Ben Crawford’s journey is one for the ages. Ben built a wildly successful real estate and construction company – and was recognized as Ernst and Young’s Entrepreneur of The Year and featured on Inc.’s 500 fastest growing companies – and then it all changed when The Great Recession arrived. That’s when Ben’s franchise journey began.
Soon after the crash, Ben pushed all his chips in to bet on himself and a young emerging franchise that no one had heard about: The Joint Chiropractic. Even with no chiropractic background, Ben made the leap, and it paid off.
Fast forward to today, and Ben owns a number of The Joints in the greater Houston area. Ben shares his journey about why and how he invested in a franchise (here’s a hint: it has to do with recurring revenue).
Listen to the podcast here
The Joint Chiropractic: How Ben Crawford Transitioned From Real Estate During The Great Recession To Successful Multi-Unit Franchise Owner
I’m excited to be joined by someone whom I met and have gotten to know better. Ben Crawford is a multi-unit franchise Owner of The Joint Chiropractic, which has been an interesting franchise over the years. Ben, welcome.
I’m getting to know you better and learning a little bit more about your story. We’d love to kick it off. How did you get into The Joint? What were you doing before The Joint? Why The Joint? Why franchise ownership? Where did your journey start?
I had this lunch meeting with a guy, and I told the whole story. I’ll rinse and repeat this. How did I find The Joint? I have a good friend of mine. His name is Steve Colmar. Steve has got a brother named Craig Colmar. It was Steve and Craig who acquired the business, The Joint Chiropractic. It was The Joint, The Chiropractic Place at the time, and they acquired this asset from a guy named Dr. Fred over in Atlanta. This was in 2010 or ‘11.
Steve and I have known each other since I graduated from undergrad a long time ago. We’ve been in and out of several businesses together. Steve had told me that he was going to acquire a chiropractic franchise. He asked me if I wanted any part of it and I said, “No, I don’t believe in chiropractic. I want nothing to do with it.” Steve is a hippie guy and one of the smartest guys I know, but he’s holistic. This fit right into his wheelhouse. I said no, and that was in early 2011.
Steve goes out and hires John Leonesio of Massage Envy. He recruited him. John comes over with his team. I’m watching this from the outside going, “Who’s this John guy?” Steve goes, “That’s John Leonesio. He took a concept called Massage that was at a super high-end and a very low-end. He made a middle market deal, made it membership based, and changed and pivoted the entire market. We plan on doing that for our chiropractic.” I went, “This is a membership deal, Steve.” He goes, “Yeah.” I said, “I’m in.”
I bought three licenses. It was the first three licenses for the City of Houston back in late 2011. I was the first one to open The Joint, The Chiropractic Place. It was the River Oaks location here in the Houston market. People were asking me, “What are you doing, Crawford? Are you opening up medical marijuana?” I said, “No, I’m opening up The Joint, The Chiropractic Place.” Landlords looked at us like we were weird. They’re like, “We had never heard of you guys. Is this marijuana? We don’t want anything to do with dope.” We said, “No, this is chiropractic.” They would throw out at us, “Do you know the number one business to fail for leases? It’s chiropractic clinics. We want nothing to do with you.”
We had all these hurdles we had to overcome initially to get leases signed up and get the general public to understand who we were and what we were trying to solve. That was low back pain. We put it into a routine adjustment that happens once a week for a membership fee of $49. That was our model, seven days a week. We had great hours. Lo and behold, we opened the 1st one, 2nd one and 3rd one. Another owner came in, bought 5 packs, and opened up 5 locations. Another owner bought 3 packs, and opened up 3 of those.
About 2013 or ‘14, I had a chance to acquire five at once from their owner who got into it. This was an old European wax guy, and I’m massaging the guy as well. He wanted out. I acquired those five. In 2022, we’re eight. We’ve slowly worked our way up in terms of the number of units, but it is a great cashflow machine. I’ve never seen anything like it.
