What does it take to build a global franchise business in the wellness industry?

Jim James: 0:23

Hello, welcome to this episode of the Unnoticed Entrepreneur. And today we are going to talk feet, and I got to say I'm really excited about today's guest because I've had plantar fasciitis now for three and a half years and I think today's guest has got a solution. So if anyone out there has got issues with their feet, you're going to love today's episode. We're going to talk to John Prothro, who is the president and CEO of a company called Foot Solutions. And John, welcome to the show.

John Prothro: 0:51

I know we're going to talk about feet, but I'll do my best.

Jim James: 0:55

Well, it all comes down to what we can walk on in the end, I guess. But, john, we're going to talk about feet, but obviously that's not the most exciting. We're going to talk about how you're building a global franchise, but how you actually bought into Foot Solutions because you believed in it so much, and how you've been building this, and how you're helping to understand how to create value and how to use technology to build greater value and a whole, much, much more. Decide, john. So tell us about Foot Solutions first and what kind of product you're offering to those people in the world that have got issues with their feet to start with.

John Prothro: 1:34

Yeah, so we're a foot wellness retailer. We have about 80 locations globally. It's a caring, expert service business. It's not a product business. We sell truly custom orthotics and healthy footwear. But the reason you go to a Foot Solutions is because you have a problem like plantifaciatis or whatever it is, and our people are very highly trained. A lot of them are what are called pedorthist, which are people who are certified to design custom orthotics as well as select footwear, and so folks come into a Foot Solutions looking for healthy footwear, or they come in and say, look, I've got this issue. My knee is hurting, my back is hurting, my feet are hurting, and we'll find a way to alleviate that pain and get you sort of aligned properly. We're really trained very highly in foot biomechanics and so a lot of doctors trust us. We get a lot of referrals from pediatrists, physical therapists, chiropractors, you name it, and we do a lot of work in the US with Medicare as well, with folks who are diabetic and have foot issues related to diabetes.

Jim James: 2:49

And it says here on your website, john, that there are over 100 tendons, muscles and ligaments between 26 bones, 33 joints, 7,000 nerve endings and 250,000 sweat glands. So that's a pretty complicated market that you have chosen to work in. Tell us, as an entrepreneur you have been involved in M&A beforehand, and you and I were actually both in Beijing at the same time. We realized as well. Tell us a little bit about the journey, of how you got to buying foot solutions, and then we'll talk about how you're building that as a global franchise.

John Prothro: 3:30

Well, I really worked as an intermediary for about a dozen years, so working on the buy and sell side as a consultant and I mentioned to you earlier I kind of did some co-investing on some of the buy side deals, which was a good experience, but also got a little bit tired of being the guy telling people what they should do rather than being the one actually pulling the leavers. And so I left that industry and started working for a company that was an industrial distribution business for a while and ran that business for a while and then started raising money. It felt like I was real dangerous because I had the operations experience and the buy and sell side experience, started raising money to buy a portfolio of companies really lower middle market kind of things where you could add some value real quick, buying in at sort of a million dollars and a million to two in earnings and turning it into something that was really special and very valuable. But during that process a friend of mine called and said there's this company called Foot Solutions. The owner is interested in selling and would you take a look at it? I'd never heard of it but did a little bit of diligence on it and thought, boy, this is actually quite a niche. It's been around for 20 years and it's kind of the best kept secret in the market because they're really solving a lot of foot problems for people, as well as being a go to place when people just want to take care of their bodies because of the foundational health aspect. And I love that it was a service business. It wasn't a product business, it was a caring, expert service. So asked to meet the owner. The owner agreed to sell to us. I called my investors and said I want to run this one. This one's got some real legs, and so we bought it. And then we bought up some franchise locations from owners that were retiring. We bought a couple of technology elements and then we bought another company called Happy Feet Plus down in Florida and built it up to a scale where we could have a nice corporate team and executive team that could support selling franchises again. So that's what we're doing. The process we're in now is we're building out new franchises and selling franchises.

