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The Inside Track About How To Scale Multiple Franchises Into Category Leaders With Chris Kenny

by | Oct 26, 2022 | Podcast

FM 16 | Scale Multiple Franchises

 

Chris Kenny, the CEO of Level 5 Capital Partners, takes us inside his world of creating some of the most well-built franchise brands in the industry, including Restore Hyper Wellness, Big Blue Swim School, Heyday Skincare, KidStrong, and Level 5’s newest brand, GoDog.

You’ll hear Chris explain how a relentless focus on the unit model can transcend a brand into greatness, along with other nuggets of wisdom.

Chris also takes us on a deep dive through his entrepreneurial journey in franchising from a technology executive turned franchise owner and how these experiences shaped what Level 5 is today and how it operates.

Buckle in because this episode is filled with nuggets of wisdom that can have a massive impact. 

Listen to the podcast here

 

The Inside Track About How To Scale Multiple Franchises Into Category Leaders With Chris Kenny

In this episode, I am joined by someone whom I’ve been following for many years and I’m honored to have a conversation with him. Chris Kenny, one of the founding Partners and CEO of Level 5, which means a lot because there are a lot of different companies, subsidiaries, and stuff going on with Level 5 that we’re going to dive into. Chris, welcome to the show. Thanks for coming on.

Thanks for having me, Dru. I’m excited to be here.

I’m excited too because I’ve been following you closely with all the growth and the things that you are getting involved with. Whenever you get involved with something, I pay very close attention. You’re a lot smarter than me and it’s a lot easier to pay attention to what smart people are doing and follow in their footsteps. I would love to kick it off by getting to know you a little bit better and hearing what your story and journey have been prior to, how you got into franchising, what Level 5 is, and what it’s becoming.

Thanks, Dru. It’s funny. We stumbled, my partner Charles and I, into franchising. Originally, I was working in the telecommunications and technology industry back in the late ‘90s and early 2000s. I learned a tremendous amount coming out of college there about the disciplines, systems, and processes you need to have to run complex and high-scale operations.

Ultimately, when I exited the telecommunications industry, Charles and I, like many friends and colleagues, we say, “We should open up a business together.” A couple of years later, we followed through on that. Even though he lived in Denver and I lived in Chicago, we still put it together. We clink the glasses a couple of years before and said, “Let’s do this.” Here we are, we’re many years into our working relationship with each other.

It all starts there. I prefer to have partners. I don’t like doing things alone. Ultimately, you got to find people you disagree well with that make you better and bring a similar mindset to things. We ultimately ended up investing in some franchises like CorePower Yoga and the corporate entity there at the same time. With all that’s said, we had no idea what franchising was at the time.

I’m sure I signed an FDD. I was so excited to do it that I didn’t read anything in there. We found a unit model. If you were in the walls here in Atlanta in our offices, you would hear that word in the unit model ad nauseam. “Take me back to the unit model. How are we scaling this thing? What are the inputs? What are the outputs? What are the variables we can and cannot control?”

We invested in the CorePower Yoga franchisee and the franchisor. Eventually, we took that from 1 store in 1 state to 34 stores across 5 states. Every day, we would get up and say, “How do we support these teams and customers better?” Also, bring that mindset that I was sharing with you when you build a telecommunications network. No device is allowed to go down for more than eight seconds a year without it failing over to the other device. That gets you a reliable network.

FM 16 | Scale Multiple Franchises

Scale Multiple Franchises: When you build a telecommunications network, no device is allowed to go down for more than eight seconds a year without it failing over to the other device.

 

We focus a lot on that with our talent that’s in the stores, the underlying marketing engines, and the supply side of how much supply I need to put out there to generate the unit model. You keep asking those questions over and over again and then turn them into a system. Ultimately, what we’ve built over the last several years is what we refer to as the L5 System. It’s a living, breathing thing that we keep enhancing and at this point are starting to wrap software around.

With the L5 System, what companies are there? What does that organization look like?

