Franchise 500

Why Franchising Was Key to Righting the Ship for This Boat Club

Why Franchising Was Key to Righting the Ship for This Boat Club

John Giglio of Freedom Boat Club.

Image credit: Freedom Boat Club
This story appears in the January 2016 issue of Entrepreneur. Subscribe »

We admit we’d never paid much attention to Freedom Boat Club, even though it has appeared on the Franchise 500® twice in the past five years. But this year, when we saw it at No. 283, its highest position yet, we got to thinking: How did this nearly 30-year-old brand land on our list?

Brands pop into and out of the ranking each year, and the changes are typically tied to leadership: either a strong team with a passion for the concept, or fumbled opportunities that sent things heading south.

Freedom Boat Club has experienced both. The company was founded in 1989 in Sarasota, Fla., by veterans of the timeshare industry, with the idea that area residents would pay an annual membership fee -- around $15,000 -- for access to a fleet of fishing boats, pontoons, sailboats and other craft. While expansion to other areas took hold under licensing agreements, it turned out the model wasn’t sustainable. Users would pay their fees upfront, but within a few years the club wouldn’t have income to maintain or upgrade its fleet. The owners would begin losing money and sell. In fact, Freedom Boat Club changed hands five times in its first 26 years.

In 2003, however, an investment group bought the brand, seeing it as a potentially great franchise. By 2007, they had revamped the fee structure for more consistent revenue.

In 2011, John Giglio bought the brand with a partner, both of whom had both worked for the company previously. As president and CEO, Giglio has reshaped the model and grown the concept from 40 units to 100, with ambitions to add many more over the next few years.

“When we got involved, we knew a lot about boat clubs but not a lot about franchising,” Giglio says. “We learned all about addition by subtraction. At that time we had about 50 clubs and got that down to 40. We helped some people sell their units and closed some underperforming locations. What we were left with were people in the business for the right reason, and that gave us a strong foundation going forward.”

Giglio turned his focus to improving franchisee support. “One thing I learned is that our successful franchisees are owner-operators,” he says. “This is a customer-service-oriented business. We need people-centric owners who can be around the business. It can be fun, and something franchisees can do for the rest of their lives.”

Giglio implemented a convenient online reservation system and refocused marketing efforts toward older customers who prefer not to maintain their own boats and Millennials who want the convenience and options a boat club provides. Now, after opening 10 to 15 units per year since 2012, with another 25 slated for 2016, the Freedom Boat Club spans from New England to Florida, from the Great Lakes to Texas. Expansion plans include California, the Northwest, Canada and even South America and Spain.

As boat clubs become more popular, with dozens of mom-and-pop operations launching around the U.S., Freedom, which allows guests to use their memberships at any club around the world, has a great head start, Giglio says. “There are no other boat club franchises out there, and we’re the oldest and largest in the space. But as the economy bounces back and this model becomes more prevalent, we have to continue to differentiate ourselves. I don’t mind competition, as long as it’s in the rearview mirror.”