Builders - StretchLab President Verdine Baker on Expanding from 5 Locations to 500

0:00If you're interested in how a successful small business expands to hundreds of locations, you're going to really like this episode. My guest is Verdine Baker. He is president of Stretch Lab, which does assisted stretching, and he's responsible for expansion. Just a few years ago, there were a handful of locations. Now they're over 500. Verdine and I start by discussing what assisted stretching is. If you haven't heard of it, I am a user. I highly recommend it. It is awesome. We also discuss his career, Verdine's advancement in the health and wellness industry, and some of the things you need to work when scaling from 500 to 500 locations.

0:42Hi, Verdine. How are you? Great to see you. Hey, how are you, John? Thanks for having me on. Yeah, you got it. So we're going to talk today about stretching and the health industry and fitness industry. I'll start personally by saying, even as an active guy, I was sort of a lazy stretcher. I didn't really take it stretching seriously until later in life when I had back pain and all kinds of issues. And now I'm a big fan of what you and your company does, which is assisted stretching, which helps with recovery, flexibility, et cetera, for me. Maybe before we get into the business and your journey, could you talk about the importance of stretching from your perspective, not just for the non-professional like me, but also for the professional athlete?

1:28Yeah, absolutely. You know, having played sports at a fairly high level, the importance of stretching becomes really apparent as it relates to your performance on a daily basis. And having access to professionals that are able to assist you with that as an athlete is really beneficial from high school to college. And even, you know, You know, you see it in NBA games or NFL games or just about any sports from a performance standpoint, you see assisted stretching being applied to those athletes. And you also see it in other areas, whether, you know, it's Tom Brady and his concept of pliability and the TB12 and all those things.

2:19There's certainly more you could get out of your athletic performance by making sure your body's prepared to perform. And stretching plays a huge role in that. You know, through my own athletic career, I've amassed a ton of injuries. I've had six knee surgeries, a shoulder surgery, a foot surgery, just to repair all kinds of different things and get yourself back out there and play. And stretching was a huge component of my ability to get back on the field and perform at a high level. and now as a 42-year-old dad, I am a believer in the concept that I lead. I've been a member of Stretch Lab for a few years and really putting my money where my mouth is.

3:03And although I'm not playing at a high level anymore, performing on my day-to-day routine, whether that's to exercise to stay fit or for me to be able to spend time with my five and my eight-year-old running around in the backyard or going to the field. Stretching has been a huge component of my ability to continue to maintain that really active lifestyle that I've desired since not being an athlete and still being connected to movement. So it is really critical, not just for the elite and professional athletes of the world, but, you know, everyday folks that are either trying to get into movement or continue to maintain it and do it really well.

3:49I love that perspective. I'm also a user or a consumer of assisted stretching. I mentioned that at the top and I can say to the audience that you feel great when you're done assisted stretching. I personally feel taller. I feel like there's a little bit of a spring in my step and you feel good to go. At the same time, I feel like this modality, if it's fair to call stretching modality, has like less focus attention or widespread understanding than some of the things that I've done or been exposed to forever, whether it's chiropractic or physical therapy or acupuncture. As you're trying to build awareness, of this industry and this service, what are you finding that you're running up against in trying to tell people about this?

4:42People always kind of gravitate towards the things that stretching is adjacent to, or you hear a lot of, is it like, right? And you could fill in the blanks of, is it like yoga? Or is it like getting an adjustment at your chiropractor? Is it like getting a massage? So a lot of it, and you can see in some of our branding and marketing uh, activations that we're focused on educating the consumer of, um, what the vertical is all about, what is assisted stretching and how we could support benefit, uh, support and benefit your, your health and wellness routine. More and more, we're starting to see the consumer take a more holistic approach to health and wellness.

5:20Um, and not just the movement part, but the recovery side, um, whether that's just the physical recovery or the mental part of recovery or, or just mental health in general, stretching certainly fits as a complementary piece to all those other kind of related or adjacent modalities that are out there. So a lot of times we get that from our consumers, like, hey, is it like? But really for us, it's about getting them to understand that stretching is different. We all know we're supposed to do it. We just don't do it as often as we should. And a specific type of stretching that we do can be beneficial to whatever your health and wellness goals might be.

6:04So really listening to the consumer, listening to our customers and then customizing a plan that's going to fit what their needs are going to be. So early on, it was a lot more of a challenge, right? Trying to help people understand what we do and who we are. But as we are continuing to grow our footprint, it's becoming easier, right? If I'm wearing a Stretch Lab t-shirt somewhere, which I have a lot of, five, six years ago, I'd walk down the street and nobody would really ask me what it is. And now certainly that doesn't happen anymore. I get a lot of, hey, I'm a member. I've tried it, which is encouraging.