Jim James: 5:53

At this point, and just to be clear though, john, you say it's a caring experts business, but you're also, if I get it, if I understand it rightly, you're you're helping to scan or you're scanning people's feet and then you're also doing 3D printing of the insoles or the inserts that people need you know people like me to help them to recover. Is that right? So there is a an element where it's not just treatment, it's actually something tangible people can use yeah, and you froze there just for a moment.

John Prothro: 6:27

I don't know if you want to re-ask that question. I got the half, the last half of it, okay.

Jim James: 6:34

Mine on my side. I will still have that because it will record locally both sides. But you're coming in, but yeah, you're. You're really blurry, so I'm not sure what's going on there, but I'll ask you the question again. So, john, you talk about the business being a caring experts company, but you're also involved in 3D printing, I believe, of some of the elements that people like me would need in their shoes. Can you just tell us a little bit about the technology that you've got in Foot Solutions and what role that plays in making the business so attractive that you wanted to run it as opposed to just invest in it?

John Prothro: 7:15

Yeah. So one of the reasons it was attractive is because it's a very antiquated market. The way that most companies are building customer orthotics is the same way that they were building customer orthotics 50 years ago and there's nothing wrong with 50 years ago and, as a matter of fact, a lot of those orthotics are very good. But we figured there was a better way to do it and so we did a search globally to see what people were doing. We found a company over in Europe that didn't have much of a presence here in the States and licensed their technology here in the States. It's a very smart CAD-CAM software. So the customer comes in and there's a digital 3D laser scan of their feet. That's top-notch. There's other laser scans out there. We think this is the best, if not one of the best, but that scan along with an intake form filled out by the expert. So the expert does an analysis of the gate and the feet and posture and lifestyle and the whole bit, and fills out an intake form for the customer and so the scan the 3D scan goes to a design team along with an intake form which contains recommendations from the expert and that allows us to design within a CAD-CAM software that was built specifically for custom foot orthotics, which is unique. Most CAD-CAM softwares for this industry are just repurposed and then that feeds into a 3D printer and we do some milling, because some doctors will prescribe milling still, but we're moving mostly to 3D printed.

Jim James: 9:02

And John, it sounds as though it's a little bit like opticians that will obviously make a lens custom for your eyes. Would that be a fair parallel?

John Prothro: 9:15

Yeah, that's right, and we always compare it to if you go to one of the department stores and buy a suit off the rack, you get an over-the-counter insult would be the example. It might fit fine, then you might look good and it's better than nothing. But if you want the optimal health for your feet, you'll go and get something designed specifically for your feet, and we might spend $300 on a pair of jeans that don't do anything for your health. You might want to think about what you're wearing in terms of foundational wellness.

Jim James: 9:52

Yeah, I absolutely agree. Are you able to say what sort of costs do inserts have? Is that possible?

John Prothro: 10:01

Yeah, Our over-the-counter insults are more medical grade, the ones that we just buy off the shelf that we can recommend to you, and that's fine and it's better than the alternative. Those are about $120 a piece. Our customer orthotics there's a range but they're generally around $400 a piece.

Jim James: 10:20

Right, okay, so a bit like a well-made pair of glasses as well in terms of taking care of yourself and is a foundational health. Let's move on to the business side, john, if we can, as the president and CEO of Foot Solutions, which is footsolutionscom. What makes a great franchise? If someone listening to this goes, oh, I've got a business that's a little bit unique, I do something in an interesting niche. What do you think makes a great franchise? For them to think, oh, that's an opportunity for expansion is through franchise rather than investing their own money to expand.

John Prothro: 11:05

So you're talking about an entrepreneur who has an idea or a business that he or she thinks could be franchised.

Jim James: 11:13

Yeah, that's right. What would be the hallmarks?

