Back in 2009, Josh Cherry and Robby Marlow started a bootcamp in a parking lot training friends and family members for a few years, but ultimately didn’t know where to go from there. They soon reached out to NPE and worked their way through all program levels within just a few years time, being named NPE Members of the Year in 2015 while growing to 25 licensed locations across the USA. Today, they’ve now grown Delta Life Fitness to the fastest growing women’s fitness franchise with over 73 locations sold in the United States and are on track to hit 100 units this year (a feat only about 4% of franchises ever achieve)!
In this episode, you’ll learn…
- How Josh and Robby started their bootcamp business in a parking lot in 2009 and evolved to a studio concept to train and help women get in shape.
- How they grew their business to the point where they had to make the decision to go from part-time to full-time.
- How they grew from a handful of company owned stores to 25 licensees in the USA
- How they went to the International Franchise Association convention in Texas with Sean and took big risks to evolve their model to a franchise (and took on investors) to grow to the next level.
- Keys on making big decisions when the risks are far greater than expected but the rewards could be even greater.
- The importance of surrounding yourself with the right people and getting a coach to guide you in the right direction.
- Two steps back, five steps forward: How Josh and Robby had to take major steps back in terms of business and finance in order to grow their business beyond where they were currently at.
- Their strategy on how to hire the right vendors and build strategic partnership instead of hiring and training employees.
- How Josh and Robby create 90-day plans for their business that continues advancing them forward.
- And much more…
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Sean Greeley: All right. Hello everybody, welcome. We’re back for another episode of Secrets To Their Success Podcast, and I’m here with two tremendous guys, longtime friends, members of the infant community, Josh Cherry, Robby Marlow, co-founders of Delta Life Fitness. Guys, it’s great to have you on the show.
Josh Cherry: Sean, what’s up man? It’s good to be here.
Robby Marlow: Yeah, thanks for inviting us on, Sean.
Josh Cherry: Yeah.
Sean Greeley: Awesome. Well, let’s tell everybody a little bit about you guys and who you are, what you do. So, tell everybody just real quickly in a nutshell what Delta Life Fitness is.
Josh Cherry: Yeah, Delta Life Fitness is a boutique fitness franchise. It’s built for women. We have 30 minute high intensity interval training classes, and we have childcare. It’s a place for women to train right.
Sean Greeley: Awesome. And, you guys are at about 50 stores now across the U.S., which is fantastic. And, we’re going to talk about that more about the concept of the model and the opportunity today, but to tell everybody kind of how we got to know each other, you guys were members of NPE community for many years, past NPE members of the year. We’ve worked together directly on a lot of the things you guys have done to get to where you are, pleased to be a part of the story of Delta Life. But, let’s take people back to kind of where this all began. So, tell us where things started for you with, really, your background with the military and this crazy idea about let’s do a bootcamp.
Josh Cherry: Yeah, we started with some 10 years ago, actually. 2019, so 2009 is when we started, and Delta Life back then was just a bootcamp and some parking lots, me to Cub Scout moms, Robby to a handful of friends and family, I think it was five-
Robby Marlow: It was five people, really changed the community when it started.
Josh Cherry: And, I had some Cubs Scout moms. It was early 2009, like you said I was through the Marine Corps, I was going through a commissioning program at Texas A&M, and I had to do a PTI program, which is a professional fitness trainer for the corp cadets at Texas A&M. So, I’d write their workouts, started telling Robby about some of the stuff I was doing for nutrition wise and exercise, I got obsessed with it, he got obsessed with it, we started doing these things in parks and parking lots in 2009, and then we actually went into some brick and mortar locations around the 2012 era, which is where we finally got connected with NPE not too long after that, around 13 I think, 2013, 2014. Kind of went at that point, it was more of it looked like a CrossFit gym mostly for women at that point. But, we had the ideal consumer figured out, but we were still building workouts that Robby and I enjoyed. The program looked like us. I mean, you can see today Delta Life doesn’t look anything like Robby or I, thank goodness.
Robby Marlow: No, yeah, no. What’s great is we just had a photo shoot and it was nothing but young ladies at all the gyms on there. There was no pictures of me and Josh on it, so I was super proud of it.
Josh Cherry: Sean, you’ll know this. We’ve come a long ways there.
Sean Greeley: A long way.
Josh Cherry: So, we got connected with NPE around the 2014 area. We’re also very coachable. We know we didn’t come from the fitness industry, so we wanted to take advice from people who were doing it better than us, and go implement it. So, that’s one thing we did when we first signed up with NPE, we dove straight into the curriculum. I mean, we went through all of the stuff. I think we went through the fast track materials in about 90 days. I mean, we just went through it super fast. We really worked on auto closer, got those cells starting to happen, and then we were able to start being more strategic.
Josh Cherry: So, we had the fundamentals of how the business was going, so that’s when it got really fun. When you got the fundamentals taken care of, it gets really fun, because then you can start thinking about strategy and how you want to change up the model, which we were starting to do at that point after having some success after joining in with NPE, and then came decision time, because something that was kind of a hobby at first to make vacation money and-
Robby Marlow: We had full time jobs, it wasn’t something that we thought hey it was going to take off like it did, but.
