Key Takeaways
- Gordon and Condon already believed in The Little Gym as parents looking for an sporty outlet for their children.
- The two investors enrolled their children in gymnastics classes before they decided to open franchise locations of their own.
- Now they own additional than 30 locations of The Little Gym, alongside another 10-plus in development.
Before Griffin Gordon and Kevin Condon owned dozens of The Little Gym locations, they were parents observing their children bask gymnastics classes at the franchise. Their kids were tumbling, operating and leaving category asking to do it all again.
As a customer, Gordon was impressed that The Little Gym personnel members knew the children’s names, greeted their parents and made families awareness welcome.
Gordon and Condon had met years before at the University of Chicago’s Booth School of Business before following distinct careers. Condon became a co-founder of Hidden River Strategic Capital, a Philadelphia-based personal equity resolute that invests in small businesses. Gordon divided his occupation between personal equity investing and operating small and midsize companies, afterward founding an funding firm focused on franchisees.
Their paths converged about an chance involving Richard Moore, a longtime Little Gym controller whose family had spent nearly three decades construction the business. Moore wanted to keep growing. His parents were prepared to retire. An adviser introduced him to Gordon and Condon, who saw a chance to brace an informed controller alongside the chief and assistance to expand.
In 2023, Gordon and Condon’s firms invested in seven North Carolina locations of The Little Gym, forming the basis of a endeavor called Somersault. Three years later, the partners say their footprint has grown to additional than 30 locations, alongside another 10-plus in development. Their endeavor generates nearly $20 myriad in revenue.
They credit that enlargement to a blend of acquainted ingredients, including an established brand. Here’s why they decided to allocate in The Little Gym and open new franchise locations.
The following discussion has been lightly edited for clarity and concision.
Why they backed The Little Gym
Why allocate so aggressively, expanding from seven locations to more than 30?
Kevin Condon: Ultimately, we’re assistance administration teams and organizational leaders. We have a really good team here, which has allowed us to measure at this gait and stated us the condemnation to continue putting prosperity rearward the business.
The another part is the repeatable procedure in franchising. You get a endeavor or open a location, and you have a playbook. With a fine squad and fine operators, you can reiterate that playbook. We’ve taken a powerful brand and expanded through acquisitions and new openings.
Griffin Gordon: Kevin’s resolute has done a lot of franchisee investing. My resolute focuses solely on it. The Little Gym has the things we discover attractive: a expanding market of parents who desire high-quality services for their kids, a powerful brand and appealing component economics whenever the endeavor is operated well.
Matching funding cognition alongside operations
What alternatively made this particular opportunity attractive?
Gordon: In our view, The Little Gym is the finest brand serving its mark age range. There are imitators, but we don’t think they equivalent the norm of its syllabus and functioning playbook.
We additionally have a powerful franchisor partner in Unleashed Brands. To allocate in franchisees, you need a alliance method and confidence that the franchisor values that relationship, too.
How did those factors rotate into an genuine investment?
Gordon: It was equal parts purposeful and opportunistic. We were curious in franchisee investing since of its repeatability and scalability. We were additionally focused on kid enrichment since we idea it was an appealing market if you did things right.
The chance to build an established business
How much did being customers power your decision to commencement locations of your own?
Condon: We lone have so much period and prosperity to allocate. The Little Gym offered the chance to allocate in what we regard a category chief in youth enrichment, particularly children’s recreational gymnastics and connected activities.
The scheme has been about for 50 years. This twelvemonth was its 50th anniversary, which was a important milestone for the franchise.
There’s an established playbook, and the two our endeavor and the general scheme are growing. When you have a powerful brand and the component economics to open a location, ramp it up and rotate into profitable, you can create returns for investors, jobs for workforce and outcomes for families. That makes it uncomplicated to comprehend why we desire to continue investing our period and money.
What are the most crucial elements of that repeatable playbook?
Gordon: There are two sides to it: the fundamentals that don’t change, and the chance to modernize the endeavor for today’s parents and children. The fundamentals contain construction and investing in a awesome team, genuinely caring concerning the syllabus and evolving authentic connections alongside the communities anywhere you operate.