John Prothro: 11:15

Yeah, yeah. There's a few things. One, I would say the system needs to be clean and airtight, so you've got to have a playbook, so to speak, for what you do, and it needs to be something that you could hand to someone else, a reasonably competent person that you could train, that then they could go and do what you do, because the system is written and clear and specific. The second thing I would say is you want to make sure you're differentiated, and that ties into barriers to entry. You need to have something that's special about what you're doing, because, I mean, there are a lot of franchises who sell hamburgers. I'm not saying you can't franchise something that a lot of other people are doing, but, in terms of looking at value as a potential, if I was a potential franchisee and being invited to join your franchise, the first question I would ask is can someone do this very similar right down the street from me with just another brand? And if the answer to that is yes, well then there's obviously a greater risk profile, or a higher risk profile than otherwise would be. On top of that, though, you might have a really nice brand and a really nice marketing strategy, and so you may be selling burgers, but you might have found a way to pitch your burgers as something very different. So I'm not saying you can't be a franchise if you're not different, but you've got to find some way to differentiate yourself and how it's branded, or the product, or the technology.

Jim James: 12:53

Right, and presumably that's where your CAD software gives the differentiation for your franchise holders to just a generic company that's doing orthotics.

John Prothro: 13:07

Yeah, it's partly that, but the barrier to entry in our business is really the training, the expertise. We have about 70 hours of online training plus quizzes and tests that people take before they can be talking to customers. We have a enormous amount of highly trained people in the business who act as mentors for new associates. If you walk into a food solutions, you're talking to someone who knows what they're talking about, and that's really the differentiator and you can't just recreate that out of thin air.

Jim James: 13:46

Right, right, and I think that you said on your website about you own this space is very confident language as well In terms of the marketing. I've got gone. What are you going to say, john?

John Prothro: 14:01

No, no, I do think we, from a retail perspective, we are the foot wellness experts. I mean, you can go to the doctor and get someone who knows more about feet, for sure doctors do. But doctors refer people to us to do what we do for them because doctors aren't, you know, selecting footwear typically or and a lot of times they're not making customer orthotics.

Jim James: 14:23

Right, Well, and I can see it's a really very specialist part of the body. Right, it was one of the most complex parts of the body, so it really needs that specialist support. On the website I can't see, for example, a press center. John, you know I like to have a look and see what people are doing for marketing. Can you just tell us how are you building the brand awareness for foot solutions? We've delved into what the product is and what makes a franchise special, which is great. But what about getting franchisees to be interested, to know about you and for them to get customers to come to their franchise? Because a big part of the proposition of a franchise is that the overall brand will draw clients in. So can you just tell us how you're doing that?

John Prothro: 15:13

Well, the brand has been around over 23 years, so there's quite a bit of organic customer. There's an organic traffic to the website. There's a large customer base that already knows who we are. On top of that, we have our own internal marketing agency. So we tried agencies for a while. Didn't really like the results or the way it was done. I can say that I can go more into that if you want me to. We have our own internal agency that's doing all the traditional Google ad words and digital ad buys and traditional where appropriate. I would say we're also going more in terms of a hub and spoke model. The business can have a halo effect. If you're 20 minutes down from another location, you can have a halo effect on each other, and so building the brand out regionally has been a very important focus of ours. We also do sponsorships. So we sponsored the pro pickleball association, which is a. I don't know if you play pickleball, but it's the fastest growing sport in the world. It's amazing, amazing sport. We all compete in it. We wear our foot solution shirts. You know, at the front it says feed her. On the back it says mind on foot solutions. We have a. We have a staff member who's a senior VP Whose main role really is brand building and impact sales. So we're partnering with organizations breast cancer organizations for sponsoring walks. We do a lot of the sort of local gorilla marketing thing. In fact, our latest hire was a local marketing specialist to we think it's going to have an even bigger impact on that. So it's really all of the above approach, but it seems to be working and we do generate quite a bit of traffic to our to our website and into our stores. Ok, John.

Jim James: 17:10

So you know, I like to ask people if there's a mistake that they've made or not in a critical way, but a lesson that you've learned. You touched on the on the agency side. Is that something that you feel hasn't gone quite as well as as planned?

