The Studio CEO: Business Coaching For Yoga & Pilates Teachers & Studio Owners

Behind the Scenes: What I Learned From a Franchise Deal (and Why I Walked Away)

• Jackie Murphy • Episode 26

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Ever wonder what actually goes on behind closed doors in a fitness franchise deal?

In this episode, I’m sharing the real story of when I almost opened a boutique franchise—and what I learned about the systems, expectations, and financial commitments that come with it. From a $25K pre-opening marketing budget to 8% franchise fees and no territory protection, I break down what shocked me (and what didn’t), why I ultimately said no, and how that experience completely reshaped how I lead and scale my own business.

Whether you’re a yoga studio owner, Pilates teacher, or service-based entrepreneur, this episode will help you rethink how you're building your business—and why ownership, structure, and scalable strategy matter more than ever.

What You’ll Learn in This Episode:

  • The real numbers behind franchise ownership: what’s required before day one
  • How corporate models bake in mentorship, sales goals, and marketing systems
  • Why paying 8% to someone else might be the wake-up call to invest in your own brand
  • Two non-negotiables that made me walk away from the deal
  • How one decision I made in anticipation of the franchise helped me scale faster than ever
  • The difference between running a business and owning a brand

This episode is for you if…

  • You’re a wellness entrepreneur ready to lead like a true CEO
  • You’ve been operating without a solid marketing or sales strategy
  • You want to build something that’s scalable and sustainable
  • You’ve been considering franchising, or you’re curious how it works

Work with Jackie Murphy
Say Hi on Instagram @studioceoofficial
Learn about The Studio CEO Program

Speaker 1:

I almost opened multiple franchise studios and what I learned behind the scenes has completely changed how I'm going to lead and scale my coaching business. So if you've ever wondered how the big brands do it and what you can borrow without giving up ownership, then this episode is for you. This is a behind the scenes look on a project that I've been working on this year and what I've learned from looking into it. Welcome to the Studio CEO, the only podcast that empowers yoga and Pilates teachers and studio owners to step confidently into their role as CEO. If you are ready to show up with passion, take your business seriously and scale to new heights without burning out, you are in the right place. I'm your host, jackie Murphy, an award-winning certified business coach with over 12 years of experience inside the yoga industry. I have seen firsthand what it takes to build a profitable and scalable business. Join me as we dive into strategies, insights and real-world advice that will help you grow your revenue, build a thriving team and create a business that serves you as much as you serve your students. It's time to embrace your inner CEO and make more money without working more. This is just the beginning. Hello and welcome back to the Studio CEO Podcast. I am Jackie Murphy, and today I want to take you behind the scenes of something that I haven't shared publicly yet.

Speaker 1:

Earlier this year, I explored the possibility of opening multiple franchise studios in a region, and this wasn't because I was burnt out with a coaching business or confused. It's simply because I saw an opportunity and the entrepreneur in me. When I see an opportunity, I know that it is my job to follow it and see what happens. I was incredibly curious about was this opportunity going to be the right thing for the business that I want to create, the growth that I want to have, and also for my family. I also was curious about how their model worked and what they offered and what kind of structure they expected, and whether or not it would match the vision for the kind of impact and the kind of scale that I want to have within the next 10 years. Now, spoiler alert I did not go through with it, but I did walk away with a lot of clarity and a lot of lessons learnings that I want to bring to you. I want you to think about this episode as being like a peek behind the curtain, and we're not going to bash any sort of corporation. We don't do that. We also don't bash small mom and pop studios we definitely don't do that. But I think when you look at how big businesses operate, you can bring those insights into your own business, and it's the kind of stuff that most small mom and pop studio owners they don't have access to, and so I want to pass it on to you so that you can make stronger, smarter decisions.

Speaker 1:

So let's dive in first with like why was I attracted to this? As an opportunity? About a year ago, my husband and I we needed help with our personal finances, so we have started working with two women who are amazing. They are from a company called the Wealth Collaborative and they are wealth advisors for female entrepreneurs, and something that they do is really make being an entrepreneur feel safe, because they are helping you take the money that you are making in your business and figuring out okay, what do we need to do with this money in order to have retirement when we are older and how can we invest it and how can we save for what goals we have and for our kids? And so, working with them, we were talking about potential investment opportunities and I saw this opportunity to open these studios and as an investment opportunity, I knew this would be a really solid investment, more solid than like putting our money into the stock market, because I knew what could be possible five years down the road, 10 years down the road. Now, this opportunity was originally attractive to me in terms of having seven or eight studios within the region and not just one studio, so you got to keep that in mind because that was a big factor in the decision that I ended up making.

