Unleashed Brands CEO Michael Browning on Entrepreneurship, Growth & Helping Kids and Parents Thrive

0:00John Busby:If you're a parent, you've probably been to, or at least heard of, Sylvan Learning or The Little Gym or Urban Air. They're all for kids, to help kids thrive, and they're all part of Unleashed Brands. And I speak today with founder and CEO Michael Browning about his story and the growth of the company. Michael's a lifelong entrepreneur, and a few things I'll point out as you listen. First, Michael has been very self-conscious about his own need to change as he goes from a one-person company to running a billion-dollar enterprise and more than 25 ,000 folks that work and are supported by him at his franchise locations.

0:39John Busby:And then second, toward the end, we talk about parenting trends and some really interesting research that his company has uncovered about parents, which we talk about. And we put this link to the data in the show notes as well. Thanks for listening.

1:00John Busby:Hey, Michael, good to see you. Thanks for being on the pod today. Thanks for having me, John. Looking forward to it. You are CEO and founder of Unleashed Brands, and I'm excited to talk to you kind of about the history and evolution of the company and you and your career. But could you start for the audience, talk a little bit about Unleash Brands mission and then some of the brands in your portfolio? Love to. So simple. We get up every single day to partner with parents who are looking to help their kids become well-rounded, life ready. and we get up every day and just say, hey, look, our job, our calling is to unleash greatness in kids.

1:42And we do that by helping them learn the basics of science, technology, engineering, and math, identify and grow in their skills and hobbies, and then just escape the world through play. Right now on our platform, we serve over 20 million kids a year across seven of our brands located all across the country. And we are having a ton of fun doing it.

2:04John Busby:That sounds awesome. I'm coming. I was thinking about this prior to joining the our conversation today, because I have two kids kind of at the tail end of that investment, you know, from from me and my wife. So my son's 18. My daughter, my daughter's 16. And it's so important to find, you know, how how can you help your student? How can you help your kid be the best student that they can be? How can you help them find their passions? How can you, I live in rainy Seattle. How can they jump on a trampoline or get exercise when it's pouring rain outside? And I know you help with all those things.

2:39John Busby:Take the audience back to the beginning, though, because I'm not even sure you had this concept of various brands in mind when you started. My understanding is you started with a single brand. I think maybe it was called Urban Air, focused on activity. You maybe talk through the seeds of that. Sure. So I've always been an entrepreneur in my DNA. My parents would tell you at a young age, my sisters were making beta bracelets. I was selling them door to door. Then I got into trading baseball cards with my dad. And then I built websites in high school. I taught myself to code. And then I got into college and I fell in love with data and analytics.

3:20Built a little company there. Sold it to Roland Hanson, who was one of the guys, a part of the group. He was the chief marketing officer globally for Microsoft. And so he had partnered up with some other people after his days at Microsoft, some other tech entrepreneurs. And they had brought me into that and bought my little company that I had started in my dorm room in college. And it was while I was going back and forth from Dallas to Santa Barbara, traveling the country, I saw one of the world's first trampoline parks. So I don't take credit for inventing the trampoline park concept, although I did scale it and then eventually pivoted out of it into more of indoor theme parks.

3:57But I saw one. And for me, everything I try to get involved in has to really check two boxes. It has to be innovative. And so when I say that, it's got to have barriers to entry. It's got to have complexity that make it hard to copy. It's got to solve a problem. It's got to be unique. So it's got to be innovative. But it also has to be scalable, meaning that I can sell it to a lot of people or I can open a lot of locations. And so where innovation and scalability meet is where I like to play. And I studied this concept and said, yeah, I think this is both innovative and scalable. And so I went back to my parents and say, I think I'm going to open a trampoline park.

4:40And they're like, what's that? And I said, I mean, think about like a water park, but it's indoors, there's lifeguards, You host birthday parties. And I started to just unpack this vision. And my parents were like, yeah, you should do it. And I said, hey, well, I don't have enough money to do it myself. How about you do it with me? And so we partnered together in the very first one. And then we opened up four family-owned locations in Dallas. Then we started franchising. And gosh, we were just off to the races. But it all got started from seeing one and then analyzing it in what I call that matrix of innovation versus scalability.