In Atlanta, we’ve got two core functions. One is our private equity functions. We’ve got thirteen people on the private equity side. They include the investors, legal, and back office working with our investors and limited partners, ensuring you have timely reporting and things like that. We have an operating team that is called Acceleration Services, which is over 100 people. The sole purpose is to accelerate our brands. We break those into two buckets. There’s franchisor acceleration. I think of franchisors as scalers. Anything that should happen hundreds of thousands of times typically is happening over at the franchisor.

In the multi-unit arena of our business, which is the majority of the people, that’s store opening. We are finding real estate, leasing real estate, building it out, free marketing it, launching it, and then doing mature store fleet management activities which range from mature demand lead generation to repair and maintenance of a store. Does the hot water get to the right temperature and things like that?

We’ve figured it out at least at our level. You can tell that we’re constantly taking feedback from the system and feeding it back into the system to make it better. We’ve constantly figured out what our role is. When we go and work with our portfolio companies, which would be companies we invest in, we’re trying to figure out the things that happen for franchisors on a routine regular basis, where it’s common across the franchisors and does not have to do with the service delivery or product delivery to the customer.

The easiest one would be private equity-level financials. That’s different from QuickBooks and cash accounting. There’s a big wide range to get to gap audited financials. That’s an easy one but there’s no magic in that. I’m not saying that’s why we exist but it is one of the core things that you need to exist. As an investor, our fuel is capital and capital requires accurate, timely reporting. Therefore, you need private equity-level financials. That’s a clean one.

For investors, our fuel is capital. And capital requires accurate, timely reporting. Therefore, you need private equity-level financials. Click To Tweet

What are your portfolio companies and whom you’re involved with?

We’re still involved with CorePower Yoga. That’s an oldie but a goodie. We’ve got Big Blue Swim School. It has sixteen stores that will open up in 2023 out of a possible roughly 400 across the country. We’re working on some things that will allow us to expand to additional markets beyond that in the US as we tune-up that unit model. Importantly in each of our entities where we can, we have a franchisor investment and we’re the largest franchisee. The one exception to that is Orangetheory Fitness where we’re just a franchisee and the third largest franchisee in that space. We’ve also got Restore Hyper Wellness. It does cryotherapy, IV drip shots, and red light therapy sauna. I don’t know if you’ve been into one.

I went and got the wonder juice before the member-guest tournament down here. Before is the key.

You got to do both, before and after.

That’s a good point. My buddy got the NAD and it hit him. It was intense.

You got to make an investment there. Nothing’s free.

Get all those old mitochondria out of your body and get the new ones regenerating. It’s a cool concept. Restore is a cool place. There are all different types of services you can get to help you feel better.

We’re 1 or 2 of that macro story there. Restore is interesting because when we made the investment the year before, we were in every cryo machine we could find to go into. When we got to Restore, they were starting to talk about mRNA. Everybody knows what mRNA is because COVID happened and that’s what the vaccines are all made about. We were looking at that stuff a couple of years ago and we’re not in biotech. The Restore Founders were ahead of the curve that the consumer was going to self-direct their medicine more and more. We have Restore. It’s a rocket ship.

I’m going chronologically here. We also have Heyday, which is a skincare business. Think of them as a high-end monthly facials business, where it’s a step below dermatology and the medical practice of looking at your skin but you’re getting a professional esthetician who’s highly trained, seeing your skin every 28 days, which is how often your skin cells regenerate and giving you advice for your skin seasonally.

You may not have had that Restore super juice in a little bit and your skin might be dehydrated. They’ll let you know some things that you can do. They can maybe even see some melanoma on your face and say, “You should be using daily SPF on there.” We found Heyday and we’re also the largest franchisee there. When we invested in that brand, it had about ten stores open. By the end of 2023, they’ll be North of 30. It has pretty good growth. The unit model has been phenomenal there. We’re excited.

