P360 Franchising – “Why Did We Decide to Franchise?” Q&A with Dave Thomas

This is a question that has come up in every initial conversation that we have had with our franchising prospects and we thought that it would make a good post to our Franchising 101 series to feature a Q&A with Performance360™ co-founder and CEO of Performance360 Franchise Group, Dave Thomas.

What are the primary reasons behind the decision to franchise P360?

“There are a lot of reasons that have accumulated over a few years and the main points that drove them all are:

• We believe in what we’re doing at P360 on an intrinsic level. It is our life’s work and we have incredible passion for its growth and getting it to new leaders.
• We believe that we are uniquely positioned and offer fitness that other concepts don’t. We don’t want to enter a space if we don’t bring value to it.
• The business aspect is appealing to a potential owner. You can’t offer to sell a business model if people find out that the business is shit.

We wanted to make sure that these were at the core of our decision to move forward.”

What do you mean when you say that you are “uniquely positioned?”

“I genuinely believe that there is no concept that does what Performance360 does. If you think about the well known boot camp and treadmill concepts on the far left side of the spectrum – longer workouts at lower intensities exclusively targeting cardio, and on the other side of the spectrum on the far right you have competition focused gyms – shorter workouts at peak intensity exclusively targeting performance; then P360 sits directly in the middle of the spectrum, at the intersection of performance and physique.

Our program is truly holistic in the sense that it develops your performance capacity but also your physique and your overall movement health. We have been this way for a decade, but we never really knew how to properly define and articulate what we’re about until we had the epiphany to brand our service offering, not just our gym. Which is where PSC was born.

• Physique – an overall programming approach that supports lean muscle development, not constant cardio muscle stripping.
• Strength – 4 way strength at the heart of our foundation delivered with barbells as the focus.
• Conditioning – varied signature formats featuring rotating duration and tempo to keep you progressing.

It’s not a gimmick. Our members know that these three principles truly do make up how we write workouts for them, and we are absolutely the only brand in the group fitness space approaching group fitness from this service offering. I feel it’s going to allow us the opportunity to become and remain a leader in our lane.”

What went into taking P360 from three gyms to franchise?

A lot, but it can ultimately be summarized by two huge steps.

Franchise Disclosure Document (FDD) – This is a legal document that discloses everything about your business. It’s like turning it into a dog in a window at a pet shop where anyone can walk by and take a look. It’s unsettling to be that vulnerable, but at the same time empowering to be able to say, “This is it. This is P360.” And so far the response has been very positive for people who’ve peeked behind the curtain.

Proprietary Software – Bryan is our Chief Data Officer and he insisted that if he we franchise, we build our own software. The short of it is that industry software sucks and he refused to deliver that to our franchisees. He also wanted something that’s automated and turnkey so that franchisee owners would never have to do that manual work that we’ve had to, and it is really impressive stuff. It’s in the last stage of development and I think this is our gamechanger. Bryan absolutely crushed this.

We’ve had all of the operating documentation for years since operating three gyms is not much different than operating one hundred. Things need to be standardized and on paper for everyone to implement with consistency. But the FDD and the software are big efforts. Now we’re ready.

You’ve been open for 10+ years, why franchise now?

“Proof of concept is the term used to communicate that a concept has been tested, tried, and shown that it is legitimate by consumers. It kinda blew our minds to learn that there are franchise concepts without any actual locations before they sell. Like…they just create a concept and sell it.

Or, open one for a few months, sell some memberships and then rush it to franchise market. I would feel disgusting and slimy if we did that. So if that represents one extreme then I guess we represent the other. Being very, very slow to market. The advantages of that is that I really believe in our process. We have a strong sense of what works and better yet – how to adapt to what does not.

I think a lot of people look at us over the past decade and might assume it’s been a straight shot to success in the industry. We have fucked up as many decisions that have been successful. And we will lean on those experiences with our future partners. When you offer a franchise, you are asking people to entrust their resources to your system. Their finances, potential time away from loved ones, and energy. And we wanted to make damn sure that we were experienced enough leaders to take on this task. There is no time for amateur when the stakes are high.

Is 11 years extreme? Probably. But I guess our strategy is based on the belief that the tortoise will beat the hare.”

Did the pandemic come close to killing your plans to franchise?