Josh Cherry: But, at about just two locations really and implementing all the stuff that we learned from NPE, we had to make a decision, because it was doing a lot better than we had ever thought it would do. So, at that point, it became a real possibility that that could be our future. We did make those decisions. I, after 13 years in the Marine Corps, helicopter pilot, walked away from that to go chase this dream, and I’ll let Robby tell a story about our meeting with Sean in California. That’s a monumental story that I think has to be told.
Robby Marlow: We both have life changing events. Yeah, for when I first met Sean and me and Josh actually were sitting there talking to him about what we had going on and explaining the whole situation, what we were doing, and how we were doing it, and I was living in Texas at the time, Josh was living in Florida, he was about to go to California for flight school. Or, he’d just finished flight school, and so we were kind of just over… I always take it to the Marine Corps and his leadership, really the pool of people really was down there in Florida that was helping us grow this thing, and I was in Texas, and me and him were doing it via the phone and trying to help grow that thing, and so happened that Sean heard our story and said, “Well Rob, it sounds like you need to move to Florida.” And, at the time, I mean, I had a house, my kids were in school, I was still working full time, we didn’t have much money in the bank as the headquarters part of it. We weren’t really making money at that time, so.
Josh Cherry: When he says not a lot, he means none. Just to clarify.
Robby Marlow: Yeah, none. So, Sean told me I needed to move to Florida to help to run the thing, and I agreed to it instantly, called my wife, and she was like, “Oh, you said what?” Yeah, no, we’re going to do it. Two weeks later I got a U-haul, and we were moving across country.
Josh Cherry: Then two weeks later, I’m standing in front of his house, which was then in our neighborhood in Florida, so the girls loved it. Sisters got to live in the same neighborhood, cousins, and I’m looking at Robby in this U-haul, and I was like, “So, we’re doing this.” And he’s like, “Well, I guess so.”
Robby Marlow: Got no choice, I’m here.
Sean Greeley: Oh, it’s so great. It’s one of my favorite stories, and I really want to point out it speaks to who you guys are, and no surprise they continue to go from strength to strength is we were at a, I believe it was a pro mastermind event in San Diego. We had had a meeting, I think it was you guys gave me a ride to the airport, and we have this conversation in Josh’s truck about this whole thing, and really hearing your story was… All I did was kind of point out a couple opportunities, but you guys said, and really Robby to his credit, just said, “Okay, I’m in, let’s go.”
Sean Greeley: And, to be able to make those decisions and go all in and commit, and when you commit, you’ve got no choice but to make it work. You will make it work, right? And, you’re willing to take those risks, and you’re willing to make those commitments to yourself, and to your company, and to the team that depends on you, and you did. And then, the next chapter opened for Delta Life in North Florida. So, quite an exciting time. So, that was going on, and then Josh, you were kind of finishing up your military career, which was they didn’t want to let you go.
Josh Cherry: No, that was not an easy thing to overcome. It took about 18 months, I mean, a year and a half of me in California separated from the family, Robby, Cassie, Kristin, the rest of the headquarter scene back in Florida running the thing. I was up early before going into the Marine Corps on Skype calls with the East coast. You know how that goes in the Marine Corps. And so, we had to get through that challenge, which was huge. 18 months later, finally the whole headquarters team is together in Florida. Like you said, we’ve risked all this, we took all these chances, we’re there now, and it feels like…
Josh Cherry: Looking back now, that feels like that was just the first of many obstacles in this, because I mean, the work was… We thought we had won, okay, now it’s… And really, we just wanted the chance to be in the game. We wanted to be able to take a swing at it, but it was just getting started, as you remember, because that very first quarterly planning we did, you kind of laid out all the things that were going to need to happen in the next year if we’re going to really treat this like we had just done a tour of the four or five studios there in North Florida, and we had some work to do to make this thing a replicable franchise model. We had a lot of work to do, and I remember looking at the list of the things Sean was saying we had to get to work on, and I remember looking at that list and thinking there’s no way. I don’t know how to do not one of those. It was scary.
Josh Cherry: But, that’s the good thing about having a coach. They put it out there, and you’ve got to figure it out, and you got to move forward. And we, of course you don’t get all of those done in the next 90 days, but you get a good amount, and then you get to make more decisions the next 90 days, and you just keep moving the needle every 90 days.
Sean Greeley: Yes. I love it. Well, let’s go back a minute, because this is really, I think, relevant to a lot of people listening to the podcast today. So, we’ve had obviously a lot of NPE members that are successful with opening a facility, and then they open a second facility, a third facility, and then they kind of reach a point where, what’s next? Some are just happy at that stage, and they’re just really optimizing the business, and it’s supporting their goals. Other people want to continue to grow, and they start doing licensing, and then some do franchising.
