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Kidokinetics Approaching a ‘Tipping Point’ for Major National Expansion, CEO Says

CEO Dave Pazgan describes the trajectory of a successful franchise, noting that the kid’s fitness franchise is approaching what he describes as a “tipping point” that will unlock incredible growth for the system.

After becoming a franchisee at 19 and later returning to the industry as a franchisor, Dave Pazgan, CEO of Kidokinetics, the kid’s sports enrichment franchise, has learned how to build a successful franchise system and identify the key traits of a successful franchise owner.

“In my first go at it with 101 Mobility, I had this plan that showed us growing and getting to this $100 million mark at some point, and when we were at $3 million or $5 million — looking at that — it’s a little bit daunting,” he said. “You’re kind of like, ‘Is that really ever going to happen? Is that even possible?’ But the math said it would. If I have this many franchisees and they do this much each year for the next five years, the math says we’ll get to $100 million … What I found was that, once you kind of get to a tipping point as a franchisor where you have enough locations being operated by enough of the right franchise owners, it takes on a life of its own. And we’re close to that at Kidokinetics.”

Much of this was learned prior to joining Kidokinetics, but with the expertise in his back pocket, Pazgan is leading the franchise toward a bright future in a high-demand industry.

“The industry is very robust; there’s a big demand for what we’re doing,” Pazgan said. “Parents are not afraid to spend money for their kids and the development of their physical and emotional wel??lbeing. We have a good tailwind as far as industry goes … It’s not a big mystery to me in terms of what it takes to grow and scale a good Kidokinetics business in any given market.”

A summarized transcript of Pazgan’s interview with Powills is included below. It has been edited for clarity, brevity and style.

Nick Powills: What’s your franchise story? How did you fall into franchising?

Dave Pazgan: My first brush with franchising was when I was 19 years old. I was in college at Penn State, and I became a franchisee for College Pro Painters. That was a fun experience. Then I was not in franchising for a long time after that; I was in the mortgage banking industry for a number of years.

In 2008, I started a company with a few partners called 101 Mobility. We decided to franchise it in 2010, and we brought it to the iFranchise group to help us with that. We grew it to around 100 locations throughout North America and sold it to private equity. I stayed to continue growing it, and in 2020, I decided I was looking for something new. That’s how I found Kidokinetics.

Powills: At 19, when you signed this franchise agreement, what was your depth of understanding of what that meant? And what were your expectations?

Pazgan: I didn’t know much about franchising then. I had heard of it through the entrepreneur club I was in at Penn State. I was always interested in having my own business, and some guys from College Pro Painters came and spoke to us. I saw myself in the opportunity and decided to go for it.

Powills: When you evaluate franchisees today, what do you look for?

Pazgan: When I think about the current opportunity with Kidokinetics, there are two things people need to be successful at — either directly or indirectly. They need to be good at business development, and they need to be a good team builder.

Being a franchisor for 15 years now and having done this a lot of times, I’ve learned where I can bend some rules — because we need to put pins on the map and bring some revenue in — and where we need to be very strict.

Powills: Obviously, you’ve experienced the $120 million in system-wide sales life. What does it feel like to now be in a business that has 65 locations knowing that you still have a gap between where you are and where you want to be?

Pazgan: It doesn’t get any easier, but using what I’ve learned has allowed me to move a little faster. We’ll probably be to 100 locations in the next year or so, but we’re a long way from that $100 million-plus. What we’re doing today, though, is setting that foundation and building the trajectory.

In my first go at it with 101 Mobility, I had this plan that showed us growing and getting to this $100 million mark at some point, and when we were at $3 million or $5 million — looking at that — it’s a little bit daunting. You’re kind of like, ‘Is that really ever going to happen? Is that even possible?’ But the math said it would. If I have this many franchisees and they do this much each year for the next five years, the math says we’ll get to $100 million. What I found was that, once you kind of get to a tipping point as a franchisor where you have enough locations being operated by enough of the right franchise owners, it takes on a life of its own. And we’re close to that at Kidokinetics.

I feel like, once we get to 85-90 locations, the foundation is secure enough to say that this explosion will probably take place in the next five to seven years. I don’t have to be a wizard to make it happen. I just need to choose the right people and enable them to grow by providing the support and tools they need along the way.

Powills: What else would you want a candidate to know about the business opportunity?

Pazgan: The industry is very robust; there’s a big demand for what we’re doing. Parents are not afraid to spend money for their kids and the development of their physical and emotional well??being. We have a good tailwind as far as industry goes. It’s not a big mystery to me in terms of what it takes to grow and scale a good Kidokinetics business in any given market.

And, while it does take a lot of work to build, it results in a significant amount of recurring revenue. Once you build these relationships with childcare centers, for example, they come back year after year. Once that baseline is established, it’s pretty easy to grow incrementally over time.

Watch the full interview here.

For more information about franchising with Kidokinetics, visit https://franchise.kidokinetics.com/.

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