“Actually, the opposite. The decision to go all in on this was born from the pandemic. I wouldn’t ever count the 2020’s out just yet, but we endured what is potentially the biggest industry disruption in the history of in-person fitness. A global pandemic. It’s easy to think you’re hot shit when trends are in your favor and business is booming, like what was happening in the early 2010s when you were lucky enough to be a part of the group fitness boom. But how about when your business becomes federally illegal, people take measures to protect their safety, and at-home technology pounces on your market share?

We like being hyper insular, but simply put, the demand we experienced both during and right after the pandemic peak showed us the very real, genuine legitimacy for Performance360 to enter this market in a way that…real talk…we just never noticed or truly hit us that squarely in the face before.”

Are you at all nervous to franchise in an industry that was deeply impacted?

“Maybe foolishly, but no. Talking about the pandemic is difficult because people experienced it differently. Some had horrific tragedy. And to be as respectful as I can of that, how our industry was treated during the pandemic was borderline criminal. We have a smoke shop as a neighbor at one location, and they could stay open selling vapes but gyms had to close despite effective protocols? It wasn’t right and the terrible reality is that a devastating 25% – 30% of gyms and studios had to close their doors permanently.

Now here we are and the industry is expected to grow again by 3.7% this year according to IBIS World, Peloton’s stock is down 77% over the past year, and the data shows that people are returning to group experiences and perhaps thrived in them more than they realized.

2021 was our strongest year as a company of all time, by a landslide. At home training is a great option for many, but so are in person fitness communities and the data is starting to show that once again.

So if anything, I personally feel that our concept was strengthened over the past two years – not threatened.”

Who is your target market?

We want to start with our member and coaching base since the idea is to build Performance360™ from the inside out. We want the highest quality leaders grown from within, and we know there is big potential just with the great people we have right here in front of our faces.“

What do you believe will make P360 franchising successful?

“We have years of developed systems, a proprietary software in progress, a great ongoing mentoring program built out, and lots of operating procedures that have been fine tuned and proven. But I don’t really believe that’s a success maker. I think those are just requirements to franchise.

First, leadership must believe in the cause almost to a fault. Any cause. History has told us that whether it’s business, politics, or whatever. If we don’t feel a deep sense of pride in our offering, if we aren’t willing to put our personal names on it – we shouldn’t sell it. I think our leadership of Bryan Pritz as our Chief Data Officer and Lenny Weiner as our Chief Operating Officer has all of the internal street credit in the world since we’re all daily users of what we offer, we’ve built it, and we’ve sold it on the floor as coaches. We aren’t outsourcing our sales to a third party. We’re selling you something that we are in fact also operating. Think about that. Why wouldn’t we put everything on the line to make it great? I think that passion and experience will come across.

Second and more importantly, I think we will do a good job of looking for that passion in others. We are not super interested in pursuing growth for growth’s sake. The traits our team will be looking for are much more intrinsic than that, find great partners and building it with them for the right reasons. I think that gives us a really good shot at building something that’s truly great.”

Dave Thomas has been a founder operator of Performance360 since 2011, and has held fitness certifications from the National Strength and Conditioning Association (CSCS), International Sports Science Association, OPEX CCP Program, Onnit, USA Weightlifting, CrossFit, and Precision Nutrition. He has previously coached over 5,000 classes on the floor at Performance360 and holds a B.S. in Business Administration from the University of Richmond. To learn more about the P360 franchising process, go here.

–

NONE OF THE COMMUNICATIONS MADE THROUGH THIS WEBSITE SHOULD BE CONSTRUED AS AN OFFER TO SELL ANY FRANCHISE, NOR IS IT A COMMUNICATION DIRECTED TO THE RESIDENTS OF ANY JURISDICTION WHERE REGISTRATION OF THE FRANCHISE IS REQUIRED BEFORE IT IS OFFERED OR SOLD IN THAT JURISDICTION. AN OFFER TO SELL A FRANCHISE IS MADE ONLY BY THE UNIFORM FRANCHISE DISCLOSURE DOCUMENT. NO FRANCHISE WILL BE SOLD TO ANY RESIDENT OF ANY SUCH JURISDICTION UNTIL THE OFFERING HAS BEEN DULY REGISTERED IN AND DECLARED EFFECTIVE BY SUCH JURISDICTION AND THE REQUIRED UNIFORM FRANCHISE DISCLOSURE DOCUMENT HAS BEEN DELIVERED TO THE PROSPECTIVE FRANCHISEE IN COMPLIANCE WITH APPLICABLE LAW. THIS WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THAT AGENCY AT WWW.CORP.CA.GOV.