Our guest today is the President of Iron Tribe Fitness, Karen Broadwater.
As the President of Iron Tribe Fitness, Karen has always been passionate about executing and advancing brand strategy, driving customer engagement, and improving the user interface experience. Before taking the role of President in 2018, she was the Vice President of Brand Experience. Iron Tribe Fitness is a rapidly growing franchise brand with nine corporate locations and 29 total locations across the country. Not only has Karen been with the company for 11 years now, but she began her journey as a customer. In today’s episode, Cameron and Karen discuss some of the idiosyncrasies of being a franchisor, and how they were able to remain resilient even through the height of the pandemic.
In This Episode You’ll Learn:
- Karen’s 11-year journey with the company, from being a customer to eventually taking over as company President.
- How they were able to create a remote culture, retain customers and maintain franchise partners during COVID, when everything was shut down.
- How Iron Tribe has made use of “the flywheel effect” to help grow their business over time.
- Some of the most common marketing mistakes gyms regularly make.
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You’re going to love this interview with Karen from Iron Tribe Fitness. I don’t think we’ve had very many franchisors on the show. This was an interesting episode. They get into some of the idiosyncrasies of being a franchisor, how to service franchise partners, whether franchise partners are your customers, or whether the mutual customers are customers. Talking about the growth of the organization, they also have 9 corporate locations and 29 total locations. She’s been with the company since very early on. She was a customer.
She talks about her growth coming into the organization, being present in the organization for many years. A lot of the things that even hit them during COVID when imagine being in an industry where you’re completely shut down and you have to pivot. Try to figure out how you save all of your customers and franchise partners through something like COVID when you’re not even allowed to stay open. Some cool stuff here. I hope you enjoy the episode. We’ll see you on the inside and make sure you share these as well.
Karen, welcome to the show.
Thank you so much. I’m so excited to be on here with you.
I’m looking forward to learning from you. We have not had a lot of franchise organizations on as show guests, which reminds me that I should reach out to a bunch. I’m going to make a side note to start reaching out to some of the best of the best franchisors out there. What was it about Iron Tribe, and when was it that Iron Tribe decided to franchise?
We start decided to franchise in about 2013, but it was always the model. Originally, I wasn’t a part of the team. I was one of the very first clients of the first concept model in little Homewood, Alabama. I came on about a year later. The concept was always to multiply and scale. The Founder was a Master Franchisor of Fitness Together and he wanted to create another model concept that he could scale. We officially launched in 2013 after we had already done two gyms ourselves to prove the proof of concept. We were working on opening location 3 and 4 while we started franchising.
You were a client first and then decided to join. What was it that you saw that wanted you to get in and start working with them then?
At the time, I was probably 40 pounds heavier than I am now. I consider myself a kid. I was 25 or 26 at the time and this was many years ago. It’s been a while. I didn’t realize how fitness could affect the rest of your life. if you can handle your body, can handle discipline, take care of yourself, and put pride in yourself, everything else starts to matter. Forrest, the CEO, did a goal-setting workshop at the gym, which I thought was very strange.
I was drinking the Kool-Aid. I was all in. I wanted to be a part of it. I went to it and learned how to set goals at a mid-twenty-something-year-old. I’d been to college and everything. I have never been taught that concept. Ultimately set a goal and won a challenge that they put on. My second goal after that was I wanted to work with this company. It changed my life and I saw that it was going to grow. I had to be a part of it.
You mentioned drinking the Kool-Aid. Was the culture by design from the early days versus so many places that are just a gym?
That was something that was always Forrest’s passion in general. He’s very much more visionary, sees the big picture, and you could tell that he wanted to make the culture great. It naturally was in the beginning, but then also, we needed to make certain that the staff was being taken care of. The bigger we got, all of that continued. His biggest thing is in fitness, most people trade time for money. You’ve got your personal trainer. If you don’t show up, you don’t get paid, all of that.
He was that for quite a few years in his earlier days and realized he wanted to be able to support a family. The vision of the company is to create careers in fitness. Everybody with us, their salaries are taken care of. They get 401(k)s, all of that versus only hiring young kids out of school and hoping to keep them for 1 year or 2. We have coaches that have been with us for over ten years, still coaching, and we’re able to take their kids to Disney, put braces on their kids, and treat it as a true career, which is fun.
