11 Concepts We Can Learn About Turn Arounds and Growth From How2Exit's Interview W/ John Prothro

11 Concepts We Can Learn About Turn Arounds and Growth From How2Exit's Interview W/ John Prothro - Watch Here

Here is what my team and I learned from this interview: (These are notes from team members, writers, sometimes AI, and even listeners who submitted what i learned loosely edited and shared here) - If it seems a bit unrefined, you're reading our notes, so. yeah. -Ron

Concept 1: Acquiring And Growing Foot Solutions

Acquiring and growing Foot Solutions is a story of taking on a challenge and turning it into a successful business. Foot Solutions is a franchisor that had about 60 franchises in North America. The company was collecting checks as the franchisor on the royalty side, but it was a small business and a dying brand. However, John Prothrow, the CEO of Foot Solutions, saw an opportunity in the business and decided to acquire it.

John Prothrow had a background in mergers and acquisitions and had worked on the buy side of transactions. He had made some good friends and close colleagues in the field and had seen how they raised funds to buy a small portfolio of businesses. He decided to do the same and was in the process of raising the money for the project when a friend called and told him about Foot Solutions. The owner was about 80 years old and was ready to sell. John Prothrow was initially not interested because the business was too small and had too many locations. However, he decided to meet the owner and talk to him about it. He loved what the owner had to say, and he decided to buy the business.

The challenge was to turn the dying brand into a successful business. John Prothrow and his investor friends put capital, energy, and professionalism behind the business. They took the master franchise and brought some of the franchisees in-house to drive up revenue. They put money back into the overall marketing and expansion of the franchise as a whole. They also expanded the business by acquiring other franchisees who were looking to retire.

Three years later, Foot Solutions is a successful business. John Prothrow has turned the dying brand into a thriving franchise. He has expanded the business by acquiring other franchisees, and he has put money back into the overall marketing and expansion of the franchise. Foot Solutions is now a brand that people recognize and trust. The business has grown, and it continues to grow.

Acquiring and growing Foot Solutions is a story of taking on a challenge and turning it into a successful business. John Prothrow saw an opportunity in the business, and he took it. He put capital, energy, and professionalism behind the business, and he turned the dying brand into a thriving franchise. Foot Solutions is now a brand that people recognize and trust, and it continues to grow.

Concept 2: Foot Solutions: Foot Wellness Brand

Foot Solutions is a foot wellness brand that focuses on providing healthy footwear and custom orthotics to adults. The brand's value proposition is that feet are the foundation of health, and Foot Solutions takes care of them for its customers. The brand operates 20 corporate stores and has a team of 30 people on the corporate side and another 60 retail employees. The brand also receives many medical referrals from podiatrists and other foot specialists.

Foot Solutions was not always a thriving franchise. When John Prothrow acquired the brand, it was struggling to make money, and its royalties from 60 locations in North America were not enough to sustain the business. However, Prothrow saw an opportunity to turn the brand around by buying some of the franchise locations and opening corporate stores. He also acquired a competitor called Happy Feet Plus in Florida, which has been a good acquisition for the brand.

The brand's technology and service are based on caring expert service, and its custom orthotic design and footwear selection are independently certified. Foot Solutions is not a medical provider, but it receives many medical referrals from podiatrists and other foot specialists. The brand's focus is on adults, and it does not sell kids' shoes. However, it does help many children who need custom orthotics in their shoes.

Foot Solutions' niche is within the health and wellness sector, and it aims to prevent foot problems and promote foot health. Many people do not realize that foot problems can affect their biomechanics, knees, hips, and back. Foot Solutions' focus on foot wellness is unique, and it has helped the brand to grow and thrive.

The COVID-19 pandemic had a significant impact on Foot Solutions' sales, as many people were staying inside and not being active. However, the brand's focus on foot wellness and its reputation for providing expert service helped it to weather the storm. Foot Solutions continues to grow, and it recently turned on franchise sales again, as it now has enough scale to build up a support team.