When we underwrote the business, it was translating the next-generation facial experience in New York and LA, seeing if that could apply to the rest of the US. We underwrote store-level revenues in year 3 of about 1,000,005 and we’re hitting North of 1,000,009 in month 2 on a run rate basis on the investment. You’re seeing acceleration services combined with a great unit model and what the outcomes can be there.

After that, we invested in a brand called KidStrong. We’re big fans of KidStrong. What the founders set out to do for their daughters and the passions that they poured into them demonstrate in the mind of every mom and dad out there who wants the same thing for their kids. They have a mantra at the beginning of every class. “I am strong. I am brave. I can do this.” Frankly, we might as well say that to ourselves every day from now until the end of time. We’ll be better for it.

Those founders are scaling that business phenomenally well. They’re set to be somewhere in the order of 70 units open by the end of 2022. Somewhere in the 75 to 100 stores opening a year, thereafter. It’s two things. This is how I think about it. If you’re going to work on something, you better love putting your feet on the ground in the morning. It’s easy to get out of bed, put your feet on the ground and work on KidStrong. You’re truly every day impacting kids’ lives and family’s lives as a result of it.

If you're going to work on something, you better love putting your feet on the ground in the morning. Click To Tweet

Was that the most recent one?

No. We have one that we just made. We haven’t publicly announced yet but we made an investment in a brand called GoDog. It’s in the pet services space. It’s a high-end doggie daycare, dog boarding, and dog bar so off-leash bar that you can go to with your furry friends. It’s a membership base. It should be a little bit like Cheers where everybody knows your name to some degree. We’ll be rolling that out for franchising in Q1 of 2023.

I’ve had tons of conversations with people about it like somebody who’s going to start a franchise company to go after the washing side of things. There are a lot more animals out there post-COVID than pre-COVID.

It was already a busy space beforehand. I have 2 dogs and 2 kids in a happy white picket fence home. There are two and a half times as many households with dogs as there are kids to give you a scale and scope of that economy there.

It’s wild. Somebody was telling me that. The guy I was talking to said that there’s also the psychology that we’re on our phones so much, living the Instagram or Facebook life, the snippets that a lot of times people are turning to dogs or pets as a way to get inner-animal interaction because of the way that things have evolved with how we’re interacting. A lot of interesting things happen in that space go down.

Health and wellness, you also got the kids enrichment and pet space but you are seeing these trends emerging and getting involved in very specific companies looks like but it also seems like there’s a theme of recurring revenue and scale. Are there certain things that you look for in these businesses that you’re getting involved with that help you evaluate if it’s a potential fit or not?

From a sector perspective, they’re generally at least in health, wellness, and family services. The family services are pretty broad. We can put kids and a number of other consumer services in there. They’re habit-based unit models. It could be twice a year or a week but it’s a habit. If we could franchise brushing your teeth, that’d be a pretty good one for the franchise.

That fits the health, wellness, and family services and then checks the boxes of people who keep coming back to purchase the services because they’re getting a great experience and value. It adds some more predictability to the business, I would imagine.

Ultimately, there’s a good feedback loop in habit-based subscription-oriented or membership-based businesses where we, as the business unit delivery model, have to deliver good value or you’ll see a negative feedback loop of churn. If we’re seeing low churn, by definition, that typically means high customer stat or high value. That’s effectively how we look at the businesses. If it’s twice a year, how big is the market? How many people are doing this? How many stores do you need to support that? If it’s four times a week, you need a smaller market.

FM 16 | Scale Multiple Franchises

Scale Multiple Franchises: There’s a really good feedback loop in habit-based, subscription-oriented, or membership-based businesses.

 

It seems like you like to get involved in businesses that you can get to the consumer through traditional advertising strategies and then it’s a function of figuring out what the right campaign is, messaging, funnel, and everything to then fund it to get to them. You then can throttle it how you want to throttle it once you have the campaign figured out.