Sean Greeley: And, this is kind of where you guys were at. I remember a big crossroads in this time where you’re figuring out, okay, we’re going to start doing licensing. And then, we had a conversation really talking about franchising. And I remember, I said, “Hey, there’s this thing called the IFA, and we need to go to Texas.” It was another crazy time. We need to go to Texas. You meet me in Texas, we’re going to go to this IFA convention. And, I remember you guys were like, I don’t know.
Josh Cherry: It was a lot of money to us then.
Robby Marlow: No, I remember looking at the bank account and thinking, okay, it’s going to cost us this much money, that’s drains half of what we have in the main account, so.
Josh Cherry: But, I remember Robby and I had a side phone conversation, and we said then too. We said, hey, if Sean’s… This guy is our coach, and if he’s saying this is what we need to look at to take us to the next lever, we got to do it. You got to do it.
Sean Greeley: Yes, yes, yes.
Josh Cherry: And, you’re right. We went, and we got to see the Alamo, which was fun.
Sean Greeley: We did.
Josh Cherry: And then, we got to go to-
Sean Greeley: Got some Alamo photos.
Josh Cherry: We got to go to the International Franchise Association in San Antonio, which changed the entire trajectory for us. I mean-
Robby Marlow: Yeah, and I mean, it’s kind of like when we went to join NPE, we’d get in there, we’d meet everybody, we start talking to them, we wanted to grow the gym business, and the same thing. We were just licensed at the time, and we went in there, we were 17 licenses, our chests were out, we were proud of it. And then, we get in there, and it’s-
Josh Cherry: It was nothing to those guys.
Robby Marlow: It’s just the way we work, and we were like, okay, well then next Spring we want to come to this one, and we want to make sure that they know who we are on this one.
Josh Cherry: Yeah, yeah.
Sean Greeley: Yeah, and I think that is a lesson for not only to be willing to take big risks and go on and make commitments, I mean, we’re talking a lot of people… You need understand the context of the risk you have. Not just you’re two single guys, but you have wives, you have kids, you have homes, you have a lot of things dependent on your financial success and performance, right? And meanwhile, you’re trying to navigate this crazy thing called a company that’s in startup mode and working through some early stages.
Sean Greeley: So, but you’ve been willing to make those commitments. Even right then, I remember that time on that call when we talked about going to IFA, and it was you’re doing to drain your working capital, and we got to eat. We got to keep things going. But, you’ve been willing to take those scary steps, and make those commitments to yourself and to your dream. And, that is a common trait among the most successful entrepreneurs and the people we work with all the time.
Sean Greeley: And, I’d love to just talk about that for a minute. How would you speak to that? What helps you… And, a lot of people think, by the way, that, oh, and this gets easier when you grow, and there’s no more fear, and there’s no more risk. And as you said, there’s just the next chapter, right? So, but how have you continued to navigate? If you think back on your journey, where you got to today, and each of those steps we talked about. And then even today, how do you navigate these steps around facing the fear, and taking those risks and figuring it out?
Josh Cherry: Man, it’s such a good question. I know it’s a couple things for me personally. For me personally, one, it has gotten easier the more you get… Because you realize how many of them are either fatal or the home run. Very few of the decisions you make are either going to completely kill you, or completely hit the home run for you. So, you just get better at making the best decision you can. We have a really good system, we follow the Entrepreneurial Operating System from Gino Wickman, so the things that used to get us in trouble by not seeing what other things it’s going to affect, we process those decisions at our level 10 meetings, so that relieves a lot of that risk.
Josh Cherry: But, I don’t know. I also think that… What do you think? It’s a hard question, because in the beginning, I think we were so willing to risk it all, Sean, because like you said, we walked away from so much. So, we weren’t willing to walk away from that much to just have one or two gyms, you know what I mean? We felt like him moving from Texas, and me walking away from the Marine Corps, we wanted to do something big. We wanted to have that big impact in the beginning. And like you said, we burned all the ships, so we had to. But, we continue, like you said, we’ve continued to do that.
Robby Marlow: Yeah. And also, communication with our spouses. I mean, we are in it with our wives, so them having 100% buy in helped out a lot. And then, like you said, it is a tough question to ask, but…
Josh Cherry: And then, I said on a podcast earlier this year, or no, Dr. John Berardi said it. He came to an NPE thing, and he said, remember, he said he keeps the picture of the manager of that coffee place.
Robby Marlow: Starbucks.
Josh Cherry: Well, it was the Starbucks equivalent for Canada, whatever that was. thing.
Sean Greeley: Tim Horton’s or something.
Josh Cherry: Yeah. And, he said he keeps that up, because he’s like, I’m always going to do my best to grow precision nutrition. I’m going to do everything I can to grow precision nutrition. But, there’s things outside of my control, so I’m not going to stress over those. And if I mess up and it all goes away, I’m a pretty smart guy, and I’ll work hard. I’ll go manage one of those. He just kept that up to reminding me, so.
Robby Marlow: Still got a hard head hanging him out.
Josh Cherry: Yeah, I keep that in mind too, right? Because, you weigh the stress of all these decisions, is this going to work out? Because, like you said, especially when it’s all these families depending on these decisions that have to be made. But, I don’t know, I try to make the best decision I can, then I relieve some of that stress by if we mess up, and if things outside of our control, if I have to start over again tomorrow, I’m not afraid to go work hard. And, that makes it a little less risky. I’ll, not figure something else out, but I’m willing to go do something else and work hard to get back to where I was.
