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How Hyper Wellness Led To Hyper Franchise Growth With Jim Donnelly

by | Feb 6, 2023 | Podcast

FM 25 | Hyper Wellness

 

Jim Donnelly, founder of Restore Hyper Wellness, shares his entrepreneurial journey and the story behind creating and leading one of the fastest-growing franchises in the country. If you want to feel better, go visit a Restore near you!

Listen to the podcast here

 

How Hyper Wellness Led To Hyper Franchise Growth With Jim Donnelly

I am joined by a Founder of one of the fastest-growing franchises in the country, Restore Hyper Wellness. If you read Franchise Times Magazine, you may have seen his face on the cover of it a few months ago. Jim, welcome. Glad to have you.

Thanks for having me. I’m looking forward to talking.

I’ve been following what you folks have been doing for a while, and it’s impressive. Before we get into Restore, that’s not the only thing that you’ve done. As we were talking before, we have a little bit of a mutual connection to Charlotte and whatnot. Have you been an entrepreneur your entire life, or did you do a stint in the corporate world for a little bit?

Both. I came from a family that didn’t have much money. My mom was a school teacher, and my dad was an Army Officer. They told me straight up like, “If you need something, we’ll give it to you, but if you want something, you got to make it happen.” I always had a series of jobs. I was always cutting grass and had these little side businesses.

I went off to college and got my MBA in my undergrad of four years. I was pretty ambitious and eager to get through school so I could be an entrepreneur. I was getting my MBA in Georgia. They had an entrepreneurship program, and you got to write a business plan for the class. I wrote my first business plan. It was for a golf ball recovery company where you’d get the contracts for golf courses and get all the balls out of the water hazards.

It’s hideous, but there are millions of balls. We would recondition them and send them over to Europe. Let’s say it will be brought to America, and people bought them for a lot of money. There are lots of funny stories of diving with alligators and snakes. I’d take dive crews down to Jekyll Island because there would be so many alligators. They would want to see me get in with the alligators before they would. You’d walk into the water then on the far bank, you’d see ten alligators walk in the water when you walked in the water. I’m glad I’m out of that, but that was my first entrepreneurial business. That was a real formal business.

My business school and professor invested in it, so that was pretty cool. I had a military commitment because the military paid for school. I went off and did airborne school. I was in ranger school when I got a call, and my business partner had literally stolen all the money and emptied the bank accounts. That was a real wake-up call as a young entrepreneur.

My dad taught me one thing and left me with one saying. He said, “Don’t worry about it. There are no debtor’s prisons in the US. As long as you tried hard, didn’t tell anybody something that you didn’t do, and risk your money right alongside them, you can start again any day.” Having said that, I did have to go into the military as an Army Officer. I came out of the military and was going to be an entrepreneur, but I did not want to do it right away. I wanted to build a foundation.

I did do my corporate career. I went and worked for Kraft Foods. I was a Brand Manager for Jell-O Pudding and Cool Whip. I helped start a retail group at AT&T in Bell South. I developed new brands internationally for Coca-Cola then went up to Citibank in New York to help run a marketing group that was going to change the way Citibank did online banking.

The funny thing was, the first day I started, I met a buddy named Tony. We started talking about business ideas that afternoon on our first day of work at Citibank. We used to call Citibank the House of Pain. I don’t mean anything bad about that. It was in Long Island City. It was this building that stood by itself. Corporate America was probably not my thing. I always say Citibank was a great place to have worked. Long story short, about two years in, we started a company called IgoUgo. IgoUgo was an online travel community. We had missed the dot-com thing. It was starting to fizzle out. This was about 6 or 8 months before 9/11.

We were spending our own money, then 9/11 happens. You can’t raise any money in the travel space. You’re like, “What the heck did we do?” It forced us to make it work and bootstrap it. Years later, we won a Webby Award for the top travel site in the US. We sold at Travelocity. From that sale, I’ve been able to do essentially anything that I wanted. That got me back to Charlotte eventually and got married in New York. I didn’t want to have kids in New York, so we moved to Charlotte.

