YOUR%Business%Solution%For%The%Modern%Economy%

!I’ve!been!exactly!where!you!are!today,!searching!for!the!right!business!model!to!pair!with!today’s!roller!coaster!economy.!As!we!all!know,!this!can!be!extremely!difficult!due!to!the!natural!reservations!of!an!untested!model!and!of!course,!our!uncertain!future!of!economic!circumstances.!!I’ve!seen!countless!“industry!experts”!lead!folks!down!a!path!of!failure!with!strategies!that!have!yet!to!be!proven,!let!alone!tracked!for!that!matter.!They!consult!business!owners!to!take!a!specific!direction!without!ever!testing!that!direction’s!result!for!themself.!It’s!astonishing,!really,!that!people!will!take!these!“industry!experts”!serious!enough!to!pay!them!outlandish!amounts!of!money!for!unproven!advice.!!I’ve!raised!capital!and!started!several!innovative!businesses,!only!to!learn!many!of!my!most!valuable!entrepreneurial!lessons!the!hard![and!sometimes!very!expensive]!way.!!For!me,!though,!it!all!came!together!when!I!became!partners!with!an!actual!“industry!expert”!who!had!created!a!series!of!personal!business!habits!for!testing!new!strategies,!proving!them!through!his!diligent!tracking!routines,!and!then!creating!a!repeatable!system!for!other!people!to!execute!each!successfully!tested!strategy.!Finally,!a!guy!who!was!advising!people!to!go!to!a!place!that!he!had!already!been!!!His!name!is!Forrest!Walden,!and!he’s!the!Founder!of!Iron!Tribe!Fitness.!It’s!an!incredible!story!that!has!the!“American!Dream”!written!all!over!it.!Much!like!some!of!our!nation’s!most!prosperous!business!tales,!Walden!essentially!started!the!concept!in!his!home!garage!–!the!site!of!his!initial!trial!and!error!testing!grounds.!!!!!!!!!!!!!!!!

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Walden'and'his'friends,'at'the'site'of'his'testing'grounds'–'his'home'garage.'!

From%The%Garage%To%The%Marketplace%

Some%of%America’s%biggest%impacts%started%in%the%good%ole’%garage!%

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Eventually,!the!buzz!he!had!created!in!his!garage,!compelled!him!enough!to!sell!his!current!business,!which!was!a!prosperous!territory!of!personal!training!franchises,!to!jump!in!head!first!to!open!up!what!would!become!the!firstMever%Iron%Tribe%Fitness.!!It’s!important!to!take!note!of!the!fact!that!I!am!NOT!talking!about!a!guy!that!most!people!would!expect!to!take!such!lifeMaltering!risk,!especially!not!in!the!middle!of!one!of!the!worst!recessions!in!our!economic!history.!!Forrest!is!a!family!man!who!makes!all!of!his!decisions!in!the!best!interest!of!his!wife,!Mendy,!and!their!four!children.!But!during!the!recession!in!2008!and!2009,!he!was!so!moved!by!what!he!was!watching!each!day!in!their!home!garage,!that!he!was!indeed!willing!to!risk!everything!to!start!over!fresh.!!And!that’s!just!what!he!did!in!February!2010,!when!the!first!ever!Iron!Tribe!Fitness!gym!opened!its!orange!doors!in!a!free!standing!building!located!at!the!center!of!our!Homewood!community!in!metro!Birmingham,!Alabama.!!Please!note!that!Forrest!didn’t!just!start!establishing!those!personal!business!habits!I!mentioned!earlier,!when!he!founded!this!first!Iron!Tribe!Fitness!gym!back!in!January!2010.!!He!had!already!mastered!them!well!before!this.!!These!habits!were!initially!honed!during!his!early!20’s,!when!he!garnered!experience!in!franchising!on!both!sides!of!the!proverbial!“franchising!fence.”!First!as!a!franchisee,!owning!six!1MonM1!personal!training!gyms!in!Birmingham,!and!then!as!a!master!franchisee!working!handMinMhand!with!their!franchisor!support!team!to!develop!and!oversee!55!franchisees!in!three!different!states.!!This!is!why!I!consider!him!an!“industry!expert”,!and!why!you!should!too.!He’s!gathered!valuable!experience!on!both!sides!of!the!franchising!table!for!almost!an!entire!decade,!before!Iron!Tribe!Fitness!was!ever!even!conceived.!Oh!yeah,!and!the!fact!that!he!grew!up!as!the!stepMson!of!a!guy!who!has!now!been!the!CEO!for!a!franchisor!with!200+!units,!for!more!than!two!decades!now!–!that!doesn’t!hurt!either!!!So!when!I!walked!in!as!one!of!the!initial!clients!of!that!first!Iron!Tribe!Fitness!gym!back!in!2010,!I!immediately!noticed!all!of!the!subtle!details!of!initial!systemization!in!this!early!startup.!Then,!as!I!got!to!know!Forrest,!those!personal!business!habits!that!I!keep!addressing,!they!just!oozed!out!of!his!pores.!It’s!who!he!is.!Period.!!For!me!at!that!time,!an!entrepreneur!who!had!already!established!a!business!built!on!market!innovation,!I!completely!identified!with!Forrest’s!objective!to!do!the!same!thing.!Market!innovators!are!strapped!with!the!difficult!objective!of!either!reinventing!something!that!is!already!out!there!OR!creating!a!whole!new!idea!out!of!thin!air.!Either!one!of!these!scenarios!makes!for!the!difficult!task!of!selling!this!new!concept!to!the!marketplace,!which!is!always!tough,!let!alone!in!a!recessive!economy!!!

