Orangetheory Fitness’ international chief shares global insights
Carlos Vidal has an impressive franchise resume so is well placed to share some global insights into franchising. Now the president of international development at US based niche gym chain Orangetheory Fitness, Vidal started out in Europe in fast food, as managing director of YUM Restaurants International Iberia.
He took on the CEO role of a Spanish multi-national cleaning and laundry franchise, then spent five years with Dunkin Brands as vice president, international development for Europe, Latin America/Caribbean.
Inside Franchise Business caught up with him on a flying visit to Australia.
Vidal took responsibility at Dunkin Brands [Dunkin Donuts and BaskinRobbins] for increasing EBITDA, support functions and franchise relationships. With so many responsibilities, how did he set priorities and time manage?
“When you reach a big role in your career, it is all about building and developing teams. You cannot do the job and achieve big goals without that. The day to day is all about establishing a vision, setting strategic priorities and tactical plans, and following up obsessively.”
Team magic is the key to success, he says, and that emerges when the product of the team is higher than the sum of the individuals.
Vidal is happy to be a team player, even as a leader.
“I do not assume I have cracked the code of great leadership at all. I see myself as a work in progress.
“However, years of experience and exposure to great leadership role models have helped me develop a management style in which frequent and deep communication is the cornerstone. Leading by example and having an empowering and service-oriented style goes a long way.
“I see myself as a team person and a people developer, rather than a naturally charismatic individual.”
What is important in franchising?
Vidal is well-positioned to reflect on franchising concerns.
“Franchise issues are the same worldwide. It’s about selecting the right franchisee, setting a profile, branding and marketing, and building capabilities, and policies, maintaining a brand standard. It doesn’t vary.
“The difficulties are the same too,” he points out.
“If the franchisees are not properly trained, if they are not making a profit, if the franchisee needs P&L support, they need to optimise the marketing funds… These are very common threads.
“In recruitment, it’s important to define what is the franchisee profile, what key skill sets are required to make a unit successful. This needs to be driven and led by the franchisor.
“Marketing the business opportunity to the right kind of profile – that’s more difficult.”
Vidal is clear that the language used to recruit franchisees is important.
“I don’t like selling a franchise. That’s not the right concept. We need to market the opportunity but not sell. It’s a matchmaking process,” he says.
As the business grows, it can be a challenge for franchisors to balance the practicalities of scale with the need to remain true to their origins.
“When organisations grow it is a challenge to keep that personal touch. Most lose that personable character and dilute what made them great,” says Vidal.
“At Orangetheory, we spend great effort in keeping and nurturing a strong culture based on solid values which start by genuinely caring about franchisees and members, and putting them first.
“When each employees embraces that, scale is not a barrier for a personable touch. Our brand is based on people servicing people.”
Orangetheory Fitness global insights
Collective Wellness Group holds the master franchise for Orangetheory Fitness in Australia.
Today there are 17 studios across the country, the bulk of them situated in Sydney.
“Australia is the second largest international market for the brand, after Canada. Most countries open one to five units in three to four years,” Vidal reveals.
“My role is about taking workouts around the world. To simply go to more markets and open more studios. Europe is a big opportunity. It’s a sophisticated and mature industry and we are looking for growth in this area.”
Vidal says the brand is eyeing up growth across Latin America too, in Mexico and Brazil.
Orangetheory Fitness right now has more than 1000 units globally. But the long term goal is to open 3,0000.
“In China fitness is booming. There are so many cities with populations of more than 10 million. It’s a very unknown market. We already have sites in Shanghai and Hong Kong and are making plans for Beijing and Xi’an in central China.”
Orangetheory Fitness is granting each of these locations as a master franchise, with very limited territory to suit the country’s regional structure.
There is further complexity with the languages. While Mandarin is the official language of China there are at least eight different linguistic groups with three other major languages.
The key for Vidal’s team is to reap the benefits of a localised focus.
“We want to maximise speed and growth and local knowledge,” he says.
Think global from the start
“In the international division which I lead we have a franchise support team and a development team which is quite small. The development team is looking for new partners, and will help them strategise, design and build their businesses.”
The franchise support division incorporates franchise marketing, operations support, product support (fitness) and some finance.
“The main goal is to support our international partners and to maximise their businesses. We are building capabilities internationally. We set up training, bring specialists from the US, and conduct in-depth training on both business and fitness.”
Vidal explains that technological innovations that are crucial to the brand’s success are initially deployed in the US. These are then rolled out progressively in the various international markets.
“We spend significant time planning ahead in detail so we have all the support details of the rollout figured out.
“Then we can ensure availability of hardware, technical service, as well as the different localisations needed in each market (language, local service, etc).
“International readiness starts from the origin of each project, we have to think global from the start.”