In conclusion, Foot Solutions is a foot wellness brand that has grown from a struggling franchise to a thriving business under the leadership of John Prothrow. The brand's focus on foot wellness and expert service has helped it to stand out in the health and wellness sector, and it continues to grow and expand. Foot Solutions is a brand that people recognize and trust, and it is a success story of taking on a challenge and turning it into a successful business.

Concept 3: Sneaker Sales Soar During COVID

However, the COVID-19 pandemic had a major impact on the business world, and Foot Solutions was not immune to its effects. While many businesses struggled during the pandemic, the sneaker industry saw a significant increase in sales. As people spent more time at home and had more time on their hands, they began to prioritize their health and wellness. This led to an increase in physical activity, and as a result, a higher demand for comfortable and stylish sneakers.

According to John Prothrow, the CEO of Foot Solutions, major sneaker brands had amazing years since COVID. Foot Solutions, which primarily serves people over 40 and the elderly population, also saw an increase in sales as people sought out comfortable and supportive footwear. While many businesses had to shift to online sales during the pandemic, Foot Solutions remained a brick-and-mortar business, as their personalized custom service requires an expert to help customers pick out the right shoes for their needs.

Despite the challenges presented by the pandemic, Foot Solutions was able to thrive under Prothrow's leadership. The company underwent a rebranding and spent time getting to know franchisees better, building a culture of collaboration and teamwork. Additionally, some of Foot Solutions' franchises were considered essential during the pandemic, as they provided diabetic insoles and footwear to the elderly population.

In conclusion, while the COVID-19 pandemic presented challenges to businesses across industries, the sneaker industry saw a significant increase in sales as people prioritized their health and wellness. Foot Solutions, a foot wellness brand, was able to thrive during this time, thanks to its focus on personalized service and expert advice. By staying true to its values and adapting to changing circumstances, Foot Solutions was able to turn a challenging situation into a success story.

Concept 4: Know The Power Structures

The podcast delves into the importance of understanding the power dynamics within an organization. They discuss their experiences in management and highlight the need to go beyond simply looking at an org chart. They emphasize the importance of getting to know the people within the organization, their communication patterns, and their areas of influence.

The host, who was a tech manager for many years, shares his approach of tracking who went with who, meaning that he could predict which employees would leave based on their previous working relationships. He also talks about the importance of understanding the knowledge, influence, and power dynamics within a company to get things done.

John agrees with the importance of understanding power structures and shares his experience of underestimating the time it takes to get the tech stack right in a company. He highlights the challenge of getting people to adopt new systems and the importance of product-market fit.

Overall, the podcast episode emphasizes the need to go beyond surface-level understanding of an organization and to truly get to know the people and power structures within it. This understanding can help leaders make more informed decisions and navigate challenges more effectively. It also highlights the importance of adapting to changing circumstances and staying true to one's values in order to succeed in the long run.

Concept 5: Product-Market Fit Is Crucial

One key concept that is discussed in the podcast is the idea of product-market fit. The host notes that many tech startups struggle with this issue, as they often raise a lot of money and then try to see if the market wants their product. This approach can be risky, as it may result in wasted resources and a product that ultimately fails to meet customers' needs.

To avoid this problem, it is crucial for businesses to carefully consider their target market and ensure that their product or service aligns with their needs and preferences. This requires a deep understanding of the market and the people within it, as well as a willingness to adapt and make changes as needed.

The host also emphasizes the importance of having honest conversations with employees who may not be a good fit for the organization. While it can be difficult to let someone go, it is often the best decision for both the individual and the company. By identifying employees' strengths and interests, leaders can help them find a better fit elsewhere and avoid the negative consequences of keeping them in a role that is not a good match.

Ultimately, the podcast highlights the need for businesses to be flexible, adaptable, and focused on meeting the needs of their customers. By prioritizing product-market fit and making strategic decisions based on a deep understanding of the market and the people within it, businesses can increase their chances of success and thrive in an ever-changing landscape.

Concept 6: COVID Led To Gradual Adaptation

One of the most significant changes that businesses have had to adapt to in recent times is the COVID-19 pandemic. The pandemic has caused widespread disruption in the economy, forcing businesses to rethink their strategies and adapt to new realities. The podcast highlights how COVID-19 led to gradual adaptation for Foot Solutions, a company that specializes in custom orthotics and footwear.