To make what I make on a monthly basis from the cashflow, my EBITDA, I’d have to have $20 million of liquidity earning 5% on an annualized basis to make the income I make now from an investment that is a lot less than $20 million. It’s a great concept. I’ve watched three management teams come through the cycle here, the founding management team, John and his team. Their primary goal was to sell as many franchises and RD licenses as they could across the country.
Who better to do that than John and his team because they came off a massive homerun with Massage Envy? In their hip pocket, they had all the RD guys and a lot of multi-unit owners ready to go do it again. It’s rinse and repeat with John in another concept. John did his deal. We had another management team come on, and they were from Starbucks. These Starbucks guys ran North America for Starbucks, and they were opening one Starbucks a day when they had their huge growth rate there on every street corner.
It was John and David. John and David took the company public, and raised $30 million to $40 million. The new management team, Peter Holt and his group, came on board. Peter has stabilized the brand. His stated objective to the investor group, which is the shareholders, is we’re going to get to 1,000 units by a certain time and then 2,000 units over the next years. He’s going to get it there. Peter has got a good team in place. I’ve been along for the ride from day one, and it’s been a ride.
Did you have any idea the ride was going to be what it has been when you signed on?
No, because remember, I was the first one to open. All these models and projections we had about how many new patients were going to walk in the front door on a monthly basis or weekly basis, what our throughput was going to be with each chiropractor? How many can a chiropractor adjust in one day? We put all this into these great formulas. I had a lot of my buddies who were in the financial game look at it, and they were like, “This will never work. Good luck, Crawford.”
Lo and behold, it worked. All of those guys are like, “Crawford, can we partner with you and do some more clinics with you?” I’m like, “No, you can’t because now, we can cashflow these things on our own.” I never understood the power of reoccurring membership. Our lifetime value per patient is significant and our customer acquisition cost, because we’re doing all digital, is fairly low. There’s a big spread there. We have good margins.
It’s sticky. You’re helping people live pain-free, which is a powerful need.
It’s somewhat addictive because when you do the adjustment, there is some endorphins release that happens. People get high for a little bit and also get out of back pain. They’re able to live their life. They’re able to sleep, go to work, perform their recreational task or play with their kids. Without that weekly adjustment or that routine chiropractic care, they can’t, or they’re on meds.
We provide them with a relatively cost-effective mechanism for $79 a month. They can come in and get adjusted seven days a week in their schedule. No appointments are needed. They come in and swipe in. There could be a little wait, maybe five minutes, but next thing you know, they’re in the back. It’s an open bay. We have three adjusting tables. We have clinics where we run three chiropractors because we run 150 adjustments a day.
That’s a three-ring circus in that clinic. We have to have two front desk associates up front directing traffic. It’s so busy. We have other clinics that run 30 to 50 adjustments. It’s a great value for the end user. With the financial reward, I never thought it was going to be where it is now. The amount of time that I spend on the business now is nowhere close to what I did when we originally burst three units in that I was hands-on.
My wife and I were in the clinics all the time because we hired the chiropractors and front desk staff. We trained them. We built a lot of systems, internal processes, and best practices that are used in The Joint system. A lot of the other people that have come in behind us as franchisees have also added a lot of depth to the operational manuals, operational processes, and accountability processes that we have in place. Those have all been built by people that have come in behind me as well.
We all lock arms and walk forward together as a franchise group. That’s the power of a franchise group. That’s what John Leonesio used to tell us early on. A lot of the internal processes of day-to-day operations as we build a brand won’t come from us as a franchisor. They come from the power of having a lot of independent owners that have multiple units identifying best practices as a group and adopting that as a group.A lot of the internal processes of day-to-day operations as we build a brand won't come from us as a franchisor. They come from the power of having a lot of independent owners. Click To Tweet
How do they embrace the feedback and the innovation from the front lines and trenches?