In!2008,!I!was!on!a!mission!to!raise!capital!in!Silicon!Valley,!to!achieve!my!objective!of!building!a!to!provide!a!new!solution!to!the!marketplace!in!the!form!of!online!technology!geared!toward!high!school!studentMathletes.!!!By!assisting!these!young!athletes!in!promoting!themselves!to!college!coaches,!scholarship!revenue!is!generated!and!college!graduations!are!funded;!it’s!a!beautiful!thing!for!all!parties!involved.!Especially!when!you!consider!the!fact!that!college!athletic!department!recruiting!budgets!are!saving!cash!by!tapping!into!our!database!of!these!high!school!athletes.!!Going!“doorMtoMdoor,”!visiting!with!high!school!administrators!throughout!the!state!of!Alabama!and!my!home!state!of!New!York,!I!grew!our!user!base!enough!to!not!only!generate!a!solid!first!year!of!revenue!in!2008,!but!also!transitioned!my!technology!provision!from!a!BETA!testing!phase!to!an!upgraded!version!that!is!currently!provided!by!several!states!including!Alabama!and!Louisiana,!as!a!free!service!for!thousands!of!their!studentMathletes.!!This!is!why!I!had!such!great!respect!for!what!I!was!watching!in!that!first!part!of!2010,!when!I!was!walking!into!the!doors!at!that!first!ever!Iron!Tribe!Fitness!gym!in!Homewood;!I!could!feel!the!market!innovation.!It!drew!me!in!more!and!more,!each!and!every!time!I!showed!up.!!I’m!a!selfMadmitted!connector,!who!is!always!thinking!big,!and!looking!for!solutions!to!bring!everything!and!everyone!together!in!a!manner!that!can!make!a!positive!impact!on!our!world.!In!2010,!I!knew!that!there!was!a!tremendous!opportunity!for!me!to!personally!help!Iron!Tribe!Fitness!grow!fast,!if!I!applied!myself!to!this!fascinating!startup.!!Because!of!our!immediate!synergy,!Forrest!and!I!would!end!up!connecting!to!a!point!where!we!would!become!business!partners!and!compliment!one!another!in!working!toward!our!objective!to!solve!that!issue!I!mentioned!earlier!–!you!know,!the!one!about!how!hard!it!is!to!search!and!find!the!right!business!model!to!pair!with!this!roller!coaster!economy!–!we!actually!worked!together!to!create!the!precise!business!model!that!folks!in!this!roller!coaster!economy!are!truly!longing!for!!!My!first!contribution!toward!this!objective!was!to!open!up!the!secondMever!Iron!Tribe!Fitness!gym!in!East!Birmingham!on!U.S.!Highway!280!in!January!2011,!just!one!year!after!Forrest!had!opened!the!first.!!!It!was!here,!that!I!would!mesh!my!unique!ability!for!market!innovation!and!other!skills!that!I!had!harvested!in!past!ventures,!with!Forrest’s!personal!business!habits!that!had!made!him!a!successful!entrepreneur.!It!was!here!that!we!would!begin!formulating!what!we!feel!is!the!solution.!From!day!one,!this!gym!was!a!pure!test!that!would!eventually!become!what!we!refer!to!as!our!“franchise!prototype.”!!!

The!test!was!a!success!and!by!April!2012,!we!had!announced!that!our!objective!to!provide!the!American!people!with!the!right!business!model!for!today’s!roller!coaster!economy,!was!now!available!!!

Introducing%THE%Iron%Tribe%Fitness%Franchise%

!From!our!ongoing!experiments!at!each!of!the!first!two!gyms,!we!began!building!a!strong!core!of!operations!for!the!Iron!Tribe!Fitness!Franchise!–!something!I!like!to!call!The'Perfect'Athlete'Life'Cycle'(PAL).'It!includes!every!one!of!the!online!and!offline!systems!that!are!needed!to!execute!the!model!for!successful!results!in!this!roller!coaster!economy!and!more!importantly,!delivering!life!transformations!for!our!clients!(a.k.a!athletes).!!!

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The!only!reason!we!even!found!this!solution!is!because!of!our!commitment!to!test!the!model!with!a!“rinse!and!repeat”!formulaic!approach,!over!two!years!and!in!four!of!our!own!gyms,!before!we’d!ever!ask!anyone!to!operate!their!own!Iron!Tribe!Fitness!Franchise.!!There!are!several!common!denominators!that!continue!to!live!at!the!source!of!each!and!every!piece!of!innovation!to!this!alwaysMevolving!puzzle.!!The%CORE%reason%a%person%should%get%into%business,%along%

with%the%THREE%key%drivers%that%can%make%that%business%

more%valuable%than%you%could%ever%imagine!%

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Whether!you!are!buying!a!tested!franchise!model!like!Iron!Tribe!Fitness!or!starting!an!untested!business!model!from!scratch,!the!initial!reasoning!should!be!centered!around!the!objective!of!creating!value!via!equity!NOT!episodic!“big!hit”!income.!When!doing!so,!you!can!actually!build!a!sellable!business.!!

Ongoing'experiments'for'systems'in'The'Perfect'Athlete'Life'Cycle,'were'built'at'our'original'400'sq.'ft.'“corporate'office”'[left]'where'Forrest'and'I'worked'ON'the'business,'so'that'we'could'test'new'systems'through'our'management'team,'who'work'IN'the'business.'

!I!want!to!be!clear,!however,!by!stating!that!this!initial!reasoning!must!include!core!values!and!a!mission!that!are!specific!to!who!you!are!and!why!you!decided!to!be!in!business!in!the!first!place.!But!to!sustain!your!core!values!and!mission,!you!must!have!a!vision!for!profitability!that!will!ultimately!create!this!value!via!equity.!!Also,!know!that!if!you!are!going!to!start!a!business!to!generate!a!series!of!unpredictable!“big!hits”!or!as!our!mentor!Dan!Kennedy!likes!to!call!it!–!“episodic!income,”!instead!of!building!equity!in!the!form!of!continuity!income,!it!is!not!likely!that!you’ll!ever!be!able!to!create!enough!value!via!equity!to!sell!your!business.!!That’s!why!we’ve!built!the!Iron!Tribe!Fitness!Franchise!around!three!key!drivers!that!Mr.!Kennedy!has!continuously!knocked!into!our!heads!as!the!essentials!for!our!franchisee!partners,!to!help!them!build!more!equity!than!they!could!ever!hope.!!