That reduces the turnover of the employees as well.
Especially somebody with a passion for fitness. They can’t go anywhere else and get a job or a career the way that we can provide.
What’s changed in the organization? You’ve been there for about 11 years, and you’re at 29 locations covering about 9 states. What’s changed in the organization from the 2 locations to the 29?
We’ve made so many mistakes, and we’ve also had so many successes. We’ve changed our actual model in itself from franchising, creating that culture, both internal. I know a lot of people had it during COVID, but create a remote culture where people aren’t with you all the time. That’s a very complex thing to do. I would still take any tips if you have tips on that, but we try to intentionally work towards locations throughout, and some of them can have 1 or 2 locations. Our Nashville locations have five within each other. They’re able to create a team environment, but from the franchisor, trying to create that culture, has been a challenge. It’s one thing that we’re getting a lot better at as we continue to grow.
Do you have 29 franchisees with multiple locations or do you have 29 locations?
We have 29 locations in total. We corporately own 9. There are 20 franchise gyms, and then 9 of those are ours.
I got it. How many franchisees make up the other twenty?
I believe it’s thirteen. Ultimately, over the years, things have changed. We’ve changed our model in different areas, sometimes mostly to fit people. We’ve done some good things with that. We’ve done some poor things. Sometimes when people have good skillsets, the right people, right bus. Sometimes we have the right people. We try to fit a position for them, and it hasn’t worked. Sometimes it has, but in doing that, it changes our model because we’re selling a model. We’re not just selling. We’re not in a corporate office where you can pivot.
Making any big change like that changes our business tremendously over time. We’re in a good spot where we finally made a decision that this is our model, this is what we’re selling, and this is what we’re doing. We’ve done that for a few years. I don’t believe in perfect, but I do believe that we’re at a place that is extremely scalable. People are our focus. A lot of businesses focused on clients and many businesses should, but we decided about years ago to make certain that our staff was our priority. If they’re a priority, they’ll take care of our clients. If our clients are being taken care of, they’ll take of us. They say the flywheel effect ultimately happens in that.
I’ve always said that your employees have to come first, and if they don’t come first, they always feel they come second. If they feel they come first, they’re going to go through brick walls to take care of your customers. I’ve always believed that great franchisors should have at least a few corporate locations. Otherwise, A) They have no business being in franchising, and C) They don’t know what the proper systems are. If you’ve got a good model, why are you giving it all away to the franchisees when you could be making some of that money yourself? Is it a focus to always have a certain percentage of locations to be corporate, or will you open corporate? What’s your corporate expansion policy or program?
Originally, it was to keep the five that we have in our Birmingham location. That’s where our hub is. We have 5 within about 3 miles of each other. Originally that was the plan, and we weren’t going to grow too much after that, maybe seven, but still keep them local so that we can be present. We went through COVID and things like that. We had three other locations that were franchise locations that we took over during COVID when other people couldn’t.
We’ve gotten those and then we had a staff member that honestly, we wanted to support and he needed to move to another state for his family. We opened a gym because he was moving there. Other than that, it’s not our appetite to continue growing corporately. We’re at a place where we have a good cashflow there. We have people taken care of. We have a good test market with nine. We can test different marketing. We have systems people. Beyond that, we want to grow the franchise company.
When did you start franchising? Was that right at the beginning as well?
In 2013. Originally, the first one opened in 2010. About three years in, was officially when we started franchising.
What lessons have you learned being a franchisor that you would not have learned if you were in corporate locations?
Personal lessons are you have to let go of control, and you have to realize that you have to create systems. You have to trust that other people are going to make the best decision for their business because it’s not my business. Their franchise location is their own business. We had to pick and choose. There are problems to solve, and then there are problems to manage.
We had to decide what problems we help them solve as business owners versus why we sit back and let the problem manage itself with them as they implement a new system. Most of the people who have bought a franchise from us were also business owners or one of their partners was. That helps the fact that they are pretty familiar with the business, but the fitness business is a lot harder than most people think. Getting into that and making certain we support people well.
