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Why Painting With a Twist's Founders Replaced Themselves as CEO After 10 years, the founders knew the business was ready for the next stage of growth. But they weren't sure they were the right people to lead the charge.

By Jennifer Larino

entrepreneur daily

This story appears in the July 2019 issue of Entrepreneur. Subscribe »

Alessandro Lecis and Alessandra Panzeri

Chris Hatten's days were long and soul-fraying. This was back in 2012, when he worked at a residential treatment facility for children who had experienced deep trauma, and then spent his evenings worrying about his bills. "I was stuck," he says. "I didn't know what else I could do." One day, on a whim, he walked into an art studio called Painting with a Twist that had recently opened in a renovated fire station behind his home in Skippack, Penn. The window was filled with colorful artwork; a promotion offered a blank canvas, two hours of painting with an instructor, and a finished product at the end of the night. Wine was welcome, even encouraged.

Hatten joined the weeknight class, and a sense of calm washed over him as he painted. "I tuned everything out," he says. So he kept returning. Before long, he'd done 100 paintings and become a well-known regular. And in 2015, he decided to go all-in: He walked away from his job at the treatment facility and became a Painting with a Twist franchisee, opening a studio in Bethlehem, Penn.

Painting with a Twist had gotten used to success stories like Hatten's. The brand was created by two New Orleans women, Cathy Deano and Renee Maloney, in the wake of Hurricane Katrina. They wanted it to be a space where people in their community could escape from their daily worries, and that ethos, which clearly connected with Hatten, also easily connected in towns and cities across the country. In less than a decade, the brand grew to 300-plus locations in 39 states.

But growth doesn't always come easy. A sea of copycats followed, crowding into a category that became known as "paint-and-sip." Competing concepts followed -- studios like The Rustic Brush, where people can sip wine while making antique-looking wooden signs, doormats, or lazy Susans. And many of Painting with a Twist's new locations would falter -- leading to disappointments and an unclear path forward.

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Last year, as Deano and Maloney wrestled with how to sustain their brand, they attended an event called the Franchise Unconference in Park City, Utah. "There was a session about founders who wouldn't get out of the way," Deano says. "I thought, That's us. It was just getting too big for us, for our wheelhouse."

So she and Maloney made perhaps the toughest decision of their careers: After building a brand that had become beloved nationwide, they decided to replace themselves as leaders.

Deano and Maloney never meant to get into franchising. The two met in 2003, when their children landed in the same kindergarten class, and they connected over a shared interest in local volunteer work. Then their lives were shaken in 2005, when Hurricane Katrina raged through the region -- flooding Deano's home, and destroying the moving-­and-storage business that Maloney ran with her husband. The two women tried helping each other out, but the challenges seemed immeasurable. Maloney recalls dumping floodwater from the silver ladles in Deano's china cabinet, thinking that they had to do something other than wallow.

"We could sit there and feel sorry for ourselves, or we could figure out how to change it," Maloney says.

They started kicking around business ideas. A friend suggested a "speed art" concept, where people would pay to spend a few hours working on a simple painting with the help of an instructor. Deano and Maloney liked it but were worried it might scare away novice customers. "I'm not an artist, and I'm a little afraid of it, quite frankly," Deano says. "Renee said the same thing: "I don't know that I'd do that. I can't paint.' And I said, "But what if you could drink?' "

In 2007, they invited family and friends into a large, air-conditioned building on Deano's property, with painting supplies purchased at a craft store. Deano remembers watching her 62-year-old brother-in-law sitting side by side with her 16-year-old niece, both intently painting a portrait of a reclining woman on a bright red background. The painters hunched over each other's canvases, offering tips and bonding over the challenge of getting the curve of the woman's face just right. Deano and Maloney asked their guinea pigs if they would pay to do something like that again. Everyone said yes.

The duo rented a storefront in the suburb of Mandeville, and Painting with a Twist officially opened in November 2007. It was far from glamorous: The 1,000-square-foot space suffered from frequent power outages, and a 30-year-old air conditioner wheezed in Louisiana's heat. But the new entrepreneurs had low expectations. "I wanted [to make enough money] to send my kid to a camp that was $4,000, and Renee wanted fancy boots," Deano says, laughing.

