Deep Dive Into Franchise Marketing, with Lindsey McFadden, CMO of Stretch Zone | Ep. 434

0:01Welcome to the Marketing Millennials, the no BS marketing podcast. I'm Daniel Murray. And join me for unfiltered conversations with the brains behind marketing's coolest companies. The one request I tell our guests, stories or it didn't happen. Get ready to turn the f*** up. welcome back to another episode of the marketing millennial podcast i am here with lindsey mcfair and cmo of stretch zone lindsey's been telling me for months and months and months i need to get stretched out because i keep complaining about my back i still haven't done that and i actually flexibility is probably one of my weakest points even when i had uh play college football i had this thing you put out a report on like player report and it says needs to work on flexibility so i should get stretched out uh so but thank you for coming on the podcast thanks for having me listen everybody says you can benefit from stretching whether you're an athlete or not your doctor your physical therapist your personal trainer stretching can help everyone so i don't what you're waiting for.

1:19Um, could you give me the story how you got into marketing first and then we'll get into stretch down. Yeah. Went to college, thought I wanted to be an English major. Didn't, um, decided I really liked the psychology behind business and understanding why and how people buy things. And that kind of led to one of two angles, marketing or advertising. Um, I wanted to go more of the corporate route. So I decided instead of agency life, I was going to choose marketing as my major and kind of then double down from there. Thought I originally wanted to do hospitality marketing. Then I realized the only thing really that never closes are hotels.

2:00And working on Christmas and New Year's and Thanksgiving and every holiday for all time did not sound great. But I kind of always liked the lifestyle and wellness space. And so after a few turns, that's kind of how I've landed here. at stretch zone. I concur. And my wife is in e-commerce and every major thing happens on holidays. So it's just a great time to have a wife in e-commerce. So somebody is like, could we do something over Thanksgiving? No. Could we maybe do something after this? No, Oh, we're running a holiday campaign. Okay. So stretch zone, sorry. Basically, I created this category of practitioner-assisted stretching.

2:50So you're now the largest in the space. What does it actually mean to market a category you created? Yeah. I mean, it's a really different animal, right? it started with almost exclusive educational content because if it doesn't exist, people don't know what it is. And so when we started, and to this day, our kind of forever offer is your first stretch is free because we believe in our service so much that we also understand that you can assign value to a service you've never experienced. So if I told you a stretch was$10 or$100, is that a good deal? Well, you don't know because you don't really know what we do.

3:31And so that educational piece coupled with the kind of free sampling, if you will, it's not Costco on a Sunday, but allowing people to come in and experience it for themselves with no barrier to entry was really critical in the educational piece of bringing that awareness, not just to the brand, but to the category and the service. All right. So you have the category side, but you also have like, it's a franchise business and you're marketing to people who want to open a franchise and are opening a franchise. So could you explain like how it works to like have that multi, two different audience.

4:10One is like, you're trying to market this category, market stretching, have a brand on stretch. but also you're trying to get new people to open this in places that need this service. Yeah, I'll tell you, there's also a third. So first, when we started, it was just about marketing the service. We grew organically through, I'd say, 200 locations. We never did any advertisement for franchise sales. It was truthfully just word of mouth. Studios would open in a neighborhood, somebody would become a member, and so much of our growth actually came from members, experiencing it like, oh, wow, I want to open one for myself.

4:48And so it really was the education piece. Now we have kind of two different buckets, if you would call it silos of telling the corporate story around the unit level economics and the floral structure and why Stretch Zone is such a great entry point for first time entrepreneurs. Unlike restaurants or food, there's no waste, there's no spoilage, moving inventory. Your real only overhead is your rent and your employees, your labor cost. And so it is such a simple business that we really attract a lot of first-time entrepreneurs and people that buy multi-units. So like 93 % of our owners own multiple locations.

5:26And so that synergy and market really also lends itself to kind of that organic growth. So that's kind of how we think of the corporate side. But on the consumer side, I don't just have people that want to get stretched like you that need to come in. I also have my franchisees I need to market to. I need to get them on board with what we're doing and the vision and the marketing for the brand that they bought into. So it's really two layers. I'm marketing to them about promotions or new things that we're doing, but then also to their customers. Yeah, I want to go into that too, because I think one of the hardest gaps in franchise marketing is like the gap between what you as stretch zone wants and what the franchisee wants to do.