In general, that’s on the engineering end. There’s a reason why Google and Facebook are several hundred billion or trillion-dollar businesses. They are uniquely able to get down to the most interested people so you don’t have to spray and pray with a newspaper ad or a TV ad. You can get down to your consumer quickly and cost-effectively. I 100% believe that the consumer boutique business exists because you’re able to get these unit models that require this much demand, which is much smaller than a big lifetime box. You can get your message through to that group without having to rely solely on word of mouth.

When you get to that level and realize that you’re interacting with a machine to deliver your ad to your consumer, you’ve got to have machine thinking going on. We spend time thinking about our brands and marketing call to action but those are owned by the brands and the brands own their voice fully. I’d be the worst person to talk about how you build your brand.

Where I met my partners was a company called Level 3 Communications and then we needed a holding company that we called Level 4 for our yoga business and then we needed another one and we call it Level 5. You can see some very basic logical thinking in there but at the end of the day, you’re dealing with algorithms. You need to get enough content out there to figure out what the consumers want to see and how they want to hear your story to get them in.

The fact that you are in the game as well, being the largest franchisee of your portfolio brands, gives you an additional source of feedback and insight into what’s working and what’s not and also testing and figuring out new ways to improve or figure out what doesn’t work in the business versus maybe having to rely on the franchise owners, which sometimes can be a little bit of a different dynamic since it’s their money sometimes.

It’s a very big thing that most franchise companies don’t do like the classic case of having one location and then it works. “Let’s franchise it.” We’re relying on the franchisees for feedback and innovation. Sometimes that can be a little bit of a recipe for some friction, in my opinion. You have a massive advantage over a lot of franchise companies.

We did such deep work on the unit model and then there were all these locations available to deploy into. We said, “We like this thing a lot.” We want to work on it more, not less so we go deeper. We become the ultimate franchise advisory council. In a franchise advisory council, as it exists from the franchisor to the franchisee, the franchisor has all these priorities of things that they want to do and then the franchisee wants these things.

We’re out there balancing the equities of what the unit model needs. What benefits the ability of this unit model of this brand to self-replicate the best? That’s what we’re looking to do. It’s another positive voice to the conversation to focus it in the near term because you have so many things you could do. How do you balance those competing interests?

It’s by having a relentless focus on that unit model and everybody’s best interest. At the end of the day, that’s what everything feeds off of. That’s where the revenue comes from. A lot of times, I’ve seen franchising can somewhat have an emotional dynamic when you’re dealing with franchise owners and the franchisor, if the culture is a little off or whatever it may be but at the end of the day, the best franchise companies have that focus. I always boil it down to if the franchisees are profitable, which goes to your unit focus and if they’re happy. Those are the two core things that can help avoid that friction and make the organizations grow faster.

You’re rarely happy if you’re not making money.

Naval Ravikant said that. He’s like, “Get rich first and then worry about being happy because it’s a lot easier when you have some money.”

It can only sustain itself for so long if somebody’s writing a check every month.

It’s inspiring to see. I’ve been in franchising my entire career and I have some opinions. I love to see what you are doing because it’s from the purest standpoint. I always tell Dennis, “I’m jealous sometimes. You are doing it the way it should be done.” The results are significant. You grew Big Blue Swim School to 400 locations in a few years. This wasn’t a ten-year horizon.

When we invested, they had two stores open. Their third was on the way. To some degree, what can we do? We believed in this strategy and that it needed to be deployed and run this way. To do that, there was a certain check size you could write. You couldn’t necessarily go by the biggest player and then tell them what to do because either they weren’t available or you couldn’t write that check. We continued to bet on ourselves in our system and it has continued to play out.

At the end of the day, it’s the unit model. If you do the right things by that, it becomes self-replicating. For me, it’s fun to see the Big Blue team. Their culture is extended out to 25, going to 35 franchise partners that are each building out 25 to 30 units a year. That system is its nation-state in swimming. My family is a customer and I love it.

FM 16 | Scale Multiple Franchises

Scale Multiple Franchises: At the end of the day, if you do the right things by that unit model, it becomes self-replicating.

 

It’s no small feet taking a multimillion-dollar investment and expanding it to 400 licenses and many in development in a small amount of time. It speaks to the unit.