That was halfway between both of our parents’ houses. When I got there, I was like, “That’s a beautiful, lovely city, but I came from New York. This place needs to be a little cooler.” I started a company called Pursuit Group to make Charlotte cooler. Our first business was Emerson Joseph. It was like a high-end men’s grooming lounge. If you ever go into that space, it’s one of the coolest retail spaces you’ll ever see. It got a little speakeasy down in the basement. You can play cards and watch games. We then bought some bank buildings and turned them into super cool high-end luxury condos.

Guys like Michael Jordan, Cam Newton, and Daughtry all live there. These were these 7,000 square foot custom-down to the doorknobs. It was super cool. I did a few other things, a Charlotte Athletic Club and all. Long story short, I got a chance to move back to Austin and had a couple of years of living in Austin. Doing triathlons, I discovered the inspiration for Restore.

That’s a heck of a journey. You can’t script it. There was adversity, alligators, and 9/11 and you persevered through it.

If you’re going to be an entrepreneur, expect adversity. If you can’t get through adversity, then you’re not going to make it. Everyone looks at Restore, for instance, and says, “What a sweet ride. That’s straight up into the right.” Trust me, there were some hard times and there will be other things that will create adversity. You got to hang in there and filter that out as best as you can.

If you're going to be an entrepreneur, expect adversity. If you can't get through it, you will not make it. Share on X

Persevere and keep fighting. You get to Austin, doing a bunch of triathlons, and the inspiration for Restore is where it was born.

I went to pick up Stacy, my wife, for lunch. A woman happened to walk by. She said, “Stace, I’m going to do cryo.” It turned out she was the ambassador for this little cryo place in Austin. I didn’t know what cryo was. I said, “What’s cryo?” She said, “You’re going to love it. You got to try it.” You freeze yourself at -250 degrees. Long story short, I had a hard training before us. I said, “Stace, lunch is great, but I’d much rather do that. I’m beating up now.”

We did and we got there. I fell in love with cryo the first time I did it. The funny thing was I hated everything else about the experience. I hated the location and the retail environment. It was way overpriced. I knew instantly, and that comes from being a multi-time entrepreneur, that I could make an experience better. That’s what I set out to do. A few months later, I opened the first Restore location in Austin and then opened 3 or 4 more to test the concept to make sure it wasn’t just an Austin thing.

I opened locations in Houston and Charlotte. I put one in the Charlotte Athletic Club, which I still owned at the time, and figured out what worked and what didn’t. The funny thing was I knew I didn’t want to have a crowded therapy place. That’s a small business in the grand scheme of things, and it’s also not defensible. Anybody can do a crowd therapy business. I started to layer in other pieces to it, like medical services. I ultimately got to ten different services all under one roof then created all kinds of defensive barriers that made it hard to replicate. It went crazy. Now we’re in 41 states and soon to be 44.

We’ll get into that run of growth that you folks have been on, which is impressive. It’s been rapid. You started, you see this cryo thing, check it out, put your spin on it and feel like it needs to be broader than just the cryo. How did you figure out these other services to layer into what Restore was and is?

I’d love to say I did a bunch of market research and was sophisticated about it. At the end of the day, I pulled up my computer and looked for wellness modalities. I went and tried them. They were all out there. They were all in these one-off places. Nobody was doing them in a way that I found particularly interesting or unique, but the modalities always made me feel better. I thought, “What if you put them all together and create a construct?”

The construct became Hyper Wellness®. We trademarked that, and that is what we do now. Hyper Wellness has a few characteristics to it. Number one, you always feel better right after a Hyper Wellness treatment. You walk out of the door feeling better than when you walked in the door. Everything’s supported by science and medical studies. Everything’s replicable, so you can do it consistently across the country, and it feels the same everywhere. It had a scale component to it.