6:43But still, within our marketing strategies, we're still really focused on educating the consumer because the vertical needs to continue to grow. and we need to build that awareness with our consumers that this is something that can benefit their health and wellness routine. You know, I'm curious, how did you decide to get into the fitness, wellness industry in the first place? Was it a natural progression from your experience as an athlete or was there something that you decide you like to do as part of your education or what was the reason to get into it? Well, I wanted a free membership. That was my primary motivation.

7:20I spent about 10 years of my career at Crunch Fitness and I started Crunch Fitness Corporate. I started as a membership advisor and kind of worked my way up to running the gyms as general manager and district manager and so forth. And I got recruited to Exponential. But I really was motivated early on to get into the gym as a young 20 something year old that's trying to play, be athletic, play sports. I needed a place to train. So I had a membership that I had access to some other services that they have, like physical therapy. I've had some injuries. So when a job opening came available, what attracted me the most is that I could get a free membership and some access to some health and wellness care that I desired at the time.

8:09So that was kind of my primary motivation. And kind of what happened after is the interesting part for me is that I fell in love with the opportunity to help other people. You know, the one really cool thing about being in health and wellness, you know, depending on what vertical you are, if you're in the gym industry in that sense, you can see and get that instant gratification of somebody having a goal. And then you get to see them every day working towards that goal. And then they come tell you that they've achieved it. And that was the hook for me. I was like, okay, I get to talk to people every day.

8:46I get to be in an athletic environment. I get to talk to like-minded people about the things that I like. And I have an opportunity to make a living out of it. And I was fortunate enough to have some really good leaders that I learned a ton from and had some upward mobility opportunities within Crunch Fitness. And I suppose the rest is history after I got recruited to Exponential to join the Stretch Lab team. But that was kind of my initial introduction to it. I really didn't kind of envision at the time that this was going to be what I was going to do for my career. But I love it. But to this day, every time I walk into a studio and I see a member get off the bench and you see that release on their face and that big smile and they're feeling so much better than when they walked into the studio.

9:35You know, I get goosebumps just thinking about it. That still hits home for me. So, yeah, super passive about what we do. And it all started by trying to get a free membership somewhere. And the story, as you told it, means that you've seen or done every single role. and allows you to understand the process by which individual locations are successful, I'm sure. And maybe we can segue into Stretch Lab. You're president of Stretch Lab, responsible for expansion. And when you started, there were just a couple of locations, as I've read. And probably Stretch Lab was thinking what a lot of successful smaller businesses think.

10:16What's the process by which we expand? And the amount of expansion that Stretch Lab has done is really impressive. Hundreds of locations. We were joking before we came online and started recording that you're on a business trip to see a partner. I'm on a business trip to see partners. I'm curious to get into the story of this. When you were just getting started, what are some of the really challenging parts of scale? Is it branding? Is it telling the story? Is it consistency of the product? Is it training assisted stretchers? You know, what are some of the things that you've had to you've had to really figure out and break through along the way of growing this business?

11:00Yeah, I mean, all those were challenges, right? We were literally growing a vertical that didn't necessarily exist. Because sure, there were some other competitors out there, some regional competitors and some mom and pops out there, but nothing to, you know, like other verticals that have scaled to a significant amount of studios as far as their footprint. So just about every challenge you could think of of getting a business off the ground, you know, first and foremost is aligning with the right partners and then creating the right systems for us to build a business. And we certainly made our mistakes along the way, but learning from those mistakes and applying it within our model has really helped us continue that growth.

11:44But to answer your question, I would say probably one of the biggest challenges that we had early on was, and you hit it kind of on the head, which is being able to train, we call them our service providers, flexologists. The challenge is, you know, consumers have to trust the service provider. You know, we're in the business of touching people, so they need to be qualified individuals that are trained, very well trained to be able to do what we do. So first, it's like, hey, we need to develop a program and find the most four leading expert in this field of stretching that could develop a training program for us.

12:25And we went out to Australia and found a stretch guru, I guess you could say. He's our chief stretching advisor now, but he was the original, Brad's original, built the first version of our Flexologist Training Program, which is a national accredited program. So it's taken us a while to get to that space, right? Six years, well, four years to get from creation of the program and to train enough people, standardize the program to where it's nationally accredited through ICE. So that was a challenge because we knew that we had to be the leading expert in this vertical. So we have to focus on the service itself that had to deliver and be impactful on our consumers.