6:10Um, and then there's like an issue where someone could potentially go rogue and, um, brand or what they're doing. So how do you get the franchisees to trust the playbook you're, you're running for that? They still do go rogue. And a lot of blood, sweat and tears is the short answer. No, but I think if they're going rogue, the way I look at it and the way I tell my team to look at is they're scratching an itch that we're not scratching. So I believe that we've got all the things under the sun, you know, at their disposal, but if they're not using them or they're doing something else, it's clear that they've identified whether right, wrong, or indifferent, some need or a want that they don't feel like we're fulfilling.

6:55So like, let's have a conversation about it. I think that we have exceedingly good relationships with our owners. I've worked in other franchise brands in the past, and that is not always the case. But really open and honest communication is really the stem of that. Because if you're going rogue, like, here's the thing, I can whip out the compliance book and cite fines or stuff. But But what are we accomplishing here, right? That's an adversary relationship. That's not going to get the end goal. If you're doing something rogue in marketing, conceivably, you're trying to market your service in a way that we are not.

7:28So let's talk about it. Maybe you have a great idea that we haven't tried and we can test it and then use it at scale. That's happened too. So I think open communication, over communicating and communicating in ways that resonate with your target audience. Because as a franchisees, we have some franchisees that are very young, tech savvy. in their 20s, best way to communicate them is via text. And then I have some older franchisees that are retired that want everything in like an outlined email with two weeks notice and a reply email. So making sure that our content, whether it's new initiatives or promos or just information is meeting them where they are, text, email, video, live call.

8:09That's how we get that buy-in. and i know you came in when there was i would say what five x less locations that you are now yeah yeah originally i came in between there was like i think 60 ish when i first came into the brand and now we're at 425 so what what was like the the day one things that you were when you came in that you, you started to implement that, um, you saw there was a gap in what they're doing now that you were needed to fill like when you started the 60 to get, and then obviously the follow-up question would be like, what is like now the issue now that you're at like four 15 locations and you have, I, I, if I'm not wrong, like zero closures ever of any of locations as well.

9:03So far. Yeah. So that's a hard stat too. That's a big stat too, because most, like a lot of franchise businesses have closures every year. Yeah. So I think, so to answer the first question, the answer is everything. Because when I came in, there was nothing. And I said, holy shit, I have to get a handle on this. And so it was literally streamlining and standardizing, just starting at social profiles, then Google business profiles, than having an email marketing tool. Because none of this existed. The brand, when I came in, we had like a joke of a website, Groupon, and some direct mailers. And that was marketing at Stretch Zone.

9:44And in spite of that, we had highly successful studios that are very profitable. Because the common thread was they were all really a fabric of the communities that they served. They were involved in neighborhood things. They were showing up at 5K races and community parks and the green market. and wherever the community was, stretch zone was. And so I said, okay, great. How do we now standardize this and get a hold on it so that we can really amplify that? And that's when we kind of started with the page structure, understanding what kind of parent-child relationship we needed to set up with all the pages in the accounts, wrangling them.

10:21Literally, I will tell you, it wasn't until like two years ago that we had all of them. And some of it was only when a store would transact and sell to a new owner, then we would be able to incorporate it into the fold from some of the OG rogue stuff. But it was really bringing that standardization into place and having the tools and processes because otherwise talk about rogue, like that's, that's wild. And then now, yeah, we have, as of now, we have no closures. And I think it's been for a few reasons. One, we have a really solid product that resonates in the consumer mind. This is not a fad.

10:57This is not some like fly by night organization. We have a patented shopping system. We have all these protocol-driven stretches that enable system-wide access. You can use your membership at any location nationwide. So we're really trying to meet the consumer where they are and enjoy. I mean, I don't know about you, like the only long-term contract I have is my mortgage, right? I want to be month to month. That's life these days, Netflix, Prime, whatever it is. And so I think we've tried to evolve the business to meet the consumer where they are over the years, as opposed to just staying stuck in our ways.

11:30And also when it comes to closures, we have seen some consolidation, people buying up other stores, ones or twos that are in market so that they can own a whole market. And so we do see a lot of that happening now, which I think is pretty normal for this stage of maturation of a franchise brand. I also want to go into the market pressure that's happening right now, because I know there's consumers are spending less than ever before also on like discretionary expenses like wellness um is probably hard to to so what how's your marketing changed during this time where people aren't um necessarily spending on things that aren't necessarily seen as a necessity um for their day-to-day?