Additionally, I know something that we’ve learned that I would not have learned in any other place is the levels of communication that have to happen are crazy in franchising. I have to tell my support team. I have to tell my management team. I have to make certain my coaches know, but then I also have to make sure owners know, managers know, coaches know, and that they’ve heard it. The layering of communication and how many things get lost. Having two corporations is tremendous.
Are there any parts of franchising that you would change? If you could change the rules around franchising or the franchisor-franchisee relationship, are there any changes you’d make to the way things work now?
The things that I would probably make, which sounds a little stern, are requiring quarterly half-year or middle-of-the-year meetings. We do one year, everybody comes together, and we do a tribe conference. Everyone leaves on fire, and it changes the business. I would make that more mandatory throughout the year multiple times because I do see the benefit of having everybody together and being rejuvenated.
We did make that mandatory at 1-800-GOT-JUNK? It was in the franchise. We put it into the franchise agreement, and my suggestion was we wanted every franchisee to come. We wrote it in their agreement that either the franchisee had to come or their general manager. One of the two had to be there every single year. They had to attend any regional meetings that we booked at whatever time we booked regional meetings. It was part and parcel.
The other thing that we did was we made sure that part of the recruiting process of finding franchisees was where we wanted franchisees that wanted to belong. They wanted to be in a group. They were part of their student council. They were part of a fraternity or sorority. They were part of their church group. They were part of little league. They liked to belong to something. They were going to come to the conference because they wanted to be a part of something. It has to be a little bit culty. The people that you have coming in as franchisees, are they changing careers to become franchisees, or are some of them staying in their business and putting an operator in place?
Most of them right now that are coming in are staying in their business and putting more of a partner operator, a small percentage equity in the gym. We found that if you are running the gym and you’re at a franchise location, they need to have a potential upside to that. We run a small amount per gym. We have three full-time staff and that’s about it. Someone needs to act like they own the gym if they don’t own the gym.
Talk about COVID for a second. It’s funny when you mentioned COVID, I’m like, “I forgot about that.” COVID must have hit your industry hard or in some states, worse than others probably, right?
47% of gyms closed down. That ended up shaking out about 37% closed for real. All of us had to close for an extended period of time. We assume that the visionary is an integrator. We joke that visionaries can be mad scientists and crazy, but Forrest made one of the best decisions during that period. He knocked out walls in our corporate office and created, what we call, Zoom Room.
We recorded videos. We went live. We decided that we were going to serve the clients. We brought our coaches in. They each had a day assigned. They filmed videos, went straight remote, and made sure our clients were taken care of. That sustained our business. We only had two franchise locations closed during that time and then we took over a few after that that weren’t able to come back in. We beat the odds in that.
I was curious if that’s where some of your nine corporates came from, where some of those takeovers of franchisees.
Two of them were COVID-related. One of them was the owner, who wasn’t engaged necessarily, and the manager was amazing. We wanted that location.
Have you continued on with the remote, with the at-home training with clients? Is that a service that you offer?
We do. It’s a smaller portion of our service because ultimately, we’re more of a relationship gym. We cap our membership. We don’t want a lot of members in the gym. We want to take care of 200-ish members, and that’s where our sweet spot is. We have it as a service. Also, our members still get access to all the videos and everything. If they’re traveling, it’s a great benefit that they can pull up any video and do a workout with a coach.
One of our former COO Alliance members and then I also used to coach the CEO is a company called LoudRumour. I don’t know if you’ve ever heard of LoudRumour.
I work with LoudRumour. I speak again at their conference in May 2023.
Yes. This is my third one.
Mike Arce is a former client of mine. Some of their past speakers are good friends of mine as well. I was thinking about marketing for gyms. What do you think most gyms are doing wrong when it comes down to marketing? According to Mike, it seems it’s fairly formulaic if you do the right shit. Another former client of mine is Alex Hormozi. Alex and Leila used to come to my culture events before. This was eight years ago. They were clients of mine.
We were clients of Alex.
Yes, marketing works. What is it that most gyms are doing wrong and what are you guys doing marketing-wise that works? You can plug LoudRumour and Alex.