Peter Holt’s team and Jorge as the Chief Operating Officer have done a great job helping standardize and implement a system-wide rollout of best practices. Even in the state of Texas, we have a great developer who has a great operations team that’s hitting its stride to make sure quarterly that all the franchises are doing everything they can do to deliver great service to the client first. If we do that right, the economics will follow.
What were you doing before The Joint? What’s your background?
From 2000 to 2009 or ‘10, I built a company called Crawford Renovation Group. That was a firm that started as a design-build residential renovation company. In 2000, we did $1 million in revenue. We hit it. In 2001, we did $3 million. In 2002, we hit $5 million. By the time we got to 2008, we were at $20 to $22 million and over 200 people on headcount. We were running anywhere from 80 to 100 active large-scale renovation projects in a tightly packed geographic area of Houston.
At that time, we had 15 to 16 project managers that drove a white Crawford Renovation truck around the marketplace for branding. In 2007, we completed our first 10,000-square design-build experience center. That’s where a client could come in, make all their selections and walk through vignettes. It was a real turnkey package. We built our business that fast, helping some of the top real estate agents in a very defined marketplace inside Houston sell houses to families that needed to be renovated.
Three agencies sold real estate. At the time, it was about $3 billion a year. They do residential real estate inside the circumference or the radius going from side to side which maybe was 10 miles across. It’s a lot of real estate but that was the center cut of Houston. We would help one of those agents inside one of those three big agencies.
I look at the agencies as three different sorority houses using my college day as an analogy. They all were different and a lot of them are women. You think about it. Real estate sold by women. They all have different personalities. The Tri Delta could be this, the Chis could be this and the Alpha Chis could be this. They all had different attitudes and flares about them. We figured out how to help those agents sell a house that needs to be renovated to a family that was trying to stretch to get into a neighborhood because of the school system.
Let’s say it’s for $1 million where they could acquire a 1950 ranch-style home that had 8-foot ceilings. Every inch of it needed to be renovated. Maybe we put a second story on it. Add two bedrooms, a playroom upstairs and Jack and Jill’ bathroom. At the end of the day, all the agent cares about is getting paid and moving on to the next client. When a house sells, they get paid. They don’t want to invite anybody into that transaction that’s going to slow the transaction down from closing.
We developed a team and an approach to help that agent’s client see the vision. It was called illuminating the possibilities of the house. I would go in in a white-collar. Our design team would go in in white-collar shirts. We would meet with the prospective buyer and their wife. We would always make sure both parties were involved and the agent. I’d say, “Wave your magic wand. We’ll give you our vision for the house as well.”
If the house had great bones, we would tell them. If the house needed to be torn down, we’d let them know. “We don’t believe the foundation can hold a second story. We had the experience to be able to tell that very quickly but this is a great house. Let’s build upon it and wave the magic wand.” We could do that in 1 to 2 hours with a client and understand what they want to do for the next 5, 10 or 15 years of their family.
We would go back to our office and then get to work. We would roll our sleeves up, draw blueprints and stick drawings and put together a scope of work and what we call an investment range. Let’s go back to the million-dollar acquisition analogy. That home needs a top-to-bottom second story so it’s going to need $600,000 worth of renovation of work because we’re going to peel the roof off, go from 8 feet to 10 feet ceilings downstairs and change all the walls out.
We may even blow out a little bit for the master bathroom and master bedroom downstairs. We’ll put a second story on top of it. The investment’s going to be between $580,000 to $650,000 in that range. We would go back to the client, tell the client that and the client would go, “I don’t have that money. I can barely get together $200,000 for the down payment on a million-dollar house, which is 20%.” We say, “Don’t worry about it. You need to meet the loan broker over here.”
We pulled in a loan broker and the loan broker then could do what they call a cost-plus mortgage on it. They would say, “The property is $1 million. The construction cost is going to be $600,000. You need 20% of $1,000,006.” It’s rough numbers, $300,000. They’re like, “$200,000 was a lot for us. We were pushing it. Where are we going to get the extra $100,000?”