It gives you a couple of gray hairs.

Yes, but you couldn’t do it without the unit performance and unit fundamentals, back to your point.

We opened up a pool in the summer of 2022 with 3,300 swimmers the day before we opened. You’re running at a $4 million run rate right out of the gates. That’s the total synergies of everything coming together where you’ve got everything picking up momentum and the solid engine underneath that.

You probably figured out some things that work well with that one that you can replicate to the people that are getting ready to open. It’s exciting. I got to ask you. What was it about CorePower Yoga that you decided to get involved in franchising?

It’s funny. We wanted to participate in the business. We loved going to it and being a customer of it, plus it was full. When we met them, there were five of them and we’re like, “This seems like a trend of where these things are going.” Our business lies at that point. We’re so corporate and intense that you enjoyed and appreciated getting to work on one that was entirely fun. Still, the yield on your time was very high.

I got introduced to it by my partner Charles because I hurt my knee skiing while living in Colorado at the time. I wiped out on a powder day and it wasn’t the wipeout that caused the knee injury. It was my walk back up to it. I said, “I work out and do all these things. Not the accident is what got me and bit me.” After that, I made this commitment that I need to be more functional. When you bend over to pick up a box, there’s no weight machine that the box is picking up. You’re on one leg trying to put your phone in your pocket while you do it. You need to get into these positions that CrossFit and CorePower were putting you into, which we’re not static.

That interested us. We could see that being macro interesting and then the focus on yourself as part of it and being a part of a community doing that. There were a lot of things that got us there but then once we got there with our mindset as operators, we couldn’t let go. We had KPI spreadsheets and all these fun things. It was funny because you’d meet the yogis that have to teach the class and we’re like, “Look at Excel.” They’re like, “I don’t want to see that.”

How did you get past that with the instructors?

Ultimately, it takes 2 types to get most things to turn into 3. We figured out what we needed to support them with and how to do that. In general, we had employees and partners who wanted to advance. We would share with them, “Let me show you how this works.” We’ll set up a very bare-bones class about how to speak to us better to help fulfill your ideas and dreams. That conversation became organic over time. We tried hard to create a non-intimidating environment to do that. On the flip side, we can’t do what they do, which is still the case. I can’t do what KidStrong does but we do know how to help them scale.

You figured out a way to meet them on their level meanwhile helping them see a way to get to where they want to get to and then also help the business at the same time.

We always say, “Don’t meet in the middle. Go 80% of the way.” They’ll then see that you’re trying to help them.

Don't meet in the middle. Go 80% of the way because then, they'll actually see you're trying to help. Click To Tweet

Was Orangetheory next?

No. Big Blue was next. We were running that as a corporate store platform. We invested when they had two stores. They opened the third immediately after we made the investment. We originally said, “We’ll take this thing out to 20 or 25 stores.” We only had so much capital. We didn’t presume that we could go from CorePower Yoga franchisee, pull out some Core services and then turn into a franchisor.

Units 3 and 5 blew away the performance. We’re like, “This is much more than a regional play here.” If we can get what happened at stores 3 and 5 and the trend line that you’re drawing off stores 1 and 2 to keep occurring, we have what should be the leading national swim school model and we should pursue that. Our choice is that we can take on somebody else’s capital because, at that point, it was $2 million to open a swim school. You’ve got 400 swim schools and $800 million. If you raise $800 million, you’ve got a boss. With the new money, you tax the unit model so you don’t have a plan. We knew that that Core loop could occur. We said, “It’s franchising.” We think our experience as a franchisee can help.

Was that the genesis of what Level 5 has become?

Yes. We went down two paths on the sales side. Remember, we’ve been selling stuff our whole lives. By selling a franchise, if we know how to do it, we know how to sell.

You had the experiences of being a franchise owner first and probably understanding the wish list of probably what you wish the franchisor may have had available to you at that time, what you had to figure out and you saw the opportunities to make lives as a franchisee a little bit easier.

