5 Keys in Selecting Your Next Franchise with Terry Blachek

0:01John Lee Dumas:Light that spark fire nation, JLD here and welcome to Entrepreneurs on Fire brought to you by High Level, the all-in-one sales and a marketing platform. Today we'll be breaking down the five keys in selecting your next franchise. To drop these vibe bombs, I brought Terry Blachek and the EO Fire Studios. Terry is Managing Director at FranVest Capital Partners and a veteran fitness and franchise executive with more than 35 years of experience scaling businesses. An original partner of Orange Theory Fitness Corporate. He helped shape the brand signature pre-sale model and built Austin Fitness Group into one of the largest franchise groups in the system.

0:35John Lee Dumas:Today, he shares his insights as a keynote speaker, industry presenter, and host of the popular Tuesday with Terry podcast. And today, we talk about the elevator pitch, the problem solved, the business model and ROI, proof of concept, and oh, so much more.

0:48Terry Blachek:And a big thank you for sponsoring today's episode goes to Terry and our sponsors.

0:54John Lee Dumas:Fire Nation, are you ready to make 2026 your best year yet? I believe it's time to start your transformation by attending the world's highest rated business growth workshop taught personally by Clay Clark and featuring football star and entrepreneur Tim Tebow and President Trump's son, Eric Trump at thrivetimeshow.com slash EO Fire. Again, request life-changing tickets today at thrivetimeshow.com slash EO Fire. Are you ready for the ultimate all-in-one platform for entrepreneurs, marketers, coaches, and agencies? Build funnels, automate follow-ups, manage clients, and even white-label your own software.

1:30John Lee Dumas:Say hello to our featured partner, High Level, and visit highlevelfire.com to start your free trial today. Terry, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1:51Terry Blachek:Good morning. I can tell you this. When I started Orange Theory Fitness, I sat in a room with CEOs and told about this concept of boutique fitness and how it could make money and presented a deck. They all disagreed with me. 25 out of 25 said, don't do it. It'll never work and don't put your own money into it, whatever you do. Long story short, 1 ,500 stores later, here we are. So don't always believe the people that, you know, the big guys and the guys that have it all figured out. I think many times it takes going against the current, going against the crowd. And that's many times how you stand out.

2:29Terry Blachek:Look at, you know, the Savannah Bananas and what they've done. But anyway, there's my quick story on that. Thanks, John.

2:36John Lee Dumas:Love that. Yeah, I've interviewed the founder of the Savannah Bananas and now Orange Theory. I mean, I was just in San Diego for two months and I'm like, how the heck do I stay in shape? So we were at an Airbnb. I looked at gyms all around us and within walking distance was an Orange Theory. And I always wanted to check it out because we don't have any down here in Puerto Rico. And so I walked in, got a two-month pass. And not only did I go like basically five days a week, but I made like really good friends doing it. Because it's like, you're not walking to a gym where everybody's like doing their own thing.

3:04John Lee Dumas:like you're going into a gym and like your team, like you're having fun together, you're high-fiving. Like it was such a great experience. So I love with you sharing that as we, Fire Nation, share five keys to selecting your next franchise. And I wanna hear your elevator pitch, Terry. What is your business? And more importantly, why does it matter?

3:24Terry Blachek:Well, I can tell you the elevator pitch for Orange Theory was it's a one-hour workout, half cardio, half strength training. About 26, 27 minutes, you switch sides. So you get a total body workout. You get to do it. We call it accelerated results at a fraction of the cost. Instead of$50 for a personal trainer, you can do it for$14 or$15 for the hour. It's based on heart rate based interval training. People getting incredible results. They're losing weight, feeling better. Would you like to know a little bit more about it? Keep on going. Talk more about the heart rate based interval training, about the EPOC effect, excess post-oxygen consumption and what that really does to your metabolism during the workout and post-workout.

4:05Terry Blachek:And again, I'd start talking to you about your goals and what are you trying to accomplish? You're trying to look better, feel better, lose weight, live longer, live the last decade of your life longer. If that's what you're looking for, I'd love to have you come in and do a workout with me.