You always feel better right after a Hyper Wellness treatment. You walk out of the door feeling better than when you walked in. Share on X

It was either one to many, like an IV where a nurse could do six people at a time, or it was machine-driven, like a cryo machine. You could do it for 4 people in 3 minutes, or it was chamber-driven where you could put them in a sauna or a hyperbaric chamber and walk away and do other things. You could get an amazing amount of throughput. It became a lovely business. At the end of the day, I tell people all the time, “If I don’t like it, it isn’t in Restore.” That was ultimately the bar. If I couldn’t understand it, didn’t like it, or didn’t feel better right away, then I couldn’t support it through some science and medical type studies, then it didn’t make it.

I can personally vouch.

There’s a ton of stuff out there. There’s so much stuff in the wellness space. There’s some voodoo, witch doctor stuff, stuff that’s not supported that has big claims around it, and there’s some great stuff. In the bucket of great stuff, there’s great stuff that does have the studies and great stuff that doesn’t have the studies.

We always say, “An absence of evidence doesn’t mean it doesn’t work. It means someone hadn’t gone out and spent $1 million to do a study.” This little business where there are lots of little fragmented players, who’s going to go write that million-dollar check? It’s got to be a decent-sized company. There is a lot of stuff in the wellness space that we know works because we see hundreds of thousands of customers but doesn’t quite have the validation behind it that we want. Ultimately, we’ll do those tests and studies, and we’ll be able to make even bigger claims about what they do.

FM 25 | Hyper Wellness

Hyper Wellness: An absence of evidence doesn’t mean it doesn’t work. It means someone hadn’t gone out and spent a million dollars to do a study.

 

It sounds like that’s how you’ve built the business model to be able to layer in new services that might emerge that are backed by science and the evidence is there. It’s to be able to continue to offer that one-stop shop for folks that want to get all different types of stuff related to anti-aging, feeling better, recovery, or whatever it may be.

We’ve had some things that we’ve taken out too. The idea is you do have this place where you can pull in and pull out if you needed to. Stretching was hard for us. We tried stretching. I love stretching by the way, but it’s the one-to-one service, hard to scale, and hard to create consistency. It violated all of our Hyper Wellness tenants, but I loved it. That’s the one that it didn’t violate.

We’ve added stuff, and we’ll continue to add stuff. None of what we do is trendy. Cold therapy’s been around since Hippocrates. Hyperbaric chambers have been around for many decades. There’s a reason that a hospital gives you an IV the first thing when you’re admitted. I could go on and on, but all this stuff is seminal stuff. Some are more supported by studies.

It’s hard to study some of it. For instance, cryotherapy. It’s hard to do a double-blind study because you can’t have a placebo because you know if it’s frozen or not. You can’t say, “This group thinks they froze but didn’t, and this group did freeze. What are the results in the two groups?” That’s an impossible construct. You have to be creative about how you do those things.

It’s interesting because you’ve simplified it, but there’s a lot of complexity behind the scenes with everything that you folks have figured out and are figuring out.

When you have a retail concept, it’s got to be relatively simple. If there’s an issue we run into, it is what I call cognitive bandwidth. That is, you got folks making an hourly wage working at the front desk. We also have nurses and other folks in Restore, but you have to be able to communicate what the ten different services help with and how they do it. People have a lot of questions. It’s hard to replicate across the country people that know everything about all of our modalities. Our goal is to make sure they know enough and make sure they’re good at getting people to the rest of the information.

I can personally vouch for the head nurse at the Restore in Ray Farms here in Charlotte. She’s awesome. I go in there and she teaches me something new every day. I can personally vouch that the IV is amazing. She said, “What are you going to be doing?” I’m like, “We’re going to be playing golf maybe for a few days with some guys,” and she’ll cook me up the right IV.

That’s the way it should work. You should give her some input, and she should tell you what you need. The typical person coming to Restore doesn’t know what they need. They know how they feel and what their need state is, but they don’t know what they need. When you come into a Restore, you’re going to get recommendations from the varied staff. There was a day when I knew every nurse and every employee in the system.

