At SCORE, we often mentor clients who are interested in franchising a business concept. Although it sounds like a clear path to success, it is a complicated process that few accomplish. Lisa Welko of Appleton is one of the few.
Welko’s business, Ellipse Fitness, started as a single unit in Appleton about 10 years ago, and is now a growing franchise. From her first business plan, Welco knew she had a unique concept that had potential for franchising. “I loved classes — aerobics, step aerobics, anything I could do in a class setting. So, I took the best part of the gym and turned it into a business with large group training or classes that change every day. It isn’t fluffy. We do tough work,” she said.
To counter the two main excuses to working out — boredom and time — Welco changed choreography daily and offered classes all day long. As fitness trends changed, new classes were added.
When the first studio became successful, Welco opened a second in Darboy. She cautiously started thinking about franchising. “I wanted to have profitability of a few years with a couple of locations before going ahead,” she noted. “Regardless of what franchise consultants tell you, you need to make sure you can do this a few times. If you can’t duplicate a concept without you being there, it’s not a franchise.”
After finding success again, Welco made the decision to franchise when a member at one studio wanted to buy the concept at the same time that a member at the other location wanted to buy that studio. She and her business partner, who has since been bought out, interviewed two well-known franchise consultants and selected one. “We spent way more money than we should have,” Welco said, “Instead of buying this manual and that manual, figure out what you need. We needed three flavors and bought 32.”
She recommends using a good franchise attorney instead of a consultant since the attorney is needed for the Franchise Disclosure Agreement that must be registered with the Federal Trade Commission.
With eight franchises, Welco looks forward to growth. Her management team is in place, and she has a system that will support the franchisees. She is the voice of Ellipse and has videos that explain her formula for success (www.ellipsefitness.com). “Do I have it totally figured out?” she said. “Not yet, but I feel very competent in my business skills and I know what works. This business works.”
The franchise is evolving to meet changes in the fitness industry, and new studios will feature a larger blueprint to allow for small group training that is specific to the individual’s needs. Welco, who is authoring a book, “Life Isn’t a Perfect Circle,” says it’s all about creating positive results in a fun atmosphere. “Small and large group training is taking over the fitness industry,” she said. “I think the world is ready for us.”
Tina Dettman-Bielefeldt is co-owner of DB Commercial Real Estate in Green Bay and district director for SCORE, Wisconsin.