Speaker 1:

But I want to talk about first, as I was looking into this opportunity, what the franchises required and why it matters, and these are things that, as I was going through this, I was like I can't wait to tell my audience this, because I just think they need to know and have this mindset shift of if this is how big corporations are thinking about business and they're thinking at scale. Taking some of what they're doing, taking some of how they're thinking, is literally how you can also scale. So the first thing that I want to talk about is that the franchise required a $25,000 pre-opening marketing spend not optional required and honestly, I probably would have spent way more than that, because when you're spending money on marketing and it's working literally, you should keep spending money because it's going to keep working and you watch the data to see if that changes, because it can. But if you are opening a studio or any sort of business whether it's a brick and mortar place or not the demand that you build before you open is so vital to what your first couple years as a business looks like. What hit me was this how many business owners, how many studio owners, are launching without any sort of marketing budget? Maybe they spend a few hundred dollars on like flyers or business cards that they pass around, maybe they are doing organic social media posts, but then they're wondering why haven't I opened with 200 members? Why are my classes full? And this can be a huge factor in that. And again, like this isn't to we're not going to judge either side here I really want you to think about this of like, am I thinking the way that I need to be thinking in order to reach the goals that I want to have in my business? So what this teaches us is that visibility it's not a luxury, it is a line item.

Speaker 1:

If you had to spend $25,000 before lunch, before lunch, before you launch, how would you plan? How would you show up. What would you change? What type of investment would you need to get this thing off of the ground? Personally, for us, we wanted to use a small business loan to get this off of the ground. So we pursued that path and talked to a few lenders and that was the way that we were going to have the resources to pour into opening the business the right way. Without stressing my current business or my husband's current business.

Speaker 1:

It is not necessarily quote unquote better to open a business without any sort of debt. I think that is one of the mindsets that if you can shift that, running a business becomes a lot more oh gosh, what's the word A lot more manageable. Now, what I mean by that? There have been clients of mine. I've talked to many people where they've opened their studios. They've been really successful and they never borrowed any money or any capital from anybody and that's amazing, kind of like pulled it together and you bootstrapped it.

Speaker 1:

And at some point, if you have big vision and you really want to scale, if you're thinking multiple studios, if you're thinking retreat center, if you have these big plans, sometimes leveraging debt or leveraging money from other people can be the best way for you to scale without adding more stress to your current business. And it is manageable in the sense that you write that in as a line item and you plan and you expect to pay that off over a certain period of time. So part of what I want you to consider is would you be willing to get financial funding to have $25,000 to spend on your marketing? And I think just playing around with that mindset is an interesting place to tell you okay, where am I in terms of? Am I really doing what, what has to be done? Am I really willing to do what has to be done in order to get it to where I want to go? Or do I have these big dreams of where I want it to go?

Speaker 1:

But when it comes down to it, I don't feel quite willing to spend $25,000 on ads. Yet. And listen to me, listen very carefully. If you are brand brand new, if you do not know how ads work, if you have not had any experience with this, please do not go. Dump $25,000 into ads Like this $25,000 marketing spend I was thrilled about because I know exactly what to put out and I know it will work. And that's only from experience and trial and error and doing it the wrong way. But the last thing I want you to think is like, oh my gosh, jackie's telling me to go put $25,000 into meta and I don't know how to do Meta Like work with not just an ads agency, but work with somebody who knows how to run ads for this industry, because it is different. Okay, cool, that's not, it's a side tangent. We're not going to go there.

Speaker 1:

The next thing that I wanted to bring to you guys is that they, in the agreement of you, can have this franchise location. One of the things that they were going to track is how is the business doing? And if the business isn't doing well, we reserve the right to pull it back at any time. And part of their minimum requirements for the business doing well was that you were required to sell five memberships per week on average. So I thought this was a really interesting way to think about it. This, again, was not a goal, it was a standard, it was expected. If you wanted to keep the franchise location, if you wanted a profitable business, consistent sales have to be a non-negotiable.