13:12but first and foremost they have to believe us on the franchisee side the challenge for our franchisees no matter where you were around the country um the training was being provided in Irvine California oh okay right so um if you're in Eagle Idaho you're flying to Southern California if you're in Livingston New Jersey you're flying to Southern California if you're in Solana Beach you're driving up, but you're still spending time from a travel perspective. And that created a financial challenge on our partners, right? And since we've, you know, the evolution of the model is now we have over 70 master flexologists around the country that deliver trainings locally in their own markets.

13:58So instead of sending somebody to Southern California, if you're in Kansas City, you're staying in Kansas City and you have a master flexologist that's delivering that training here. So we had to work through some of those growing pains of scaling the business and find the most efficient way that we deliver training, deliver the experience, and then stay consistent within it. Not that we figured out everything, but that's our mentality is, you know, sometimes we're, and I joke with the team, you know, just about every 50 studios that we open, say every half a year, we have a new company. 400 studios compared to 450 or 500 or 550 is a different animal in a sense.

14:40And we have to be nimble enough. And the puns are all intended to do a lot of puns in our whenever we're doing these things. But yeah, we have to be nimble and we have to adjust our business and to meet the needs of our franchisees so they can find the right way. There's consistency. I'm sure it sounds like you've developed really great consistency in the quality of the reflexologist and what they do. Have you had any challenges with the other or any learnings from the other part of it, which is the experience? What happens when you walk in the store or when you walk in the location? Are there certain guiding principles that an employee abides by?

15:27And how have you had to sort of figure that out? Similar to maybe how you had to figure out how to scale the training in a different way. Through trial and error, to be honest. Everything that we do, we try to systemize it. If you do something more than a few times, it should be like a clear system in how you're going through it. And you have to define it, right? So there is a specific way that we want our customers to be introduced to the brand. The challenge is we're relying on other people to do it. One of the coolest things about doing what we do is that we don't get to do it alone. We have amazing franchise partners that are really passionate about the brand.

16:06They're passionate about helping other people. So being able to impart the learnings that we're giving our franchisees to create the right experience for their members has been really critical for our growth, right? We'd like to think that the experience you have walking into a studio in Los Angeles will be similar, if not all the same, with an experience just about anywhere else. From coming into the studio and being able to assess how well you're moving through time and space with an overhead squat assessment through the MAPS machine, which is a tool that we use to essentially gauge how well you're moving and then be able to gamify the experience, right?

16:46To being able to have access to video on demand where you could stretch on your own and enhance the benefits that you're getting in the in-studio stretch and increase the likelihood of achieving your health and wellness goals in a timely manner. So we look to add different things to the service ecosystem that can be simple, supportive, but we could deliver to our franchise owners in a way that's easily digestible for their teams to execute at the studio level. But it is a challenge, right, to have that consistency across the country. I took my daughter to Chick-fil-A after soccer. That was her reward to my eight-year-old after soccer practice.

17:26And I love the fact that it doesn't matter which Chick-fil-A you go to, if you say thank you, they are going to respond a very specific way, right? And that's never failed. And that's the level of consistency that we want to get to. for us about creating the right systems to deliver that message to our franchisees so their teams can digest it. And they do a really good job of that. As a marketer myself by trade, we're taught to find out who your target customer is and engage them and attract them, et cetera. I'm wondering if there's a group of people that have really gravitated towards assistant stretching that you never expected.

18:11And one that's turned into an opportunity for you to engage a type of customer that might have been outside the original scope. For sure. You know, I mean, when we first started, it was kind of the obvious, right? Disposable time and some disposable income, and that tends to be your newly retired or a little bit more of our active senior age group, call it above 50. And every year our average age has continued to decline, right? Which is to us, that means we're attracting larger customer segments from a younger demographic. I would say probably the biggest surprise for me has been our younger student athletes, which is one of our fastest growing segments.

18:54I certainly anticipated that our active seniors would be really into this because they typically tend to be educated. They've gone through a lifetime of movement and there may be some areas of opportunity with how well they're moving and how active they are. But being able to see younger athletes from five, six, seven, eight years old and how quickly it takes for them to get deconditioned from, you know, you take a baby, you're in yoga class, you do the happy baby pose. When you see an actual baby do it, It's like, I don't look like that in yoga class. But, you know, when you come out, you're pretty pliable.

