How To Build A Multi-Unit Franchise Empire And Sell It To Private Equity: Dwayne Duprey Shares His Journey As An Early Orangetheory Franchise Owner

by | Jul 28, 2022 | Podcast

FM 7 | Franchise Empire

Dwayne Duprey and his wife Karen were early franchisees and area developers with Orangetheory Fitness. Dwayne shares their journey of building a successful multi-unit franchise empire and exiting private equity. Dwayne covers everything – from how they structured their organization and hired and developed their employees to how they prepare their business to sell. He also shares his insight into the next franchise they bought – Restore Hyper Wellness.

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How To Build A Multi-Unit Franchise Empire And Sell It To Private Equity: Dwayne Duprey Shares His Journey As An Early Orangetheory Franchise Owner

I am excited to be joined by my long-term friend, Dwayne Duprey. He is an experienced franchise entrepreneur. He had a good run as a multiunit franchisee with Orangetheory and is now a multiunit franchisee with Restore Hyper Wellness. Dwayne, welcome to the show. It’s good to see your face.

It’s nice to hear from you and see you as well.

I’ve been looking forward to this conversation for a long time. Your experience and journey in franchising can get a lot of people to learn because you were in Orangetheory early and had built that into a good run. I would love to talk about what that journey was for you and your wife as you built up. Do you have eight studios open?

We had nine personal units, and then we had the two franchisees who each own two each.

You were one of those area developers that kept your licenses to yourself and decided to open them versus bringing in franchisees.

There are two paths you can choose. We chose that path.

It’s a wise path. There’s no doubt. We will get into all that stuff, but I would love to give the readers a little recap of who you are and how you got into franchising.

We have always been looking for a business. I was a stay-at-home dad for six years. My wife was a VP at a major corporation. We were always balancing things and looking for something. She went on a business trip to Arizona in Paradise Valley. A college friend of hers took her to an OTF workout. We never heard of it. She loved it. She called me and said, “We need to check this out.” I checked it out. Right on the scene, we signed up and got rolling. I knew that I wanted to be an area developer if I was going to do this. They had that model. It was great.

We bought the states of Vermont, New Hampshire, and Maine and spent eight years building something. That was exciting. She left her corporate job after six months. One day, she came home and said, “I quit.” We made it work. We bootstrapped a lot and made every mistake in the franchise world. We had better ideas. We had our hands slapped a few times. I always tell people, “You can make mistakes as long as you have money to cover those mistakes.” We grew from there.

You’ve packed a massive eight-year journey into a 30-second recap. I would love to dig a little bit. When was your wife in Paradise Valley and went to the first OTF? What year was that?

It was 2013.

How big was OTF at that time?

At that time, there were only 53 studios open in the US. We were in very early. Generally, those students were open in California, Colorado, Florida, and Arizona. Those were the major markets.

Now, they have thousands open around the world.

When we exited, there were 1,253 studios open. There’s more coming. There’s all the international growth as well. It grew into a monster.

There were billion-dollar-plus system-wide sales. What was OTF like back then? Back then, this was your first venture into franchising. How did you go about figuring out if OTF was the real deal?

No one knew about it. Nobody was doing it in our area. It wasn’t a big brand yet. My wife is an athlete runner. I’m a triathlete myself. I’m always cycling, working out, and training with heart rate. All of these things came together. My wife loved Bob and Jillian back in the day. This put all those things together. Looking at the package, I’ll be honest. I was never in the fitness industry. I did not like the fitness industry. It was all hype. This was different. We were excited about it. That’s what captivated a lot of franchisees about this. It was exciting. We got in. It was a blast.

You didn’t like the fitness industry before OTF. It changed your mind. How did it change your mind?

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I haven’t had a gym membership since college. That was because I had a buddy that I lifted with. I could not stand it, honestly.

What was it about OTF that changed your mind?