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5:59John Busby:Check it out at business.com slash plus. That's business.com slash P L U S. I naturally go to the scalability part, part of it because if parents like it in one place, they'll probably like it in many places. But what did you see about trampoline parks that was innovative? Yeah. So at the time, it didn't exist, right? We had to create a category. So when I opened mine, I was probably the sixth in the country. And so from a marketing perspective, we were targeting keywords back then, like fun things to do on the weekends. We were like best places for birthday parties. And then we had to create the category because nobody was Googling trampoline park from an SEO perspective, right?

6:40You couldn't even SEM it because nobody was typing it. There are no keywords to buy. So what I saw was like back when I was a kid, there was a concept called Discovery Zone, which was a free play space, a little bit of arcades, but you ran around and just had this fabulous time. And it was active and you were socializing and you weren't on a screen. And so when I started this concept in 2011, I just kept going back to the days I had when I would go to Discovery Zone as a kid, which is no longer around. And so for me, it was all about helping kids and families celebrate special moments, escape the hardships of the world and connect through physical play.

7:23And I've said to our team, our goal is to keep guests safe, keep guests happy and make money in that order. And so we said, hey, our why is to celebrate, escape and connect through play. And then we're going to keep guests safe, happy and make money. And that's how we would filter all of our business decisions. And we were off to the races.

7:43John Busby:That's very cool. You know, when you open up a business that's brand new and you're trying to find, you know, product market fit, there have got to be a few things that make you nervous along the way. I mean, trampoline parts aren't small. You've got to have a lot of square footage. You've got to sign the insurance. You've got to do all those things. Were there any times before it really took off where you took a big hard swallow and said, uh-oh, is this thing really going to work? Every day, right? I mean, I think that's the thing that entrepreneurs, right? It's not that we're fearless. It's that we continue to operate through that fear.

8:28Every day that you're putting all of this money into this business that really hasn't been proven at scale, right, is unique. right? You wonder, is this just going to be like a one hit wonder? Is this going to be a fad? Like, is anyone going to show up? What are people going to think? Right? And so the constant paranoia or pit in your stomach that you have as you're building something is healthy, because if leveraged in the right way, it will, it will cause you, it should push you to constantly be seeking customer insights, constantly be seeking data, constantly be curious in the world around you.

9:05And then the biggest thing is like never bet the farm on any one idea. Now I did bet on the trampoline park. However, there were elements of it that I knew were sound. Like every kid has birthday parties. Parents are looking for places to have fun. No matter like the season, it could be too hot or it could be too cold, right? People are looking for things indoors and vastly across the country, right? Maybe it's rainy up in your neck of the woods. Well, it's hot as heck down here in Dallas and could be cold in the Northeast. So although the seasons might be different, like people still seek indoor things.

9:42The trend of people wanting to do active things is sound. So, you know, as you piece the mosaic together, you're always going to have that pit in your stomach, but it should continue to help you keep taking steps forward towards executing your vision.

9:58John Busby:The first one was successful. Maybe it was selling out and you decided to open a handful in the Dallas area. What was the impetus to move into a franchise model? And as you were going through that decision, what made the pro list and what made the con list for being able to achieve scale in a different way, but maybe not having quite as much control as you expand? I didn't honestly have franchising on my radar. In fact, I didn't even know what franchising was. And I mean, to the extent I joke, the extent of my franchise knowledge was the fact that I had seen the movie called The Founder about McDonald's.

10:41Like that was all I knew about franchising. And for me, I tried to be curious enough and to have opportunity recognition. And so what was happening was we had these family unlocations in Dallas, Fort Worth. and after the holidays, after summer, spring break, people who had traveled into Dallas to visit friends and family and their friends and family took them to our locations. These people would go home and call me and say, you got to open one in Hackensack, New Jersey or you got to open one in Wichita, Kansas. And I'm like, you know, like, honestly, I just didn't want to, like life was good. We had a great business.

11:19But I had a guy out of Wichita, Kansas that kept calling me and he said to me, franchise it to me. I don't even know what that is. And honestly, I was a little lazy about it. And that's why it's always good to have mentors and trusted voices around your life. I went over to my grandfather's house and we're having all this success. And he said, what's next? And I was like, I don't know. And he goes, well, what's been happening that's out of the norm? I said, this one guy keeps calling me. People are always asking me to open them outside of Dallas-Fort Worth. But this one guy keeps calling, encouraging me to let him franchise our business.