Robby Marlow: And, we started in a park. So, that gives us a lot of solace that we could do it again.
Sean Greeley: Yeah. Yeah, I started with no resources. So, if you know how to be scrappy, and you’ve proven, get it done. So, awesome. So, talk about… Yeah, and the other point I wanted to talk about was each of these steps, joining NPE, and going from just in your own silo with your world, to going to NPE community and seeing lots of bigger businesses and things that now give you a room to grow in, and then very much with then taking it to the IFA and going to the IFA and, again, walking in and thinking, we’ve got it figured out and realizing I’m the dumbest person in the room right now, and I’ve got a lot to learn and grow, which then inspired you to keep growing.
Sean Greeley: And, I think it’s so often is you hear me say all the time, you never want to be the smartest person in the room. You want to be in a room that’s going to force you to grow, and be in an environment that’s going to force you to grow, and being surrounded with other entrepreneurs that are ahead of where you are today, they’re going to inspire you, and push you, and bring out the best in you. And, talk about what that’s meant to you, I guess, along this journey, and how I know you’ve actively sought that out in many ways.
Josh Cherry: Yeah. I mean, it’s been everything for us. I mean, like you said, early on in NPE just finding other gym operators, maybe ones that were using NPE that were close to us, or I… Like our long-term marketing guy, Cody Bishop, I met him through the NPE community, that Facebook group. Just being able to bounce things off. And too, the thing that’s so good about coaching or hearing it from somebody else, is that you don’t have to second guess it so much if the coach is telling you, and four other people in the community are saying, hey man, I implemented this auto closer thing and my staff is killing sales, you don’t have to sit and spend precious brain energy wondering, what should I do for sales? No. Hey, coach said it, these three guys are doing it, let’s just get on auto closer and lets go. And then, you can use your brain energy for something else.
Josh Cherry: But, we had a lot of fun people in our group too that were, like you said, were doing some cool things. I mean, we’re still really good friends with [crosstalk 00:16:53]-
Robby Marlow: Yeah, gained a lot of friendships.
Josh Cherry: The Pages, and the Fetters, I mean, these are people that are building big companies and cool companies, and you’d like to stay in touch with those people. It’s just so nice to be able to get on a phone, and just talk through what you’re dealing with and how they’re dealing with it. It’s everything.
Sean Greeley: Yeah.
Robby Marlow: That’s always been Josh’s strong suit, and one of his strengths. I was lucky enough that it was his strength, I wasn’t too strong at that. I probably wouldn’t have sought that out early on, but he did and forced me to do it, and over the years, I look forward to going into groups and talking it through, so.
Josh Cherry: Yeah. Sean, I know you’ve talked about it. I mean, you’ve always surrounded yourself with business owners that are doing well. I mean, it’s just…
Sean Greeley: Yeah. I think it’s really a key to, if you’re not in an environment where you’re being challenged, you’re not in the right environment. So, you’ve got to continue to invest in that for sure. So, I’d love to also explore, I think it’s so relevant. Early on, so much of your journey in the work we did a lot together at NPE was around sales, marketing, customer acquisition, business strategy, figuring out a lot of those pieces. And then, you grew up to, I remember it was, I don’t know, 25, 30 licensees, and really had to take this step in the company where we had to go be we willing to go backwards to go forwards. And, going backwards to take a step forward is really, really difficult in business, because not only it kills your ego, but you have to be willing to just kill your baby, right? And start over in some ways with your model.
Sean Greeley: But also, financially, you take steps backwards through that journey, and you have to be willing to imagine a bigger future, and really go back to the core of the customer experience, the model, the user experience, all the things that, again, really, really refine for Delta Life. And, I know that was a big part of the journey for you guys moving from Florida to Texas. And, let’s talk about that a little bit, because I think we get people who’ve come through the NPE programs, and they’re at that place where they’re looking to continue to grow, and they could have success with where they’re at to kind of maintain, but it’s not easy to make that decision, okay, to go really two, three, four, five steps forward, I am willing to go backwards. And, how did you work through that? Or, what advice would you have for others working through that?
Josh Cherry: Again, there’s no way we would have done it. And Sean, you know us, and you know our personality, there’s no way we would’ve done it outside of just being surrounded with the right people, and the coaches, and the mentors that didn’t let us. Because, you’re right, and it was hard. I mean, it was really hard on us ego wise, it was hard on us financial wise, the move, the stress, I mean, it pressure tested everything, right?
