Healthy Appetite: John Clancy is into Smoothie King and Planet Fitness - in a big way!
Last summer multi-brand operator John Clancy and his Smoothie King Midwest company inked an agreement to develop an additional 60 Smoothie King locations in Ohio, Kentucky, Indiana, and Central Florida. The deal was just another day at the office for the former Wall Street investment banker and hedge fund manager who says he remains dedicated to aggressive growth with the brand.
"It's the right time to invest in brands that cater to healthy living, and Smoothie King stands out in that space," says the 53-year-old. Now operating 30 Smoothie Kings, he's no stranger to the brand and is already three units into his new agreement. But Smoothie King wasn't his first foray into franchising: he began his franchising career with Planet Fitness and operates 31 locations of that brand.
"When I left my previous career behind in 2009, I discovered Planet Fitness and saw the opportunities that held for me," says Clancy. He chose the brand in part because of the leadership. "Chris Rondeau [Planet Fitness CEO] has an ear for his franchisees because he understands they are the gas that keep the franchise going." Another plus: he also believes firmly in the health-centered focus of the brand.
With Smoothie King, Clancy first loved the brand as a customer. He then became a believer in the brand and its leadership. "Wan Kim [CEO] and Kevin King [CDO] are great leaders with a commitment to the company vision, a top franchise organization, and strong financials," he says. The brand also offered him diversity in his portfolio while sticking with his healthy living mantra.
Clancy loves the change of pace that franchising has brought to his life. He says it has improved his lifestyle and offered more flexibility in the way he lives and spends his time. The turn to franchising also suited his business skills well, and his real estate and site selection skills have helped him grow the business to more than 60 locations in just a decade.
Clancy says his goal is to have 50 Smoothie Kings and 37 Planet Fitness locations opened by the end 2020. At that pace, it's no wonder he has no exit strategy in place. "We're just building too much to even have that conversation right now," he says.
Name: John Clancy
Title: Managing member
Company: Smoothie King Midwest, Planet Fitness Midwest
No. of units: 30 Smoothie King, 31 Planet Fitness
Family: Wife and 3 children, son 19, daughter 17, son 15
Years in franchising: 10
I was a stock boy at a supermarket called Food Town in Massapequa, N.Y., on Long Island.
I read Think and Grow Rich when I was around 13 or 14. I started studying goals and masterminding with my friends on how we could get rich when we got older. I was thinking a little differently than the average kid, that's for sure.
I got into investment banking right out of college because, frankly, I couldn't get any other job. I graduated in 1989 and took a sales job. I interviewed with probably 15 different people at different places, and they all told me "No." Even some of the sales people told me I wasn't cut out for sales. In fact, in the second-to-last interview I ever had in my life, the hiring manager told me I wasn't cut out for sales. Two years later, I was making half a million dollars, and the year after that another $2 million as a salesman (100 percent commission). The crazy part about it at first: I believed him. This is the guy with the better job than me, better suit than me... so yeah, I believed him at first. However, I was blessed enough to get out of sales in 2009 when I was introduced to Planet Fitness. My lifestyle changed: I got married, found Christ, and I just didn't want to be in sales anymore. I prayed that God would show me something where I wouldn't have to sell anymore, and he did... that's for sure.
Biggest current challenge:
In really strong markets, the biggest challenge is finding that right piece of real estate; and making sure you're not going to get out-positioned is key.
Next big goal:
To have a $100 million franchise real estate portfolio.
First turning point in your career:
I go back to that second-to-last interview with the hiring manager who told me I was never going to make it as a salesman. What that conversation made me do was push myself to be even better than what was expected of me. When I got my first sales job, I was expected to make 200 calls a day. So based on that previous interview, I thought, "Well, I have to make 400 calls then." I got into the office at 7 a.m. and would leave at 10 p.m. every night. I just doubled most people's input. Rejection was a huge motivating factor.
