Orangetheory Fitness: Franchise Development Takes a Village

1851: How does franchise development take a village, and what does this mean to you at Orangetheory Fitness (OTF)?

David Carney, President: With the speed of our growth, combined with the complexities involved, I need an extremely passionate, extremely talented team around me.

Fortunately, I am in the enviable position of having an A team! When I came on as COO, we had 120 studios, and our staff was 32 employees. We had a key person to which a lot of departments roll up. Our CFO was my first hire and our Chief Learning Officer was my second hire, which were key. Other key hires have been our General Counsel, who we brought on three months ago, and our CLO, who just hit his one year. Our Chief Brand Officer just hit three months, too. We have a young group, but a phenomenal team. I’m a big fan of hiring for EQ, IQ and culture; our team gets along well. In fact, the first thing we did when we brought in our general counsel on was attend an offsite strategic thinking retreat. We came away with a wealth of ideas. So, to answer your question, it does take a village!

1851: What impresses you most about your team?

Carney: The amazing aspect is that this A-Team is in its infancy:

• Chief Financial Officer (CFO) has been with OTF less than two years.
• Chief Learning Officer (CLO) 1.5 years.
• Chief Technology Officer (CTO) one year.
• Chief Brand Officer (CBO) one year.
• General Counsel three months.

Their strengths - individually and as a team - creates confidence both within our corporate ranks and throughout our network of 800 studio owners. It truly takes a village.  As in any franchise, we have invested in our team to ensure that we have the right team in place to continue to grow as well as strengthen and protect the brand.  

1851: Give us some examples of where this team is focusing their efforts now.

Carney: Looking at our technology platform and our plans for the future, our head of technology has the ability to create the amazing number of experiences we desire.

The head of our marketing and brand department has been able to quickly understand the needs of a diverse crowd. He understands franchisees' studio needs and the network as a whole. He is tasked with growing our worldwide brand presence and our corporate office, where he is responsible for supporting numerous initiatives from our various departments.

These two individuals, the head of marketing and the head of technology, have been joined at the hip for the past few months building many new member facing initiatives. Several of these will be unveiled at our annual conference in San Diego, California this October.

A third valuable part of my A-Team is our Chief Learning Officer, Leslie Daley. This person has worked with me for the past 16-plus years. She is so good, that when I begin somewhere new, she is the first person I reach out to. One of the many duties she has is to build a learning platform for our network, both domestic and international. We call it Orange University (OU), and its purpose is to provide our studio owners and their teams a with a one-stop educational portal. It has everything from forms to training videos. OU is designed to make our owners successful.

1851: What is Orangetheory Fitness’ biggest department?

Carney: Our largest department, which is 44 strong, is our technology department. The second largest department - people might be surprised - is learning and development. People consider us a fitness company, but we’re not just that. We are well beyond a fitness company. When I started, we had a technology department of one person and no training and development department. 

The previous fitness club I worked for was corporately run. I made sure each manager was set up to succeed. The difference here is that we have franchisees instead. We don’t have as much control over them, but we need to provide a platform for these owners to train up their teams. We are as good or bad as our worst franchisees. I’m proud that at 800 studios, we have never closed a studio and we don’t plan to. As I mentioned, we just unveiled our Orange University, which is portal for franchisees to get information - facts, videos - to train their small staff. The typical studio has 12-18 employees, most of whom are part-time. For the franchise owners, what will make them successful is making sure all of their team members are well trained.

1851: What are some strategic priorities for Orangetheory Fitness in the coming year?

Carney: Our primary priorities are to continue to grow our tech platform, including a new mobile app and our connected fitness platform where we will be providing our members with a much more rewarding experience. We know that a good percentage of our members love to track their personal progress. They will be able to do this and much, much more in the future.

Second, we are so passionate regarding the brand, and we want the world to know as such. We are building a worldwide brand initiative with the goal of introducing Orangetheory Fitness to every part of the globe. Today, aside from our 750-plus studios in North America, we have locations throughout Latin America, Australia, the UK, Germany, Israel, Japan, Hong Kong, Spain and others. To assist in our international development efforts and in keeping with your question that it takes a village, we have just hired a President of International Development, who began at the beginning of the month.

Third, we pride ourselves on the support we provide our franchisees. Our learning and development department is one of the largest departments at Orangetheory Fitness solely for the purpose of making our franchisees successful. Our mission statement is to "Lead, Support & Inspire the Orange Passion in our Franchise partners to Achieve Superior Results." We not only have a large team of educators who work with our franchisees prior to opening their studios, but we also have a second group of business support specialists whose sole responsibility is to support our existing franchisees. To that end, they are continually reviewing studio performance metrics and reaching out to studios who we feel could use some additional guidance.