4:19John Lee Dumas:I absolutely just loved my time in San Diego for the reason of like, I walked to Orange Theory, you know, which was a great franchise, had that great experience you're talking about. Then on the way home, like I remember like actually as I was kind of like cleaning up after the end of my Orange Theory workout, I would be on my phone on an app ordering a Vitamix bowl. There was another franchise that was on my walk back. I'd grab this amazing protein shake on the way in the exact same little corner complex that we were there. And then I'd be walking into my Airbnb a couple minutes later. I'm like, I set a great workout.

4:50John Lee Dumas:I've got a great little protein shake in my hands and I'm sitting down. And man, that was just fantastic all around. So think about that, Fire Nation. Like, what are you doing in this world that's adding true value? And that's kind of why I want Terry to talk about the problem solved. I mean, you know, talk about the specific problem that we need to understand of what our business is addressing and why this is urgent for our customers. Because, you know, we all know that there's like a pain point, but is it a real pain point? One that is like, okay, this would be a good to have, but not a need to have.

5:25John Lee Dumas:So talk about the specific problem businesses should be addressing and why it's urgent for the customers.

5:30Terry Blachek:I think a lot of people, they get passionate about a business and they go, I'm going to do it. And everybody believes the same thing that I do. And I think you'll be quick to find out. Not everybody believes in, certainly in fitness or in healthy living the same way that you believe in it. The mentality of build it and they will come regardless of what retail, what business manufacturing, service-based business you have. That doesn't really work. And so what you have to think about is what is the problem that your business really overcomes and how do you incorporate that solution to that problem into your sales pitch or into your communication, into your marketing and your communication and branding?

6:09Terry Blachek:I'll give you an example on Orange Theory. A lot of people go, well, you're solving a problem of getting people, you know, helping people to lose weight, look better, feel better. The answer is that is an outcome, but that's not really the problem. The problem that we solved was, this again goes back 15, 16 years ago, was personal training, the economic problem of personal training. So if you have a higher personal trainer and it's 50, 75 or$100 an hour, you do that twice a week. It's anywhere from 100 to 200 bucks a week. It could be 400 to$800 a month. Most people, and this includes the big box gyms that are out there, less than 10 % of those folks are actually using a trainer.

6:48not because they don't want to, but because of an affordability issue.

6:53Terry Blachek:And so when Orange Theory came to the table, we actually took the personal training concept of a personal trainer. We took all you had to do is show up, you get accelerated results at a fraction of the cost, instead of 50, 75 or 100, it was literally only, you know, 12, 14 or$16 for the one hour workout. So you could have a personal trainer, get the results that you want and not have to think about your workout, just show up for about$139,$149 a month versus$400,$600,$800. That was the problem. And the reason that becomes important is because everybody couldn't understand how come we were, you know, blowing up and things were, you know, members were signing up and they were doing it for this fee when other gyms were only charging, you know, this.

7:43Terry Blachek:I mean, the high volume, low price clubs charge 14 or$18 a month,$19 a month. Why were people paying 139 or 149? We weren't marketing it as a gym. We were marketing it as affordable group personal training.

7:58John Lee Dumas:Yeah. And I also think it would have been smart to kind of market it as like you're actually having a social time as well, because that was the big thing for me. Like, again, I was in San Diego. I knew nobody that was around me. if I just walked into like a plan of fitness, everybody's on their headphones, everybody's doing their own solo workout by themselves. Nobody's talking to each other. You go and they're all start, you all go in at different times. You leave at different times. You're not talking to anybody. You're not striking up conversations, but in there, like we'd all get there for the start of the class.

8:26John Lee Dumas:And like, I'd be kind of like, we'd be waiting outside, you know, as the last class was finishing up. And I'd be kind of chatting with a couple of the people that before we were going in. And then, you know, after we're after each, like one of those individual workouts, they'd be like, right, high five the person next to you, share something. like they you know really good like kind of conversation starters then like as you're walking out you're kind of like talking to that person as well he's just had this shared experience with them and so like I again I met some friends through this that I never would have met just going to like a planet fitness type gym um just going in and going out and doing and going on my day and they had like you know weekend activities there was like there's a lot of just really cool things that were going on you know not to mention like the energy and the tempo and even like the ambiance of like, you know, being in there with the great music.