We would hand the blueprint with the scope of work and construction budget to a guy called an appraiser. They would go out and praise the house as if all of the improvements have been done. Lo and behold, 9 times out of 10, that house would appraise at $2 million. They got their equity. They’d go to closing zero down out of pocket. They picked up $400,000 in value. We have $600,000 in escrow that is at the bank. All we have to do is a billing company that will go out and execute. The real estate agent wins because she gets her 6%. The broker does and she gets paid. It all happens within 30 to 45 days of us meeting the client from the very first time. Once that happened, it caught fire.
We did that in 2001 with 1 or 2 agents. They’d tell two friends and the next thing you know, we’re being invited into these real estate offices to do the pitch that sells me. “Ladies, here’s how it works. How many of you have ever had a client that you’ve shown 100 houses to and they all need to be renovated but yet they don’t have a clue on how to do it and finance it to get it done?” They all raise their hands. “How many of you want to get rid of those clients, close those deals and move on to new deals?” They all raise their hands. We provided a solution for them. For that, I won Inc.’s 500 fast-growing company. In Houston Business Journal, that’s when I won the Entrepreneur of the Year Award for Ernst and Young.
We forget about that little recession when the credit markets froze.
That was the impetus for me. I had to wind the company down because we lost our mechanism for cost-plus loans. If the cost-plus loans scenario had still been going, we’d have regional design centers in Atlanta. We already had multiple states and cities to go into that needed the same thing that we had here in Houston. Everything was in place.
You were a true-blooded entrepreneur that created that business from scratch and scaled it to a massive degree.
It took me three years to wind it down. We had 80 to 100 projects running when it hit the fan. We were throwing everything we could overboard to cut down on our SG&A and then I was running projects. I hadn’t run a project in five years. I was back driving a white truck being a Project Manager. At the tail end, I was running twenty projects. Any productive project manager that provides a high-level service where the average job size is $400,000 or greater can only be leveraged on 3 to 1 but we had to wind it down and protect the little families that entrusted us with their homes.
Some houses had no roofs on them. We had to get that finish. I protected all of our relationships. We also had started doing spec homes. At the time, we had leveraged up to almost $20 million. With about ten specs, they were at various stages of construction. The spec value was anywhere from $1.5 million to $3 million per house. We had to systematically complete those homes and protect our banking relationships and lending relationships because I was personally guaranteed in all those notes.
We had 1 short sale out of those 10. It was maybe $80,000 that I come out of pocket to pay. We were very fortunate but we were able to jettison all those and get them done while other builders were going out of business left and right and screwed banks. That’s important because I protected my banking relationships, which allowed me to go into and scale The Joints.
I was able to go back to the banking relationship. One of them knew me very well and he was the character lender instead of more of a balance sheet lender. He knew my character. He knew I was going to do everything I could do to protect the bank before putting myself first. He said, “No problem. I’ll finance these Joint clinics all day long for you. You bring me a deal.”Protecting your banking relationships really allows you to go and scale your business. Click To Tweet
Was he a regional local bank?
He was a community bank with assets under $2 billion. They have been acquired and are in a much larger banking system but he still banks me on some construction projects much as he did back then. Simply because I went up and beyond. I took care of the relationships. Those guys believed in me to lend the money and I should pay every dime back. We did. 2010 rolls around. I’m trying to figure out what to do. I’m 47, maybe 48 in that range. I got young kids at home. They got to go to college.
I practically broke down trying to save the relationships and keep everyone whole. I go down to my last $200,000 in the world. I’m like, “What am I going to do?” That’s when Steve said, “I’m going to go buy this little concept called The Joint Chiropractic, The Chiropractic Place.” I said, “I don’t have anything to do with that. I don’t want to place my last chips on that.” The next thing you know, I’m in and I got three locations. It was like the guy at Vegas who turned the hat around backwards, put the sunglasses on, pushed all my chips into the middle of the table, stood up, and waited on the river card to come down.
