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Back When Orangetheory Started Expanding, Its New Studios Failed. Here's How They Turned It Around. Learning to replicate one location's success is a whole different equation, cofounder David Long says.

By Jason Feifer

entrepreneur daily

This story appears in the June 2023 issue of Start Up.

Courtesy of Orangetheory Fitness
Orangetheory CEO and cofounder, David Long

Expansion can either be the best thing for your business, or the absolute worst. It all comes down to this question: Are you really prepared for your new locations to be successful?

Back in 2010, when Orangetheory was a new company entering the franchise fitness space, its cofounders thought they'd prepared for success. But then their new units started failing.

"We just weren't getting the same traction, and we weren't happy with the level of the customer experience," said CEO and cofounder David Long in a 2019 interview. "We were alarmed and questioning whether or not we could really scale this brand."

To fix the problem, they had to pause expansion, step back, and deeply investigate what was going wrong. What they discovered changed the course of Orangetheory — and ultimately put it on track to become one of the dominant players in the fitness space.

Related: 6 Things You Gain By Embracing Failure and Learning From Mistakes

Here, Long explains the problem they faced, how they solved it, and why their experience is an important lesson for anyone looking to franchise.

Orangetheory started with a single, successful fitness studio — but when you opened your first franchise locations, you couldn't replicate the success. What did you do?

We stopped opening any more franchise stores for a period of time. We did consumer serving and net promoter score serving very early on. We were getting initial feedback. We were going into the studios with our team.

And what did you see?

At the time, coaches at each location helped develop their programming for each day. Some of their workouts were just too advanced for the audience. The modifications to make it more accessible just weren't being utilized. You can imagine that a coach could drive a consumer away from the brand, because the workout was too hard in the beginning.

That's when we realized we just needed a more centralized approach to curating the programming. Then we had to find a way to empower those coaches before they step into the studio that day, to know those workouts inside and out, know the modifications, and know the way to present it so that our audience was comfortable.

So it was a standardization problem. But standardizing workouts must be tough, if you have coaches who pride themselves on developing their own workouts.

Our number-one challenge as a brand is making people feel comfortable to try us. The public is intimidated by exercise and intimidated by trying a new gym or a new class. We had to overcome those barriers. If we weren't delivering a comfortable experience for them to come back, obviously they weren't going to.

Related: 5 Things Orangetheory Fitness Taught Me About Running a Company

What was the timeline and process for understanding the problem and building the solution?

We analyzed over a course of a few weeks, and came to a few conclusions. We needed more training [during] prelaunch, more training during launch, and additional touch points. There needed to be more time to get the content and the essence of the brand across. We needed more detail, and more layers in the actual training materials.

So it was probably a month of identifying the problem, and starting to work on solutions simultaneously. It was everything from the training for the manager that runs the studio, to the employees, the coaches, the trainers, and the front-ofhouse employees that do all the customer service.

Looking back on it, why do you think you had this problem?

It's a couple things. We underestimated the complexity of the business. The other piece was, we were in the mix of having a really successful pilot studio and then starting to franchise. As we realized later, there were still a lot of things that needed figuring out. Stuff was happening and it wasn't necessarily all translating to the training system in real time. We had to catch up everybody who was already in flight and get them up to speed.

Fortunately, we were very small at the time, and it was literally a handful of individuals who we had to get up to speed, get buy-in from, and get firing on all cylinders.

Looking back now, what advice would you give to entrepreneurs who want to scale their businesses?

We started growing the brand very shortly after we opened the first location. I don't know that there's a finite timeline around it. It might be six months for one person and five years for someone else. There's a process that anybody with a startup can follow to make sure that they're going through a few iterations, innovations, improvements, and understanding their customer before they start scaling. It's going to vary, but we didn't do enough of that.

Related: 18 Ways to Bounce Back from Failure

When you hit pause and started changing things up, how did your early franchisees feel?

We had pretty good buy-in. During all this, our very first location just continued to grow, and grow, and grow. So that obviously helps with confidence around the brand. All but one of the initial group got on board and excelled, and they ended up seeding a lot of the development that grew Orangetheory land.

How did you roll out the new changes?

It wasn't a big-bang approach. We soft-launched the changes to show the amazing content that the coaches could use each day. Then we brought all those frontline coaches together and did what was really our first training summit. It was probably 30 people. We brought them in, and instead of focusing on the negative — some of them were really upset about losing the ability to create their own program — we focused on giving them good tools for commanding the room, managing a class, and better connecting with the members.

On the training system side, we identified some low-hanging fruit. We started hosting training webinars, which we still do to this day, around sales and operations. We started reeducating and going deeper on some of the topics that we needed to get the field to pivot on.

We also launched a centralized training that was a multiday training — more about running the business and operations — and invited everybody. That process also gave us a foundation for how to develop a training system to really scale the brand.

How long did you have everything on pause before you started expanding again? And did the machine work as programmed?

It was right around six months. And it did. We'd identified the real foundational things that make the brand what it is today, and made sure that we focused on that core: making a person feel comfortable trying to work out, and then just giving them a really amazing experience with the results-based programming. Our operators built up a lot of confidence when they saw it work, and just doubled down on commitment to the brand.

Then we started to tackle the question of, "How do we become more successful with presale, which is when people engage with the brand at the brick-and-mortar store?" So we developed that side of the business. And those two things really started to fast-track growth.

Related: 3 Ways to Know If Your Growth Strategy Is Actually Helping You Grow

Jason Feifer

Entrepreneur Staff

Editor in Chief

Jason Feifer is the editor in chief of Entrepreneur magazine and host of the podcast Problem Solvers. Outside of Entrepreneur, he is the author of the book Build For Tomorrow, which helps readers find new opportunities in times of change, and co-hosts the podcast Help Wanted, where he helps solve listeners' work problems. He also writes a newsletter called One Thing Better, which each week gives you one better way to build a career or company you love.

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