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Key%Equity%Driver%#1%–%The%List%

!The!first!of!these!drivers!is!the!list.!There!is!not!a!more!valuable!asset!to!ANY!business!than!The!List,!which!contains!contact!information!for!prospects,!current!clients!and!former!clients.!!!Not!the!most!valuable!proprietary!technology,!robotic!equipment,!potent!real!estate!or!superstar!staff!member,!can!top!The!List!as!the!chief!asset!that!a!business!possesses.!!Think!about!it.!!!What!value!does!new!tech,!robotic!labor,!land!or!an!allMstar!team!member!possess,!if!you!don’t!have!anyone!to!serve!or!sell!something!to?!If!you!ditch!the!technology,!lose!the!robot,!walk!away!from!the!land!and!part!ways!with!your!staff,!you!could!still!start!from!scratch!with!The!List.!!!Thus,!The!List!is!the!winner!when!it!comes!to!being!the!most!valuable!asset!for!building!an!equitable!business.!!I!say!this!from!experience.!Since!the!beginning,!building!a!list!has!been!the!number!one!objective!to!grow!our!business.!We!became!so!good!at!it,!that!our!Infusionsoft!Customer!Relationship!Management!(CRM)!software!provider,!named!Forrest!and!I!their!2012!Ultimate!Marketer!of!the!Year!award!winners.!!While!more!than!10,000!businesses!use!Infusionsoft!to!build!their!list,!we!were!the!ones!on!stage!presenting!and!then!receiving!their!prestigious!award.!Why?!Not!only!because!of!our!ability!to!build!The!List,!but!because!we!scaled!our!list!building!power!with!Key!Equity!Driver!#2!–!Process!Power.!!

Key%Equity%Driver%#2%–%Process%Power%

!To!ensure!you’re!consistently!working!toward!building!equity,!you!must!possess!Process!Power!in!the!form!of!systems!for!every!procedure!in!your!business.!Otherwise,!you’re!merely!relying!on!the!initiative!and!talent!of!each!individual!on!your!team,!instead!of!depending!on!a!proven!set!of!steps!to!execute!each!milestone!toward!your!success.!!!Through!each!phase!of!The'Perfect'Athlete'Life'Cycle'(PAL),'Process!Power!shows!its!true!colors!on!a!consistent!basis,!through!a!series!of!Award!Winning!systems!that!leverage!your!list!through!the!establishment!of!a!proven!conversion!process!that!has!converted!a!significant!number!of!our!incoming!prospects!to!become!active!clients.!Should!you!become!a!franchise!partner,!we!can!share!both!these!conversion!rate!and!the!lifetime!client!value!statistics!that!we’ve!experience!thus!far!!!It!doesn’t!stop!there,!however,!as!there!is!Process!Power!in!place!to!nurture!those!unconverted!prospects!to!the!point!where!we!they!eventually!decide!they’re!ready!to!sign!their!active!client!agreement.!!Knowing!these!numbers!has!been!integral!to!our!success,!because!it!has!allowed!us!to!build!systematized!marketing!campaigns!in!diverse!forms!of!media,!while!knowing!what!we!are!willing!to!spend!to!acquire!a!new!client!!!In!addition!to!the!marketing!campaign!aspect!of!our!Process!Power,!has!been!our!on![and!off]!the!floor!coaching!systems,!which!have!been!established!to!set!the!standards!for!delivering!the!Iron!Tribe!client!experience,!which!is!successfully!reflected!in!our!97%!monthly!active!client!retention!metrics!(2.98%!attrition),!with!most!of!these!folks!referring!their!friends!to!potentially!become!clients!as!well.!!You!can’t!just!have!Process!Power,!though.!It!takes!time.!You!have!to!establish!systems!through!failure!until!success,!through!an!obligation!to!testing!and!refinement!–!countless!“rinse!and!repeat”!cycles.!With!now!six!of!our!own!gyms!here!in!Birmingham,!we!have!the!unique!opportunity!to!test!each!and!every!system!first,!before!any!Iron!Tribe!Fitness!franchisee!is!asked!to!implement!it!at!their!gym!!!Okay,!there!are!several!moving!parts!when!it!comes!to!this!Process!Power!key!equity!driver.!But!ultimately,!the!objective!is!to!ensure!that!the!business!is!ran!with!processes!instead!depending!on!a!person’s!talent.!%

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The%List%&%Process%Power%At%Work%

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Forrest'and'I'had'the'opportunity'to'win'several'awards'because'of'the'Iron'Tribe'Fitness'business'model’s'ability'to'leverage'The'List'and'integrate'Process'Power.''