The workout, the HIIT style, the heart rate monitor, and all of those things made sense to me. It put the package together as far as I can lift and then get my cardio. My wife loved it. I saw it as something worth investing in. I loved it. I’m a member, my wife is a member, my daughter is a member, and my son is also a member. They love it.

Back then, OTF had 53 locations. Do you remember how you went about doing your due diligence? There’s a lot of wisdom that you could talk about in terms of how you researched and analyzed OTF at such an early stage with a pretty new concept in the fitness world that has the reputation. There are a lot of things that come and go right in the fitness world. How did you go about researching to figure out if it was the right fit for you?

I did spend a lot of time with the franchise sales group looking at the demographics and the maps. I have secret knowledge. I went and found a book by a gentleman. T. Plummer was his name. It’s How to Make More Money in the Fitness Industry. It talks all about boutique studios. It was before this was even happening. It made sense. I don’t think the big box gyms around here or anybody had any idea of what was happening out there. I saw an opportunity to be first to market, get ahead of this quickly, and build the brand because the Orangetheory brand was exciting. We did a pretty good job of that.

You heard about this boutique fitness idea or trend starting to emerge. It seems like you had a pretty open mind around it as you can consume as much information both from OTF and also the third parties in this space to validate everything and get the information. Right before you signed, I’m sure you didn’t have 100% information to feel, “This is going to be a billion-dollar company in ten years. This is the one.”

I’m inherently lazy anyway. I knew franchising would be an opportunity for us because it’s a business in a box. If you have an exciting brand to grow with that you believe in, it makes it a lot more fun and more passionate. You work a little harder. I could get into the analysis paralysis mode and say, “What is going to tip you over into moving on the inside?” Honestly, we spent a lot of time researching it before signing but didn’t see the cons. The pros were overwhelming. We leaped. We had the resources because we were always looking for something. That was key. No bank was going to finance us with this. We had to do a lot on our own at the start.

You were prepared. It sounds like you and Karen had been talking about the idea of doing business together for a while. I’m sure OTF wasn’t the only business concept that came across your plate to run down and do a deep dive on.

There were others. There are a ton of franchises out there. You can buy a job. That’s what a lot of these are. You buy a job, or you can build something bigger. We were more interested in building something bigger. We had 65 employees we scaled pretty well over the years. We didn’t want to buy a job.

OTF had brought in some leadership from other concepts like Massage Envy which had some experience franchising with David Long.

There were only twelve people at corporate when we started. You were dealing with people who had a lot of experience in the franchise world. We were able to scale quickly. They sold a lot of units. There was a point when we were opening 200 stores a year. All these things were happening with minimal resources at corporate, but they were organized in a way that worked. I’ll contrast that with Restore, which has 200 employees at corporate. They have been operating for years, and they have 130 stores open. It depends on your model. They have a lot of experience. That was comforting that we weren’t going down a bad path.

Of twelve employees at corporate, who is their chief music officer? I saw that they brought on some famous DJ.

I don’t remember his name, but I saw that. That was big news.

You and Karen do a lot of research to find the right fit. That’s when the journey starts of opening nine studios and having two franchisees in your area. Shifting gears to operating the business, how fast did you get those nines studios open yourselves? What was that journey like?

We opened a couple and then sold a couple of licenses to our franchisees. They opened their first page. For the first couple of years, it was establishing the brand. We had two open. Each franchise had one open. It was year three when we opened five in one year. We hit our hockey stick. Each franchisee opened their second unit. We opened three units. That’s when it became full-blown corporate. We had to scale our employee systems and accounting systems.

Those things are something that potential franchisees need to think about before going in. It’s setting up your systems and how big you want to be if you buy your first unit as we did. You don’t know how many you want to open. We didn’t know we would open nine but ended up doing that. We had to scale our systems, whereas with Restore now, we have six units. We have scaled everything to open those six units. We will not be chasing our tails and trying to do that during the growth years.

That is an interesting topic. You open three in one year. When you say systems, what types of systems are you talking about that you need to focus on scaling to hit that growth?