They exceeded those goals. Within a year, Deano and Maloney had built a passionate customer base. In August 2008, when their faulty electricity went out in the middle of a class, customers refused the founders' offer to finish their paintings at a later date. Instead, they pulled up their cars to the storefront and, with the help of the headlights beaming through the windows, finished their wine and their paintings.

"We were like, "What's going on here?' " Deano recalls, wondering why their customers were sticking around in the lousy conditions. "And they said, "This is two hours when we're not thinking about the kids, the husband, or FEMA.' That was the real aha moment for us. This was more than just a little concept."

The next year, Deano and Maloney opened their second location, in a neighboring suburb. It attracted visitors from all over the country, many of whom were in town volunteering with post-Katrina recovery efforts. Those customers wanted to know how they could take the concept back to their hometowns.

Related: Natural Disasters Are On The Rise. That's a Big Business Opportunity.

The answer, it seemed, was franchising. That way, visitors could open their own Painting with a Twist back home. But the founders had no idea how to get going. They called up the owners of the successful Louisiana-based franchises PJ's Coffee and Wow Café, who gave them some advice. Then Deano and Maloney wrote an operations manual, and in 2009, they opened their first franchised location. By the end of the year, they had 24. By 2011, they had 75 -- and started to feel out of their depths.

"I was just buried in emails and questions like, "Should we spend $50,000 on this IT setup?' " Deano says. "I don't know. Are you kidding? You're asking me?"

But what was there to do? Deano and Maloney had a simple understanding of franchising. They thought they needed to keep opening units -- that growth was the solution to any challenge. So instead of focusing on what wasn't working in their business, and learning from it, they just pushed harder on opening more doors. And the result wasn't good. Over the next few years, as they continued to open locations, nearly 30 studios would go out of business.

In retrospect, they realize, many of those new units were doomed from the start. For example, they opened a studio in Destin, Fla., a beach community with plenty of tourists. But at night, Painting with a Twist struggled to compete with the dominant tourist activities -- local mini golf courses and ice cream parlors. They should have seen that coming.

"We needed a CEO long before we actually got one," Deano says.

The business world values leaders. We romanticize them. All praise is heaped upon the founders of companies, who craft a mission and inspire a team to action. But that doesn't mean the role is for everyone. "Too often, people are lured into a leadership role, not led," says Scott Miller, EVP of thought leadership at the consulting firm FranklinCovey, and author of the book Management Mess to Leadership Success. And so he preaches something that leaders rarely hear: It's OK to not be the leader.

"There's no shame in saying, "You know what, no thank you,' " he says. "Too many people become leaders when they just should have stayed amazing individual producers. I have seen too many extraordinarily productive, influential individual performers move up into leadership and crumble."

Deano and Maloney hadn't exactly moved up into leadership, of course. They started a company -- a small and manageable one at first, but one they eventually didn't feel confident leading. So they chose the path that might seem unflattering but that they felt was best for themselves and their organization: They hunted for someone more qualified.

To start, they got back in touch with the same local franchisors they'd called at the beginning of their journey. They were connected with Joe Lewis, who has spent 20-plus years in franchising, most notably with Smoothie King, which he helped grow from a few dozen units to nearly 1,000. They liked him and, in April 2018, hired him. Then Lewis assembled an executive team made up of other Smoothie King vets -- CMO Katherine LeBlanc and chief development officer Richard Leveille.

They had a lot of work to do.

On a stormy afternoon in May, Lewis looks fully settled in at the company's headquarters in Mandeville. He leans forward in his seat, holding his hand at eye level to demonstrate the trajectory of a franchise. Many go through a plateau period, he says, and flattens his hand: That's where Painting with a Twist is now.

"We grew too fast, and now we've got to make sure everything's set," he says. "I don't see a reason why this company couldn't do 25, 50, 75, or 100 [new] units in a year. But you've got to be able to support that kind of growth."

His first order of business was expanding Painting with a Twist's footprint. Here it was useful for the brand to have copycats; it meant there were smaller franchises in marketplaces where Painting with a Twist wasn't. Lewis acquired Bottle & Bottega, a Chicago-based paint-and-sip concept with 20 locations in the Midwest and California. He's set out to rebrand them Painting with a Twist, and brought the company's CEO, Nancy Bigley, on as Painting with a Twist's new COO.