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Key%Equity%Driver%#3%–%Continuity%Income!!It!is!in!this!exact!spot,!where!everything!connects!together!like!a!puzzle.!I’ve!explained!why!The!List!is!your!top!asset!and!illustrated!how!you!can!scale!growth!plans!through!Process!Power.!!Now!let’s!address!the!necessity!of!sustainability!via!profitability.!This!is!where!my!frustrations!with!“episodic!income”!start!to!come!about.!Read!carefully.!No!matter!how!passionate!you!are!about!a!business!and!its!mission,!you!cannot!accurately!plan!or!forecast!revenue!without!Continuity!Income.!!This!is!where!those!“episodic”!or!“big!hit”!income!plays!run!into!the!harsh!realities!of!having!an!unpredictable!business!plan.!This!is!also!where!so!many!businesses!go!to!die,!and!where!few!will!prosper!in!ways!that!have!the!rest!scratching!their!heads.!!!When!we!made!the!conscious!decision!to!limit!membership!capacity!to!300!people,!knowing!that!the!active!client!is!paying!between!$230!and!$310!per!month!on!a!4,!8!or!12!month!agreement,!our!planning!and!forecasting!efforts!became!clear!as!day.!!Our!Continuity!Income!is!personified!through!a!metric!we!call!Average!Client!Value!(ACV),!which!takes!your!gross!revenue!and!divides!by!the!number!of!paying!active!clients,!to!establish!a!monthly!dollar!amount!that!each!client!spends!on!their!experience.!!!When!we!last!calculated!our!Average!Client!Value!(ACV),!it!was!$270!per!month!(including!profit!center!sales).!This!is!based!on!an!average!of!217!Active!Clients!per!month,!across!our!entire!Iron!Tribe!brand.!!From!brand!new!gyms!open!less!than!one!year,!to!gyms!that!have!opened!more!than!three!years.!This!performance!yielded!an!Average!Monthly!Gross!Revenue!of!$58,590!for!the!Iron!Tribe!brand.*!!There!are!several!other!Continuity!IncomeMbased!metrics!that!work!together!to!help!us!make!extremely!profitable!decisions!in!the!realm!of!product!innovation,!staff!recruiting!and!of!course,!marketing.!Because!let’s!face!it,!if!you!know!how!much!you!are!willing!to!invest!to!acquire!new!clients,!hire!the!best!staff!and!evolve!your!client!experience,!then!your!decisions!will!become!much!easier!to!make,!and!your!opportunities!for!brand!ubiquity!will!follow!suit.!!!*We!obtained!this!information!from!all!four!of!our!corporateMowned!facilities!that!have!been!operating!for!at!least!one!full!calendar!year.!Of!the!4!facilities,!1!(25%)!reported!having!an!average!client!value!per!month!of!at!least!$270!from!April!1,!2012!M!March!31,!2013.!Additionally,!of!the!4!facilities,!2!(50%)!reported!having!at!least!217!average!active!clients!per!month!from!April!1,!2012!M!March!31,!2013.!Lastly,!of!the!4!facilities,!2!(50%)!reported!having!average!monthly!gross!revenue!of!at!least!$58,590!from!April!1,!2012!M!March!31,!2013.!There!is!no!assurance,!however,!that!you!will!do!as!well!

You’re%Just%Like%Me!!!Maybe!not!exactly!like!me,!but!enough!where!you!are!reading!this!report!because!something!about!what!Forrest!established!in!his!garage!and!what!we!have!carried!on!with!the!Iron!Tribe!Fitness!Franchise,!has!intrigued!you!enough!to!do!some!research!and!find!out!more!for!yourself.!!That!same!intrigue!is!what!ultimately!triggered!my!personal!reinvention!back!in!2010,!when!I!joined!Forrest!to!open!up!our!franchise!prototype.!!You!can!now!do!the!same!and!open!up!your!very!own!potentiallyMequitable!Iron!Tribe!Fitness!Franchises!in!any!of!the!markets!that!still!have!availability,!but!you’ll!actually!be!able!to!benefit!from!something!that!wasn’t!around!back!when!I!partnered!with!Forrest;!SPEED.!!OUR%COMMITMENT%–%“Innovate%Faster%Than%They%Can%Copy.”%%

–%Ray%Kroc,%McDonald’s%Founder%

!Through!a!dedication!to!testing!innovation!at!our!own!gyms,!we!have!set!the!foundation!for!you!to!build!a!valuable!business!faster!than!you!could!ever!hope,!while!possessing!a!continuous!structure!of!support!from!our!corporate!headquarters.!!!We’ve!made!your!expensive!mistakes!for!you!and!plan!on!continuing!to!do!so!!!!Of!course,!you!will!make!your!own!mistakes!too.!But!you!will!also!have!your!own!breakthroughs.!Your!very!own!market!innovations!in!places!that!we!may!have!overlooked!or!missed!out!on.!!!We!are!in!this!thing!together.!Not!only!as!a!franchisor!supporting!our!franchisees,!but!as!owners!and!operators,!continuing!to!build!our!own!equity!at!each!of!our!six!Birmingham!gyms,!while!evolving!the!model!to!a!point!where!you!can!do!it!too.!!!The!best!part?!We!are!all!working!together!to!impact!the!world!in!ways!that!get!us!chomping!at!the!bit!each!morning!we!arise.!!OUR%DRIVE%–%%“The%ones%who%are%crazy%enough%to%think%they%can%change%the%

world,%are%the%ones%who%actually%do.”%%

–%Steve%Jobs,%Apple%iCEO%

!Now!that!you!know!us!better,!let’s!take!the!next!step!and!jump!right!into!the!Iron!Tribe!Fitness!Franchise!model.!I!am!going!to!let!you!in!on!the!secrets!you!need!to!know!so!that!you!can!further!understand!operations,!along!with!relating!each!daily!management!activity!back!to!those!three!key!equity!drivers!we!discussed!earlier.!

You’re%Investment%Is%Only%As%Good%As%Your%

Operations%Plan%–%Execution%Is%A%Must.!

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There!are!three!fundamentals!crucial!to!the!execution!of!your!Iron!Tribe!Fitness!Franchise!business!model,!and!each!correlates!to!the!key!equity!drivers!that!I!addressed!in!part!one!of!this!report.!!

1. Site!Selection!–!proper!demographics!where!you!can!build!The!List.!2. Manager!–!the!right!person!to!implement!the!Process!Power!systems.!3. Coaching!Staff!–!the!team!you!will!entrust!with!the!Continuity!Income.!

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Fundamental%#1%–%Site%Selection!!The!Site!Selection!process!is!lead!by!our!Vice!President!for!Franchise!Development,!Tom!DeLosa,!who!has!more!than!15!years!of!experience!in!developing!franchises.!!!DeLosa!and!our!development!team!utilize!data!that!we!have!gathered!from!each!of!our!gyms,!to!help!you!select!the!best!site!within!your!territory,!based!on!statistics!like!household!income,!home!value,!age,!reading!material,!etc.!!It’s!an!important!first!step!that!we!take!very!seriously,!to!the!point!where!Forrest!recruited!Tom!and!his!family!to!move!to!Birmingham!from!Denver,!where!he!had!a!successful!career!in!executing!the!Franchise!Development!process!for!multiple!franchisors!based!in!that!market.!!Tom!not!only!spearheads!the!Site!Selection!efforts,!but!he!and!his!team!are!also!your!resource!to!execute!the!Lease!Negotiation!and!Construction!Management!portions!of!the!Development!Process,!which!will!literally!get!you!from!the!ink!hitting!the!page!on!JoinMTheMTRIBE!Day!to!the!Certificate!of!Occupancy!(CO)!that!you!receive!just!before!you!open!your!very!own!orange!Iron!Tribe!Fitness!gym!doors.!!