At the onset of the pandemic, Foot Solutions, like many other businesses, was unsure of what the future held. The lockdowns and restrictions that were put in place to slow the spread of the virus had a significant impact on the company's operations. However, the gradual nature of the pandemic allowed Foot Solutions to adjust its operations and adapt to the new realities.

The company was fortunate to have high net worth individuals backing it, which meant that there was no pressure to generate cash flow immediately. This allowed Foot Solutions to focus on supporting its franchisees and helping them navigate the challenges posed by the pandemic. The company worked with its franchisees to apply for PPP loans and advised them on the best course of action during the pandemic.

Foot Solutions also took advantage of the pandemic to open a new store. The company recognized the need to have a local presence, and it got a good deal on a store that no one else wanted to open. The company's small team worked from the back of the store, using laptops and milling blocks to continue their work. This experience taught them to appreciate what they had and to be grateful for the progress they had made.

The podcast highlights how COVID-19 led to gradual adaptation for Foot Solutions. The pandemic forced the company to rethink its strategy and make changes to its operations. However, the gradual nature of the pandemic allowed Foot Solutions to adjust its operations and adapt to the new realities. By focusing on its customers and supporting its franchisees, the company was able to weather the storm and emerge stronger on the other side. The pandemic has shown that businesses need to be flexible, adaptable, and focused on meeting the needs of their customers to succeed in an ever-changing landscape.

Concept 7: Grow Strategically, Maintain Quality

One of the key takeaways from the podcast is the importance of growing strategically while maintaining quality. John emphasized that while there is room for growth in the U.S. market, Foot Solutions is focused on building regional hubs and maintaining quality in its operations. Margiano believes that the company made a mistake early on by spreading itself too thin and trying to have one store in each location. This approach did not allow for buying power, sharing of inventory, or the ability to buy TV ads, which did not make sense for a small store. By focusing on regional hubs, Foot Solutions can build its brand and support its franchises more effectively.

The company's growth strategy is focused on bringing in more franchises while being acquisitive and looking for other acquisitions. Foot Solutions has partnered with a company in Canada to grow the Canadian market and is always looking for new opportunities. However, the company is also cautious about growing too fast and not being able to maintain quality. John emphasized that Foot Solutions will not grow faster than it can hire superstars, and it will not put someone in a seat just to fill the position. This approach ensures that the company maintains its quality and reputation while growing at a steady pace.

Another important aspect of growing strategically while maintaining quality is having the infrastructure in place for the business to operate without the owner. John stressed that this is crucial for anyone wanting to sell their business. Buyers will be skeptical about handing over a large check if the business relies too heavily on the owner. Therefore, it is essential to have the necessary infrastructure in place for the business to run smoothly without the owner's involvement.

In conclusion, the podcast highlights the importance of growing strategically while maintaining quality. Foot Solutions' approach of focusing on regional hubs and maintaining quality in its operations ensures that the company can grow steadily while building its brand and supporting its franchises effectively. By being cautious about growing too fast and having the necessary infrastructure in place, the company can weather any storms and emerge stronger on the other side. This approach is essential for any business looking to succeed in an ever-changing landscape.

Concept 8: Franchisees Need Cash And Expertise

One of the key takeaways from the podcast is that franchisees need cash and expertise to be successful. John emphasizes that buying into a franchise model is not always the best option, and that it depends on whether the franchise can provide enough value to justify paying the royalty fees. In the case of Foot Solutions, the company offers a high bar to entry, requiring expertise in custom orthotics and a strong financial foundation.

John notes that small business owners looking to sell for the highest value need to put somebody in place who can run the business after they are gone. This highlights the importance of having a strong infrastructure in place and not being the main point of contact or center of gravity for the business. This is especially important for small chains of retail foot care stores, where the owner cannot be the sole operator of the business.

The podcast also touches on the importance of having the necessary expertise to operate a franchise. Foot Solutions works with podiatrists, chiropractors, and physical therapists, and John notes that the company is better at doing customs than a chiropractor would be in general. This highlights the importance of having specialized knowledge and expertise in the industry, which can be a key factor in the success of a franchise.

