Membership Exclusive: Former Vet Loves Membership-Based Brands

Randy Merrill is an Army veteran who is looking for a few good brands--as long as they're in his wheelhouse: sports, health, and wellness. "I want something I can wrap myself around and I'm comfortable with," says Merrill, a former athlete who was involved in fitness chains in Los Angeles before returning to Atlanta, where he got into tanning salons. He also wants his brands to be membership-based.

"My career's been in membership-driven businesses," says Merrill, who operates 17 Solar Dimensions tanning salons (not a franchise) where he is a partner, two Massage Heights units with another set to open in January, and one Cartridge World store. He's signed on to develop at least 15 Massage Heights salons in the coming years.

In general terms, says Merrill, he's looking for "a segmented service industry that can be brought down to a value proposition for the masses. America will be 70 percent services at some point." And, as a 51-year-old, he says, "What are the things I'm interested and need?"

With these criteria in mind, he's looking to add other brands. "I get opportunities all the time," says Merrill, adding that he has "nothing under lock right now." However, when considering a new concept, Merrill says he looks at it in both the short and long term, considers its staying power, and wants to be ahead of the curve in any sector he chooses.

Yogurt, for example, has "no legs underneath it," says Merrill, who previously operated a Planet Smoothie. Also, with its relatively low cost of entry, he says, "Everybody thinks they can open a yogurt shop, and they do." That's one reason he prefers a brand with a high entry-level cost, which provides a barrier to entry, and he's at a stage now where he can afford it.

He also has considered whether to buy a franchise or create one, but "I'm not mature enough financially to take the risk at this point," he says. However, he has his sights set on building a larger organization over the next 5 to 10 years. "I feel like the next three years are going to be explosive, then through year five should be really powerful growth," as he builds out his Massage Heights salons to 15 or 20, along with a similar number of units with a new brand he's not ready to name until the deal is finalized.

If all goes as planned, he says he could sell his organization for a significant amount of money. But at that point, he expects it will become more about building an organization, helping young people build their dreams, and serving people than about selling out and retiring. "I don't know what that looks like, but I look forward to being in that position, past that financial tipping point," he says. "Then it's about having a big cash flow and what you can do with that."

As he speculates on a future involving philanthropy, he cites fellow Atlantean Charlie Loudermilk, founder of Aaron's, as a model to strive toward. Loudermilk, who retired in September, has donated nearly $20 million to local charities and causes. "We all hope we can evolve to that point to change the world not only through our organization, but also through your financial contributions," says Merrill. What better reason to consider adding new brands?