Josh Cherry: Because like you said, I mean 2015, we’re on top of the world. Licenses going great, we’re signing massive license agreements for the first time ever, we NPE client of the year 15. Okay. We go to try and transition this, say, into a franchise, and we learn if we’re going to do that, you’ve got to shut off all revenue basically, since you can’t sell licenses anymore. So, you’ve got to cut off all new sales and revenue, and spend hundreds of thousand in new legal fee, of which we did just what you did, we laugh, because we were like, where am I going to get that? Plus, Lynette, a franchise consultant, came in and gave us a laundry list of things, and told us we had to move to a bigger city, a hub, and start over basically, and build a replicable model and then go from there. And, that was terrifying. When you look at that list, and if it hadn’t been for the…
Josh Cherry: But, that was absolutely, now, it’s obvious to us that’s the right step, because you fast forward. We do have the right type of model, we have the replicable model, they’re doing amazing, we have these major fitness industry investors flying in now. Our valuation at the headquarters levels going higher than it’s ever been. However, you go back to 2015, we would have done what some of the other bootcamp style franchises did back then, and we would have just sold 500, 600 licenses that would have closed as fast as they opened. It wouldn’t have been a replicable model, the valuation of the company wouldn’t have been worth very much, right?
Josh Cherry: So, it’s easy to see now for us that it was the right decision. But, we’re like anybody else. We want to think about growth, and I don’t think we would have ever wanted to say out loud, we’re going to take the next two years to do worse than we’ve ever done, right? But, we had those coaches and important people telling us, if you really want to do this right and have a big impact on the world, you’ve got to do it this way. And had it not been for those people telling us that, I don’t think we could have. We would’ve just kept doing what we knew made money. I mean, I think it’s not a sexy answer, but I think it’s a fair answer.
Robby Marlow: No, absolutely.
Sean Greeley: Yeah, and I think that is also a key hallmark of what makes the most successful people the most successful is you’re willing to burn yourself down and start over. And, that’s brutal transformation on the inside and on the outside, and that really separates, are you for real? Or, do you just want to look like you’re successful and look good on the outside? So, you guys are willing to take the hard steps, and the painful steps, that mean pain for a couple of years to then have a great 10 beyond it.
Sean Greeley: So, let’s talk about that, because that, really some of the lessons learned on the model, and the optimization of the model, and site selection, and should we be a warehouse? Should we be a retail space? Where do we put it? What does it look like? What’s the square footage? How do we optimize workspace and flow? How do we make it so 50 of these are going to look the same and work well? That was a huge part of growth learning in the last few years. So, take people through how you work through that. What were the some of the big lessons and takeaways?
Josh Cherry: And, there’s so many things, and I think without a process of process, that’s the number one, right? That you have to have a process for how you look at those and process those issues and talk with the leadership team, you have to. That’s-
Robby Marlow: And, we evolve there. A lot of times it was me and Josh making a decision. We would see it instantly, we would go try to push it down everybody’s throats, and we realized that didn’t work.
Josh Cherry: And, not see what other… If you don’t let your team challenge you for… You’re going to have to answer for it eventually when it hits the market, you know what I mean? So, if you don’t let your team push back and answer it and work through those. But, everything you just said, Sean, and here’s the thing that we’re getting a lot of props for right now with the people that understand the industry. When they come in, they’re asking us these site selection questions. We are very good at saying where it should be, what it should look like, how it should feel in the studio, and all of that is because we know who we serve. I mean, and you know this. The vendors that we’ve been able to align with that are great vendors, the franchisees that we bring in, the site selection process we go through for knowing where we want to go to, it all comes down to we know who we serve.
Josh Cherry: We tell people all the time, because we’ll get with a new broker and a new Chicago, and she’ll say, “Well, I assume you guys want to be as close to an orange theory as possible.” Well, maybe the orange theories that are out in the suburbs by the grocery stores and the elementary schools by the moms, those, yes. The ones that are on the downtown district, those aren’t really our consumers. We serve the moms, and we know that, so we want to be out where mom is. And so, every decision we have is based off who do we serve, and how do we serve them? And when we say Delta Life Fitness is a place for women to train right, we serve women 30 minute classes and childcare, if it can’t be put into one of those buckets, we don’t do it anymore. And, that makes our decision processing a lot better. It makes it easier for us to find partners, vendors. Everything starts with knowing who that target consumer is, for us.
Sean Greeley: Yeah. And, let’s break that down a little further, because you’ve gone, with some of the catch-up we were doing just before this recording, really the last few years, you’ve made this so simple for you guys to continue to grow the company efficiently, which is also, I think, a big part of why you’re sitting right now the best place you’ve been, right? In years. We’re celebrating your best year ever financially, right? For the company last year. We’ve got double growth projected next year when we had three years of that consistently, but now it’s going to be the fun stuff that’s really giving some growth to the company, and to everybody that’s involved.
Sean Greeley: Let’s break that down a little bit. So you today, you’re a small HQ team, and instead of trying to have a hundred employees, you’ve gotten really smart about aligning with, as you said, the right vendors, the right outsources. And, I think that’s also a big key to success, especially right now in the day in age we are, because too many people try to do everything themselves at every step. I think we just got to hire more labor, and we got to figure it out, we got to control everything. But actually, that is not the most efficient strategy. And so, talk about how you’ve made that adjustment from really growing a big in house team, to really having a leader in house team efficient house team, but having the right partners for different areas of the company that support your growth.