What was it? That’s a tough spot to be in. How did you make that decision to put the chips in the middle and go with The Joint?
I knew entrepreneurially that I could make this work. I knew that I could build great internal systems because I’m an ops and systems guy. That’s why we were able to scale the business at Crawford of Innovation so quickly and methodically because that’s my skillset and part of my gift. I knew I could make this work and so we went to task. We took the playbook that they had cobbled together at The Joint and we expanded on it.
We put together a 2-week, 80-hour training program for our front desk staff to make sure they could move from the four stages of competency of knowing, “I’m not competent,” to being unconsciously competent. We had to move them through that whole process so that they could work at the front desk, cater to the people when they walked in the front door and get someone who calls in on the telephone to make an appointment for that day.
We could get them in the system and relieve their pain. I knew I could do that. Lo and behold, it all worked out and here we are. If I told you the numbers, you wouldn’t believe them. I shared with you off-camera what some of the numbers are but they’re in the seven-figure range. It’s something that prints money. It works well and I got lucky.
You bet on yourself to a certain extent.
I bet on myself and my wife. Tamara runs all of the finance, accounting and back office. She’s allowed me to do my deal. She stays in her lane. I stay in my lane. I can’t do what she does in her lane, and she can’t do what I do in my lane. I am more Mr. Outside Operations face of the company. Tamara is comfortable being behind the scenes at 11:00 at night doing books.
You are a good yin and yang.
We’ve worked together for a long time. Prior to Crawford Renovation, I was in the medical field and sold physiological patient monitoring. The stuff that’s on the bedside that you see, the little bleep going up and down and the little dings, I sold that stuff. My first job out of college was I sold endoprosthesis, the artificial knee, hip and shoulder. I sold that tools to implant that gear to orthopedic surgeons in surgery.
Here’s a guy that got a Finance degree and gets hired by an implant company that knows nothing about medical but I could speak well and relate to people. They said, “Are you going to go into surgery? We’re going to teach you sterile technique, how to get in and out of the OR and how to talk to surgeons.” I said, “I’ll do that.” I worked for a guy named Dr. Dickey Jones, one of the top implant guys in the country out of St. Paul Medical Center in Dallas, Texas. Dickey did not speak to me for six months.
Why is that?
He would just look at me in the OR. After treating me like crap for six months, I made it. I passed the test of time. He looked at me and said, “Are you ready to learn now?” I said, “Yes, Sir Dickey. I am.” He taught me the business of selling hips, knees and joints to orthopedic guys. He taught me well. I owe a lot to Dickey for taking time with me.
You seem like a learner too. You’re willing to put in the time and dig in to learn new things in your journey. You went from the medical field to the construction renovation field to the chiropractic field. That’s a journey.
Here we are. What’s next? I don’t know. We’ve got some other things that we’re working on like launching a new franchise brand that’s none related to chiropractic. It’s taken a long time to develop skillsets so I could be a well-rounded CEO. I think I have those. We’ve passed the hat. We’ve raised a couple of million bucks to build a prototype of a new brand. We’re going to finance the rollout of the franchise concept using the Regional Developer approach.
Since we know where all those RDs live and work and what brands they serve, we know how to go out, go find them and approach them. Our goal in the next years is to have this brand. Go from 0 to 50 to 100 operating units open with another 200 to 400 RD licenses sold, get the thing into the public market, see if we can raise $50 million in that range and then go open up a company-owned expansion as well.
Also, build out our management team. At that point, I’ll probably exit from a management perspective and let a professional guy who’s experienced take in an existing brand and take it from 500 units to 2,000 units. That’s the plan for now and we’ll see where it goes. That’s the next chapter and that starts in January of 2023.
