In-Business Magazine (Arizona) February 2014

What was the one thing about your initial concept or product that made franchising a good option?

By: William Brennan | Jack Eberenz | John Leonesio

William Brennan
Co-founder and CEO
Kalologie
Sector: Health & Wellness

Kalologie is a word that, translated, means "aesthetics." Our company, Kalologie 360 Spa, focuses on spa services in the aesthetics industry. We offer an array of membership-based spa services that include massage and facials, and we manufacture the award-winning Kalologie Skincare line of products. Traditional growth in the retail/service space can be capital-intensive. Because Kalologie is a product manufacturer, economies of scale are particularly important to us. As a result, franchising provides a tremendous growth platform for us to leverage.

Our regional developers contract with us to develop territories throughout the United States. As with most franchise systems, franchisees incur the cost to build out and operate franchise locations, which creates an opportunity for accelerated growth. And, unlike hired senior and middle managers at most corporate-owned chains, franchisees of a franchise system are true stakeholders. Their investment helps facilitate an alignment of interests with a franchisor. For Kalologie, this has yielded a stronger commitment to our long-term growth objectives while mitigating the need for cumbersome outside investors or burdensome debt financers.

William Brennan is co-founder and CEO of Kalologie. Formerly an executive with a leading Los Angeles-based investment banking firm, he is experienced in the areas of investment banking and private equity financing. An entrepreneur, Brennan co-founded MusicNow, the Internet's first online-recorded music promotion company, which was acquired by CDnow; the combined company went public on NASDAQ. Brennan holds an MBA from Harvard Business School and a Bachelor of Science, magna cum laude, in Finance from Virginia Polytechnic Institute & State University.

Jack Eberenz
Chairman of the Board
Precision Holdings of Brevard
Sector: Home Repair

When Precision Door Service (Precision Holdings of Brevard, Inc.) started 12 years ago, we envisioned a national company that would consolidate a highly fragmented business in repairing garage doors. The idea was to bring fast, professional service to major metropolitan markets. To be successful, we felt we needed rapid market penetration (a nice way to say "fast growth"), and franchising was chosen primarily for this reason. By finding highly qualified franchisees to manage each market, we were able to greatly decentralize control and save overhead while adapting quickly to local market conditions. The results have been a national company repairing more than $100 million in garage doors a year - that is more than 1,000 garage doors every day. Most of our franchisees run companies with several million dollars in revenue and many of them could not repair a garage door if they tried. Their job is to run a quality company and hire professional technicians that repair doors to Precision Door standards.

Jack Eberenz is chairman of the board of Precision Holdings of Brevard, Inc. and a nationally known franchise consultant. He is manager of Integrated Franchise Partners, an outgrowth of Franchise Integration (www.franway.com), with clients from coast to coast. He is often identified by his tag line, "If someone says 'Franchising' you say 'Call Jack.'"

John Leonesio
Chairman of the Board
The Joint Corp.
Sector: Healthcare

I am motivated by finding unique business niches that fill a void for the consumer and provide recurring revenue for the franchisee. I enjoy identifying products and services not readily available and providing for their delivery within a turn-key system. In the health club industry, we did this by offering extended hours, child care and other conveniences not found elsewhere. With Massage Envy, we transformed massage from elite and expensive to a membership-based delivery system that made it affordable and convenient for most everyone. The Joint…the chiropractic place replicates the Massage Envy model, making chiropractic accessible so people can take control of their own health. The Joint doesn't take insurance, so decisions about care remain between the patient and doctor - where they should be. I believe this is the way of the future for health services. RedLine Athletics goes back to my health club roots but focuses on training young athletes to hone their skills in competitive sports. I believe there will always be a business that can be modified or developed within this successful franchise model.

John Leonesio has more than 40 years' experience in the health, wellness and franchise industry, which includes Scandinavian Health Spas (co-founded and sold to Bally's) and The Q, the Sports Club (co-founded and sold to 24 Hour Fitness). In 2002, Leonesio founded Massage Envy, taking it in six years from concept to a $300-million operation with more than 800 licenses awarded. As CEO, he took The Joint…the chiropractic place from a wavering concept to nearly 500 units in three years.