Fundamental%#2%–%Manager%

!Who!will!hold!the!keys!to!your!investment’s!fate?!That’s!the!question!you!must!ask!yourself!when!making!the!crucial!decision!on!whether!you!will!be!an!OwnerMOperator!or!if!you!will!choose!to!have!a!Managing!Partner!running!your!business.!!While!you!definitely!want!your!business!to!thrive!on!the!Process!Power!that!we!have!created!at!our!gyms!in!Birmingham,!you!don’t!want!to!miss!out!on!the!opportunity!to!pair!it!with!a!talented!Operator!that!can!execute!each!system.!!

If!you’ll!be!the!OwnerMOperator,!get!ready,!because!we!are!about!to!go!through!a!day!in!the!life!of!a!Manager,!to!paint!a!clear!picture!of!each!daily!activity!and!then!relate!it!back!to!those!three!key!equity!drivers!that!will!build!immense!amounts!of!value!via!equity!into!your!new!business.!!However,!if!you!are!looking!for!a!Managing!Partner,!we!have!several!resources!that!can!assist!you!with!this!necessary!acquisition.!First!off,!you!can!request!our!one!page!Managing!Partner!Executive!Summary!that!provides!three!examples!of!relationships!that!our!franchisees!have!established.!This!document!also!includes!some!insightful!commentary!from!each!of!these!three!franchisee!examples.!!The!other!resource!is!in!our!good!friends!at!The!Fireseeds!Group,!a!strategic!partnership!that!provides!due!diligence!in!this!category,!at!a!level!that!is!unparalleled.!!The!Fireseeds!Group!has!been!thorough!in!their!efforts!to!understand!our!business!at!a!high!enough!level!to!utilize!their!worldMclass!vetting!process!to!qualify!potential!Managing!Partner!as!well!as!Coaching!candidates!for!you!to!choose!from.!!Regardless!of!the!operations!route!you’ve!chosen,!there!is!a!plan!mapped!out!to!train!as!the!manager!for!your!Iron!Tribe!Fitness!Franchise,!in!a!simultaneous!manner!that!correlates!directly!with!the!timeline!of!your!Development!Process.!!

Fundamental%#3%–%Coaching%Staff%

!What!are!we!selling..?!!'''Commodity'''''''''''''''''Good'''''''''''''''''''''Service'''''''''''''Experience'''''''''''''Transformation''''''''''''''''''Coffee'Bean''''''''''''''''Folgers'''''''''''''Waffle'House''''''''Starbucks'''''''''''Iron'Tribe'Fitness''''''4¢/cup 15¢/cup $1.20/cup $4/cup Pricele$$'!How!can!you!scale!such!a!progression?!!!FirstMClass,!WorldMClass!Coaching.!!Coaching!that!starts!and!ends!with!priceless!relationships!that!produce!lifeMchanging!results!on!a!consistent!basis.!!These!relationships!are!initiated!with!the!Iron!Tribe!101!classes!that!make!up!a!clients’!first!four!weeks,!setting!the!foundation!for!the!transformation!that!they!signed!up!to!experience.!

!At!the!core!of!this!Iron!Tribe!experience,!is!an!overMdelivery!of!happiness!that!results!with!a!client!that!is!willing!to!pay!even!two!or!three!times!as!much,!to!make!sure!they!continue!experiencing!their!personal!transformation!at!your!Iron!Tribe!Fitness!franchise!gym!!!Who!can!ensure!the!overMdeliverance!of!such!a!transformational!experience!M!one!that!will!ensure!a!low!Attrition!Rate![2.98%!or!less!on!a!monthly!basis*]!and!Continuity!Income![$270!monthly!Average!Client!Value*]!that!you!can!build!upon!each!month?!!!Your!Coaches!!!Much!like!the!resources!we’ve!prepared!for!you!to!find!the!right!person!to!manage!your!new!business,!we!have!also!arranged!several!tools!that!can!help!you!recruit,!interview!and!hire!the!right!Coaching!Staff;!a!true!group!of!“A!Players”!that!you!can!grow!from!an!entry!level!coMcoach!position!to!a!head!coach!and!eventually!place!into!a!management!role.!!We’ve!even!created!a!Coaches’!Certification!program,!where!you!can!send!your!Coaching!Staff!to!our!Birmingham!Headquarters!for!a!twoMday!training!event!with!our!worldMclass,!veteran!team!of!coaches!!!Not!to!mention!the!fact!that!you!can!request!The!Fireseeds!Group’s!services!to!help!you!in!finding!the!right!people!to!achieve!this!absolutely!invaluable!accomplishment.!Along!with!the!right!manager,!having!two!solid!coach!hires!is!vital.!!

Are%YOU%Holding%The%Keys%To%The%Fastest%

Growing%Iron%Tribe%Fitness%Franchise%To%Date?%

!I!have!absolutely!NO!DOUBT!that!you!could!definitely!be!opening!what!could!be!our!most!successful!franchise(s)!yet!!!!It’s!in!the!following!progressions!where!your!operations!foundation!is!built.!This!is!truly!where!your!projected!run!rate!and!overall!ramp!up!will!be!produced.!!!

1. ITFU%Online%Learning%2. ITF%Birmingham%Management%Practicum%Program%3. TRIBE%Academy%4. Pre`Opening%Assignments%

!MY%RULE:%“He/She%who%takes%what%I%am%about%to%share,%the%most%seriously,%will%

be%the%most%successful.”%%

!*We obtained this information from all four of our corporate-owned facilities that have been operating for at least one full calendar year. Of the 4 facilities, 1 (25%) reported having average attrition rates per month less than 2.98% from April 1, 2012 - March 31, 2013. Additionally, of the 4 facilities, 1 (25%) reported having an average client value per month of at least $270 from April 1, 2012 - March 31, 2013. There is no assurance, however, that you will do as well.!