12:21I'll tell you that our service is a necessity for a good portion of our member base. Like people that have mobility issues or disabilities, that they can't get out of bed unaided. They can't tie their shoes. And so having that twice, three times a week stretch routine really is their quality of life. So it's non-negotiable for them. So while for sure, we're not an essential service for a subset of our member base, we really are essential to their lives. And then I think when we see a compression in spending, I think like everybody, there's different seasonalities and cyclical nature of things.

12:56We try to do promos that matter to the consumer, right? If you're not looking for a membership, we do a package offer to get people in to sample it and really low commitment entry into the brand, things like that. But I also think, I know it sounds like maybe elementary or routine, but we do one thing and one thing only. And that is a really damn good stretch. All these other concepts that I see that have this kind of fad nature, it's hot therapy, then cold therapy, then red light, then blue light, then green light, and all these things in one place. And then they're going to give you a massage and maybe some Botox on the side.

13:32And then you don't know, like, what am I going here for, right? When you're going to a stretch zone, you're going literally for one thing and one thing only and staying true to that. I think truthfully has insulated us a bit from market volatility and consumer trends changing. I also want to know, because with local marketing, every community is like different and everywhere you go, there's different events that every and maybe different cultural things that are going, especially in the US. What are things that are like, that you see are the same marketing tactics that you could use in every single local marketing?

14:16And every, if you're doing local marketing right now, you should invest in these one, two, three things because every local marketing should be doing this. Yeah, I think what we try to say is 80 % the same, like in our franchise space. The playbook, what we're doing, no matter if you're in Minnesota, South Florida, California, it should be 80 % the same, right? In Minnesota in January, you're probably not doing golf tournaments, but in South Florida, that's like the end all be all, right? So I think what we try to do is allow for customization that really our owners drive or their staff in location because they know that market better than we do or that I ever will sitting in an office, right?

14:53But we try to give the tools and the playbook for that. I think it's a mixture of paid digital where we can drive demand and target really, really well from what we know our consumer base is, coupled with that local presence. And you can't replicate that, right? Being present in studio and in market is paramount. And we tell that to all of our owners and operators, whether it's them or the designated person, the manager or the regional manager, whomever, that really make sure that stretch zone is a fabric of the community that it serves. What does your media mix look like as a franchise brand?

15:31Because I know that, I mean, everybody is feeling like costs are going up in the digital landscape of like Meta, Google, all that stuff. But what does like a media mix look like or like a marketing mix between like digital events, et cetera, et cetera? Yeah, we try to, when we do franchisee training, I give like a pie chart example. And I want to say, this is marketing. It's not all one piece. And we kind of go through the different pieces. paid digital is one for sure. Events, we do a lot on referrals, you know, because our service just kind of is a natural referral business. When you feel good, it's like, oh, you have bad bag?

16:12Have you tried Stretch Zone? First one's free. So we really try to set up not just our app, but our members to really leverage referrals, which is such a good driver of new leads into the business. We're just kind of now dabbling into what I kind of call like micro partnerships with some local influencers in different markets. We use, we just did this kind of big media launch in the beginning of the year and Drew Brees is our brand partner and ambassador. So we use, you know, his network and his reach to kind of spread the message. You know, he came to us organically many years ago and really credits the longevity of his career to having a really solid recovery plan of what stretching was part of.

16:52And so between paid digital, organic digital events and grassroots in community marketing, a solid referral structure and plan in both in studio and in app. That's kind of how we think about our mix. I love that. And I know the, what is, what is like the foundation of a good like referral program? Like, I know you, I mean, obviously the product is like, it has to be a product that people want, but like, what are some things that are doing versus, for example, like email marketing or when in store this is happening or what is like the foundation to make sure that that flywheel keeps happening and people know there's a referral program and know that they can refer their friends in that flywheel just yeah so in app primarily for our um our current members we're constantly focused on that in studio we have a lot of in studio experience and signage focused on that but truthfully it comes down to the owners having member appreciation events that you want that you can bring a friend to or a guest giving free stretch parties we have some owners that do um like dating myself i know this is like the millennial podcast i think technically i'm a geriatric uh millennial but back in the day a la mary k parties or tupperware our studios have done similar things where it's like hey we'll we'll invite our members in with 10 of their friends and provide stretching and and like a social hour for them and that's a really organic feel good grassroots way that not just spreads the experience, but the referral strategy.