We’ve learned everything from a ton of different people. I love the Hormozis. I follow everything that they do. We’re still a client of LoudRumour, and they’re amazing. The majority of things that people do incorrectly in the fitness industry is they don’t spend enough on marketing. I’m not saying that there’s always a perfect ROI on your marketing spend, but most people don’t spend enough on it. They take for granted that a lot of it, while it is a direct ask, is awareness.
You need to be the best known, not necessarily the best. Making certain that you’re always front of mind. People don’t take enough time to build their content. Even though you can put ads out there, you’ve got to get them. Do you know how many gyms I’ve talked to that don’t keep a list? They don’t have their prospects that had a list. They don’t have their past information. They only have their client’s information in a system. We think there’s so much gold in an email list, I’m sure you do as well.
Not spending enough, not keeping a list, and then making certain that you’re constantly doing a jab punch. Give something, give something, then ask. Being intentional, how do you like to buy? Thinking through that and making certain that we’re not being crazy, annoying people, and we’re treating it as a luxury experience to be able to come through and buy from us, and we care.
I love that you understand the value of the coaching and the masterminds as well as being a part of those industry events too. Another former client of mine is Fit Body Boot Camp. I used to coach them. What do you think is the difference between a franchisee and an employee? Are your franchises your clients, or are your gym attendees your clients? Are the franchisees employed? Where’s the franchisee fits in terms of the client or partner?
We had a very concerted effort in the very beginning. We would start calling our franchisees behind their back. We would call them Zs. We decided to make a decision that we would call them franchise partners. They are our partners. They are who we work with. We locked arms with them. They are on the same level as we are. We happen to support them. I put myself below our franchise partners personally because if they’re not happy, the business isn’t going to run well. It’s that whole cyclical thing again. They’re our partners.
That was exactly what we called them at 1-800-GOT-JUNK? We called them our franchise partners. I tried to get the team to visualize the org chart upside down with the CEO at the bottom. Supporting the C-level, supporting the managers. Supporting the employees, and supporting the customers, is almost an inverted pyramid. Everybody can see the vivid vision. Do your franchisees or franchise partners see that? How do you get them to see that you’re their partners versus they’re your clients? Sometimes they feel we work for them or they’re we’re supposed to be. How do you get them to understand the relationship?
The best part is we did a bad job at it at the beginning. When you say, “We’re humble,” but we had to humble ourselves and say, “We’ve messed up here and there. We were transparent on, “you don’t have to believe us, but over the next year, we’re going to do this.” The next year we’d say, “Over the next year, we’re going to do this.” We kept living up to what we said we were going to do. I believe our franchise partners trust us, like us, and know us. We implemented monthly calls with them. They’re all on it.
We do monthly calls with their managers. We do sales calls. All the things to try to align to make certain they’re included, they have a voice, what they do matters, and what they say matters. Making certain that we have an intentional effort for them to be involved. That’s helped a ton. We implemented it years ago, saying, “We’re going to do this,” and then we started getting their trust heavily over the past two years again.
Are there any things that you think you do very differently as a franchisor that other franchise companies would say are best practices? Have you thrown out some of the best practices and say, “We have a better way?”
I wouldn’t say we’re any smarter than anybody else. I’m certain, but we do have an intentional effort towards creating relationships. I would consider a lot of the franchise owners or managers to be friends. We know about personal life. We know about all that. I’ll personally coach them. I have a girl right now, and we’re making certain that we have a protein shake a day and that we don’t have alcohol more than once a week right now. We’re working out. We’re doing life together and that makes a big difference in going through business together as well.
Does Iron Tribe have coaching as part of its model as well, or is it on the fitness side? Do you have any other products and services that you’re also selling?
We’re about to start selling more high-end coaching services short-term for people to onboard. It’s not something we have right now. It’s something we do for our team and our franchise partners. It’s something that we believe that our managers could execute well on because they’ve been a product of it for so many years.
I know a lot of gyms and fitness places got into private labels, supplements, bars, drinks, and stuff. Are you guys doing anything around that yet, or are you staying focused on the actual core currently?