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It’s our HR systems, accounting systems, payroll systems, and those things. QuickBooks is an example for year one and year two. You’re into 3 units, 4 units, and 5 units. You want more reporting capabilities and bigger HR systems. Things get more expensive as well. HR is worth every dollar we paid for it. Something that people don’t feel is important is HR or those systems. All the liability stuff is what you think about when you get a bigger company. There’s health insurance.

When you say HR systems, what type of systems did you implement to help you scale specifically around HR?

I’ll use Paychex or ADP. We had a smaller company out of New Jersey. They were a consultant with us, but it was like having an HR person in the office. It was very hands-on. They went above and beyond. HRAA is the company we used. It was like having an HR person on staff, but we didn’t pay a staff salary. For everything you go through with employees, especially if you have 65 of them and then you’re continuing to grow, you have to keep on top of those things because your employees are important. You have things to think about.

There was that person or someone that your employees could go to if they had questions. Was it more of a resource for you and your management to go to? That was a huge resource for you, from benefits to payroll and all different types of daily questions. Did they help with recruiting as well as staffing?


Would they post job ads and stuff like that?

OTF had great tools. They use CareerPlug. We could post jobs network-wide. It is a great tool. We’re using it with Restore as well. We can post jobs and use those resources. It’s very helpful to have. Someone focused on those things takes some of that work off your plate as you get bigger.

How did your organization evolve from a recruiting and staffing perspective as you grew? What did it look like as you grew relatively quickly from the 2 studios to the 5?

It became difficult because we were trying to get staff members a career path as they grow and move up. That’s part of why we wanted to grow as well, “If we’re growing, that means our people are growing.” When we opened five, it was eye-opening. We said, “We don’t want ever to do that again,” but here we are doing that again. It’s having those people in place, developing them, moving them up to more responsibilities, and then having the regional people layer between our studios and us.

You created a regional management team that would oversee the studios. Underneath that, was it the individual studio managers?


As you created this organization and gave people a career path, how did you help your employees get on that path? What progression did they see? Was it from assistant studio manager to manager and regional or from instructor to manager? What did that visioning look like for some of your employees?

We evaluated the staff, the studio manager, the assistant studio manager, and the regional manager. Those are the levels you get to. After we opened the five studios, we hired a leadership consultant to work with all of our leadership staff. Those are the studio managers, assistant studio managers, and head coaches. We worked with them for about a year and a half. We evaluated personalities. We did personality tests and 360 evaluations from your peers. We used all those tools and figured out who should be where. Some people are in positions they should not have been in at the time.

Things moved around after leaders do self-awareness evaluations. They figure out, “Maybe I don’t belong here, but I should be here.” We did some moving around, but we spent a year and a half with off-sites. There were lots of conversations. Each studio manager or the head coach has access to a coach to help them lead their teams. We invested heavily in our people to figure out where we should have had them. It helps them with their confidence, where they should be, and where they’re comfortable and growing.

It’s interesting. As we’re talking about how you scaled, it keeps coming back to the people. HR is one of those things that people don’t think about too much, but the people. What are you doing to develop, groom, and attract your talent? You almost get out of their way as you build the organization. What did you look for in your employee? What are some of the key things that you have found to be successful in hiring some of your most successful employees?

There’s a simple exercise. There are three circles. It’s humble and smart, and there’s one more of these three traits. We have three intersecting circles. You put your people in those circles and where they are. Those people are not part of your organization if they’re outside those circles. They shouldn’t be there. The best people are the people who intersect in these three circles. Those are your people.

You have a few that are on the fringes. They’re either 1 foot in or 1 foot out. They will eventually either exit themselves or figure out, “I want to be in, come in, and improve my standing.” We did that exercise. Honestly, this was a back-of-a-napkin thing we did as a leadership team one day. Months later, we came back and looked at these three circles. We looked at who was still with us and who had moved up. It’s amazing. It was that simple. I can’t explain it any other way. You figure out where your people are and know who’s going to be there for the long haul.