Importantly, we had the unit model. We wanted to own a bunch of it ourselves. We were already down that path. From there, we decided, “We don’t know this. Let’s go find people to work with.” We hired Mark Seibert’s company. I franchise as a consultant. We then hired a recruiting firm to go help us find a Chief Development officer, which ended up being Scott Thompson, who has been a partner of mine for years.

We also hired St. Gregory Development Group. We’re going to put all these things together and see where we get to. We recognize the significant need to invest in franchise operations ahead of the curve and behind that. That’s how we bolted on the franchisor component to us. We quickly realized the selling. It fits into a normal B2B-ish corporate CRM sales structure with some unique education required. The franchise operation side was purely scaling. Do not do things you’re only going to do once. Do all the work that you’re going to do of things hundreds, if not thousands of times.

Do not do things you're only going to do once. Do all the work you're going to do hundreds, if not thousands, of times. Click To Tweet

In the Swim School, what’s the first thing you do? You’ve got eleven curriculum levels at the time. We’ve shrunk it down to ten. Within each curriculum level, those are the different levels of the business. There are 4 different curriculums and 11 levels. In each one, there are 4 to 7 skills that have to be taught in milestones along the way.

You’ve got to go break down that training regime into a learning management system because it’s the number one role you’re going to have as a swim associate. When you look forward to a franchise and you say, “We’re going to have 100 units,” every store has 25 swim associates in the average of 10 years year to year and a half.” You’ve got a lot of people that you’re going to need to teach and teach well for customer consistency. You go look at, “What are the biggest things that we have to do the most often?” You start building scale behind those.

It’s a very systematic approach to about everything that you do. A lot of companies say that but it seems like that’s one of the core values of your company and everything that you get involved with, which is amazing.

What are our problems? One of your problems can be hiring all the swim associates and then training them too. Hiring has been difficult the last few years but that world is shifting to be very much like Facebook and Google where you have to have somebody who knows how all the hiring engines and algorithms work. You go find those people and give them the right milestones and mission. You get good people behind the unit model. We have a marketing unit economic model and a hiring unit economic model. It all comes into the big unit economic mode.

There’s no obstacle you can’t figure out a permanent solution seems like to get through it. What’s the long-term game plan for you? What’s the vision that you have?

We want to work with the best founders and brands in the country. We want to bring capital expertise. It’s our desire to build out units to accelerate a brand massively. Nothing we do is an accident. We don’t have this mindset that we must be here in eight years. We took on these tasks and we want to get this far. We generally believe that a hard specific goal versus a layup like a sandbag goal is much better. If you get 70% of the way to a hard specific goal, it’s going to be well past your sandbag goal.

FM 16 | Scale Multiple Franchises

Scale Multiple Franchises: A hard specific goal versus a layup, sandbag goal is much better.

 

We like to bite off a little bit more than we can chew and aim high. It tends to also make that other thing happen, which is focused on the big things. Ultimately, we’ll probably have somewhere around twelve brands in our portfolio. We will have them along our curve which we call the acceleration curve. We stand a brand up. We start scaling the brand and we stand it alone.

Ultimately, you are getting to work with founders and help explain that process. Generally, we invest in things that are good for people or the consumer benefits. For us, we have a mission or a purpose, which is to help create the communities we’d love to live in. When we do those things, we get to work with great people here and at the brands, and then ultimately, we get to change lives. We’re getting to do what we do and we’re working hard at making that a bit easier for all of us and our partners.

The businesses you get involved with impact everybody’s community. That’s a part of your company at every level.

If you look at it from another perspective, there are many enablers of the chamber of commerce. You got to move from X City so let’s take Atlanta and you’re going to Dallas. Your family looks at it and says, “They don’t have a Big Blue.” We want to make sure of that move, which happens a lot because people have the things they want and need to win in life.

I got to ask you one question before we wrap up here. Did you know that Restore was going to be the runner that it was at when you got involved? Did you see that hockey stick-level growth happening?

