Why This Financial Advisor Spent 3 Years Researching Before Signing His Franchise Agreement
Franchise Players is Entrepreneur's Q&A interview column that puts the spotlight on franchisees. If you're a franchisee with advice and tips to share, email firstname.lastname@example.org.
As a personal financial advisor, Allan Boomer knows business. While examining potential career paths for former pro athlete clients, Boomer became well acquainted with the franchise industry. As Boomer found the perfect fits for his clients, one former NFL player asked Boomer to join him as a business partner. After years of learning the ins and outs of the franchise industry for other clients, Boomer was able to sign on as partner with confidence. Here's what he has learned.
Name: Allan Boomer
Franchise owned: Retro Fitness in Rockville and Lanham, Md., and Horsham, Pa.
How long have you owned a franchise?
My partners and I signed our first franchise agreement in early 2013. In 2014, we built our first two locations, and acquired the third from another franchisee. Prior to signing our first agreement, we spent three years attending conferences and trade shows and speaking to franchisees.
I stumbled on franchising while trying to solve a problem from one of my clients. I am a personal financial advisor by trade. I had a client who was retiring from the NFL and looking to start a career in business. I was afraid of him making a costly mistake, so I suggested that he find a franchise with a proven track record. Franchising was similar to football – the coach gives you a play and you go out on the field and execute. In this case the coach is the franchisor. Once we found a franchise that made sense, the client asked me to join him as a business partner.
What were you doing before you became a franchise owner?
I was running a wealth management company called Momentum Advisors, and I continue to do so. I visit my three clubs no more than once or twice a month. However, I keep an eye on the business daily. I start each morning by reviewing automated reports on each location, and end each day by reviewing detailed written summaries from my managers. We have a conference call with all of the managers at the end of every week. Not that I don’t trust them, but I also have an app on my phone that allows me to view the camera feed from my clubs in real time!
Why did you choose this particular franchise?
My partners are professional athletes, so we wanted to find a business they were passionate about. Fitness was a perfect fit. As a Wall Street guy, I was blown away by the amount of money gyms make, and how reliable the cash flows are each month. We chose Retro for two reasons, first because of the quality of the team, and second because of their growth plan. The company is growing from a regional footprint to a national one, and gave us the opportunity to be a key partner in their most important growth markets: Washington, D.C. and Philadelphia.
How much would you estimate you spent before you were officially open for business?
Pre Construction Total: $145,000
Initial Franchise Fee: $69,000
Lease Security Deposit: $40,000
Construction Phase Total: $1,650,000
Buildout & Furnishings: $775,000
Working Capital: $120,000
Audio/Visual Equip.: $40,000
Pre-Sale Advertising: $26,000
Smoothie Bar Inventory: $5,000
Computer Equipment: $2,500
Utility deposits: $1,300
Grand Total: $1,795,000
Where did you get most of your advice/do most of your research?
I attend the International Franchise Association's franchising show in NYC every year, and have done so since 2011. I also attend an annual conference called the Pro Athlete Franchising Initiative, which is dedicated to teaching professional athletes about franchising. In addition to these great events, I reached out to dozens of franchisees. The franchisor gives you a list of names from the FDD who you SHOULD call. However, I called all of the OTHER ones because I wanted the real scoop!
What were the most unexpected challenges of opening your franchise?
The biggest challenge has been finding the right people to work in the gyms. Customer service is a big part of Retro’s competitive advantage, and there aren’t a lot of people who can consistently deliver great service. For one location, we went through four managers in a year before finding the right person. Now that we have the right team in place, it has made all the difference!
What advice do you have for individuals who want to own their own franchise?
First, find something that you’re passionate about that fits your personality and lifestyle needs. Second, be open to partnering with other people if you don’t have enough money yourself (however, choose your partners wisely!). Third, realize that just about anyone can own a franchise, including you. A lot of people go to a job that they hate every day, and don’t realize owning a franchise is very realistic and attainable. They also don’t realize they can find creative ways to pay for the investment, like using assets from their retirement account (without penalties and taxes).
What’s next for you and your business?
My partners and I are currently negotiating a lease for a fourth location in Philadelphia. We would love to get up to 10 locations in five years. However, we are also conducting research with other brands outside of fitness.