Josh Cherry: Robby gets credit for that one. I mean, it all starts with hitting a ceiling. When you hit a ceiling, when you’re feeling frustrated, overwhelmed, or overworked, you’re hitting a ceiling. So, you’ve got to go look at, why did we hit the ceiling? And in my head, it was just we were understaffed, and I was kind of starting to stress and vent to Robby a lot about, hey, we’ve hit the ceiling, and I thought it was we’re never going to be able to catch back up to this demand, we’re understaffed. And he kept saying, let’s look at this. There’s other ways to fix breaking through a ceiling. Maybe there’s some good outsourcing. He kept saying that over and over again. Maybe we can stay small, and lean, and just look at it. And then, you want to talk about what led you to think that?
Robby Marlow: What led me to think about it is just, and I hate to say it, but controlling costs. How do we run lean? We’ve had the best year ever, so how do we spend that money on growth, and then run lean internally. And so, I started looking at vendors, and what these vendors can do. And this vendor, say, for example, we had a real estate vendor that goes out and finds all the real estate. She has data, she puts it together for us. She does that better than anybody I could bring in house-
Josh Cherry: Her and her 15 person team by the way.
Sean Greeley: Yeah.
Robby Marlow: Exactly, that’s what they do. What we pay her is the cost one employee to us, and they give us the the ability for five to six employees in house. And when you start doing that at scale, it has opened up a lot of opportunities for us. So instead of spending money on employees, training time, taking away our leadership team from doing what we need to do, we’ve got to go down and train, it just made more sense to where we were at as a business than trying to bring five, six employees on.
Josh Cherry: And Sean, like you said, we’re just getting better at our strategy, because when we start talking about things, even inside the model, we know we want to be the best play, we want to be the best 30 minute workout in the world for women, that’s what we want to do. So, if we start thinking about adding in Zumba classes, or dance classes, or bringing in nutrition, it doesn’t make sense with us. We want to stay on our core competency, our core focus. We’ll find the right partner to outsource those pieces too, but we’re going to build the best 30 minute workout for women.
Josh Cherry: And now, we’re getting more clear because when you’re running a franchise, do you remember the Painting With a Twist ladies told us this at the International Franchise Association Conference, you’re running two different businesses, and it took us a long time to understand that. There’s the business of the business, and then there’s the business of franchising, and they are completely separate. So, kind of the same way we said, well how do we measure what we’re going to spend time on when we’re building the brand? Do we focus on nutrition, or the classes? We’ve also established nothing on the front end of this franchising process we were experts in prior to coming in here. We like having the vision and controlling the brand aspect, but for all of the things on the front end, site selection, construction management, it just makes so much sense to outsource a lot of that.
Robby Marlow: It was good for us to cut our teeth on it and understand it, because now when we bring these vendors on, we know what to expect. I know how much a price to build a Delta Life should be, because I’ve built five or six of them. I had to learn that process with the franchisee, but now I’m very… I don’t want to do it, I’m not an expert at it, these guys are, but it allowed me to understand everything that needs to happen. I can talk on it intelligently, I can actually lead that team, and know what we’re getting is actually a great product. So, it has benefits of going in there and cutting your teeth on it. But definitely, I’m glad we’re outsourcing it.
Josh Cherry: It’s a… Yeah, go ahead.
Sean Greeley: No, no, no, no. There’s some great things to talk about in there. So, what are some of the key areas you’ve… How do you decide the cures that you’ve chosen outsource? And, what’s some advice you’d give to other people out there that feel overwhelmed like you’re saying, and are trying to control it all themselves?
Josh Cherry: We look at it every quarter as a leadership team, and we throw it up there. We start off every quarterly planning what’s going well, what’s not going well. So, when we start looking at… And you also, I mean I know we’d all love to just be able to bring on every employee that we need, or outsource every week point. But, we’re running a business, and we’ve been through lean times, just like everybody that’s going to be watching this.
Josh Cherry: So, we understand you’ve got to match what are our biggest needs this quarter, and predictably the next quarter, and how do we match that with the resources we have? And sometimes we get that right, and sometimes we get it wrong, but we just re-look at that every quarter with the entire leadership team. What’s the best one we can outsource this quart? And, we also base it on the capacity of the team here. We wanted to make one more hire this quarter than we did, but we knew our team capacity wouldn’t have the ability to onboard that person. So, we’ll have to put that until next quarter. So, we just look at it strategically as a team every quarter.
Robby Marlow: Yeah, and we started looking down the pipeline, realizing how many stores we were going to open. That’s why we started putting on the front end. We knew, hey, we got a lot of these area developers, a lot of stores coming in, a lot of big guys coming in that we want to make sure they get a good product. And right now, where I was at in the process was the COG, so how do I unclog that? Well, let me go outsource what I can. That brings me up so I can lead the vendors, and lead the team, and lead the process, but get myself from being the clog that’s in it, because I’m slow and don’t…. And, learning on the job type stuff.