Best business decision:
Becoming a franchisee of Planet Fitness. It took me away from a sales position where I was so focused on just chasing the dollar to having a steady cash flow, an improved lifestyle and greater flexibility to pursue other franchise opportunities like Smoothie King. As a salesman, it made it difficult to enjoy the kinds of things I enjoy today. Getting involved in franchises like Smoothie King and Planet Fitness where you have residual cash flow opened the door to the kind of lifestyle I was looking for. That was the turning point.
Hardest lesson learned:
Trying to build my business without God. Jesus and his wisdom is the key to my success.
I get up in the morning around 5 a.m., pray, read, clear my inbox, get my hit list done, write down some daily goals, get a workout in, grab a protein shake, and then I'm out the door and into the day by 9 a.m. On a general workday, I'm on the phone with my attorney, people I'm doing real estate deals with, etc., for a large portion of the day until around 4 or 5 p.m. That's when I try to get off the phone and spend quality time with my family.
I do something pretty much every day. It's usually attending the gym. I used to play soccer. Unfortunately, I'm a little hobbled in my knee right now, but I'll get back to it. If I can't get to the gym, I'll just bang out 50 to 100 pushups. I have a pull-up bar, so I'll get some of those in, too. It's tough when I'm traveling, but if I have to get down on the ground and knock out 100 pushups, I will.
Best advice you ever got:
Find the right people to surround yourself with. Absolutely critical. That's from a business standpoint. The best life advice I ever received came from my mother-in-law, my father-in-law, and my girlfriend at the time (now wife), all of whom told me to humble myself and accept Jesus, and I did. That is the key to my success.
What's your passion in business?
To create generational cash flow through my businesses (Smoothie King, Planet Fitness, and real estate) to help people who need to be helped and advance the gospel of Jesus Christ.
How do you balance life and work?
It takes a lot of discipline. You have to know when to shut it off and take a break. It goes back to surrounding yourself with the right people. If I'm on vacation and have to take three or four calls because they're critical, I may take those calls, but I schedule them strategically. As soon as they're done, the phone goes away and I'm hanging out with my wife and kids. I have a goal book, and one of my main goals every day is to be present with my wife and my kids.
Pizza. I'm from New York, a Long Island kid.
"Schindler's List" because it's a very educational movie about where human nature can go wrong. It's a brilliant piece of art. I think it should be shown in every school. Every person needs to watch it. I watch it once every 5 years, and it puts things in perspective for me.
What do most people not know about you?
I'm a very transparent guy. What you see is what you get, almost to a fault. When I negotiate, I'm an open book--almost always.
People who are impatient behind the wheel. People who are disrespectful while driving, that drives me crazy. I learned patience recently. I fell off a ladder from 10 feet. I had to get an operation three months later, and I lost feeling in a good portion of my hand and couldn't move it for six to eight months. I had a grueling rehab, and I'm only recently back in the gym. I started with 20-pound military presses and just moved up to 55 pounds. That was quite a challenging comeback, but it did teach me the value of patience.
What did you want to be when you grew up?
I knew I wanted to do something in real estate, but I didn't have anything specific in mind. As I got into investment banking and mortgage banking, I knew I wanted to own cash-flowing real estate. When I was young, though, I didn't really know what I wanted to do.
I just took one to the Bahamas.
Person I'd most like to have lunch with:
Jesus Christ. Also, George Washington.
To make sure I'm doing something I love, creating cash flow from that, and using it to provide a great lifestyle for my family and those in need. It's important to give back.
Management method or style:
I rely heavily on data to make my decisions. I've always been that way, it's in my DNA. In the past three or four years, the strides that have been made with how we gather and use data are incredible. From a real estate standpoint it's exciting, the tools I now have.
How do others describe you?
Professionally, I would say data-based and analytical, for sure. Personally, straightforward and honest.
One thing I'm looking to do better:
I would go back to managing my lifestyle, managing my pipelines more efficiently because, essentially, that's what I do for stores and real estate projects. Learning how to manage those more efficiently and spend more time with my family. Also, spending more time on the golf course!
How I give my team room to innovate and experiment:
The way I do that is with discipline. I am a professional delegator and delegate a lot of authority to my team. In fact, from an operational standpoint, there are things I have no idea how to do. However, I don't need to know how to do those things because my partners are the best at it, and I trust them. Just because I'm managing member doesn't mean I make all the decisions. I try to empower my team and delegate to them. We make decisions as a team.
