your guys’ system is because you’re really changing the way that stretching is being delivered in the marketplace. Tell me about this idea and how did you come up with it?

Brian Cook:

Great question. So we started a little over four years ago and looking at the market, there’s a few competitors in the space and everyone’s pretty much charging in the $75 to $95 for a 50-minute stretch. And we’re heavy into looking at data. And something we get our owners to do is really, we want them to be analysts. Look at the data, the data’s going to tell you where you have opportunities in your business. And us as the franchisers are looking back, we’re still seeing a lot of turnover, still seeing a lot of people come in and out of the program. And if you back up and you say, well, it’s $75 or $80 a stretch to come once a week, you’re in the three to $350 a month space. So it’s significant expense for most people, some people not. But again, the masses, that’s a lot of money.

And as we sat back and looked at the success of Massage Envy, this lower membership priced model, we looked at the success of The Joint chiropractic franchise. They’re charging roughly $90 a month and you get four adjustments and they’ve got 800 locations open. So it was really like how do we get the price down? So we spent a lot of time looking at, we want StretchMed to be, if you go to a fitness program we want and a StretchMed, we don’t want it to be your program or StretchMed. So we piloted these flexibility trainers that allow us to have you come into the studio. We’re going to show how to use it The first three times you come in, you’re going to spend 15 minutes on device, this machine going through the dynamic warmup, and then we get you on a table and then we’re on a table. We’ll spend 10 minutes doing the customized deep stretch, but you’ve already spent 15 minutes essentially warming up.

So allows us to deliver a 25-minute stretch, but only utilizing the therapist 10 minutes. We’re able to turn four of these stretches per hour, allowed us to lower the price to $20 a stretch. So our entry-level membership, it’s $80 a month and you get four credits. One credit’s a 25-minute stretch. And then if you want to stack your credits, you can use all four credits and you’ll essentially get a 70-minute appointment, which would be 50 minutes on the train and warming up, followed by a 55-minute deep, head-to-toe, 36 different stretches. So we’re opening our first location in California like next week. And yesterday we had 16 people booking free intros.

So we’re doing a free 25-minute intro, which obviously no risk come in and it out. And then $80 a month like, “Oh, I can afford that. Oh, everyone can afford that.” So we’re seeing the growth probably five times greater than it was before. A store in Boston that we piloted this two and a half months ago, they’ve doubled in size in two and a half months. So super exciting. And the way we like to say it’s like you first got to find out what’s the amount of money people can comfortably part with, and then how do you build the program to deliver results within that amount of money? And the direction we’re going is we’re going to get you to do more at home. So we’re going to provide this $8 a month service that you can come more and spend a lot more, but we want that entry level to be very affordable. Then we’re going to get you to stretch at home, do more at home, buy one of these flexibility trainers at home, build a mobile app that holds you accountable at home.

Stephen Semple:

So the vision is that you would also sell the person this home device that they would take home, but you would also know whether or not the work has been done. So there’s this accountability. So when they come back in, it’s like, “Hey, you’ve been doing your stuff at home or you’ve not been doing your stuff at home”, which allows for that conversation.

Brian Cook:

Exactly. So it’s the flexibility trainer, yoga mat blocks and a strap, and then this at-home routine. So the idea is that that $80 a month that you pay is the most valuable thing that you have in your life, that there was no chance you would ever look at that fee and go, “You know what? I want to cut that” because you’ve got someone checking in. “Hey Steven, great job. I saw you got three stretches in last week. Fantastic. Keep up the great work.” Coming in for that interaction, the hands-on. The stretch you put yourself through isn’t the stretch we’re going to put you through, right?

Stephen Semple:

Right.

Brian Cook:

So we don’t have to worry about losing you to your home. We just want to provide more value to you for the program, which will then increase the length of your stay, increase lifetime value, and ultimately fill up the store.

Dave Young:

Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.

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Dave Young:

Let’s pick up our story where we left off. And trust me, you haven’t missed a thing.

Stephen Semple:

So one of the things that was interesting when you were sharing this with me, it brought me back, it actually recalled a podcast that I did. Oh, I guess it was back episode 25 on Supercuts. And Supercuts didn’t just drop the price of hair cutting. And I think this is the part that people lose when they go, “Oh, let’s drop the price.” Well, when you do that, there’s a floor. Like sure, you can do it less expensive, but it’s like 10% less expensive or 15%. When you’re really going down into this disruptive pricing model where you’re really like $80 a month, it’s because you changed how it’s being delivered.