I’m fortunate to know what it is but I’m not going to tell anybody because it’s under wraps but it’s exciting stuff. Your story is amazing. You have a proven track record. Whatever you get involved with, you figure it out and make it successful.
I don’t have a choice. It’s interesting. I sent my kids to this school called Babson. It is the number one entrepreneurial-focused school on the globe for many years in a row. It’s in Boston, Massachusetts in a little suburb called Wellesley, Mass. The Founders of Home Depot went there. The guy who invented the ring doorbell went there.
It teaches one thing. Entrepreneurial thought and action. When the EY deal came, Babson was a sponsor of it. I’m like, “What is Babson?” “Babson College.” “Do you mean there’s a college out there that teaches entrepreneurial thought and action?” My son was in 7th or 8th grade at the time, I believe. We wrote a letter to ourselves when we graduated from high school like, “Here’s what’s going to happen to me.”
My son wrote a letter and his school teacher at the time tracked me down. She gave it to me. I opened it up and he said, “I will attend Baston College. I will play golf for Babson College.” He had a couple of other things. Lo and behold, the kid played golf for Babson College and got in. It’s ingrained in my family and DNA. We want to be entrepreneurs and think like entrepreneurs. My daughter was lucky enough to go there. She ran track and field. She was a high jumper for them as well. She did incredibly well academically.
My son went into iBanking, and he is a CFO of a digital media consultancy out of Boston. He is nomadic. He has a computer and can go wherever he wants to. In 2021, he got 100 days of skiing in Colorado. My daughter graduated from Babson. The primary reason she was hired by Ernst & Young in their business consulting practice was that she thinks like an entrepreneur. They want the business consulting guys to think like entrepreneurs. She’s in a cool space too. She’s in FinTech.
She’s here in Charlotte. You shared that she moved to Southend.
She is working on helping businesses pivot from old banking to things like Venmo and PayPal. Those are FinTech companies. She’s a happy girl using her entrepreneurial skills. We’ve taught that from the beginning with our kids. It’s in our DNA. Here’s one last thing. I didn’t know this but my kids were at the right age. They were old enough to understand that dad was going through a great loss with his business from Crawford Renovation, having to shut it down.
They saw the mental drain and the emotional toll that it took on me. They saw my wife pray over me every day that we can get to the other side of this. They saw the resiliency that we had coming out of the other side. I never knew that when I was going through that but those little eyes are watching. It wasn’t until my son was a sophomore or junior in college that he told me that. I almost broke down.
He goes, “It’s because resiliency taught us this.” I’m very fortunate to be in that position. Even though we go through some deep water sometimes, there are a lot of positive takeaways that we could have from that and that was one of them. We had life lessons that we were able to teach our kids through that that we didn’t know we were teaching them at the time. Here we are living the dream.Even though we go through some really deep water, sometimes, we can have many positive takeaways from that. Click To Tweet
I leave the town for three weeks. We’re off to Amsterdam with my wife and another couple. We get on Viking Cruises and head South to Budapest for two weeks and then off to Prague. We booked another trip for the summer of 2023 for two weeks on Silversea with a couple of other couples. We booked an around-the-world cruise that leaves January of 2024 for five months with the new gig that I’m taking on. I’m not sure if we’re going to be able to do that but it’s still on the books.
That’s an amazing story you have. It’s quite the journey. I appreciate you sharing it and coming on here. Thank you. You’ve got some exciting stuff going on.
We do, so stay tuned. As we launch the new brand, I’ll come back to you and say, “Here’s what we’re doing.”
I’ll have you back on.
We’re still trying to piece together the straw dog of it. We’ve got a lot of it done, but it’s going to come down to execution, and I know we can execute.
Without a doubt. You’ll figure it out.
We’ll figure it out. We always have.
Ben, I’ve enjoyed getting to know you better. Thank you for coming on here and sharing your story with us. It’s a good one.
Thanks. Have a good one.