19:36You have the perfect squat as a baby. And then a few things happen, whether you're a dancer, you play sports and your body gets pretty deconditioned pretty quickly. Seeing our younger athletes in the studio has kind of really opened my eyes to like, wow, we have to start getting on the movement of flexibility, pliability, at least for me personally with my own kids, a lot sooner than I had anticipated. So that segment has been a little bit of a surprise for us. Call it the under 18 from really young athletes to your middle schoolers and high schoolers and early college. And I guess the other side is I'm not as surprised in a sense because you are seeing more specialization earlier on in student athletes or younger athletes more than ever, right?

20:32Whether that's through a personal trainer or personal pitching coach or a strength coach or a speed coach, we're starting to see that more often. Um, uh, so that specialization leads to, uh, wanting to have improved performance for those athletes. So you're starting to see, um, you know, parents, coaches, schools, institutions start to spend a lot more, um, of their resources on, um, the recovery and performance aspect of those student athletes. So that's been, um, um, a welcome surprise, I suppose. Yeah, totally. And also having kids who are active in athletics. There's also a lot of parents that want to invest in their kids being super athletes.

21:21And I'm sure that's part of the training regimen, too. But that's cool to see. So one of the opportunities, I think, or maybe a different way to say it, your most profitable customers, I guess, are ones that have a high lifetime value. Ones that see the benefit and come back again and again. And you've introduced a loyalty program to Stretch Lab. I think it's new called Class Points. Maybe talk about the loyalty program, why you decided to do it. How's the adoption been? And what have you learned along the way? Yes, you're right. We just launched the Class Points program. We have about 10 ,000 users that are online.

21:59And I think for us, it was important that we create an even stickier member By engaging them in other ways other than just on the bench and getting a stretch, being able to create opportunities where they can showcase their progress with the people that are around them and then expose them to those services as well so they can benefit from it. we're really looking at this as a tool for us to create a member that not just sees our facility as a place that they get stressed, but a place where, call it the third home concept, right? Where this is the place that I really want to spend some time in.

22:43And I do spend two to three hours in this space on a weekly basis. And the loyalty program allows me to stay engaged when I'm not in the studio and maybe even create some opportunities for people that they're around to get access to the studio through the work that they're doing. So we're looking at different ways that we can engage our customers with the loyalty program so we can get more people stretching. Yeah, that makes sense. And so much of our many adults enjoyment is working out and doing stuff with other adults who like the same things you do. And it can be hard to meet people. So this is also of a way to do that, I would think.

23:20What do you see maybe looking ahead, not necessarily this year, but two, three, four years ahead? What do you think are the biggest opportunities for Stretch Lab? I see you're already in Canada, so I don't know if international expansion is part of that. What do you think is the biggest opportunity for the business? Yeah. So domestically, we're over 500 studios around the country. We have expanded internationally with 23 studios in Australia. We have a studio in Mexico City. We have a studio in Japan. I would say international would be the kind of long-term biggest opportunity for us as a brand.

24:00We have a few other countries that should come online here pretty shortly, which we're really excited about. and really when we came out and launched the brand, our mission was to become the worldwide leader in this vertical. And I think, you know, if we think about the number of studios we have, maybe we're there. Think about the revenue we generate, maybe we're there. But for us, what that really means is that our brand, our vertical becomes, you know, as synonymous to other health and wellness modality, that's as widely accepted as you could think, right? Right. So think of chiropractic care or massage therapy or physical therapy or just about anything else that's widely accepted out there in health and wellness.

24:43That's that's our goal. And for us to be able to do that domestically is not that just tackles the U.S. and maybe Canada. Right. So we're really excited about our international expansion and really continue to grow the brand and vertical to where, you know, stretching becomes a necessity for everybody. body. And that's the opportunity that we have. And we're excited about where we're going. And we still have a nice runway of studios that'll open in the next three to five years here domestically. But we're also really excited about growing our brand internationally and exposing some of those communities to the benefits of stretching.

25:23And the really cool thing is a lot of those communities already know about it, right? The adoption rate in places like Japan has been fantastic. A high level of education around health and wellness. Typically, we do well when people know that they should take care of their bodies for them to live longer and healthier lives. Rodine, congrats on all the success. It sounds like you're well on your way to meeting that goal. And I really appreciate you being on the pod with me today. Hey, thanks a lot for having me. Hope your listeners got a little something out of it.

25:58Did you know that more than 20 million professionals and business owners visit business.com and Business News Daily? Why? It's the best place for resources, advice, and information about how to grow your business. And if your goal is to reach our audience, you should become one of our lead partners, sponsor a section of the site, or sponsor even this podcast. Reach us at business.com slash connect. That's business.com slash connect.