Sprinting Out of the Box
Rich Kissane's son was a good athlete, but "kind of clumsy," says the 25-year franchising veteran. The family was living near Atlanta, and friends told him about Velocity Sports Performance, a small company that offered the same kind of sports training that large professional sports organizations provided their players. Kissane enrolled his son, and "The next year, he was defensive player of the year for his football team."
That impressed Kissane. In fact, it impressed him so much that he told Loren Seagrave, the coach and trainer who started the company, that it should be franchised. It's a classic case of liking the company so much, he bought into the Marietta, GA, concept. Kissane partnered with David Walmsley and Seagrave, and as president has, in just under a year, sold more than 50 franchises.
Kissane certainly has the credentials. He started in 1975 with Wendy's. He was successively a franchise consultant, regional director, then vice president. Then he was sent to Australia to start the franchising operation there.
From Wendy's he went to Sylvan Learning Centers when it had fewer than 50 centers. As vice president, he watched the company grow to 500 units. The next step, in 1991, was to AlphaGraphics as president and CEO, where the growth was also tremendous. "We ended up going into 26 countries and we also got them established as ISO 9000-compliant, the first in that industry."
That experience brought him a stint as president and CEO of OneSource, a billion-dollar facilities services company that wanted to create a franchising division. Again, Kissane successfully set up their program.
After a few years of working in various kinds of businesses, Kissane came across Velocity. In many ways, he says, it was similar to Sylvan. "When you do something for kids, you're really making a difference," he says. The cost is along the same lines as tutoring. The company is targeting six primary market groups: student athletes ages 8 to 20, recreational athletes, elite amateur athletes, professional athletes, occupational athletes (people whose jobs require physical strength, speed, and agility), and active seniors. The company says that the market is huge: $4.1 billion is spent on private coaching and sports instruction every year. Seven out of 10 Americans participate in one or more sports, physical conditioning, and outdoor activities, making them candidates for sports performance training.
After buying in Kissane took 10 months to put everything together and rebrand the company to change it from a mom-and-pop operation. The company started selling franchises in June of last year. He believes that Velocity will reach the same size as Sylvan.
As with Sylvan, Kissane expects competition to show up.
"I tell our franchisees and employees to be prepared," he says. "We're the first in our category, similar to Sylvan when it first started. In 12-18 months someone else is going to enter this category. The key is to stay cutting-edge on program development, marketing, and service to our franchisees. You can be No.1 in a category and fall to the bottom for not executing. Sylvan has been doing it right. Now there are five or six other companies in the same category."
Kissane expects Velocity to go international with units opening in Australia this month. There are also some area developers. "I didn't expect as many franchisees who wanted to do area agreements," he says. "Area franchising is both good and bad: It's good to get the fees, but there's a longer development schedule. And if you don't bring in the right person you're stuck with the person with a large territory."
The key is always the franchisee, and the way the company is organized for the franchisee. As a franchisor, Kissane says, "You're in the service business. Franchisees are in the education business, etc., but I'm in the franchising business. I've always prided myself on the service we've given our franchisees."
That means he won't compete with franchisees, and will regard them as partners. "Both times I was at Sylvan and AlphaGraphics we were rated #1 or #2 in franchise relations," he says. At Velocity, "we want to have at least one store for research, but we're in the franchise business, and a lot of company operations take away from serving your franchisees."
Setting up a franchise, he says, is a delicate operation that has to take account of both the larger regulatory climate and the expectations of franchisees: "Make sure you go through the right regulatory elements and conditions under franchise law. Understand the franchisee's goals and expectations. So many times they're much greater than what they can get. You have to address that. I've always said that there are a lot of people who have a great concept and are successful with one operation, but when they franchise, they don't bring in somebody with expertise in franchising. It's a skill you have to have and know how to do for your company and your franchisee. Velocity was a great concept, and the company was fortunate that I was able to bring in a number of experienced franchise people from other places I've been."
Then, he says, you depend on your franchisees. "Franchising is the greatest business model this country has ever seen," he says. "It gives the franchisee the opportunity to be successful, and once the franchise is set up, you can concentrate on the franchisee."
Kissane believes the franchise advisory council is critical to the success of the franchise. "The best ideas come from the franchisees," he says. "The Big Mac was invented by a franchisee. Franchisors have to leave their ego at the door. The franchisee is in the trenches and knows what makes the business work. You get all these ideas and you just have to decide which ones you can do. Then FACs are a great way for you to be able to sell your ideas to the franchise community as a whole. They'll go out and help you sell these ideas to the franchisees."
You can't do that at long range, he says. And you can't do it by being democratic: "I tell franchisees that if you have a franchisee next to you not doing it right you need me to force him to do it right to protect your brand and investment."
With support and training and enforcement franchisees, will be happy and tell others. But all that will fail without good marketing program development: "what you can provide to your franchisees that they can take to the end consumer. The marketing has to stay fresh."
Kissane considers himself lucky with Velocity Sports Performance. "Starting a new company is tough," he says. "Marketing has become so expensive, with the Internet, and everything is so crowded. We're fortunate because we have a product that can be grown with grass roots marketing. It's community driven. Direct mail works well, local advertising in the paper."
Again, he says, it comes down to franchisees. "Our franchisees are involved in the community, in local leagues." With that kind of community connection, he says, the concept doesn't require national advertising on TV. "For Velocity we have in our franchise agreement a clause that when we reach a certain point we can pull dollars from franchisees for national marketing. But we're committed to local marketing for some time. We do public relations for our franchisees at local and national level because we think it's our responsibility."
The company is also working on new products: a nutritional program and a girls' strengthening program. "There are more injuries in girls' sports than ever," he says. "Their bodies in a lot of cases are not made for what they're put through, so we do a lot of injury prevention programs."
Another marketing effort is a promotional video for franchisees to use starring Terry Bradshaw. Why the former quarterback for the Pittsburgh Steelers? "We have to look at the decision makers and influencers," he says. "Sometimes it's the kids and sometimes the parents. So my age knows Terry for when he played, and kids today know him because he's on NFL Today."
A runner for many years, Kissane says some of his best ideas come when he's running. Since he came to Velocity the same way he expects most of his customers to, he has a different take on his participation.
"I've always been in the corporate world," he says, "but I've never been a part owner, so this takes on a different perspective than when you're just working for a company. I have loved it; it's like your own baby."
It's an attitude he wants pushed down through the company.
"I've always told my employees to run it like you do own the company--it wasn't that big of a change because I've always tried to look at any company as if I were an owner, and do what's best for the company in the long term. But now when I say that to our team members, it takes on a different meaning, because it is my company."
by Ripley Hotch, Editor, Franchise UPDATE magazine
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