John Prothro: 17:31

Yes, yeah, I think agencies, albeit some, are well intentioned. I just don't think the model works works that well, because you can oftentimes get pitched the sort of the investment banking model where the managing partner pitches you and then the, the intern, does the deal. It hasn't been. That wasn't that dramatic with us when we used agencies but and a lot of them did did decent work. But the fact is, if you use an agency, you're paying fees that you could use towards staff and you've got someone whose part time job is to deal with your company. And so you know we we decided why don't we have some people focused full time on our company and use the you know the cash that we're paying agencies to build our own internal team?

Jim James: 18:24

Yeah, and I think that that's a very fair criticism often for the agency. There they're pitching and they bring in the senior person because that's who the client expect to see, but the budget doesn't match the senior person being involved day to day. That's one of the structural challenges, having been on the agency side, that the client's budget doesn't match the expectation, and so you're absolutely there's this structural problem where to get the business.

John Prothro: 18:49

That person turns up that model, the answer is always spend more. You know it's not working. Spend more. Well, hold on, it's not working. Why would we spend more on something that's not working right?

Jim James: 19:00

Yeah, no, exactly. So structurally, agencies can bring more people to to a problem, but if it becomes sort of a lower person who's basically just an outsource hire, if you're a big enough company, as you are with foot solutions, then having an in-house can really make a lot of sense, especially as then they have product knowledge, market knowledge as well, which often agencies, you know, really can't do. In the same, way.

John Prothro: 19:25

You have to have the scale. If you're starting small, you're going to have to go with agent. You have to go with an agent agency. But if you get enough scale, you can bring your own team in, and that's. That's always with that goal.

Jim James: 19:37

Yeah, I think that's absolutely right. So there does come a time when an agency has value and also when we've had clients that are doing multi-regional work, for example, in the different languages, for example, and couldn't possibly hire someone in each market. John Prosperos, as CEO and president of Foot Solutions, if there's one piece of advice that you'd give to my fellow unnoticed entrepreneurs you know, on business and getting noticed, and you've run many businesses and many roles and been in many countries too what would be your guidance to us about what really moves the needle and what really to consider?

John Prothro: 20:20

So the a lot of branding is focused on defining yourself, you know, and defining yourself for the customer. And so you'll see, let's talk about who we are right, and that's a very important slide In every slide deck. The first thing is who we are right. But that's important, but you have to make the transition, the important transition into why should the customer care. And so if you think about, if you think about, you know we're a foot wellness retailer and I tell the customer we're a foot wellness retailer, then in the back of their mind, if they're not saying it out loud, they're thinking what do I care? And so the next part of your branding exercise needs to be what am I? What problem am I solving for the customer? Why should the customer want to come see me? Why does the customer care that I'm a foot wellness retailer? Well, we, you know, when we were doing our pre-call, you talked about your plantar fasciitis, right? If I say you know we, our brand is we solve problems for people who have foot pain, okay, well, now, now we're talking, right, because Jim's been dealing with plantar fasciitis this whole time, for three years, right? And so you're going to, you're going to be motivated to come and see us. So I know you talk a lot about that chasm and crossing the chasm between the, you know, the early adopters and the folks who who make the more practical choice to to come and visit you on a regular basis or use your service or product on a regular basis, and I think that's that's the key. The key is, how you know, foot wellness retailers are all well and good, but if it can't help me, I'm not interested, and so the value proposition has to be brought in very early. What are? What are we doing? So our value proposition is your feet are the foundation of your health. Let us take care of them for you. And so we're bringing in the health and wellness industry and we're letting you know that we're a service that can take care of you.

Jim James: 22:21

John, I feel reassured and also very happy. I think you've got two franchises in the UK, so I'm going to be looking for those. Yeah, Tell them. I said hey.

John Prothro: 22:29

I'm going to say hey.

Jim James: 22:31

I will do. I'll tell them. You said you're going to give me a discount as well.