That’s what Frank Emmett and Geoffrey Rappaport did at Supercuts. They changed the way hair was being cut, which allowed them at a profitable price deliver good quality haircuts, like decent quality haircuts at this price point that at the time the industry went, “It’s totally impossible.” Just like for you saying if you went to a traditional sports model or workout model or gym model, and you go, “Hey, you’re going to be with a trainer four times a month and we’re going to charge $80 a month, it’s like that’s not possible.” But what you said is, “Oh no, there’s a way to do it” because basically you’re only spending 10 minutes with the therapist even though you are doing this 25 minute thing and getting the full value of it. So it’s a real disruptive pricing model.

Brian Cook:

We still can generate $80 dollars an hour, and even some markets 80 a month, another market could be 90 a month, Manhattan might be a hundred a month. So it allows us to still generate between 80 and hundred dollars an hour, but reach probably, I don’t know, let’s take a guess. For every one person that can afford $350 a month, how many can afford or would like to spend 80 a month? And maybe is it 20 times the people? I have a feeling 20 times more people will spend $80 a month than 350. So now we’ve get this massive demand.

And then think about the expectation of someone walking in to a beautiful stretching studio. They know they’re spending $20 a week, what’s their perceived value? This is the best thing in the world I’ve ever experienced. Where the other person that can afford the 3, 4, 5, a month, it is like, “Oh, it’s just another high end service.”

Stephen Semple:

Well, and there’s a saying, when you sell to the masses, you live with the classes. When you sell to the classes, you live with the masses. And what’s really remarkable is when you look at the bell curve on income, the average family income in the United States is like $65,000 a year. And when you even go up to 200,000, it starts becoming a significantly smaller percentage of the population. Yet how many people are suffering with knee pain and hip pain and back pain? All of these things which can be solved with stretching. Non-surgical, let’s do some stretching. And you’re bringing it down into that price point.

And the other thing I love is the free sample. Like, okay, you’re going to come in, you get to try this out for free. Because people are like, “Well, how good is it going to be for that price?” And they get to experience it. It’s a really innovative idea. So what made you, I get part of it was you were looking at how do I bring the price down and you immediately recognized to bring the price down, I have to deliver the service differently. That’s the McDonald’s story. That’s the Supercuts story. That’s Michael Dell’s story. But couple of things. What made you interested in stretching?

Brian Cook:

When Stretch Me was formed, the purpose is to eliminate chronic pain, increase mobility, rejuvenate, and help you move well. So we kind of got really clear on that. Then after doing a bunch of research, it shocked me that there’s approximately 116 million Americans in chronic pain. People are turning into medication and there’s just a lot of other complications happening from being in chronic pain for any extended period of time, which not good for mental health, many things.

But even to back up for me, most of my career has been in boutique fitness, one-on-one personal training studios, small group training studios approaching almost 200 locations across four different brands. And then happened to see the one-on-one stretching industry start to take off. And I kind of waited a minute and saw it over maybe several years, take shape. And then I just remembered, is this something we can do? Does my team have the capability? Do I have the capability? So as I dug into it kind of brought me back to my one-on-one training days and back even when I was 20 years old. Personal training, I developed a little 10-minute stretch after your session that my clients loved.

And then when I joined a one-on-one training franchise as an area developer, I brought the stretch routine into that company and it cascaded through the whole brand. And then when we got into group fitness, it kind of left. We didn’t really have time for stretching in the group fitness concept. And then another thing is I used to personal train one of the partners of the Boston Red Sox way, way back, and I stretched them for 30 minutes and trained them for 30 minutes, but never did I think stretching would become its own thing.

So once I saw the studios kind of taking shape, few different competitors in the space, grabbed my daughter, flew around the country, went to about six different competitors. Thought it was really cool, wasn’t particularly blown away. There was some better than others. And then the key is of course looking at the degree of scalability. How fast can you scale kind of service? And I was surprised at the lack of systems within the same franchise that I went to, which I thought that was interesting. I’ve gone to multiple different studios within a franchise and I’m getting a different treatment every time or different experience every time. So I’m like, “Well, we’re definitely not going to do that.”