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It was the back of the napkin. You’re picking your judgment on each person and where they land. Was there an assessment you used?

It was humble, smart, and another one. We went through all these exercises with the 360s, pushed the personality test we used, PRINT Profile, and found out where these people’s personality traits sit. The peer reviews were big, “What do your peers think about you? Where are you?” It showed those traits. We put them on those circles. Months later, we took a peek at it. We were amazed. We were like, “This has some value.”

There’s a lot of wisdom there for sure. It’s something simple. It’s not that overly complicated of an exercise. You got the five open in a hockey stick growth year. What happened after that?

COVID. In 2019, we had our studios open. The franchisees had two each. Things were humming along. 2019 was a great year. Things came to a halt in 2020.

Nobody can do anything about it. How did you fight through that?

We had our open. We were in development. We had one in development right before COVID and the shutdown. We just finished construction in Concord, New Hampshire. PE groups had approached us at that time. Two days before everything shut down, we practically had a deal on the table. That vaporized. It is what it is. I saw Facebook videos of lots of people crying over $125 million deals that vaporized. It wasn’t that amount of money, but it was a decision we had to make. We were in it for the long haul.

Thinking back, it was unprecedented, “Is this happening? The world has shut down. What are we going to do?” What happened? Fast-forward through COVID.  You came out of it. Did that same deal reemerge?

Thankfully, we live in New Hampshire. Most of our studios were in New Hampshire. We were able to open earlier, generate some revenue, and wait for Vermont and Maine to do their thing, but we had to pivot dealing with 3 different states, 3 different governors, and 3 different sets of rules. We did all of that. During this time, you have your people.

Generally, our people are in their early to mid-twenties. They go through the evaluation of my life process, where they want to be, and what they want to do at this point. You’re hoping for your leadership training, loyalty, and all those things. People love the brand. They want to stick to it. You come out at the other end and start hoping you pick up where you left off, which more or less wasn’t the case.

You exited shortly after the reemergence. That’s when you sold Orangetheory.

There was more money when the PE groups appeared. We decided to dip our toes back into the waters of a market and see what was out there. We worked through it and did our due diligence. We closed in July of 2021.

Congratulations. It’s a journey. It resurrected. You bring it back and make it happen. You didn’t want to retire. You couldn’t stay retired. This broker was constantly bringing you franchises for years.

There’s this guy that I met through email marketing. His name is Dru. I would call him and say, “What’s going on in the market?” He filled me in and gave me some ideas. Here I am.

Dwayne and I have known each other for a very long time. We have talked about a lot of different franchises that are out there. What’s next? What’s the new venture?

We’re with Restore Hyper Wellness and Cryotherapy. We are jumping on the pain management anti-aging train. This gets into Karen and me, our lifestyle, and what we’re interested in. We’re not doing it because it’s fun but because it aligns with our beliefs and lifestyle. It’s not a stretch for us.

You’re bringing the level of experience that you have been through with Orangetheory. You built a successful multiunit operation. Are you going to run that playbook back again? Are there any differences you see and adjustments you’re going to make to what was successful for you with Orangetheory?

The difference is there’s no AR model with this franchise. We’re just franchisees like everybody else. This time around, we have a defined number of units. We have gone out there and talked to all the landlords. We have relationships with those landlords. We know where the good areas are. It’s a slower process. It’s more relaxed.

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We’re going to open multiple units at once and scale as quickly as we can because we know we have six units. It’s not like, “Let’s open 1 this year and 2 next year.” We already have our systems and infrastructure in place as far as HR, payroll, and accounting. We’re ready to scale it. We don’t have to scale both at the same time that we’re opening more units, which can be a drag.

You have the framework and the platform that you can plug into. Do you see a lot of similarities operationally? It’s a different type of business, but are there similarities between running a unit of Restore and running Orangetheory? Are they completely different operational models?