1851: What are the characteristics of your most successful franchisees?

Carney: That’s a great question and one which we focus on quite often. We have found that our most successful studio owners are first and foremost passionate about the brand. Taking nothing away from other brands, ours is a health and fitness product. Our top franchisees live the brand. They take the classes; they even teach the classes. Their passion is often contagious, and they hire passionate people.

Second, they are willing to put the time into making it work.

Third, they understand how to promote and sell their product. They are visible in their communities, understand and use social media and have their studio teams well trained in how to sell memberships. We are a premier brand, and as such, there is training involved with the sales process. The good news is that the workout often sells itself. Our prospective members take one class, and they are hooked. The hardest part then is to help them determine the best heart rate monitor for them – a chest strap, a wrist based or a forearm. 

1851: How long has Orangetheory been franchising?

Carney: The one thing that people are amazed at when they meet with us is that we are only six years old. At the same time, we are opening 25 studios a month and have close to 800 worldwide in 16 countries. As much as we are a young company, we are growing by leaps and bounds and don’t see an end to it. We have and will continue to have a wonderful relationship with our franchisees. We have a wonderful franchise advisory council, which I set up close to three years ago. We get together four times a year, and it’s been beneficial. The relationship we have with our franchisees is good; we have a passionate brand and are thankfully very successful. I am thankful every day that we have a great relationship with our franchisees, and they have a great relationship with their 600,000-plus members.

1851: Tell us about yourself as President.

Carney: The seat I am occupying is one that I love. I’ve worked 30-plus years in health and fitness in similar positions. I started as our COO for three years and am now our President. I feel this seat is the right seat for me. I enjoy being more of a jack of all trades. For as long as I remember, I have been more of a coach in my mentality. I have been in health and fitness but never in franchising, so I’m still learning. David Long, our CEO, has been a great mentor to me in that capacity.

1851: What is the biggest difference to you in being President than your former job as COO, and what’s the toughest part of your job?

Carney: The biggest difference between being President and being COO is that more departments roll up to me as President. We are at 800 studios and 140 employees in our corporate office. What tests me every day is the prioritization. Any given day, there is a focus on our technology initiatives and learning initiatives, as well as other departmental initiatives, and one of the toughest parts of my day is deciding which department to focus on. It’s the busiest company I’ve ever worked for. We have so many wonderful initiatives in our pipelines in every department.

What I prefer as President as compared to COO is the ability to be the point person and sit in the driver’s seat. Together with Dave Long, our Founder and CEO, we feel we have great synergy and it always helps to have an amazing executive team surrounding us.  Dave often states, “My job is to create the vision, Carney’s job is to bring it to fruition.”

1851: Where are you corporately located?

Carney: We just bought a building in Boca Raton, and we just put some pretty cool things in here for our employees. We have an EPOC (excess post-exercise oxygen consumption) room that has a bar with ping pong. We keep it loose and fun, which I love. We are all busting it. We are going at an all out pace. David Long himself personally designed our office room by room and decided what we want. We just unveiled our wellness center downstairs, where we have everything from sleep pods and flow pods to a chill take area. Our office also has spaces for physical therapy, massages, meditation and yoga. We even built an Orangetheory studio downstairs just for the employees!

1851: Being headquartered in Florida, did the recent hurricane impact the way OTF approaches business continuity (disaster recovery, etc.) for franchise support?

Carney: Actually, we didn’t learn a whole lot from the recent storms, specifically Harvey in Texas and Irma in Florida. That's primarily because I have been through them before, as I have lived in Florida for 26 years and have been in charge of multi-unit businesses.

The toughest challenge is communication. We need to have ongoing communication with our employees, our franchisees and our hundreds of thousands of members, but I am pleased to announce that our communication did not break down. Also, we provided a network-wide donation initiative for Houston, and both members and franchisees alike and generated over $150,000 in donations. We used a portion for our franchisees in Houston and submitted a check for $104,000 to the mayor of Houston earlier this week. That is the passion of Orangetheory Fitness in its purest form.

1851: What’s next for you as far as developing the franchise?

Carney: As mentioned earlier, our focus over the next 12-18 months will be to continue to grow the product itself. We do not want to be seen as fitness brand – rather we see ourselves as a lifestyle brand. Between the technology initiatives and the areas we are looking into from a wellness and medical standpoint, our goal is to become an entity which will not be limited to helping with one’s weight loss, but so much more-looking at our members overall well-being. I mentioned our internal mission statement earlier. For our studios, the member-facing mission statement is “Our heartbeat is to deliver proven fitness results for a healthier world.”