This!is!ONLY!for!the!above%average%initiative`taker.!For!the!self`starter,!the!world`changer,!and!ultimately!the!guy!or!gal!who!has!truly!set!out!to!be!a!die!hard!gym!operator!ready!to!make!a!BIG!impact.!Is!that!you?!!We’ve!prepared!for!you!road!map!that!we!like!to!call!the!Daily!Growth!Checklist!(DGC),!complete!with!every!piece!of!Process!Power!that!you’ll!need!to!execute!effectively!enough!to!efficiently!grow!your!Iron!Tribe!Fitness!gym!faster!than!you!ever!thought!possible!!!Will!you!set!the!records?!Will!you!exceed!each!goal!for!each!of!our!set!Key!Performance!Indicator!(KPI)!metrics?!Will!you!grow!your!Iron!Tribe!Fitness!gym!faster!than!anyone!else!has!ever!seen!or!at!least!than!your!pro!forma!forecasts?!!I’ve!compiled!this!information!based!on!my!personal!experiences,!running!our!2ndMever!location!in!2011!and!then!overseeing!as!many!as!four!of!our!own!locations!in!2012,!before!transitioning!to!drive!our!entire!brand!as!Chief!Operating!Officer!(COO).!!When!I!ran!my!gym,!I!would!organize!my!daily!tasks!into!three!categories;!Acquisition,!Retention!and!Administration.!When!I!stepped!out!of!gym!management,!I!built!a!oneMpage!document!that!could!guide!our!managers!in!their!daily!workflow,!to!help!them!exceed!the!monthly!goal!for!each!of!the!KPI!metrics!that!I!would!discuss!with!them!in!our!weekly!meetings!–!The!Daily!Growth!Checklist!(DGC).!!What!I!am!about!to!share!with!you!is!the!daily!gym!operations!guidance!that!has!produced!individual!staff!growth,!member!athlete!transformations,!and!ultimately,!true!equity!value!at!our!Iron!Tribe!Fitness!gyms.!!

Pre`Requisite:%SET%YOUR%1st%YEAR%KPI%GOALS%

!Before!we!address!any!daily!management!activities,!it’s!important!to!know!exactly!where!we!want!that!strategy!to!take!us.!Where!exactly!do!you!want!to!be!as!a!franchise!owner,!after!your!first!twelve!months!of!operations?!!A!wise!man!once!told!me!that!“setting!goals!is!the!first!step!in!turning!the!invisible!into!the!visible.”!This!is!so!true!!!Personal!Development!and!goal!setting!has!been!at!the!forefront!for!both!Forrest!and!I,!since!the!very!beginning!of!our!relationship.!In!fact,!it’s!really!what!triggered!my!interest!in!pursuing!him!about!Iron!Tribe!Fitness!–!Forrest!saw!me!at!a!coffee!shop!and!gave!me!a!Harvard!Business!Review!article!about!purpose,!vision,!values!and!goals.!This!really!got!me!thinking!about!those!topics!in!my!own!life!!!

In!Darren!Hardy’s!book!The'Compound'Effect,!he!emphasizes!the!significance!of!both!goal!setting!AND!the!power!implementing!a!series!of!daily!habits!to!produce!growth!toward!your!goals!and!in!turn,!massive!success.!

Darren!defines!the!Compound!Effect!this!way:!!

It’s!the!principle!of!reaping!huge!rewards!from!a!series!of!small,!smart!choices.!Success!is!earned!in!the!momentMtoMmoment!decisions!that!in!themselves!make!no!visible!difference!whatsoever,!but!the!accumulated!compounding!effect!is!profound.”!

For!example,!if!you!want!to!save!money!so!you!can!enjoy!your!retirement,!consider!the!compounding!effect!of!spending!$4!a!day!on!coffee.!If!you!choose!to!invest!$4!a!day!at!8%!interest!rather!than!spending!it!on!a!cup!of!coffee!it!would!result!in!$51,833.79!in!20!years.!!The!same!result!could!also!be!reached!by!making!your!own!lunches!rather!than!eating!out.!!Do!both!and!you!will!have!saved!an!extra!$100,000.!

Some!of!our!best!intentions!fail!because!we!don’t!have!a!system!of!execution.!When!it!comes!down!to!it,!your!new!attitudes!and!behaviors!must!be!incorporated!into!your!monthly,!weekly,!and!daily!routines!to!affect!any!real,!positive!change.!A!routine!is!something!you!do!every!day!without!fail,!so!that!eventually,!like!brushing!your!teeth!or!putting!on!your!seatbelt,!you!do!it!without!conscious!thought.!!Success!is!NOT!doing!5,000!things!really!well!!Success!is!doing!a!half!dozen!things!really!well,!more!than!5,000!times!!

!Before!I!establish!what!is!basically!your!daily!“half!dozen,”%I!need!you!to!put!something!important!IN!PRINT!–!your!1st!Year!KPI!goals!!How!can!we!support!you!from!our!corporate!offices!without!having!a!road!map!to!hold!you!accountable!to?!!Utilize!this!KPI!glossary!to!guide!you!in!establishing!your!own!monthly!and!annual!goals!for!each!of!the!following!metrics,!so!that!we!can!take!the!next!step!and!begin!working!through!how!you!will!get!there!!!!

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Gross!Revenue!Gross!Expenses*!Net!Profit*!Net!Profit!%*!Payroll*!Payroll!%!Food!Revenue!Product!Revenue!Avg.!Client!Value!(ACV)!Total!Active!Clients!!

Leads!Consults!Lead/Consult!%!New!Clients!Close!Rate!%!New!Client!Rev.!Avg.!New!Ticket!Marketing!Budget!Marketing!ROI!%!!

Renewals!NonMRenewals!Monthly!Attrition!%!On!Hold/Injured!%!Renewal!Upgrade!%!Avg.!Renewal!Ticket!Total!Renewal!Rev!Class!Capacity!%!!