9:07John Lee Dumas:And I mean, it was just like, it was the total package, especially for something like me who's competitive too. And I just loved wearing the monitor and seeing what I was getting for my splat points, you know, up on the screen. So just a lot of things were nailed kind of, which leads me Terry to the business model and ROI. I mean, when entrepreneurs are like looking at a business model, like what is a solid business model and what are the average unit economics and ROI look like for a solid business and maybe give a specific example if you want.

9:35Terry Blachek:You know, when I look at, you know, a lot of people look at franchises because they go, I'm going to get involved in a franchise because they have all the systems and processes figured out. They also have brand recognition, maybe national brand recognition or regional brand recognition. They don't have to try to figure all the systems or the processes out if they don't have the experience. And so a great, great way to go about it. However, even in franchising, you want to look at that business model and we call it unit economics. So unit economics typically refer to the top line revenues and the bottom line EBITDA profitability, earnings, you know, I can get into all that, but you know, how much does it cost to get in the business?

10:17Terry Blachek:Meaning how much money does it cost? Is it half a million dollars to get open? Is it 600, 700, a million dollars to get open? And how long will it take you to get your money back? So give you an example, if you spent a million dollars to get a business open and the average unit volume, meaning the top line revenue is around a million dollars in after, you know, in a mature situation after 12, 24 months, and you've got a 30 percent margin or profitability. That means you're getting 30 percent on the million dollars and you're making about three hundred thousand dollars a year in about three years, just a little over three years, you should be able to get your investment back, meaning 300 a year times three, 900 ,000 plus or minus.

11:06Terry Blachek:Now you put a million in, you got about a million back. If you can get your investment back in three years, three and a half years, that's a pretty good ROI when you start looking at businesses. What you want to also make sure is, is that, you know, you don't have to put up a million dollars. You can put up a portion of that and go out and get SBA funding. You can bring a partner in, lower your risk. So all of the risk is not, you know, on your, you're not risking all of that cash. You're not risking a million dollars in cash. You don't really need that. You'll need about 20 % of that and then go out and get an SBA loan to support the rest of it.

11:39Terry Blachek:But getting your investment back in about three years, I think 30%, 25 to 30%, three, three and a half years. I think that's a pretty solid unit economic business model. And you want to make sure that that's really happening.

11:52John Lee Dumas:Fire Nation, a lot of value bombs being dropped by Terry, and we have so much more to talk about. Proof of concept, franchisor support, and more when we get back from thanking our sponsors.

12:02Terry Blachek:Fire Nation, are you ready to make 2026 your best year yet?

12:06John Lee Dumas:Are you looking to learn the proven processes and success systems that have been used to create thousands of millionaire success stories? See thousands of success stories and testimonials from real people just like you who Clay Clark has mentored and coached into prosperity at That's thrivetimeshow.com slash EO fire. Clay's proven business coaching program is month to month and it costs less money than hiring a minimum wage employee. Yes, it's month to month and it costs less money than hiring a minimum wage employee. Schedule your free personal 13 point assessment with Clay Clark himself today at thrivetimeshow.com slash EO fire.

12:40John Lee Dumas:Because Clay only takes on 160 clients and only allows 300 attendees to each business conference, you will interact with Clay directly. See thousands of real success stories and learn about attending the Thrive Time Show two-day in-person workshop featuring football star and entrepreneur Tim Tebow and President Trump's son, Eric Trump, today at thrivetimeshow.com slash EOFire. Become the next success story, schedule a free consultation, and request tickets to join football star and entrepreneur Tim Tebow and President Trump's son, Eric Trump, at Clay Clark's next business conference today at thrivetimeshow.com slash EOFire.

13:11John Lee Dumas:Okay, let's talk about a platform that's completely changing how entrepreneurs are running their business, and they are also our featured partner, HighLevel. If you're an entrepreneur, coach, agency, or course creator looking to grow faster and smarter, HighLevel is the all-in-one platform that replaces your entire tech stack. Seriously, think ClickFunnels, Calendly, MailChimp, Kajabi, and even your CRM all rolled up into one powerful white label solution. You can build funnels, send SMS and email campaigns, schedule appointments, manage pipelines, run memberships, and even launch your own branded mobile app.