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From there, Lewis says his challenge is to stay ahead of the competition. Painting with a Twist got a head start in the now crowded DIY space, though Lewis and his team admit the brand's identity has become less focused over the years. He thinks it has the potential to be among the last brands standing as others fall victim to the trend-driven whims of customers-- ­ but it needs to strengthen fundamentals.

"We're very confident that the demand is there and will be there," he says. "The question is, who is going to be the concept that's going to continue to grow and capture that demand when the others start falling away?"

To do that, Painting with a Twist is looking hard at untapped markets. The concept may sound old to people who learned about it a decade ago, but it still has plenty of room for discovery. Roughly half the people who walk into a Painting with a Twist event are experiencing the brand for the first time, Leveille says, and plenty of cities don't have any paint-and-sip offerings at all.

But the company isn't eager to repeat its mistakes, so it's focusing on thoughtful growth rather than runaway growth. That means not just opening new locations, but instead ensuring that the people running those locations are set up for success.

To do that, Painting with a Twist is becoming a lot more selective about who can be a franchisee. Owner qualifications and requirements have been strengthened to ensure that new franchisees have enough money and business acumen to successfully run a studio. The brand has also revised how it selects new locations, and is paying closer attention to market demographics.

Once a new franchisee is in the system, Painting with a Twist is offering them a range of updated tools and services. The brand boosted its internal tech systems, improved supply-­chain costs, and provided access to a digital media agency so that franchisees can fine-tune their social media marketing. It also invested more heavily in its existing training programs. Every other month, new and returning franchisees and their instructors are invited to HQ for several days of coaching focused on leading and engaging customers.

"[Franchisees] sort of have to be a bit of a politician," Maloney says. "You have to be willing to shake hands and kiss babies and make people feel special."

The brand is also expanding the services it offers to compete against the other DIY studio concepts. Rather than just have customers paint one of Painting with a Twist's 15,000 copyrighted designs on standard canvas, new surfaces such as pinewood planks are going to roll out later this year. "It's kind of like a McDonald's franchisee having 15,000 different ways to serve a hamburger," says Leveille.

The changes are slowly creating a much-needed structure and forward-looking awareness that Deano and Maloney had envisioned but couldn't quite build on their own. As the pair hand off day-to-day tasks to their new exec team, they will remain involved in big-picture ideas, keep up with longtime franchisees, and manage Painting with a Purpose, the company's nonprofit arm, which helps local franchisees give back to the community.

They feel, finally, that the rest of their brand is in expert hands. "These systems are making it work for the franchisees and the employees," Deano says. "It's like watching your baby grow. And we want to see it grow--in a good way. Our goal is to keep the culture intact for the franchisees."

It's been just over a year since Painting with a Twist embarked upon its corporate makeover, but the results have so far been encouraging. In addition to the Bottle & Bottega acquisition, the company is moving forward with plans to sign on another 10 to 20 franchisees in the second half of 2019, primarily in the Midwest and Northeast, where it sees growth potential.

Existing franchisees, Lewis says, have been mostly receptive of the changes -- and in some cases, even requested them. (Of course, there's a bit of grumbling about adopting new systems and practices, but that's to be expected, he says.)

Related: A Good Accountant Is Key to a Good Franchise Operation. Here's How to Find One.

"We've learned that you cannot overcommunicate," says Leveille, who implemented biweekly teleconferences between the corporate team and Painting with a Twist's franchise advisory council, which has kept conversations open and constant.

Hatten, the Pennsylvania franchisee, feels reassured. After he opened his first studio in 2015, he saw what felt like countless locations pop up all around nearby Philadelphia, and he worried that the company was growing too fast.

He was so worried, in fact, that he decided to open his new Allentown location simply because he didn't want to end up competing with another franchisee. The process -- finding a site, getting permits, completing a build-out -- has pulled his attention from his first location, he admits. And he is relieved to see the company focus shift from fast growth to measured growth.

"They've realized some of the errors of the past," he says. (Still: "I'm just glad it's me opening Allentown and not someone else.")

Past concerns aside, Hatten remains one of the brand's biggest fans. His collection of paintings has doubled to 200 canvases. He stores them at home and puts his favorites on display, swapping them out depending on the season. Painting with a Twist, he says, will always be more than a business to him. And his future, which used to frighten him, doesn't look so scary anymore.

"They have a piece of my heart," he says. "Honestly, I feel indebted to them."

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