18:28Because then those 10 or 12 people will then tell their friends or family. So I think really it comes down to in-studio experience and leveraging our current member base for that. You can imagine at 425 locations now, we've got quite a sizable member base. So it's really using the people that we have as our brand evangelists. what do you see is the difference between a location that is crushing it and a location that is like is doing okay but needs help like what is like the biggest through line to the ones that are crushing it versus not crushing it the owner's the mayor like the owner knows everybody they're working with the nail salon next door the orange theory around the corner they're shaking hands and kissing babies, it all comes to the person.

19:18That is really the main differential. Our service and offering is so standardized that whether you're getting stretched in South Florida, California, or anywhere in between, the practitioners should be providing the exact same service. So like, you know, when you walk into a place, does it have a good vibe? Do I want to come back? And so creating that culture at the studio level is really the main differentiator. If our owners or the manager in charge of the studio does a really good job of taking care of their people, then their people will take care of our members. They'll like coming to work.

19:50They're making a difference in people's lives. And that is a common thread. Obviously, this is not charity. We're here to run a business. But the people that are our best owners are passionate about helping people in some capacity. And I think that is just authentic. And that really comes through. We've got a store here in South Florida that the owner, literally, he was just on a podcast with the mayor. He goes to city council, everybody's his best friend, and he's offering you incredible hospitality when you walk in. That's really it. What we do is so simple. It's not complex at all. So really just focusing on the basics and having a great studio experience is where it's at.

20:28I'm also interested in the onboarding experience for you as the marketing team to onboard it because i i get that maybe some of them understand marketing but most people aren't marketers they're getting into it because they loves they think this is a great product or they're trying to make an investment or they're um they believe their area needs one but they're not like inherently marketers so how do you i know we talked about that that's part of your role but What does it look like to market to people who don't get marketing?

21:06It's a puzzle, let's say that. But most of our, you know, we have some, a few franchisees that do have an extensive marketing background, but most don't. And I think what we try to do is, A, do a lot of it for them on the corporate level. That's why you buy into a franchise is because you pay a royalty that covers a lot of the national marketing. they wouldn't know overwhelmingly how to source local media, what to say and how to even reach out to have, you know, to have in-studio news like show experiences and having people, reporters coming to studio to do features. And so we do that for them.

21:41So really all we ask our owners to do is really local events and business networking. And how do we do that is we give them playbooks and training. And I call it Fisher Price at the risk of sounding ignorant. If it's not Fisher Price easy, they're not going to do it. So I tell my team all the time, when you get your iPhone, you open the box, you just know what to do. It turns on, it prompts you through, and all of a sudden your phone's working in four minutes, right? That's how we have to have our marketing playbooks. They have to be so turnkey that before they know it, they've done all the things they need to do and they're off to the races.

22:15And so oversimplifying is, is really like the MO of, of the department. And, and that's how we see high adoption. If I give somebody some 87 page checklist or outline of saying they're not going to read it, they're not going to do it. They're going to just delete and move on. Yeah. I just had this conversation about someone about like just briefing influencers and stuff like that. And a lot of it, I'm like, you have to keep it brief. Like I don't think like people, like I know myself, like if you're giving me a handbook or something like that and it's 80 pages, I'm reading five of those pages maybe.

22:51And then I'm like burnt out of it. You're going to upload it to chat. Tell me what are like the key takeaways and miss probably some of what you actually need to read. Literally for all of our campaigns and stuff, we have a one cheater. I know it sounds so antiquated. One page, who, what where when why and how if it can't fit on one page it's too much and that's kind of it's been working it's so funny this is like a pivot but i um when you said fresher price like i have a kid and i'm just thinking of like that purple monkey song like in my head now i'm looping because you just said fisher price this is so funny uh so i'm in the middle of my podcast like singing singing a purple monkey in a bubble gum tree um singing in my head right now so if parents if you know that and if you have a kick and play you know that that song is on loop all day um all day my kids are a little older now so we're we're out of the fisher price but you never forget that yeah that's it um i also i also am interested in i know it's not necessarily your role but like how do does one like get approved and like that's a good look is there like a playbook that these certain locations are more valuable than other locations because obviously like um you that's part of the um enticement of being in a franchise too because you have done that research to know that certain locations, certain shopping centers, certain areas have certain demographics that will use this service?