13:45John Lee Dumas:It's drag and drop simple, incredibly customizable, and built for serious growth. My favorite part, you can resell high level under your own brand. That means recurring revenue, loyal clients, and total control. So whether you're tired of duct taping tools together or ready to start offering high value services with ease, high level is your unfair advantage. On top of it all, their support team is second to none and has your back every step of the way. Seriously, every question that pops up, they will have your answer waiting. And if you visit my special partnership link, you'll get a free trial.

14:16John Lee Dumas:So visit highlevelfire.com to start your free trial and see why thousands of businesses are switching. That's highlevelfire.com where marketing, sales, and automation finally come together. High level, join the revolution. Terry, we are back and I want to talk about proof of concept. So what exactly is proof of concept with a business? Like, how do you know that it actually works? And how do you validate that before actually taking the plunge?

14:47Terry Blachek:I think there's a couple of ways, John, to do that. I think number one is, has the business, how long has the business been in business? And is it a one, what do they call it? A one horse pony or a one win pony or a one hit wonder maybe is a better word for it. You know, the bottom line is, do they have one location in Florida and it's doing really well and they have a lot of support around that. Is that really proof of concept? Some people think it is. I tend not to believe that. I think proof of concept is where someone can take a concept, they've created the systems and the processes, and they can duplicate that time and time and time again, not only in a geographic market, but in multi-geographic markets, meaning maybe in Florida, maybe in Chicago, maybe in New York, maybe in Kansas, maybe in Wisconsin, maybe in California or Oregon.

15:41Terry Blachek:What I'm suggesting is a proof of a concept is usually somewhere around a half a dozen to 12, 15 locations in different geographic markets. And the way to say, you know, confirm that that's really created proof is what they call validation calls. Call those owners in those different markets. Or if you're looking at an FDD in a franchise document, you can look at what's called item 19. Always go there in a FDD. That's where I go first. And I take a look at what are the averages across the network? How long did it take these stores in these other markets to ramp? And are they as successful? And what are the averages?

16:22Terry Blachek:What are the average top line revenues? What are the average margins or profitability on those businesses? And the business they started with in Florida. Does it have the same impact to the people in the North, to the people in the West, to the people in the Midwest? And I'm telling you, geographic markets are different. So look at all of those pieces and parts, proof of concepts, get six to 15 locations open in different geographic markets. Then you can be pretty sure your average unit economics will work for you and your market.

16:52John Lee Dumas:What is one trick pony is the phrase you're looking for, Terry. Let's talk about franchisor support. Share how the franchisor provides experienced support team in sales, in marketing, and in operations, but specifically how these people and processes set the owners up for success.

17:13Terry Blachek:You know, I get asked a lot about, you know, how to select a good company or a good franchise. And one of the pieces, and many of the things we just talked about, correct? But then the other big piece is the franchise support. And are they really set up? Do they have a franchise training in place? Not only you come out there and you, you know, discovery days, that's not franchise training. That's looking at the product and that's looking at the business and going, hey, is this interest me enough to take a further or deeper dive on it and get the FDD? Once you get the FDD, then what happens is, can you, do they supply you franchise contacts, franchisee contacts for validation calls?

17:57Terry Blachek:Meaning that, hey, I want to talk to these guys and see if their story matches up with the franchisor. Secondly, take a look at the organizational chart of the franchisor. and do they have the support based around the number of locations and specifically support not only for the business and the systems once you open the business, but what about the support in selecting your site, the real estate support? What about the support they may have in identifying the correct demographics and economics around different cities and different areas and what makes a good location, what makes a bad location?

18:35Terry Blachek:Do you want to be in the center of city or do you want to be in the suburbs? Also, once you select that, do they have an outline and a construction team or somebody that they can refer to you that can help you with your architectural plans, your zoning, your construction, and actually building your facility in a timely fashion? Wouldn't it be disappointing if you signed up for a franchise and you were all excited, you signed the docs, you paid the license fee, but then you didn't open up for a year and a half