Speaker 1:

The thing that I thought was interesting about this is the weekly perspective. It was five membership sales per week on average over a quarter over six months. So it really would look at like monthly sales, which is typically how I think of it, like monthly membership sales, because you know, we might have some weeks where everyone's on spring break and things are super slow and five memberships didn't sell that week, but the next week everyone comes back and is ready to get back into their routine, and so I just think it's a really interesting metric to think about for yourself of if my goal every single week was to sell five memberships, what would I need to change in how I'm operating or how my teachers are operating or what we talk about in our content or our newsletters, if that was the requirement of what had to happen? The final kind of like nugget that I want to bring to you is that this was so interesting. So this was the initial application, and one of the questions that you had to answer was who is your business advisor? Non-negotiable, and I think this just was such an aha for me and as a business coach, I'm like, yes, thank you. I'm so glad that not only was it normalized, it was like you better have somebody advising you, helping you with this business, and that told me everything that I needed to know that.

Speaker 1:

They understood that businesses build in mentorship. They know that you can't grow alone. This is something that I deeply believe and I model in my own programs. Obviously, but you deserve to have strategic eyes, objective, strategic eyes on your business so that you're not figuring it out in isolation. But so many studio owners cut that cost. They cut the marketing costs. They say I don't want to focus on sales every single week. They cut the marketing costs. They say I don't want to focus on sales every single week. They cut these vital, key things that are so important to your overall business being profitable. And then they wonder like, where are my students?

Speaker 1:

And it is sometimes a big shift that has to happen, where you have to understand that to have the students, to have the impact, to build the community that you want to build, these are the things that you have to prioritize, even if they're not the things that you absolutely love doing, they are the things that your business loves. And then your business creates the impact that you want to have. Think of it as like a plant needs water and sunlight to grow, and you really love plants and you want to have. Think of it as like, a plant needs water and sunlight to grow and you really love plants and you want to have a ton of plants around, but you say I'm not doing sunlight and I'm not doing water, but I really want my plant to grow. It's not going to work right. Your plant is going to die. It's not going to have what it needs to grow. It's the same thing with your business. Are you prioritizing visibility? Are you prioritizing sales? Are you prioritizing strategic mentorship for your business? Because that can be the determining factor of whether or not you open with a really solid membership or you're able to create a really solid membership.

Speaker 1:

Now, this was an interesting thing that kind of made me think twice about the investment Every single month moving forward. You had to agree to spend 2% of your revenue on marketing monthly. I actually think that number is really really low if you want to have consistent growth, specifically in a membership business, because you are going to have churn, you're going to have people leaving, and so I thought that 2% was really kind of shocking. However, it makes sense because right underneath that, you have to make sure that 8% of your revenue you pay to the franchise, you pay in franchise fees, and it's not like. 8% is outrageous, but it was just revealing. You're going to pay four times more just to have access to the brand name than you're investing in your own growth in terms of marketing. So you have to think about if I'm willing to spend 8% on someone else's model. Would I be willing to take that 8%, take the 2% of revenue on marketing required and essentially spend 10% of my revenue every single month on visibility, on growth? And I think that is a really solid metric to kind of go after. And it's not that every single month you have to spend 10% of your revenue on marketing, but between 5% and 10% being in your budget every single month for marketing, for meta ads, for Google ads, for PR. If you want to do that, like whatever type of marketing, you're really seeing work for your people having that budgeted every single month. So you aren't ever in a position where you're like why don't we have enough new students? Why aren't more people walking in? This is the kind of stuff that I wish more small studio owners were taught. They had the knowledge from day one.

Speaker 1:

Ultimately, I decided not to go forward and I was kind of bummed. You guys, I had a location, I had multiple locations picked out. I was with a real estate agent. I was like ready to go, but it became really really clear that the growth that I wanted to have regionally wasn't going to be protected, meaning that when you're opening a franchise business, something you have to think about is, like I wanted the region because I wanted to know that, like, okay, all of the studios within this radius are going to be high quality, similar experience, good vibe, and essentially, over the course of our conversations, I realized that was not going to be the case and that's not a bad thing necessarily. It just didn't match the goal that I had.