We sell a bunch of supplements. We looked into the private label, and I believe some people out there are already doing products well. We do a lot of research. We think there’s power in partners too. We love selling products, but we like to pivot and change. Honestly, our coaches are bottom-up. They’re the ones who said, “I love these products. I could sell these. They’re genuine.” Listening to them and selling the products they’ve asked for has drastically changed our product sales.
What’s the plan for the next few years? How many locations are you going to have years from now? Where are you franchising? What’s the focus there?
We have a 2030 goal. By 2030, we will be a hundred-million-dollar brand, and that’s our big goal. Ultimately what that works out to is about 156 thriving locations. We wanted to set that goal because how we get, there could look differently, but we will be a hundred-million-dollar brand in the year 2030, whatever that ends up looking like by then.
Reverse engineering, is that all in North America?
Are you going to stay intentionally a US-only brand? Are you going to Canada at all? Are you going to stay away from the international markets?
As of right now, to get to that goal, stay probably even a little more Southeastern. We could fit there. It’s easy to support. It’s a culture we understand. If someone wanted to buy outside of that, absolutely. It’s simply right now, that’s our focus and our growth path where we’re trying to target new franchise partners.
You’ve been with the company for many years. I’m sure that it has always been easy.
Always the easiest thing I’ve ever done in my life. I’ve never tried to quit.
What are the struggles been for you over the years?
Some of them are growth struggles. I started as a little girl and grew into who I am now. I’m sure I’ll say that again in several years. The struggles have even been of perception. How I’m perceived is often a concern of mine. Not necessarily that I care what people think, but I want to be understood. That’s played off in the business. I’m a behind-the-scenes person and always have been and enjoy it. I love that the CEO can be in front of the scenes. I love being the helper. That’s my skillset. I’m good at caring for people. I’m good at hard conversations. I’m good at doing either of that. We’ve always said that Forrest paints the walls, and I paint the corners. I make certain that everything is in place, people are taken care of, ducks are in a row, and all of that.
I also have a team that helps me do that because I’m not great at details at this point. At the end of the day, ultimately, the hardest things have been Forrest and I getting on the same page, being visionary-integrator. There are a lot of people out there who are great visionaries and a lot of people who are great integrators, but they may not work well together. Us deciding or realizing that we had good chemistry as coworkers, and we were able to tell each other when you have a bad idea and tell each other when something we did was stupid.
I can go to him real quick and say, “I need you to call this employee and give them a pep talk.” We’ve had downsides of creating that relationship but that’s the biggest learning curve I’ve had in how hard the business can be is making certain that you have someone that you trust in the company that you can go behind closed doors. You can work out hard problems. We bring in coaches all the time. If he and I aren’t communicating well, almost a married couple, where if we need somebody to step in and help us, we do it for the business. If we need someone in the middle, someone’s coming in, and we’re going to figure it out together.
We have had a very high-powered marriage counselor to a lot of the Wall Street power executives. She’s come and spoken to the COO Alliance twice. She’s speaking at one of our COO Alliance events again this coming May 2023. Her name is Dr. Patty Ann Tublin, but she does marriage counseling for CEOs and COOs. She helps them understand that dynamic. I’m going to drop in the chat for you, but take a look at the last third of my newest book. The Second in Command is all about the relationship between the CEO and COO and how to continue to build those strong relationships. You mentioned the visionary integrator a few times. Do you follow the Traction EOS model?
We do, a little more loosely than it’s laid out. We have an EOS coach that comes in and helps us. He’s not directly with EOS but has the same principles.
Has that been helpful for you?
It’s super helpful. It’s more helpful in the fact that it’s easy to teach to other people because we want it to be able to scale. We have the complication of a corporate team and then a franchise team. We don’t quite fit into EOS with the two different teams. We’ve had to customize it a little bit.
How about you in terms of your skills? What specifically have you had to work on over the years for you to continue to grow as president of the company?
I’m a very naturally confident person and that’s not necessarily skill, but being able to be okay being in front of people confident. I’m confident. I can do anything. You can give it to me, and I’ll knock it out. I’ll take care of it. I’ll take care of people. We have two people on the leadership team, Forrest and then a guy named Kyle. They have pushed me to figure out the skill of being confident about my confidence.