They’re similar. Speaking with a colleague, you mentioned something interesting. OTF was pretty simple. With the Restores, it’s a different business. The memberships and appointment settings are a little different. It’s getting things more routine. With OTF, you have your class schedule. People come in and leave. Everything was simple, but now, it’s a little more complicated with the medical side of things. We’re figuring that stuff out.

There are the nurses. There are so many different options that Restore offers, too. I’m still learning about the biomarker panel. It was cool. She was super knowledgeable. They helped educate me about a lot of different things, especially for our son. We’re going to run him through that and see how it helps. It’s a cool concept. I would love to gently talk about the exit a little bit because that’s something that a lot of people reading are thinking about at some point.

What’s it like to package up your business and prepare it for an exit? Do you mind talking a little bit about some things that you did to prepare your business for the exit? I’m sure it wasn’t like, “Let’s start calling private equity companies and see what we can get.” This was a plan you put together to ensure that it was packaged up perfectly to help maximize the value of the sale.

With a franchise, you have a potential exit. If you’re starting your business, then you might not. Our management style conflicts with a good sale price as far as leaders of our corporation. What we wanted to build as far as staffing, our staff community, and corporate community was sharing the profits with employees and different things. Leadership training and all of those things conflict with a good price in the end.

We did go into this with a plan, “I don’t want to do this forever. We will see what happens on the other side.” We were late to exit. A lot of people exited in 2019, but we were still developing studios. We went into it with an exit plan. Interestingly, I was on a webinar with an OTF gentleman for Siterra. It was the accounting software that they used. Many questions were about preparing for an exit, the financials, documentation, everything, and having that squared away. It was right on.

When we were doing our due diligence during the sale, around six months for due diligence, everything was open for discussion. We did pretty well keeping leases, corporate documents, and all those things in order. You can hand them over and say, “Here’s my business. What do you want to talk about?” Going into Restore, it’s not that we’re looking for an exit. If you have all your ducks in a row all the time and an opportunity does come up, you can immediately act on that and feel comfortable about it.

There’s a lot of wisdom in that. It’s the more organized and documented, regardless if you’re planning for an exit or not, but if you plan for every single thing to get scrutinized. From the buyer’s perspective, they should be scrutinizing things, too. They want to know what they’re buying.

Where are the dead bodies? What are the risks?

It’s a business deal. There’s no doubt. Did you keep investing in your people? Did you slim that down a bit as you prepared to reduce some expenses and stuff to make the numbers look better? Did you keep doing your thing and have the leadership coaching and investing in the people?

We didn’t have the opportunity to cut too many expenses because we’re coming out of COVID. We had to cut certain operational expenses because of COVID. You had revenues down 50%. By default, yes, but when we were setting up in the first round, we were focusing, “Let’s scale back on some things but not in-your-face expenses.” Eventually, there are some things you can account for during a sale anyway, like leadership training. Any buyer is going to look at that and say, “You spent that money on X. We can ignore that.”

It goes against our management style as far as growing our employees and spending money on our employees. When you come to a sale, it is tough to say. You don’t know what’s going to happen to those employees after post-sale and what the management style of that new company is going to be. You have to get people feeling comfortable but not crazy. It’s a fine balance if you want to keep people happy and then be prepared for profits.

The theme or the secret sauce is the people. It’s how you take care of them, pay them, develop them, and treat them. It keeps coming back to that.

It’s the people. Many business owners are afraid of employees, having employees, and the risks that come with employees, especially in the environment we’re in. It is tough, but at the end of the day, they are what grow your business. Without them, you don’t have a job. You buy a job. You have a small company. You can make some money. If you want to grow something great, it takes a lot of people.

It’s especially to scale like you and how fast you have scaled. The three-in-one year is significant in a big way that probably a few people can appreciate. That’s no easy feat. I would imagine the exit, too. It’s part of the benefit of getting into a franchise system. I would call OTF a unicorn in my little world of franchising. There are not many OTFs that come along out there, but there were some comps and groups that sold and exited a private equity company.