John Prothro: 22:35

Probably, friends and family Got to go to a corporate store for that.

Jim James: 22:38

Got to go to a corporate store for that I got to come away to Alfred Retta, Georgia for that and any other sort of parting wisdom as an entrepreneur that you wanted to share for those people running businesses and aspiring to greatness and to success.

John Prothro: 22:59

Sure. So I've been on a few podcasts of people and a lot of it's related to people who are really driven and ambitious, and there's nothing wrong with being driven and ambitious. I count myself among that population and I remember early on in my career really getting out of college and thinking, boy, I don't know anything, I'm lost. I need to read and consume as much as I can, so I read. I even went so far as to read economics textbooks and I went and read the Austrian Economist and I went and read, found a list of books top 100 nonfiction books of the 20th century and read through those books and thought, ok, well, now I have a bunch of book knowledge and now let me go read management textbooks on how to manage things. I was entirely focused really on success, as I had to find it at the moment, and I would say the luckily that this transition happened. You know prior to me, you know not that I'm crushing it right now, but if your goal is to make a bunch of money and be successful, that's a perfectly fine, fine goal. But if that's your goal and that's the end, end, all be all for you, you're liable to find yourself waking up having accomplished your goal but being entirely unsuccessful with the rest of your life and in fact, you can wreck your life going after what you're going after. So, rather than focusing entirely on how do I make money and how do I make money faster, you got to find a way to to feed your soul. You've got to find a way to find who you are and what really matters to you and to the people around you. You got to find a way to love your neighbor while you're doing that. And so if you do hit, if you do cross that chasm and you get to a point where your business is really crushing it, you haven't lost yourself, because if you don't solve that problem, if you don't establish and ground yourself spiritually, I would say, prior to making that money and prior to getting to where you want to go, you're going to wreck your whole life. So it's just a. Unfortunately I didn't wreck my whole life. Thank God I still have a loving family and loving wife and good friends. But I've seen it enough. I've seen it enough to know that there's another way that can go and you can find yourself being a billionaire who's completely unhappy and unfulfilled. So that's all I would say.

Jim James: 25:45

John, very wise words and thank you for sharing that very honestly and transparently, and I think also it's very good reminder that it really isn't worth owning the world and losing your soul, that we're on as entrepreneurs. We're doing this for many, many reasons, and if it's only for the money, then it's not going to be rewarding for you. John, if you want to find out more about you, how can they connect with you?

John Prothro: 26:18

Best thing to do is go to footsolutionscom. That'll tell you all you need to know about us. If you want to connect with me on LinkedIn, I'm always happy to connect with folks, as long as you're not an IT salesperson.

Jim James: 26:33

Or a podcast promoter, in my case John Prothro. Presidencyoffootsolutionscom. Thank you for agreeing to come on this show and possibly give me a solution to my plantar fasciitis. So thank you so much.

John Prothro: 26:45

Yes, sir, let me know how it goes, jim, thank you.

Jim James: 26:48

I will do. Thank you so much for listening and thanks to John for sharing. He's joining us from Alpharetta in Georgia and I'm sure that you've got some great takeaways from here. We talked about franchising and what a business opportunity it is, but also what you need in order to make it a successful one, and also talking about in a more sober way what we also have to focus on in terms of wellness as entrepreneurs and making it part of our calling to be happy inside ourselves and not reliant on the wealth to give us the happiness and the satisfaction. So I know, as an entrepreneur, it's not always easy, and every day we have to keep going out and pushing ourselves, ambitious or not. We've got people that rely on us. We have to rely on ourselves to keep going. Hopefully you found this episode of the Unusual Entrepreneur helpful for you to keep going. If you have, please do review it and follow the show so you don't miss another guest. I have these amazing guests like John on the show and they're here for you and me to learn from. So, until we meet again, I just do encourage you to take care of yourself and to keep on communicating. Katie, thanks for listening.

John Prothro: 28:06

That was our first take. Right, we have to do another one. Yeah, you didn't know that.