I’m way beyond the point where I know the specific nurse at Ray Farms. The thing that’s consistent across our stores is we have a net promoter score of 86. That’s the score that people give a ranking to a place that they’ve just been in. They get a little email survey and they rank. Long story short, nobody’s in that range. We are in a class of ourselves being at an 86 net promoter score not just for the medical wellness space but for any space.

You name a brand, and I guarantee you we have a higher net promoter, which means that people love the employees and the experience. This means people walk out saying, “I’m going back there.” It’s not because we’re perfect. There are lots of little quirky things about our retail experience, but the fundamental thing is people walk out feeling that they were treated well, treated with respect, and feel better.

I can vouch for that. If you’re reading and want to feel better and check it out, find a local Restore. It’s awesome. Let’s go back to the genesis and the expansion. It sounds like you opened up a couple of corporate locations first. Was franchising always on your mind?

We opened five corporate locations first to AB test a variety of things, different communities, and different states. At that point, we evaluated. Franchising’s very capital efficient. Franchising’s also, for my personality, delightful because you have entrepreneurs at each franchise location that care about it. To me, that’s more fulfilling and more interesting than a corporate location because I love our corporate staff and our teams, but there’s not an entrepreneur’s put his or her life savings into the business that shows up every day needing Restore to work because, in some cases, it’s paying for their mortgage and funding their retirement.

FM 25 | Hyper Wellness

Hyper Wellness: Franchising is very capital efficient.

 

I love that dynamic that it was 1) Capital efficient 2) You had a passionate partner with every franchisee. We did a lot of research. We don’t know a darn thing about franchising. We certainly didn’t know it when we started. We studied and took our past experience. We always said we’d run Restore more like a tech company, hire high-quality people, iterate, and this and that. A lot of the people in the franchise space ask us about franchising.

They’re often surprised by my answer, like, “How did you grow so fast? How did you sell so many units? How did you do this? How did you do that?” Oftentimes, the answer I give them is completely different than what they would expect or what they’ve seen again and again. That was intentional. Now, we are a pretty sophisticated franchisor. We do the things we have to do to be that, but we will always do it our way and do it a little differently.

What are some of those answers that you give to folks when they ask you about how you’ve achieved what you’ve achieved with franchising?

I will say we approached our franchisee selection a little differently. When we first started, we were super picky. Partly, we were leaning into our networks. You had to be either a military academy grad or a high-level sales exec at a blue-chip medical device company to be a franchisee in the beginning. Why those people? Military academy grads are the hardest schools in the country to get into. You’re with the best of the best.

You’re taught to be a leader. You’re taught to follow a game plan and go through hell. If you make it out to the other side, we know that you’re going to persevere and be able to handle some adversity. Usually, you go off to war and get shot at. A bad day at Restore is like, “I got this. It’s no big deal.” They’re incredibly bright, have high integrity and all the things that you want in a franchisee, and are super smart. They figure things out. There are the medical device folks. I’m talking about the J&J, the Abbotts, the Strikers, the true blue-chip guys.

By the way, many of them were West Pointers as well, but they’re vetted. You know you’re getting a high-quality candidate. They’re attached in some way or form to the medical world because they’re working with a medical device. They tend to be ex-athletes and a bunch of other things. By focusing on those very specific recruiting strategies, we got better candidates, which is not to say that other systems don’t have great candidates, but as a rule across the board, we got more consistently great candidates. That was one thing.

The second thing was we didn’t use brokers and used area developers. The conventional wisdom is that if you want to go fast, you got to do brokers and area developers. We didn’t need brokers because we had high demand, and I’ll talk about that in a sec. In area developers, we felt like that was leaving too much value on the table. We had a medical component and didn’t feel comfortable off-ramping that to the area developer.

We had a special salesperson that ran FranDev and still runs FranDev for us. People say, “Jim, you’ve got 189 and about to have 200 locations. It’s only been four years. How’d you do that? You got another 500 or 600 under development agreements. What did you use? What system? Who?” I always say that we use JJ. They think JJ’s like a system they haven’t heard of, but JJ is a guy. His name is JJ, and he was incredible and very connected. We went out and found a bunch of folks, and I helped him a little. Stacy helped him. It happened quickly.