Getting on shows, talking on stage, stepping out there and talking about it and telling people versus I’ll sit in my office all day and have meetings with people and never act like I’m a leader ever. Trying to figure out that skillset to come in front of people and be proud of who I am and what we do. When you want to grow a brand, you want to help people, and it sounds like, “Poor Karen. You have to talk on stage.” I don’t want to. I like working in my business.
Probably one of the core skills that we work with our COO Alliance members on is the imposter syndrome and getting rid of it. We’re building them up so that they feel the confidence in the day-to-day confidence to lead their teams, lead themselves, lead their CEO, and lead suppliers. There’s this weird thing because every day, the company gets to be the biggest thing we’ve ever built. You have to keep working on that confidence. I get it. It makes sense.
In any early company, you’re a doer. You do the job. You work on the job. You always go through it. Even if you’re not doing all of it, and then all of a sudden, you become a leader and you almost do nothing but lead people. I don’t accomplish anything in my day. I don’t write a new system. I get home and I’m like, “I talked to twelve people.” Even that mindset shift is so different. You never achieved. You haven’t reached it. It is a funny concept to make that transition.
It’s bizarre. Our job as leaders is to grow people, not to do work, which is a very weird feeling. Talk about the people side of the business. It’s a strength and passion of yours. Give us some of your beliefs around the people side of the business and some of your focuses around people and leveraging people.
With our well-being, we want to create careers in fitness. That’s where it starts. My natural passion is, back to the doers versus leaders, I had to tell myself people are more important than tasks. When I started to realize how much more important people are than tasks and how much it changes our business to invest in people, it tremendously changed my life. It changed other people’s lives. Especially in fitness, it’s so hard to have a career in fitness. I have staff that can make six figures in a fitness business, but they’re an employee. They don’t have the responsibilities of all of that. It’s important.
I’m a big wow type of person. I’m patting myself on the back. I’m a naturally thoughtful person. I’m trying to figure out how to make certain that that’s something that people learn from as well. Constantly, I’m like, “It’s their birthday. They got their hair cut. Call ahead and pay for it.” I even put those little things on the calendar for my franchise partners to even say, “Pay attention to your staff. Could you hand write them a note? Could you do this?”
The little things that I think people think, “I’m not natural at it,” I’m not either. It’s on my calendar. Anybody could take care of their people better if they thought about it. Always say, why don’t you take time to think, to think? Most people don’t take the time to think, to think. If you sat down and said, “I’m going to think about my staff,” pull up your calendar. You look at things over the next month, you could create a crazy experience with twenty minutes of thinking to think about your people because you took the time.
Howard Behar was brilliant at that. He was one of the four CEOs ever at Starbucks. Howard would spend two hours every Friday handwriting thank-you notes to people in stores throughout the system. He never knew who to thank. His assistant would give them a list of people, but he was spending 5% of his time every single week being thoughtful and saying thank you, and showing gratitude. It’s huge. Leaders don’t do enough of that at all. Let’s go back to the 21 or 22-year-old Karen Broadwater. She needs some advice from the current Karen. What advice would you give yourself back then that you know to be true now?
Speak louder. Often, when I’m right, I will step back from it. I think a lot of people know when they’re right and they cower because the person they’re speaking to is more powerful. There’s a way to finesse that conversation and make certain that you’re heard respectfully. I would give her that advice to speak up and speak up sooner again, respectfully. Additionally, I would’ve probably told myself to care and invest in people earlier intentionally.
One piece of advice that I got a long time ago was empty all of your information on everyone that you meet. Don’t hold anything back because you can make them so much better than you are by teaching them everything. I didn’t understand what that looked like because I thought that would be overwhelming. I understand it. If anybody in my company wants to learn anything, I’ll teach them. They can have my brain and my job. I don’t care. It’s only helped the company grow so much faster by, “Anybody wants it. You can take it from me, my brain. I don’t care.” I would’ve told me to do that sooner.
I love it. Karen Broadwater, the President of Iron Tribe Fitness. Thanks very much for sharing with us on the show.
Thank you so much. I hope it helps your audience, and I enjoyed it.
Fantastic. I appreciate it.