11:55And I said, I don't know, it sounds like a lot of work, right? And my grandfather looked at me and he said, listen, son, he's like, you don't want to look back 15 years from now and wish you would have listened to him and at least put in the effort to explore it. Because it sounds like you're being a little lazy. And I always want to be coachable. I always want to be teachable. I always want to have, you know, people in my life who have like been to the concert and have the t-shirt. My grandfather and my father were great entrepreneurs. And so I sought counsel around what is franchising? How would I do it?

12:26Does it make sense? Is this concept scalable and innovative in that framework? And was able to make the determination that it was and called back John Becker in Wichita, Kansas and said, John, you can be my first franchisee. Let's do this together. And he's still in the franchise to this day.

12:42John Busby:That's awesome. And, you know, there also could have And then a little bit of FOMO as trampoline parks. You know, we have several bunch in Seattle. I've taken my kids to. They're all over. And so you got to drive that rather than people say, I'm just going to do it myself. You know, if you won't franchise to me, I'll just do it myself. So that's really cool. At some point along the way, you decide you wanted to move beyond the experiences. And maybe could you talk about when you tried to establish your second brand, and then also when you recognized, you know, I might want to take on some funding and some investment partners to help me go faster.

13:24So what was the thinking behind that? The investment partners came before I moved to my second brand. So we had achieved a significant amount of scale at Urban Air. And, you know, I was, we were franchising. I mean, and like, for example, in 2019, we opened 54 locations in 52 weeks. And these are massive, as you mentioned earlier, massive locations. And so I sensed that I needed to go to that next level from a leadership perspective. And I needed to help in areas that I didn't necessarily know how to do. And so as fate would have it, one of our franchisees knew someone in the family office private equity world.

14:13And he was watching her via Facebook, like open and urban air and have tremendous success. And we started talking. And so the next thing you know, they talked to me about how they could help me with capital structure and how they could help me determine my org chart and how they could help me recruit and hire the best talent and how they could help me with supply chain. And so it was a logical next step in both my growth and leadership, but also in the company's growth to bring in a family office partner who could walk alongside us in that phase. And so I brought in a family office partner in 2018.

14:51That was my first one. And then my second one was in 2020, call it just early 2022, end of 2021.

15:02John Busby:So you took on a family office partner and then another one a couple of years later. And as I understand it, you incubated some brands on your own and acquired some brands. And I'm really interested in your experience acquiring Sylvan, which I'm sure many parents know, but it's a brand that started decades before you had even thought about Urban Air. Could you talk through how you consciously decided to expand and then specifically the idea to acquire Sylvan? So when COVID hit, March 17th, 2020, we had to shut down all of those urban air locations as the rest of the world shut down. And I told my team, I said, I don't think we've come this far to just come this far.

15:50I don't think the human race is going to come out of COVID and not want to be together and not share amazing experiences, not want to create memories. So everybody stay calm. But what we're going to do is retool all of our business processes while we're shut down so that we can come out of COVID bigger, faster, stronger. And we're going to constantly understand what the consumer wants and needs as we're in the COVID lockdown. And I told them, I said, hey, where there is turmoil, there will be opportunity. And I don't know what that is yet. But I just, I feel it like something's going to happen.

16:27And so we started reopening all of our urban air locations in Texas in June, July of 20. We got the last urban air opened in January of 2021 in Albuquerque, New Mexico. We didn't lose a single location, which was a testament to the team, our franchisees' tenacity, our vendors and partners being great partners, great vendors. What also I noticed in the time is not everybody had the same amount of success as we did. People were coming out of COVID needing infrastructure. and I was like, well, maybe we'll build, you know, an entertainment concept, like multi-brand entertainment concept and leverage the infrastructure we had at Urban Air.

17:07But it was then when, as a parent, so I have three kids. Today, I have a 14-year-old girl, 11-year-old girl, and six-year-old boy. So take them back all to COVID. I had a COVID baby and I had like a, what, a six-year-old and I had like an 11. And when our local community said, hey, you can come out of your house is my wife and I literally divided and conquered and said, Hey, we got to start looking for things to do with the kids. And it was like re-enrollment for everyone in America. Right. And so we're sitting on the couch and we're just like looking like, where can I go for theater? Where can I go for martial arts?