First off, credit to Jim, Steve, and that team there. They have a passion for what they do. That did two things. It attracted a core community of customers at their original locations. They then had people visit their locations that were from out of town and they said, “I want one of those. I can’t have one here. I’m going to move somewhere to go be a part of the Restore community.” That created that from the start.

When we invested, Restore had 30 units open. We had a lot of confidence in them. We signed the term sheet on about March 10th or 11th. We all know what happened on March 13th, 2020. We represent not just our money. We represent others’ money. We had to be diligent and make sure that it was going to do well coming out of a pandemic.

Restore got classified largely as an essential service and the demand took off. It was already doing well pre that and they had a lot of stores in flight and moving. We always looked to underwrite the market-leading unit model. We will not go find the 3rd or 4th place and say we can fix it. We want the market leader so 1 or 2 that’s got the potential to be clear in a way of the leader. Restore was that. There are 160 plus stores and they’re adding about 100 a year. To say we knew that was a scenario. I’ve built lots of cool scenarios that make me get excited. Jim and Steve are the engines behind that growth. We’re happy to be partners at Restore corporate but also the largest franchisee.

From my sideline perspective, it felt a little Orangetheory-ish back in the original Orangetheory days as a unicorn. There was a lot of horsepower behind it, helping it become a unicorn but you don’t see those that often come around that take off, catch the lightning in a bottle, and it goes. It went during the pandemic.

They had 130 or 150 sold in 2020. They’re well North of 600 sold in 2022, maybe touching 700. It zoomed. To give every founder out there the right mindset on it, they started with one store. When we invested, they were five years old. Generally, I see that we’re about 5 to 7 to 8 years old when we make our investment. There is a good 5 to 8-year period where you’re slugging it along, figuring it out, getting your product market fit, getting your second store out of state, and all those little things that need to happen to zoom. They did the work but so did Heyday and KidStrong.

I love the founder mindset of, “Give me two nickels and I’ll rub them together.” It’s so funny to come back and every single founder, you can ask them and they’re like, “I built that store for $100,000, and now that CapEx is $800,000 to $900,000 because there’s inflation.” You realize there were probably fair things that were done that weren’t to code.

It speaks to the crawl-walk-run strategy. Sometimes I’ll do a little bit of consulting with young brands and I’m like, “If you take the time to learn the franchise world, start small. Don’t go fast out of the gates. Crawl it. Get a couple open. Tweak it. Understand what needs to be tweaked and then start to walk. Get a few more franchisees, then you have the foundation that enables you to truly be able to go exponential if that’s what the goal is but it’s hard to go exponential straight out of the gate.” There are a lot of risks in that, in my opinion.

Scaling is hard.

You need the foundation. We talk about the fun stuff with Restore and the growth that you have helped these brands get to but there’s a lot of hard work that had gone in before all the fun stuff started to happen. If anybody reading wants to get in touch with you, where can they find you?

Shoot me an email at Chris@LFiveCapital.com. I look forward to hearing from people.

Chris, I appreciate you joining the show and talking a little bit about your journey and all the exciting things that you have going on. Thanks a lot. I appreciate it.

Thanks for having me. I appreciate it.

 

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About Chris Kenny

FM 16 | Scale Multiple FranchisesLevel 5 and its portfolio companies are focused on Changing Lives Locally. Chris co-founded one of Level 5’s affiliates in 2009. Chris has been involved in a wide variety of health, wellness, family services, real estate, manufacturing and communications investments as both an investor and an executive. Chris is CEO and a director of Big Blue Swim School, Level 4 Yoga and Chambers Gasket & Manufacturing. He obtained a Bachelor of Science in Finance and International Business degree from Georgetown University.

The First Step is a Conversation.

If you have that burning desire to build your own successful business so you can live a life you can only have working for yourself, let’s talk.

The First Step is a Conversation

The first step is a pretty simple one: We have a conversation.

After we speak, we’ll be able to figure out if there is a good fit to work together.