How close are you to operations?
I'm pretty far, geographically. However, because I have such great operational people I don't need to be in close proximity.
What are the two most important things you rely on from your franchisor?
First, appropriate support; and second, an open ear. It's important to hear what the franchisees have to say, and I'm blessed enough to have that with both of the franchises I'm a part of.
What I need from vendors:
Reliability, quality products, and competitive pricing.
Have you changed your marketing strategy in response to the economy? How?
How is social media affecting your business?
It's huge. We put a lot of money into social media for both Smoothie King and Planet Fitness. It's affected our business positively. We're huge believers in marketing, especially on social media.
How do you hire and fire?
I'm not the operator at either of the businesses, but I can tell you how we hire and fire. We hire slowly and we fire quickly.
How do you train and retain?
That's a better question for my operators. However, with both models, we are by the book. We're not trying to reinvent the wheel. If we feel the wheel needs to be modified, we work with franchisors that are open and willing to listen, which is great.
Fastest way into my doghouse:
Disrespect someone on my team, or lie to someone or me.
To have 37 Planet Fitness locations open by December 2020, and 45 open by December 2021. For Smoothie King, to have 50 open by December 2020, and 75 open by December 2021.
Growth meter: How do you measure your growth?
They're two totally different businesses. With Planet Fitness, we measure it by our growth in EBITDA. At Smoothie King, it comes down to how many stores can we open as quickly as possible and still reach that 15 to 20 percent EBITDA margin.
Vision meter: Where do you want to be in 5 years? 10 years?
I want to be done in 5 years. By then, God willing, I'll have over 200 Smoothie Kings open and over 60 Planet Fitness locations. Then I'll be done.
Do you have brands in different segments? Why/Why not?
I do, and it's because I liked the Smoothie King brand. I consumed the product and believed in the brand and the management, especially CEO Wan Kim and Chief Business Development Officer Kevin King. Those two things were the key. With Planet Fitness, Chris Rondeau is an A-plus CEO too. He listens and is brilliant. He realizes his franchisees are the gas that keep the franchise going. Planet Fitness and Smoothie King are both run by top-notch people.
How is the economy in your regions affecting you, your employees, your customers?
The economy is doing very well right now. However, we built our first Planet Fitness location in 2009 during the Great Recession. I believe we have a recession-proof business with Planet Fitness. With Smoothie King, it's not like it's a luxury item. As long as we're picking the right markets and strategically building the stores the way they should be built, we're going to do great.
Are you experiencing economic growth in your market?
How do changes in the economy affect the way you do business?
Because of the scale, having as many units as Smoothie King has, we're able to keep the cost of goods sold at a number we can make our margins with. I don't see any negative impact right now.
How do you forecast for your business?
With Planet Fitness, we're buying a lot of real estate and building aggressively. We had a similar spike about 2 years ago, and the same thing is going to happen in the next 18 months, God willing. Smoothie King is going to be pretty consistent, opening 10, 15, or 20 units a year.
What are the best sources for capital expansion?
Existing cash flow and great banking relationships.
Experience with private equity, local banks, national banks, other institutions? Why/Why not?
We're not involved in private equity. We do have regional banking institutions for both brands, and we have great relationships with them.
What are you doing to take care of employees?
My operators could speak to this better than I could. One thing for sure is my partners know how to retain and take care of strong employees.
What laws and regulations are affecting your business, and how are you dealing with them?
There really aren't any.
How do you reward/recognize top-performing employees?
Bob Viani, our Smoothie King Midwest COO, and Mike Hamilton, our Planet Fitness Midwest COO, are the best in the business and both have set up reward and incentive systems I trust.
What kind of exit strategy do you have in place?
We do not have an exit strategy in place yet for either brand. We're just building too much to even have that conversation right now.
Share this Feature
Comments:comments powered by Disqus
- Multi-Unit Franchising
- Get Started in Franchising
- Open New Units
- Featured Franchise Stories