Speaker 1:

The other thing that really gave me pause was the buyback clause or the callback clause, and this is something that I had experience with within the yoga studio that I opened down here in Charleston, and it can be really devastating. And it can be really devastating. Essentially, what it says is they've reserved the right to buy the business back at any time for lower than what it would sell for publicly. So, essentially, you can spend your time, money, energy, building it, growing it, take the risk and they can swoop in and buy it back on their terms and hopefully you love the people that you are working with and you feel like that would not be the case. However, sometimes it can be that the private equity company changes and they change their structure and you just kind of never know what would happen. And so I again was visiting this opportunity as an investment for our future family's wealth, and I couldn't risk that investment not returning what it could return. So essentially, the way that my lawyer said it, he was like you would be more of a glorified manager. That's not ownership, it's really just kind of a lease at that point, and it's a lot of time, energy, effort to get the studios open. If you've ever opened a studio, you know. And so I didn't feel good with that. That was like my walkaway moment. I didn't. I don't want to build something that I don't fully own at this point, but I want to build something that reflects my values, my visions and the people I care about serving. But here's what I really gained that you can think about as well.

Speaker 1:

Part of exploring this opportunity was realizing that I was considering not just opening like one other business, but multiple other businesses. I have two kids four and two and I have a really successful coaching business that I realized that I was going to need more support inside of this coaching business to free up my time to go pursue this other opportunity. So, like in anticipation of who I would need to hire, I went through with hiring for the coaching business, and the very decision to hire based on where I want to grow is going to allow me to scale this business this year faster than what I would have done if I hadn't pursued this opportunity. So I hope that makes sense. Essentially, if this hadn't landed on my plate, if I hadn't pursued this franchise opportunity, I probably wouldn't have been thinking like, okay, who do I need to hire in order to scale? But because I was looking at this and I was like, oh shoot, I'm going to need some time and energy back to do this other thing. Who do I need to hire to keep the coaching business thriving and build up this other business? And I made a really, really good hire. I'm so excited about growing my team and I'm so excited that I didn't wait until I was overwhelmed.

Speaker 1:

But we made the decision in advance. I created capacity in order to grow. I invested in structure before we get to the next level. I led myself like someone who knew where I was going and you can too. Now I'm not saying that you should hire before your business can support it right.

Speaker 1:

My coaching business was in a place where hiring is a very solid investment. It doesn't put the business at risk at all and it's necessary for me to go to the next level to have a bigger team in place. What can happen for studios and the reason that I say this caveat is that you can very easily overhire, overpay, not have the profitability that you need in your business, and that makes it even harder to scale and grow. So there's nuance and there's caveats to all of this. Obviously, I feel like I'm just I'm saying some high level things today and I don't want you to take it the wrong way and hurt your business, but I do want you to think about like am I treating my business like the business it to think about like am I treating my business like the business it is right now, or am I treating my business like the business that will be December 31st of 2025? And for me, I was treating my business like it is the business now, versus where I wanted to be at the end of this year, and it was very clear that when I started to realize what type of business and where I wanted the business to be at the end of the year, who I needed to hire now. So through all of this, it was like a few months and it was exciting and it was so fun and I met some really cool people. But through all of this kind of exploring this other opportunity, that's the main thing that I walked away with. That I'm still going to take with me now. With that I'm still going to take with me now.

Speaker 1:

So, final thoughts you don't need to go the franchise route in order to succeed Now if you want to. Obviously I thought it was a good opportunity. If you want to, that's amazing. Just make sure you get a lawyer and you read through that agreement really, really carefully. You don't have to follow someone else's amazing. Just make sure you get a lawyer and you read through that agreement really, really carefully. You don't have to follow someone else's blueprint. You can build your own model and learn from the franchise model what type of structure to put in, what type of support to have, what type of strategy that you can borrow from them. But the big shift happens when you stop waiting until you feel ready and start planning, like the CEO, that you already are planning for the business growth that you want to have.

Speaker 1:

If this episode resonated and you're in a season where growth feels close and you want strategy support and you want to scale sustainably, this is exactly what we do inside of the Studio CEO program. You are going to learn how to have structured sales calls so you convert more people. You're going to learn how to become a really true leader and create momentum in your marketing without burning out, so that you can have the income and the impact that you were made for. So we'll put the link in the show notes for the Studio CEO program. I would absolutely love to have you in there. I hope this episode was helpful. If you have any other questions that you want to know, send me a message on Instagram. The handle is studio CEO official and you can send me a message there and I will answer you back. Talk to you guys in the next episode.