17:39Where can I go for tutoring? Because all the kids got behind. Right. And it was in that moment, I was like, nobody's created like the Marriott Bonvoy for kids? Right. I was like, this is crazy. Like this, everyone in America right now is just good. Like nobody stitched it together. Nobody's created, made it easy on parents. I go, this is hard. This is ridiculous. And my wife turned to me and she goes, oh no, like you're going to do it, aren't you? And I was like, yeah, like I'm absolutely going to do it. I think, and I just kept saying this to her and my team and where there's fragmentation, there's the opportunity for consolidation and to reduce friction, both in the businesses and for the consumers who are our parents.

18:24And so I developed this thesis of what do kids really need to do? They need to learn the basics. They need to identify and grow in their skills and hobbies, and they need to escape the world through play. And I came out saying like, hey, we just want to unleash greatness in kids and let's go find some of the world's best brands to build the Marriott Bonvoy of Youth Enrichment. And so we started acquiring, bringing these brands in-house. And what ended up happening, for example, with Sylvan, is we listened to our parents. And we have a lot of brand affinity and a lot of trust. We conduct a tremendous amount of consumer research, consumer insights.

19:00And so we were hearing from parents in our ecosystem, hey, my kids are struggling with math and reading. Where can I take them? And we trust you because of how you've treated us at the little gym. or we trust you because of how you've treated us at Urban Air. Like we trust you and we trust the parent brand. Where should we go? And we didn't have anything. And I look at it like we've acquired all these customers. So if they have to leave our ecosystem to go and get tutoring, then I'm going to have to reacquire them again. Another customer acquisition cost to bring them back in, to keep them going on that journey.

19:35We've got to get something in here. And so we went out and found Sylvan. The owners of Sylvan at that time were looking to recapitalize and the stars aligned and we brought Sylvan in-house and all 600 locations.

19:52John Busby:That's very cool. I'm curious when you said you do a lot of research on consumer trends, my ears perked up. I'd love to know what's something new that parents are really thinking about right now? Or maybe another way of saying it is, what's different between the 2011 parent when you were starting Urban Air and the 2026 parent, almost a generation later? Yeah, there's a lot that's different. And we're, we are just coming out of a really big customer research project insights focus group. And parents are not looking for more activities to put on their calendars. They are looking to understand that the activities that they're in or the activities that they're going to choose is helping the development of their child.

20:42And the biggest, like confidence is the new report card. Like it is what they want. Like only 17 % of parents, and we surveyed over 4 ,000 families, it came out as a very high statistical significance, only a 5 % margin of error. So this data that we're releasing, and I'll give you a little teaser today, is representative of America across all geographies, all mosaics of households. So 17 % of families are worried about grades. But the number one thing parents are worried about is their kid's character. And it's self-confidence, it's kindness, it's patience, it's self-discipline, it's perseverance.

21:27Parents are wanting their kids to be well-rounded and life-ready. And if you really think back to research thousands of years ago, I mean, Aristotle talked about the golden mean. And so if you think about the scale, right now the scales are tipped on what is important to parents. Right now, the world is telling kids and parents that greatness is likes and followers, it's report cards, it's trophies, it's scholarships, it's making the select team. Those things are great. But greatness is also someone who is kind, someone who perseveres, someone with confidence, someone with patience. And so we've got to balance the scale out where report cards and trophies and all of these things are there.

22:21But we've got to rebalance it with character. And that's what parents are saying. They're saying, I want to know how what I'm signing my kids up for is going to increase confidence. So we did a study on over 23 virtues that matter to families all across America. and to help us and them understand like where they can focus. And so for us, it's not about putting kids in more of our activities. It's about helping parents identify what they should put their kids in to help them grow in the character strengths that they need their kids to grow in. Tough macro out there right now. So parents want to know like, hey, I'm not just trying to keep my kid busy.

23:02Keeping them busy was very low on the chart when it was like, what do you evaluate when looking to put your kids in something? that was very low. What was very high is how they're developing self-confidence. And so there's so much research we're about to release on this along with a new app, along with the world's first character assessment for kids. All of this is coming out in just a few weeks because our job, our goal is to partner with parents and help them understand how their kids are developing and where they should lean in and provide them with both the activities and the resources to do it.

23:39John Busby:That makes me feel good about parenting in our society. You have younger kids, you have older kids, but an obsession around how many marks do I get about trophies or selects or ice time or whatever is, it's hard for children, but it's also really hard on parents. And to hear that parents are focusing on well-rounded, happy, confident kids makes me feel pretty good. As we close out, you strike me as someone that's able to look within and see where you need help. What are you focusing on right now in terms of your own personal growth to kind of keep growing the company and keep going to the next level?