Josh Cherry: And, that’s the better answer. It’s whichever alligator’s closest to the boat. And, you don’t know that unless you take a operational pause every 90 days and rethink about what did we put into place? What’s worked and what hasn’t? Because you’re right, I mean, two quarters before that, it was franchise sales. How do we get more franchise sales? Okay, so we fixed that in that quarter, now it’s, we made all these sales, we got all these area developers, how are we going to support that many sites selections and that many construction projects? So it’s just, I think the need of the business changed, and it changes. You look at what’s the closest alligator of the boat.
Sean Greeley: Yeah, and you’re just reinforcing something that we preach all the time. We continue more and more of this doing the work to do the core of the reflection quarterly planning, and being disciplined about that. Not saying, “Oh, we’re too busy.” Or, “I think we know what we’re doing. We got lot of stuff to focus on, I’ll just keep going and figure this out, and then we’ll do planning again later.” Just being always being able to pause the game, wherever the score is, pause the game, reset, and reprioritize.
Sean Greeley: And the discipline of that, now you go through five years of consistency in 90 day cycles, well, you’re going to have a great output, right? That’s 20 cycles. If you’re not learning better in 20 cycles, you really shouldn’t even be in business, right? So, it’s just so much that forces you to grow when you take the time to follow the discipline of the process and the strategic planning.
Robby Marlow: I think about last quarterly planning. We were so busy, we were so behind.
Josh Cherry: We did not want to go.
Robby Marlow: No, it could have been easily, hey, we were so busy. But honestly, I think last quarterly plan, we had the biggest breakthroughs. We brought on these vendors, we really sped the process up, we’re going to take our franchise build out process from 12 months to eight months hopefully in the next two quarters. If we do that, that means royalty is coming faster, that’s going to speed everything up. So, no, it’s definitely, you have to stop, and every 90 days.
Josh Cherry: I fear everybody listening is going to glance over this part, and it scares me, because when we think a lot about what’s got us here, it’s really as simple as that. We’re not the smartest guys in the room. But, every 90 days, we have stopped and looked at what’s the most important things to work on. And, I get it. Everybody that’s listening, everything you just said Sean about why people don’t, I get it. Almost every time it comes around, even knowing how important it is, we still almost do the same thing. No, we’re too busy, we’ve got enough work to do, we can just keep going. And every time, we make ourself take the whole day out with the whole team. It just gets us back on the right track-
Robby Marlow: Yeah, it gets everybody on the same page.
Josh Cherry: It’s so important.
Robby Marlow: It gets buy-in for everything we’re trying to do, we understand where everybody’s big priorities are, because a lot of times, I’m trying to, me and Josh are both trying to see the whole business at whole, but the person that’s in the seat that’s running that thing really knows it in depth. So, if we take 90 days, let them, hey, these are the biggest issues we have. Okay. We can just discuss it, talk about it. Man, it changes the way the business does.
Josh Cherry: I will tell you, as a leader, it’s going to relieve a lot of pressure. Because if not, you’re always thinking of everything that you think has to be done every night, and you’re going to bed every night with a million things on your head instead of knowing I don’t have to worry or stress about those things anymore. And even when I start, Robby will calm me back down and say, “Josh, we address that at quarterly planning. We’ve got a good plan. Stick to the plan, we’ll talk about it again this quarterly planning.” Oh yeah, that’s right, and then I calm back down.
Robby Marlow: Yeah, it really holds accountable to what the team feels important, and makes sure that you communicate with the team. The problems, especially early on in our EOS coach right now, me and Joshua have sidebar conversation, we’ll make decisions, and we weren’t communicating that with the team. And, it was creating a lot of confusion, and every time we did it, we get our hand slapped. And now, I caught myself two weeks ago, me and Josh were saying something, we were about to make a decision. I said, no, we need to bring it up at the level team, we need to talk the whole team about it, get them behind it. And so, it’s just practicing things like that that makes you a better leader, makes you a better communicator.
Josh Cherry: And then on that issue, when we brought it up to the whole team, Cassie mentioned something that both of us had missed, and would’ve costed us pretty big.
Robby Marlow: It would cost me big at work, and at home, so. I’m glad we caught it.
Sean Greeley: That’s key. That’s key. So, you’ve done a tremendous job. Right now where you’re at with finding the biggest bottleneck, and removing it for that quarter to then remove the constraint, right? To then allow continued growth through the system, and more output. And, I think the other part you mentioned is allowed you to keep the focus on the core. And for you, the core is the vision and the brand. And, talk about what that means. What does that really mean, and what does that look like for you? Where you keep your focus, and how you do that.
Josh Cherry: Yeah, a good list of books you gave us early on, Sean, from Jim Collins Good to Great chapter five. He talks about the hedgehog concept. Be that hedgehog, and why he’s so effective, because he’s good at that one thing. The fox has got a million different things he can do, but… And then, Robby always references Jack Welch, I believe, who said if you can’t be number one in the world at it, don’t go for that.
Josh Cherry: So, we literally, when we build our purpose, and our niche, and our core focus for what we do, almost every decision we do now, it’s just we go back to that, and we say, is that our core thing? And if it’s not, we don’t spend a lot of time looking at it.