Acquisition% R

etention%

KPI%Metric%Pathways%

%

DRIVERS%

Administration%

To!assist!you!in!creating!your!first!year!monthly!goals!for!each!of!the!KPI!metrics,!I!have!provided!an!explanation!for!each!metric.!Upon!becoming!franchise!partners,!I!can!provide!further!data!and!even!suggestions!for!first!year!goals!per!KPI.!!

Driver%KPI%Metrics%

%

Gross%Revenue%is!the!total!top!line!revenue!that!you!generate!on!a!monthly!basis.!!Payroll%%%of%Revenue%is!the!total!percentage!of!payroll!versus!your!gross%revenue.!!Food%Revenue%is!the!itemized!revenue!that!is!a!result!of!active%clients%who!have!subscribed!to!the!weekly!food!program!that!your!gym!should!be!offering.!!Product%Revenue%is!the!itemized!revenue!that!is!a!result!of!active%clients%who!have!purchased!supplements,!snacks,!merchandise!and/or!any!other!APPROVED!product!offerings!at!your!gym.!!Active%Client%Value%(ACV)%is!the!average!spend!per!month!from!each!active%member,!based!on!their!monthly!membership!dues!and!pointMofMsale!food!and!product!purchases.!%

Total%Active%Clients%is!the!number!of!people!who!are!actively!paying!a!monthly!membership!fee!within!their!4,!8!or!12!month!agreement.!

%

Retention%KPI%Metrics%

!Renewals%are!the!active%clients%(athletes)%that!have!chosen!to!renew!their!agreement![which!autoMrenews!unless!they!proactively!contact!you!to!make!a!change].!!On%Hold/Injured%%%is!the!percentage!of!current!active%clients%who!have!provided!medical!documentation!to!put!a!hold!on!their!monthly!payment!due!to!injury.!!Monthly%Attrition%%%is!percentage!of!those!non`renewals%versus!the!total%active%client%number!at!your!gym.!

!Non`Renewals%are!the!number!of!active%clients%who!proactively!contact!you!to!disable!their!autoMrenewal.!

!Renewal%Upgrade%%!is!the!conversion!rate!for!those!renewal%candidates!who!are!currently!on!a!4!or!8!month!agreement!and!are!eligible!to!upgrade%to!a!8!or!12!month!agreement.!!Average%Renewal%Ticket%is!the!average!value!of!each!renewal%in!a!given!month.!

Total%Renewal%Revenue%is!the!total!amount!of!revenue!generated!by!each!of!the!renewals%in!a!given!month.!!Class%Capacity%%%is!the!percentage!of!active%clients!who!attend!your!daily!class!offerings!for!the!month!versus!the!20!spots!you!have!available!for!each!class!offering.!!*Gross%Expenses,%Net%Profit,%Net%Profit%%%and!Payroll!are!also!in!the!Drivers%category,!but!are!based!on!mathematics!that!you,!as!an!owner!will!ultimately!make!decisions!on,!as!you!grow!your!gym.!

!

Acquisition%KPI%Metrics%

%

Leads!are!the!number!of!people!who!“raised!their!hand”!and!showed!interest!in!learning!more!about!your!gym.!!!Consults%are!the!leads!who!qualified%for!a!personal!visit!to!your!gym,!to!get!a!free!tour!and!sit!down!to!see!if!it’s!a!good!fit!for!them!to!become!a!new%client.!

!Lead/Consult%%!is!the!conversion!rate!for!leads!who!sit!down!for!a!consult.!

!New%Clients%(athletes)%are!the!consults!who!sign!a!4,!8!or!12!month!agreement!to!transform!their!life!at!your!gym.!!Close%Rate%%!is!the!conversion!rate!for!consults!who!become!new%clients.!%

New%Client%Revenue!is!the!total!amount!of!revenue!generated!by!each!of!the!new!active%client%agreements!that!you!have!signed.!

!Average%New%Ticket%is!the!average!ticket!per!agreement!signed.!This!doesn’t!include!their!initial!payment!for!their!Iron!Tribe!101!class,!but!is!essentially!the!total!amount!of!continuity%income%generated!from!each!month’s!new!active%clients.!

!Marketing%Budget%is!the!amount!of!money!spent!in!a!given!month,!on!any!marketing!or!advertising!to!generate!new!leads.!

!Marketing%ROI%%%is!return!on!your!monthly!marketing%budget!investment.!%

Transforming%Into%The%Ultimate%Operator%

!As!fun!as!it!can!be,!running!your!Iron!Tribe!gym!is!still!running!a!business!in!the!new!economy.!The!good!news!is!the!fact!that!we’ve!prepared!you!with!the!Process!Power!systems!to!crush!your!first!year!KPI!goals!!!

My!Operations!Support!Team!takes!the!“Michael!Jordan!mindset”!to!heart,!in!all!they!do.!It!was!Jordan!that!said!it!perfect!when!he!boasted;!“I've!missed!more!than!9,000!shots!in!my!career.!I've!lost!almost!300!games.!26!times,!I've!been!trusted!to!take!the!game!winning!shot!and!missed.!I've!failed!over!and!over!and!over!again!in!my!life.!And!that!is!why!I!succeed.”!!Well!we’ve!missed!most!of!those!9,000!shots!for!you,!lost!most!of!those!300!games!for!you,!and!missed!most!of!those!26!game!winning!shot!attempts!for!you!–!so!that!you!would!be!able!to!come!in!and!start!stronger!through!our!experiences!with!failure.!That’s!where!these!Process!Power!systems!were!born,!have!been!developed!and!are!continuously!being!refined.!!You’re!going!to!have!to!thrive!on!the!motivation!to!crush!each!big!hairy!audacious!goal!(a.k.a.!BHAG)!that!you!and!your!team!have!set,!along!with!taking!slight!setbacks!in!stride!knowing!that!you!will!ultimately!succeed!in!the!end,!as!long!as!you!stay!within!the!lines!of!the!model!we’ve!built!for!you.!!So!I!ask!you!again!–!are!you!holding!the!keys!to!the!fastest!growing!Iron!Tribe?!!To!get!there,!you’ll!need!to!work!through!the!Acquisition,!Retention!and!Administration!tasks!and!strategies!that!we!have!mapped!out!in!your!Daily!Growth!Checklist!(DGC).!If!you!want!to!think!back!to!Darren!Hardy’s!tutelage!from!his!book!The'Compound'Effect,!this!checklist!is!essentially!your!“daily!half!dozen”!group!of!habits!that!you!will!master!to!become!the!top!operator!in!the!Iron!Tribe!Franchising!system!!!To!learn!how!to!execute!in!each!category,!along!with!how!these!Process!Power!systems!each!connect!to!your!KPI,!I’ve!created!four!progressions!of!learning,!training!and!testing!for!you!to!follow!and!take!massive!action!in!preparation!toward!creating!the!most!successful!Iron!Tribe!Fitness!gym!ever!!!Each!progression!comes!as!its!own!section!to!add!to!this!report,!as!a!workbook!to!ensure!you!are!staying!on!the!correct!path!toward!your!success.!!1. ITFU%Online%Learning%–%https://ITFU.customerhub.net%