24:32Yeah, we have twofold. We have a real estate department. So we have a director of real estate. And from before you even sign a franchise agreement, we have to approve the territory, right? So between a hybrid of some data mapping tools that we use, not that just that showed, you know, map of like physical real estate locations, but overlay demographics and then overlay our target customer profile to then understand literally heat mapping. This would be a red zone for us. Like this is top territory or this is yellow, maybe less exciting. And then really overlaying how many studios can this territory support.

25:07And so between our director of real estate and then our store opening team coupled with the software that we use, that's how we pre-approve sites before we even sign a franchise agreement. Because we are not in the business. I know there's a lot of brands that talk about how many locations, oh, we're at 500 locations. And that means either like sold or in development, but they've actually opened like two dozen. We're not in the business of selling franchises, we're in the business of opening studios. And so when we say 425, that is open and operating. That's not counting other licenses that we've sold that are in the pipeline ready to open.

25:42So I think that's really important differentiation is that oftentimes people will sell territories or states or blanket regions just to say, oh, we sold a 78 unit deal. Well, you gave somebody like the first right of refusals of Florida, and maybe they're going to develop it and that could sustain 78 locations. That's not how we operate. We sell specific studios that we map and pre-approve in advance because that's how you avoid closures, right? We don't want to be oversaturating a market that can't support the stores. And we also want to put stores in a market where there's, there's no need or demand for the service or enough to sustain a profitable store.

26:20Yeah. It's like this, you don't want the subway model where it's like the subway everywhere. Um, yeah. Uh, also I, I do think like, I do think that's like part of marketing because I do think like, for example, back in the day like i used to do me and my wife used to do berries um and like i always knew that like if i was going to a city and i knew found where berries was i knew that was probably a good part of the city because like there's a berries there um yep and i think like you want to have that like association with your brand that like or if that's the clientele i'm not saying that's clientele but like if you want to be in places where like it's also like like good areas that people want to visit when they are in that area more it's like or neighborhoods that people like are seen as great neighborhoods in that area you don't want to just be in a random corner where people are don't want to hang out that's right yeah i think it's funny do you say berry do you know we are owned by the same company as berries is that uh why you bring berries into the combo i don't know i might have brought berries in the combo for that reason but i just wanted to say berries because i just know that that's the sourcing is very good when it comes to like a berries location um that's my point of reference of like a franchise brand that brings up two points though one is that we try to be like we like grocery anchored plazas because we are generally a weekly or multi-weekly service.

27:55So we want to go where boutique fitness is or where the grocery stores, places where people go regularly. To your point, if we're randomly out in some random location, nobody's going to come. Number two is that marketing to people, our target clientele, or I should say overall, our clientele is an older population. We see people, high school athletes and elite athletes, but we also see a lot of what we call seniors or retirees. One of the things I tell my overwhelmingly Gen Z marketing team is you're not marketing to yourself. You have to think about who we're marketing to. So I a thousand percent agree with you.

28:35Barry's, trendy location, good vibe. You know, if you're staying near Barry's, like it's a good spot. I tell my team all the time, you have to understand who's coming to our studios three times a week and it's not you. So taking yourself out of the equation and really understanding who you're marketing to, like what would your mom or dad want? That's who we need to be talking about. And so I think that's just an interesting lesson for marketing is that when you're marketing a product or service that is not necessarily right in your demographic, it's just like stretching a different muscle. Yeah, like berries are more younger, millennial, sexy, beautiful, trendy.

29:12That's not stretch though. And yeah, says Jones is like more town center, vibe where you're like, I'm going to go sandwich shop and then I'm going to go get a sandwich and then I'm going to get a stretch type vibe where I can get everything at one place. I don't have to leave my area to do it. That's right. Yeah. Where berries is like in the hottest, one of the strips in the area that are nice where there's like a Joe and the juice and blah, blah, blah, blah, blah, where people can get that juice and stuff like that. Yeah. But it just shows like that's like different real estate's thinking about that.