In terms of what Foot Solutions looks for in a franchisee, John says that they need somebody who is "cashed up," or financially stable enough to invest in the franchise. This highlights the importance of having a strong financial foundation, which is essential for any business looking to succeed in a competitive market.

In conclusion, the podcast emphasizes the importance of having both cash and expertise when operating a franchise. Franchisees need to have a strong financial foundation and specialized knowledge in the industry to be successful. By focusing on these key factors, businesses can build a strong infrastructure and grow strategically while maintaining quality, which is essential for long-term success.

Concept 9: Patience And Cash Required

The podcast highlights the need for patience and cash in operating a franchise successfully. John emphasizes that retail businesses go up and down, and the economy fluctuates, so it is crucial to have cash reserves to weather any financial storms. Additionally, franchisees need to have the patience to build a customer base for the first few years of owning the franchise.

John Prothro stated that owning a Foot Solutions franchise is an annuity investment rather than a replacement for income. It takes time and money to build a customer base, and franchisees need to be willing to invest in the business for the long term. The first few years are critical, and it takes time to build a loyal customer base. However, once the business reaches the three or four-year mark, it starts to ramp up, and the repeat customer numbers become significant.

Moreover, John emphasizes the importance of having the right attitude and mindset. Franchisees need to be genuine, trustworthy, and competent, and the kind of people who are pleasant to be around. They should have a good service mindset and be able to deal with difficult people, as many customers come to Foot Solutions with foot pain and are not in a great mood.

The podcast also touches on the importance of advertising in places where foot pain is prevalent. For example, They talked about advertising near places where people stand for long periods, such as casinos or factories. This strategy can help attract customers who are more likely to need orthopedic shoes or custom orthotics.

In conclusion, the podcast emphasizes that owning a franchise requires patience and cash. Franchisees need to have a strong financial foundation and specialized knowledge in the industry to be successful. By focusing on these key factors, businesses can build a strong infrastructure and grow strategically while maintaining quality, which is essential for long-term success.

Concept 10: Acquisitions Take Nerve And Competency

However, the podcast also highlights that acquisitions take nerve and competency. It is not rocket science, but it does require a lot of extra work and the right people in place. John encourages business owners to approach acquisitions with humility and to spend time learning from those who have been doing it for several years before making assumptions about what can be done better.

John also emphasizes that acquiring companies and building them up can be done as long as the business owner has the right capital and competency in the industry or a good grasp of the basics of business. John encourages everyone who wants to be an entrepreneur to go out and do it, whether by buying a franchise or an existing business. 

Moreover, John notes that structuring a deal is not that hard and that banks can provide loans to help with the acquisition. John encourages business owners to approach acquisitions with a basic blocking and tackling mindset, emphasizing that most of what they will do will be straightforward. 

Finally, John suggests that a private equity recap is the most likely scenario for selling the company, but this is not set in stone. The podcast emphasizes that acquisitions take nerve and competency, but with the right mindset and approach, they can be successful.

Concept 11: Foot Solutions - Franchise Opportunity

The podcast features an interview with a representative from Foot Solutions, a franchise opportunity in the foot care industry. The representative discusses the company's mission to provide customized solutions for foot pain and discomfort, and how their franchise model allows for individual entrepreneurs to own and operate their own Foot Solutions location.

The representative emphasizes the importance of proper foot care and the potential for growth in the industry. Foot Solutions offers a range of products and services, including custom orthotics, footwear, and foot assessments. The franchise model allows for entrepreneurs to receive training and support from the company, as well as access to a network of franchisees.

The podcast also touches on the potential for the company to be sold in the future, with the representative suggesting that a private equity recap may be the most likely scenario. However, the representative also emphasizes that the company's focus is on growth and providing quality foot care solutions to customers.

Overall, the podcast provides valuable insight into the Foot Solutions franchise opportunity and the potential for growth in the foot care industry. The company's focus on individualized solutions and support for franchisees makes it an attractive option for entrepreneurs looking to enter the industry. With the potential for a successful acquisition in the future, Foot Solutions is a promising franchise opportunity for those interested in foot care and entrepreneurship.

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