It’s a cool business. People like it not only because of the business potential and the financial potential but because it’s something that everyone wants in their life, “How do I make myself better? How do I live longer? How do I live more vigorously?” You embrace Hyper Wellness, and if you embrace Hyper Wellness, you can do more. That’s our tagline, “Restore and do more.” What restore means to you is very personal and what do more means to you is very personal.

We have pro athletes that are the lead of the lead. Multiple pro-athletes that come to Restore played in the playoffs. We also have folks like grandmothers that want to braid their granddaughter’s hair and couples who, at their retirement age, want to be able to walk around the lake and enjoy each other. It’s not always these athletes and athletic. It’s more energy and less pain. If you get more energy and less pain, you’re more prone to get out and do the things that you love doing. When you’re doing the things you love doing, you’re a better person. You’re a better mate, a better spouse, a better parent, and a better human being. That’s what we hope we’re doing for society.

If you get more energy and less pain, you're more prone to get out and do the things you love doing. When you're doing the things you love doing, you're a better person. Share on X

You have what you’ve built in aggregating a lot of newer new age. This is my verbiage, so I know it’s not accurate, but you put together something that can affect a lot of people. That’s a cool thing, the vision you have and how it’s come to reality. It sounds like you were very intentional about who you partnered with as franchise owners.

Sometimes, when you start to franchise, that’s where it can get a little bit different if you don’t bring on the right people but get that foundation of franchise owners that align with the vision. I’ve heard a rumor. I think it was part of your selection process. If you’d have a beer with them, they pass one of the filters.

We’d make them stay at one of the founder’s houses and have dinner with them. We’d get everyone in the family to vote, including the kids. It’s interesting when you get kids in the mix because everyone’s nice to me when they come to stay at my house or have dinner with me. I’m the Founder of Restore, but how do people treat the kids, especially when no one’s looking?

One time, one of the kids raised their hand and said, “I vote no.” We were like, “We like that guy.” He said, “Why’d you vote no?” I said, “You might not have noticed, but he wasn’t very nice to us. He didn’t ask us questions. He ignored us. Most of the franchisees that come are so nice, ask questions, and care about our opinion. They play games with us.”

Once again, whether you’re nice to my kids or not is not the main criteria for being a franchisee in the Restore system, but are you a human being that is nice to everybody? That’s important, and you can find out these little subtle things when you go deep. Now, we can’t do that anymore. We’re way too big to have everyone stay at our house, but we find ways to make sure we see they demonstrate they’re good humans when they don’t have to be and when no one’s looking. There are lots of ways you can see that. We pride ourselves on that.

The sign behind you says, “You can build an empire and be an unbelievable business person without compromising kindness.” I respect that.

At some point, I lead from the heart. I’m a people person. I’ve gone to great lengths to create a culture here. This has been an unbelievable ride, like a rocket ship, but I never want to forget the people that help me get here. Those folks, I owe them an immeasurable debt. I certainly try to be kind, pure of heart, assume and project good intent, and all those things. At some point, you’ll have the folks that say process and all this other stuff becomes more important and you can’t lead from the heart all the time.

That’s when I’ll raise my hand and say, “Great, it’s time for me to hand the reins over and let someone take it to the next level.” I have this structure for my life, and I’ve always said, “Every five years, I wanted to do something totally different.” Five years is the fuse that you can remain super passionate, high energy, and not be jaded. The interesting thing about Restore is I’m at the eight-year mark. I am three years past my construct.

I got to figure out, “Is this something I want to continue to do day-to-day?” I’ll never be out of it because I’m a big owner here. I’m the founder, so that will never change, but you have to look in the mirror and say, “1) Am I the right person given the new phase we’re in? 2) I might be the right person, but am I willing to do it at the same intensity that I’ve always done it?”

A lot of times, the answer to one or both of those is no, and that’s when you got to step aside. There will be a day, it may be soon or maybe a little farther off, where I say, “That’s awesome, but someone else needs to come to do this.” I can just observe from the sidelines, give my input, and enjoy the fruits of it, continue to go in, get my services, chime in, and put my opinion in but not have to grind the spreadsheets, the HR issues, and all that stuff that inevitably start to happen.