So the best way to explain it is what the competitors do is they’ll teach their therapist a certain number. They’ll say, “Hey, use these number of stretches, but do anything you want.” What they didn’t do is they didn’t establish a minimum volume of stretching in a particular minute at a time. So what we did at StretchMed is we developed a sequence, a head-to-toe sequence, 10 minute, 25 minute, 40 minute, 55 minute different protocols, not including the flexibility trainer. So these are super time-efficient and the best way to explain is we’re getting twice the work done in the same minute of time. So you’re feeling a lot more stretching when you go through one of our protocols.

Stephen Semple:

Well, what’s really interesting, and again, this is almost so much like the Supercuts model, where before something like Supercuts came along, every hairstylist cut the hair, however they wanted to cut the hair, and Frank and Jeffrey came along and said, “No, no, no, this is the way you do it.” It has to be done this way to create not only the consistency and time, the consistency experience, which also suddenly makes it something that’s very, very franchisable.

But it’s interesting too, that this whole idea of stretching has been kind of, and I see this with a lot of people who’ve built really successful businesses. The idea wasn’t brand new. It’s been sitting in the background with you for a while and then you saw, “Oh, wait a minute, this thing’s starting to catch on.” You went out and you did research, you visited a bunch of places and went, “I think I can do this better.” Then created this model that allows you to deliver it at this really exciting and quite frankly, really disruptive price point that is going to be hard for competitors to copy. So really exciting. So if somebody wanted to learn more about StretchMed, both as a potential customer or as interested in terms of franchising, where do they go, man?

Brian Cook:

Yeah, so they can check out stretchmedstudios.com, so stretchmedstudios.com and then there’ll be our website. We’re opening our first location in California and like I mentioned in a week, super excited that’s going to, we’ll probably put 50 locations in California in the next 24 months alone because it’s such a bright market. We started in Boston, as you know, we’ve got about, I think 20 or so locations in the Boston market, and now we’re in 15 states, and this should be a really big breakout year. We’re bringing on a COO pretty soon. So I can start to take a step back, focus more on strategy and people development, and then this individual will take over the day-to-day.

Stephen Semple:

Well, the thing that I want people to take away from this is this whole idea of if you’re wanting to go into a market and you want prices being your offer, again, it’s not about being a little bit less expensive and for you to be a lot less expensive, it means operationally you’ve got to do something different. You’ve either got to uncover a real inefficiency in the marketplace or deliver the product or service in a dramatically different way for that to be done. And then what’s really interesting about that is that that’s hard to replicate. Eventually somebody will copy you. You’ve got a several year head start before that happens because reverse engineering all those things, takes time.

Look, it took a long time for the compute, like Michael Dell had a head start on the computer industry for a long time before people started going, “Yeah, that’s maybe a better way to make computers.” It didn’t happen overnight. And talk about an industry with really deep, really deep pockets looking around. I wish you all the success and we’ll have to have you back on in a couple of years time and talk about where you are at that point. But if you had a lesson that you wanted to share, an insider lesson about this journey that you want to share with other entrepreneurs out there, what is it that you would like them to know? What would you like to share with them?

Brian Cook:

So for me, starting stretch over four years ago, it really helped me get clear that I love starting new companies from scratch. That’s really my passion. So for many listening, there’s a cool software called Fran Chimp, F-R-A-N-C-H-I-M-P, and there’s a list of about 3,500 franchisors. And as discussed, many don’t make it past 20 units. I would challenge everyone to open, become a franchisor instead of a franchisee. And that’s like the next chapter for me in a new company I’m going to start, is helping entrepreneurs become franchisors because it’s the holy grail of wealth creation. As much as we would love you to buy a franchise, the goal really is to help people find what their true calling is, what’s going to fit them the best and where the greatest opportunity is. So yeah, I think, and most things can be franchised, even though you think it might not be.

Most things are. I don’t think I’ve really heard much that can’t be franchised. To me, it’s a nice seven figure earning potential model, which then frees you time to invest in diversify investments. But the name of the game you first have to, you need to cashflow something in order to invest. You got to make money today before you can invest for tomorrow. So anyway, I love it. StretchMed has been exciting starting the company from scratch, already looking forward to a couple other brands we’re going to start in the coming year or two, which yeah, I’d love to come back on and every time we launch a new brand, we’ll share with your listeners.

Stephen Semple:

All right, awesome. Thanks for your time, Brian.

Brian Cook:

Thanks, Stephen.

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