Robby Marlow: Yeah. I love talking to everybody when they always ask, why do y’all just do fitness? And we talk about we don’t do nutrition. Precision nutrition is better than that than we can be. But if we put all our resources in being the best place for women to train right, then we can actually accomplish that. And so, I-
Sean Greeley: So, I wanted to strive further here, because this is also a key point early on, and we see later. People that are, I got five different business models, and I’m going to get rich at all of them, and frankly none of them are working effectively, right? And seeing business opportunity, right? And ways to serve people. And yeah, we can make money, but not seeing the opportunity cost, and that is the biggest threat, is the opportunity cost. So, that’s really what we’re talking about, but I don’t think people truly understand. So, if you could speak to that, that’d be great.
Josh Cherry: Well, we’re also careful, we used to not be so, but now we are careful to kind of give this advice, because it’s different for everybody and what their business model is, right? So, I don’t want anybody to hear what we’re saying and say, “You shouldn’t do nutrition.” If nutrition makes sense in your model, by all means. For us, what I mean by that is, just like you just said, especially on scale, if you want to accomplish, if you want to produce predictable revenue, you need simple systems to be able to follow to hit those, right? And, you need to be able to get people trained up and be able to deliver on it.
Josh Cherry: So for us, in our model, a lot of times when people come out with 10 or 12 different revenue streams, and then you’re going to try and systematize that and base your scripting, because everything, in my opinion, the entire customer life cycle is based on that product. And, this is something you taught us very early on. The person that’s willing to pay $120 for my group, for Tone and Torch Delta Life classes, that’s a different avatar than my lady that wants to pay $500 a month for personal training. Not saying I can’t serve both, but until I really understand one, have built some predictable ad copy to get them in the door, a predictable sales system to convert them, some scripts to get them to show up to their appointments, and cancellation prevention.
Josh Cherry: Until I’m tracking that and I’ve maximized that revenue stream, I’m not sure I should move on to the next. So, that’s what our franchisees, until we’re at max capacity in our Tone and Torch class, which that’s our main revenue stream, I don’t want you tending the freezer, and putting the prepared meals in and sending those out. We can make more money by having that sales associate execute on her calls, and set more appointments, because I already know we already have that system set. Set the appointment, she’s going to come in, she’s going to go through our sales process, boom. That’s our best way to make revenue, so until they’ve mastered that, I don’t want them focused on non-revenue or a different revenue stream that then takes up 30% of the time and we make a couple hundred bucks a week on it. It’s just the wrong effort displayed there from the payroll.
Sean Greeley: Oh yeah, awesome. So, I want to, I know we’re running out of time here, and thank you guys for so much with catching up here with everybody. I think they’re going to get a lot out of just hearing how you talk, and hearing how you speak about business, and hopefully they’re inspired to keep going down the path that you guys have the past 10 years, and congratulations, 10 years now. It’s been an amazing journey, and the story is, in many ways, just getting started. The best 10 years are just beginning, right? So, and it’s going to be exciting to watch that, but tell people that are excited about, inspired by, your mission, your purpose, really where things are heading in the years ahead, and how they can learn more about Delta Life, and if they have an interest in becoming a franchisee.
Josh Cherry: Yeah, and Robby and I are open books. I mean, Sean, you know that, anybody that’s listening, I mean anybody that wants… Well, our social media links will be there, so if you want to hit us up on LinkedIn, send a message to us. Or, anybody that wants any advice there. You can go to deltalifefitness.com, you can go to deltalifefitnessfranchising.com, or on the Delta Life Fitness webpage, there’s an own a studio tab. If you have questions about any franchise model out there, if you’re looking to get into franchising, Robby and I have learned that a lot, where the NPE community is near and dear to our heart. So, if you have any questions about any of that, reach out to us. My email, firstname.lastname@example.org.
Robby Marlow: Mine’s Robby, R-O-B-B, with a Y, Y, @deltalifefitness.com.
Sean Greeley: Awesome. And yeah, tell people what’s coming up in the years ahead.
Josh Cherry: Yeah, so next year, we’re getting over the mythical 100 units, and that’s a big mark in franchising, because only about 4% of franchises ever hit that 100 unit mark of being open and developed. So, we’re excited to hit that next year. We’ve got some really big strong partners coming on next year, so we’re starting development. We’re already in eight States currently, and then we’ve got some good developments going in Denver and the Tampa area, the Miami area, the Ohio area, Cincinnati, Dayton areas. We’ve got a lot of big development coming across the country, and we have a guy in Germany right now negotiating our first European deal. So, we’ll be looking at some international expansion at some point, whether it’s 2020 or beyond. But, yeah.
Sean Greeley: Awesome. Well guys, thank you so much for being here. Excited for everybody to listen to this interview as soon as we get it out. And, please, for my recommendation, get to know Josh and Robby. Go check them out on social, say hi. They are tremendous people who give back to the NPE community every day. And guys, thanks for being here. It’s a pleasure to catch up with you today.
Josh Cherry: Sean, thanks. It was fun.
Robby Marlow: Yeah, thanks Sean. We appreciate it.