It sounds like you’re very aware of the growth of the company, where you want to be, what you want to be doing, what the company might need, and to continue the path that it’s on. Being aware of that says a lot about you as a leader. Not everybody is.

I’m an entrepreneur at heart. I like to build and start things. You also start to get to the point where you’re so big that it’s harder to move the ship. You’re not creating original things at the same pace, if at all, and there are things you want to do. There are lots of things that I want to do in the health and wellness space that Restore will never do. We have a model, and we’re going to stick to that model. Once again, all those things tug at you, and eventually, the tug of war results in you getting pulled into the mud pit. That means you go through something else.

You went into hypergrowth mode a few years ago after you had the foundation. Wasn’t there a point where you hit the hockey stick?

Relatively speaking, we’ve always grown faster than other franchise systems, particularly in the health and wellness space. The health and wellness space is incredibly difficult. It’s difficult because every state has its own set of regulations. In the United States, it’s like 50 countries. The regulatory boards, the cosmetology boards, and the medical boards are all different. They have different rules and regulations, so you’ve got to set up a system that accommodates that. It’s hard.

FM 25 | Hyper Wellness

Hyper Wellness: The health and wellness space is incredibly difficult. It’s difficult because every state has its own set of regulations. So you’ve got to set up a system that accommodates that.

 

Even if we weren’t in the health and wellness space, most people would say, “You guys are still a crazy rocket ship,” where every 4 or 5 days, we’re opening a new location. We have five grand openings in just a week. It is a rocket ship. It felt like a rocket ship from day one, to be quite honest. There’s a ton of space in front of us. We ultimately think we can open 1,500 locations in the United States, and there’s international and all that. The journey still got lots of stops along the way.

It’s been a heck of a ride. I got to ask you, did that franchisee that your kids voted no against get approved?

They did, but we had to go through a lot of extra steps. To be fair, they’ve turned out to be an incredibly kind and great franchisee. I did have the hard conversation with them to say, “As an FYI, this almost didn’t happen.” We’ve got a good relationship that I can have that conversation with them, and they appreciated it.

They were like, “That is not me. I don’t know what was going on.” As I said, they’ve been beautiful. If they had turned out to be bad, we would’ve elevated the kids as the first funnel and changed the way we talked about things, but it was all good. It all worked out for the best. I consider that franchisee to be a good friend. I’m a people person. I consider most of the franchisees to be good friends.

That’s great. I admire what you’re doing and the way you’re going about it at the same time, being mindful of people and culture, balancing that with the growth of the company, and all that good stuff. Jim, I appreciate it. Thank you for coming on here and sharing your story.

My pleasure. Keep pushing and grinding. If there’s anything I can do to help with your growth and help you reach more people, we’ll certainly post this to our community. I always enjoy talking about these things. I hope that everybody at some point in life gets their crack at being an entrepreneur because it’s a lot of fun. Other than that, thanks a lot for having me. I appreciate it.

I’ll let you roll. Thanks, Jim.

Thanks a lot. Talk to you soon.

 

Important Links

 

About Jim Donnelly

FM 25 | Hyper WellnessRestore is focused on the 200 million Americans that want their bodies to look and feel like they did when they were in their prime. With the opening of multiple locations in top cities across the U.S., the company is on a path to create a national presence and leading brand in the Hyper Wellness space.
 
Prior to Restore, Jim co-founded IgoUgo.com, winner of a Webby Award as the top travel website in the U.S. In under five years, IgoUgo became the leader in user generated content for travel websites and was sold to Sabre Holdings / Travelocity.
 
With a focus in the luxury retail market, Jim has developed luxury condos (for homeowners including Michael Jordan, Cam Newton and Chris Daughtry), as well as salons, spas and high-end health clubs including the Charlotte Athletic Club. The accumulation of these experiences informed the creation of Restore.
 
 

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