It’s not like you were coming out of COVID. There was this isolated case. I’m sure buyers were able to look at other parts of the country and other operations that had been acquired and how they had been performing. From a buyer’s perspective, it adds a little bit of reassurance. This isn’t just some operation in the Northeast that we hope continues to perform outside of this. We can look at other parts of the country to get a feel for how OTFs are performing and what we can expect coming out of this “new normal.”

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There’s performance. All of the data was there for every studio. Corporate was helpful with a lot of that, too, because honestly, Orangetheory Fitness provides a lot of data to their franchisees from their franchisees. There’s a lot of data to look at and benchmarks. It’s the one studio operator that had a hard time selling because it’s a one-studio operator. We had an advantage. We were an area developer, and we had some white space available for future growth for the new buyer. There were a lot of sales that they could look at and say, “Where do you fit in when it comes to multiples?”

It is one of those significant benefits that people don’t probably think about a lot of times when they’re getting into a franchise. It’s the power of other people around the country operating these businesses either on a small level or a big level and how that can benefit and help whatever type of business somebody is trying to build within a franchise, not just from an exit standpoint. The royalty that I pay is worth it because I have access to people like Dwayne and other people around the country that are operating this same business.

I can call them. We can have an hour-long conversation, discuss our identical businesses, and work through some things. That’s the benefit of them bringing in high-caliber people who will be successful, build significant businesses, and find new ways to do things. That’s where Restore is, too. Restore has attracted some very talented franchise owners to build a business. They’re open to ideas because you bring a lot to the table. If Restore wants to listen, there are a lot of things they can learn from you as well. Are you seeing some of that stuff in the Restore organization?

Jim Donnelly talked about that. You have L5 and General Atlantic, which brought in $140 million to the franchise. There are a lot of resources and smart people putting their time into this. In the next year or two, you will see massive growth in these units. They’re always improving their processes. This is a moving target. You’re dealing with the medical side of it, FDA regulations, and FTC stuff. It’s not as straightforward as opening Orangetheory Fitness, which is a gym anywhere. There are a lot of smart people and resources. It’s a constant change, which makes it exciting. This is going to blow up. We’re all going to live ten years longer.

If you haven’t been to a Restore Hyper Wellness studio, they’re opening more around the country every month. It’s one of the coolest things in the world. I like the drip.

I bought a sauna for my house. I love the IR Sauna.

They ran a promotion for the NAD. I’m tempted to do it. Have you done it yet?

You’ve got to do it. I’m going to do it.

For folks who are reading, what’s the NAD Treatment?

You’re talking about mitochondrial-level regeneration, cleaning out dead cells, and giving your little soldiers or repairing your DNA from some stress relief to do their jobs.

It’s pretty significant stuff. That’s one of the cool things that Restore does. About how long until you get your first Restore open?

We’re looking at July of 2022 to have two open.

Is that going to be in New Hampshire?


If you’re in New Hampshire or you’re vacationing in New Hampshire in the summer, go to Dwayne’s studio.

Come to Bedford and Portsmouth.

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Franchise Empire: There’s the concept and the offering you see from the customer’s perspective, but the stuff behind the scenes can make the most significant difference in the business, like taking care of your people. So, invest in your people.

There you go. It’s an exciting time. I’m looking forward to watching what you do with this new venture with Restore. Thank you for joining me, chatting about your journey, successes, and learnings, and sharing them with people. Are there any final thoughts for anybody considering a franchise or owning a franchise and is interested in scaling?

I always come back to this. It takes money to make money. It’s difficult to get into franchising if you don’t have a lot of money for the good concepts but do your due diligence on your franchisor. What are they doing? What’s their plan?

What’s behind the scenes? There’s the concept and the offering you see from the customer’s perspective, but the stuff behind the scenes can make the biggest difference in the business. Take care of your people and invest in your people. Dwayne, I appreciate it. Thank you.

Thanks. It was nice talking to you and seeing you.

It was good seeing you, too.

Someday we will see you in person. Keep the tips coming for those new franchises.

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