Starting a franchise chain is not for the faint of heart, yet John Rotche has already done it twice. He helped grow two mechanical-system-cleaning brands, DUCTZ and HOODZ, into the largest of their kind before ultimately selling them to become a partner and president of TITLE Boxing Club. Now, with not only franchising experience but an athletic pedigree (he was a football player and coach at the University of Michigan), Rotche is diving once again into chain development, using his unique curriculum vitae to develop valuable insight about what can drive TITLE Boxing’s growth and success.
Rotche’s route to the fitness organization began in 2011, when he won the International Franchise Association’s (IFA) Entrepreneur of the Year Award. Ten years prior, David McKinnon, the founder of Service Brands International (parent company to the Molly Maid and Mr. Handyman chains), won the same award, and 10 years before that, Domino’s Pizza’s Tom Monoghan won the award. Both men have been key mentors in Rotche’s career, so it seemed almost fated when he took home the award as well. Having such executive models inspired Rotche to create Franship, an IFA mentorship program that is attempting to do for the next generation of entrepreneurs what Monaghan and McKinnon did for Rotche.
It was through this program that Rotche came into contact with the TITLE Boxing brand. He didn’t want to start again from scratch after DUCTZ and HOODZ, and he thought it’d be interesting to see the other side of the franchise relationship and become a franchisee. So, he met with Danny Campbell and Tom Lyons, the founders of TITLE Boxing Club, when they had only 20 units open and about 60 sold. They were looking for the endorsement of a “franchise guy.”
To Rotche’s mind, the two had all the ingredients for success except one crucial thing: a franchise executive. In April 2012, though, they offered him the position of partner and president. Rotche says it was the brand’s story that actually tabled his desire to become a franchisee and enticed him into the position, and it’s also what he believes sets the company apart from its competitors.
—John Rotche, President (Photo: Michael Hough)
John Rotche on
Parenting Franchising
“If there’s anything I’ve learned doing this, it’s that the product may differ, but how you run a franchise system never changes.
Franchising is counterintuitive. When franchisees first come in, they’re young, like children, and rely on the parent company for growth and support. They need to be looked after and guided down the right path. Oftentimes, they don’t know anything about franchising, so they’re more dependent on you. They look up to you, and they don’t have members or any business yet, but they want to do right in your eyes. At this point, it’s all about them and their business—because they don’t pay royalty fees when they’re not making any money.
Then they begin to grow, and they start needing you less. And, similar to how kids grow, they look to you in the younger years with love and admiration, but then they reach their teenage years, and you start to become less cool, and they don’t need you as much—at least they think they don’t. However, now they start paying you more. Then, before you know it, months and years pass, and they become full-fledged adults, and naturally they really don’t think they need you. It’s a fine line between balancing when they need you the most while they pay you the least versus when they pay you the most and they need you the least.
At the end of the day, it really relates back to parenting. It could also be really easy not to have a curfew for my kids, and I’d be known as the coolest dad around. Or I could put some disciplines and guidelines in place that they might not like but which they’ll someday appreciate. A lot of franchisors aren’t willing or prepared to play that role. We can’t always be their best friends. We have to do what we feel is right to protect and grow all our investments.”
The tale, in short, goes like this: Lyons was a proven entrepreneur who got his start building the nation’s largest travel club, which gave him a keen understanding of membership-based companies. He created TITLE Boxing Club with Campbell, who, as a former professional boxer, referee, and announcer, brought authenticity and credibility to the brand. They wanted to make the sweet science less intimidating and make training more available in the suburbs. Together, they attracted boxing’s diehard fans, and today their chain is considered a premier brand in the sport.
The company believes boxing has the power to change people’s lives by offering not only fitness but empowerment, and its locations focus on a simple conditioning concept: a 15-minute warm-up, eight three-minute rounds of boxing with active rests in between, then 15 minutes of core and medicine-ball work. The regimented approach has improved TITLE Boxing Club’s business model, too, because no matter how many students are taking a class, only one teacher is needed. This has resulted in some of the best unit economics Rotche has ever seen.
To keep improving, the company is focusing on managing its long-term goals and initiatives over the course of 90-day periods. One of the chain’s biggest challenges is teambuilding and fostering a company atmosphere where franchisees believe in the company’s vision, even when the business has to make unpopular decisions.
Something TITLE Boxing Club is continually fighting against is the perceived need among franchisees to compete with big-box gyms. Rotche believes that the company offers a unique, sustainable model that allows its locations to coexist alongside other gyms, whose business—unlike TITLE Boxing Club’s—is based on price. Also, as group fitness becomes more popular, TITLE Boxing Club is banking on people’s social natures. “People are meant to be part of communities,” Rotche says. “Running on a treadmill by yourself isn’t a sustainable business model, but being part of a community bigger than yourself is.”
Rotche actually sees nearby big-box gyms as potential sites from which to draw new customers. “We’re really proud of what we do; it’s a stand-alone, unique workout,” Rotche says. “So, being near other fitness facilities brings us closer to our key demographic. Why not be in the same locations as people seeking wellness, health, and fitness?”
As of January 2014, the company had opened approximately 125 clubs, including its first in Cancun, Mexico. It currently has about 500 more locations under development, and it’s continuing its expansion internationally into Mexico, South America, and Canada while improving certain elements (such as sound systems) and conceiving more flexible prototypes that can fit into spaces with smaller footprints.
Rotche is excited to be a part of the process. “Whatever business someone is in, whether it’s pizza, donuts, or offering boxing classes, you want to create magic for people and change people’s lives,” he says. “If you do that, you’ll help others and change your life along the way.”