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For!each!group!of!action!items!on!your!Daily!Growth!Checklist!(DGC),!there!are!videos!with!several!different!team!members!joining!me!for!strategy!sessions!per!topic.!!!The!ITFU!Online!Learning!menu!option!allows!you!to!interact!with!the!DGC!in!a!clickable!format!that!not!only!contains!educational!videos!per!action!item!topic,!but!it!also!triggers!your!completion!of!specific!preliminary!actions!that!prepare!you!to!open!your!gym!at!full!force.!!

You’ll!also!enjoy!the!ability!for!you!and!your!team!to!continually!utilize!ITFU!as!an!online!resource!reference!for!every!operations!topic!within!your!business,!for!new!hire!training!you!have!to!do!or!even!just!a!current!staff!refreshment!program!to!keep!everyone!at!the!top!of!their!game!!!%

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2. Management%Practicum%Program%(MPP)%–%ITF%BHM%!We’ve!established!a!series!of!Management!Practicum!Program!(MPP)!milestones!for!each!category!of!action!items!within!the!DGC,!and!you!can!actually!participate!in!these!milestones!at!one!of!our!gyms!in!Birmingham!!!It!is!strongly!preferred!that!you!come!to!Birmingham!to!participate!in!our!six!week!MPP,!where!you!will!have!the!opportunity!to!work!through!a!detailed!on!site!training!program!for!each!of!these!DGC!milestones!at!one!of!our!ITF!corporately!owned!gyms.!!The!MPP!workbook!will!plug!directly!into!this!report!as!an!addMon!that!allows!you!to!continue!running!your!own!MPP!at!your!gyms!whenever!you!add!or!develop!staff.!!!!!!

3. TRIBE%Academy%%

In!the!Iron!Tribe!Franchising!version!of!what!most!franchisor’s!call!“Franchise!School,”!each!of!the!key!players!on!our!Operations!Support!Team!will!review!the!key!items!you!have!learned!and!put!to!work!in!both!the!ITFU!and!MPP!experiences.!!!You’ll!go!through!a!scenarioMbased!testing!program!through!our!TRIBE!Academy!workbook,!which!once!again!is!an!added!plugMin!to!this!report.!%

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What!might!be!the!neatest!part!of!TRIBE!Academy,!is!the!fact!that!it!takes!place!approximately!one!month!before!you!open!up!your!new!gym!–!READY!TO!TAKE!MASSIVE!ACTION!AND!CRUSH!YOUR!YEAR!#1!BHAG’S!!!!!!!!!!!

4. The%150`To`100%Pre`Opening%Marketing%Manual%!The!final!progression!is!one!of!the!most!exciting.!!Picture!this!–!your!construction!process!is!coming!together.!You!are!just!weeks!away!from!your!first!class!!!There’s!a!lot!of!prep!work,!including!a!strong!push!toward!your!preMopening!sales.!We’ve!compiled!a!large!list!of!initial!action!items!in!several!of!the!areas!you!have!been!learning!and!practicing!for!months!now.!!!The!thought!is,!that!you!can!get!to!100!clients!within!150!days,!and!should!you!start!that!process!as!many!as!30!or!60!days!before!then!well,!you!get!the!point.!It’s!on!you!to!ramp!your!gym!up!as!fast!as!you!can,!and!we’ve!created!a!manual!to!get!you!started!after!you!leave!TRIBE!Academy.!!

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Granted!–!I’m!a!young!businessman!who!is!still!seeing!lots!of!things!for!the!first!time.!But!one!consistent!thing!that!I!have!picked!up!on!throughout!my!first!few!years!in!business,!is!the!fact!that!there!is!a!lot!of!“hot!air”!out!there.!!!But,!like!everything!else,!actions!consistently!speak!louder!than!the!words!of!the!best!of!the!best!talkers!out!there.!!!With!top!line!revenue!numbers!getting!thrown!around!as!if!it’s!the!EBITDA!going!into!reserves,!and!our!economy!flailing!more!each!day,!it!is!becoming!rarer!to!see!a!business!sustain!to!the!point!where!it’s!profits!help!it!grow!to!more!locations!so!that!it!can!serve!more!people.!!But!not!for!you.!That’s!your!vision.!It’s!why!you’re!reading!this!report.!!Not!to!mention!the!fact!that!it’s!even!more!unusual!to!see!a!business!give!back!in!both!nonMprofit!and!profiteering!agendas!that!touch!so!many!lives.!!You!get!to!engage!your!community!as!one!that!will!support!nonMprofit!causes!like!Neverthirst!and!Team!Red,!White!&!Blue,!while!you!simultaneously!get!the!chance!to!change!the!lives!of!this!same!community!with!the!Iron!Tribe!experience!!!So!as!you!work!toward!your!goals,!note!that!there!is!something!bigger!going!on!than!just!achieving!them.!There!is!a!purpose!being!worked!toward.!One!so!large!that!no!individual!can!even!fathom!its!significance.!!!Keep!this!in!mind.!It!will!motivate!you,!as!it!has!us,!to!build!something!bigger!than!yourself.!!!Your!gym(s)!and!its!community!await.!!