Keeping the curriculum
How do those fundamentals nexus alongside changes to the business?
Gordon: You additionally have to activity alongside the franchisor to create certain the syllabus supports the outcomes everyone wants: Confident, self-assured, well-adjusted children who have an chance to rotate into physically energetic first in life.
That dovetails alongside Unleashed Brands’ investments in infrastructure. Before our investment, The Little Gym didn’t have much in the way of technology, systems and infrastructure. It operated additional akin a small-business-owned enterprise.
Since Unleashed Brands’ acquisition, we’ve been capable to merge the traditional strengths of the endeavor alongside improvements in the innovation we use to run it and the systems customers engage with.
There’s additionally been a additional thoughtful method to customer acquisition and marketing, alongside continued funding in the programming. The offering has to remain rivalrous alongside parents’ changing demands and schedules.
Condon: The center syllabus is the concealed sauce. It’s been part of what has made The Little Gym particular for 50 years. But you can build on that. For example, Unleashed introduced an app this twelvemonth to assistance parents affect alongside their children’s classes and see milestones and pictures.
That’s item that evidently didn’t be 50 years ago. It connects what The Little Gym has historically done fine alongside what a contemporary genitor wants from a class.
Both of you have children who attended. What were their experiences like?
Condon: Smiles from ear to ear. They’d expend 45 to 60 minutes in class, arrive out sweaty and exhausted, and their archetypal inquiry would be, “Can we do that again?”
There’s a joy in observing children move and obtain suitable risks, whether they’re learning a cartwheel or somersault, jumping, running, singing, following directions or engaging alongside another kids.
Much of what I’m describing is in that 2-to-6-year-old age range, although we assist younger and older children, too. I saw it alongside my own kids, and we see it across the children coming through our locations. There’s a consistency to that experience. It’s unadulterated younker joy.
Why franchise?
Why franchise alternatively of starting an autonomous business?
Condon: In small business, the chance to be part of item alongside a name as established as The Little Gym is attractive. We allocate in the two franchised and non-franchised businesses. One advantage of franchising is that you can be part of item much bigger than you could create on your own.
If we started a competitor, we wouldn’t have 50 years of former or an established brand. Franchising gives us an affiliation alongside a much larger institution and system.
You pay royalties and run inside certain rules. But in this case, we accept the playbook and brand provision additional benefits than going it alone.
Gordon: When done correctly, franchising have to be akin buying a small business alongside the advantage of a national platform. Those two things should activity together. That’s what we accept we have alongside The Little Gym.
What should person do if they’re curious in franchising but don’t cognize anywhere to start?
Gordon: One of the finest things concerning franchising is the preparedness of information. Not all item is public, but the data you need to comprehend the example is there.
In particular, there’s a catalog of franchisees in the rear of the franchise disclosure document. If you’re evaluating a system, commencement calling owners and learning from them. These are group who have already done what you’re trying to do. I can’t think of a improved resource.
Condon: Find item you’re passionate about, particularly if you’ll be the operator. Even if you won’t run the endeavor yourself, you motionless need to attention concerning it. In our case, as investors assisting build and measure a company, we additionally need an controller who knows how to execute the playbook successfully.
Lessons learned
What instruction have you learned during construction the company?
Gordon: The instruction we’ve learned and continue to study is that this endeavor is all concerning people. People sometimes comprehend concerning The Little Gym and think it appears simple. It’s a uncomplicated endeavor to understand, but a challenging endeavor to run well.
The endeavor depends on our capability to discover the finest people, train them effectively and provision them occupation opportunities. That power average moving beyond a instruction role, taking on additional duty inside a gym or eventually overseeing multiple locations.
What milestones are you operating toward? Could income eventually attain $100 million?
Condon: That appears great.
Gordon: We’ve gone from seven locations to additional than 30 in three years. We’ve quadrupled our footprint. Doing that again complete the next brace of years would be aggressive, but we’re big believers in the brand and our business, and we desire to keep growing.
