ActionCOACH

ctionCOACH 2.0: the Firm Franchise and the FDD

When starting the Business Coaching industry 30 years ago, ActionCOACH was a single coach, owner operator model, called a “Practice”, with no territory exclusivity working from a home office. Along the way, we allowed Coaches to add another coach or two to their Practice which some did, but most didn’t. It was truly a “be a coach” model.

All the “me too” brands copied and that is largely what the industry is today, single coaches or very small groups of coaches mostly working from home offices with no real scalability or salability. They own a job not a real business and it will die when they retire.

As ActionCOACH continued to grow and mature, we innovated various growth models with our best Franchisees who had the biggest visions. We wanted to create a model that allowed for true wealth creation, scalability and semi-passive ownership.

We eventually perfected our current “Firm” model which is designed to be both scalable and highly saleable. It is analogous to a larger law firm compared to a solo attorney office. The Firm franchisee can even provide its employee business coaches the opportunity to “make partner” if the Franchisee wants to allow for that.

An ActionCOACH Firm can be semi-passive or active and the Firm is operated from a professional office (a shared office like Regus or WeWork is sufficient) and has a semi-exclusive territory of approximately 10,000 businesses in contiguous zip codes.  One executive office can support multiple territories with small satellite offices allowing for significant economies of scale.

The Firm owner will immediately starts building their team to both grow faster, have added capacity to support more clients and even position their staff to buy them out in the future when the Firm owner elects to retire.

After testing, measuring and tweaking the Firm franchise model for several years alongside the Practice business coaching model, in 2022 we were so confident with the model and the future of the Firm, ActionCOACH officially stopped selling Practices and now only sells Firm franchises.

The full transition to Firms will continue until all the current Practice owners eventually retire, upgrade to Firms or get absorbed by a Firm. 

IMPORTANT TO KNOW:  In the interim, during the transition and maturing of Firms, there are several things to note:

1. Item 19:
   1. Since ActionCOACH transitioned to “Firms only” very recently in 2022, we don’t yet have many long-term mature Firms.
   2. Most of our Firms are either newer or are led by long term former Practice owners who upgraded their franchise to a Firm.
   3. We still have a lot of legacy Practice owners who are grandfathered and by their nature of wanting to be self-employed as a “coach” have far more modest income goals.
   4. Therefore, as strong as our Item 19 is, the financial representation is not yet nearly as strong as the Firm model is actually designed to deliver or what they will hear directly from our Firm builders during due diligence.
   5. So, simply tell them it is a very strong Item 19 and that they will be very impressed with the financial model compared to anything else in the industry or in other industries that typically require long leases, inventory, build-out, etc.  
   6. We will guide them on the specifics and the existing Firm owners will validate the opportunity.
2. Item 20:
   1. Prior to focusing on the Firm franchise model, we were very coach centric and counted each individual coach as a “unit”, even if they did not own the franchise.
   2. In 2021 when we knew the Firm franchise model would truly be our future, we realized most “coaches” going forward would be employees (W2 or 1099) of our Firm owners.
   3. We therefore decided to reclassify non-franchise owner coaches in Item 20. To do so, we had to “terminate” the business coaches who were not franchise owners  in the FDD, even though these coaches were still here as employees/contractors of Firm franchisees or Practice franchisees.
   4. This reclassification and explanation are explained in footnotes in the FDD under Item 20.
   5. On the surface, it can appear as if we had a large exodus of “units” a few years back when it was merely a reclassification of coaches who didn’t own the franchise in the first place.
   6. This is something we explain to your candidates so they can read the FDD in its proper context.

During the Due Diligence process, we explain those dynamics so your candidates will know the history, will be able to envision the future will understand the FDD.  They will validate the history and the earnings potential directly with our trail-blazing  Firm owners.