Eric Dore | Crain's Orlando

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Eric Dore

Background:  

Founded in New Hampshire in 1992, Planet Fitness has grown to 1,300 club locations across the U.S. and abroad. Eric Dore and Shane McGuiness opened the company's first franchise club in 2003 in Central Florida. Their franchise group has 30 locations, including 18 in Central Florida.

The Mistake:

My biggest mistake was related to franchising – getting into a franchise and then thinking you should tweak the model.

We were the first franchisee of Planet Fitness. They had four corporate stores at the time. They’re in over 1,300 locations now and we’re about to open our 30th. But day one, when we were opening our first location, we thought we’d play around with their pricing structure.

Planet Fitness is judgment-free and a non-intimidating environment, but also a great value at $10 a month. And we decided we’d take that up to $19.99 a month. And they had tanning at $5 a month, and we decided we’d do it at $10. We decided we would add a juice bar. They were very against that.

And we quickly learned that some of this stuff that we were trying to do on our own did not work and in fact was very detrimental to the business. Once we learned that and started doing what they told us, things got a heck of a lot better a lot faster.

We thought, “Oh my God, they’re leaving so much revenue on the table." We spent a bunch of money on the smoothie bar and getting [people] trained, and it didn’t allow us to provide good customer service without adding extra staff. And it was the same few people every day who were getting the smoothies and sitting at the counter talking to the staff for a long time.

In terms of the customer service, it really didn’t allow us to focus on where our attention should have been. It was messy – all the things we didn’t want to do. And you know, those [corporate owners] had already figured it out. It took us awhile to realize, “Why reinvent the wheel?”

To come in right away and make a lot of changes just dilutes what you’re trying to do.

The Lesson:

I think what we learned is you don’t come in and tweak the model on something you believed in enough to invest in.

What we learned is to learn what the business is, learn what they have in place, and then keep data as you go along that helps you work with corporate – together – if there are opportunities that exist.

Because on the franchisee level you may see stuff that they don’t on the corporate level. We’ve got a very close relationship with corporate today, which we think is very important. And they’re great about getting our feedback.

When you’re buying into a franchise and a system, it’s obviously something you believe in. So to come in right away and make a lot of changes just dilutes what you’re trying to do.

Follow Planet Fitness on Twitter at @PlanetFitness

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