Ellipse Fitness Makes the News!
Lawyer lights fires under franchises
By Gail Appleson
ST. LOUIS POST-DISPATCH
04/06/2007
When lawyer Eric Riess was a kid he wanted to be a firefighter or a movie star. His inspiration was the 1970s television series 'Emergency!' Riess would get on his bike and pretend he was a firefighter on the show's Squad 51 and ride around the neighborhood with sirens blaring; the sirens being his own voice. Riess didn't exactly grow up to be a firefighter, instead he manages the corporate practice group at St. Louis-based Greensfelder, Hemker & Gale P.C., where his specialty is franchising law. 'I ended up being this, and I end up putting out fires on a daily basis. Isn't that ironic?
Why did you become a lawyer?
I was a CPA for many years, but I decided to be a lawyer, as hokey as it sounds, because I wanted to be a politician. I thought it was the only way I could change things I was dissatisfied with. Who knows what are you dissatisfied with when you are in your mid 20s? You name it, you're dissatisfied with it.
I would say 80 percent of the politicians are lawyers, so I said I needed to go to law school. … I had so much debt coming out of law school that I couldn't afford to go into public service. I had to just take the highest-paying job that was offered.
What kind of law did you first practice?
I worked in commercial litigation, but commercial litigation today is so adversarial that when it cost me my first marriage, I said, "Well, this is nuts. I've got to get into something that is more suited to my CPA background and less adversarial." So I found this thing called business law. I came here (to Greensfelder) in 1999 because it was the most entrepreneurial firm I found. It was like the businesses I represented. It understood it was in the business of law and wanted to grow and had ambitions. And that was a hoot. That was cool. Since that time, it's grown from 80 lawyers to 170 lawyers.
Why is franchise law your passion?
When you drive down the street, I would venture to guess that 50 percent of the businesses you pass are franchises. It's the way U.S. business gets done. Guess what? Today there are only 2,500 franchise concepts. The prediction for the next five years is that there will be 2,500 more franchise concepts. … It's not only the way that U.S. business gets done, it's the way of the future for U.S. business. …
The part that really gets me juiced every morning is helping these franchise concepts grow. I don't just want to be a document producer for them, I don't just want to draft documents and say, "Here you go, good luck, hope you grow." I fly to my clients routinely, I strategize with them on Saturdays, on Sundays and in the evenings on how should we grow where should we grow. I'm a hands-on guy.
There's no bigger kick than watching a concept go from one location to 100 locations. And I would bet you there are very few practice groups in the law that can have that sort of a kick, that kind of continued excitement. It's always fun to talk to the CEO of a hundred-plus franchise system and know that he or she knows you were with them when they just had an idea.
How did you get started in franchising?
My first franchisor was Show-Me's, which is a beach-themed restaurant chain. I was at (local law firm) Thompson Coburn at the time. It was not something that I sought out, but it was something I fell in love with. It just seemed to be a natural thing for me. After I got Show-Me's, I went to an American Bar Association Franchising Forum. Then I really got juiced.
I saw the group of lawyers that serviced the franchising industry was not all that large but that the franchisors were large in number. And I thought, "This is a niche I need to focus on." Today I represent both franchisors and franchisees. If there are 2,500 franchisors, that means there are hundreds of thousands of franchisees. And each franchisee is a business. So if you represent franchisors and franchisees, the number of businesses that are available to you because of the niche you practice in is unbelievable.
Can you tell me about some unusual franchise proposals you've received?
I got a call from a professional wrestler in Los Angeles. He heard I would fly anywhere in the U.S. on my nickel to visit with any true prospect who thinks he wants to franchise the business. He wanted me to fly out and visit him. And you know how kids have visions of sugar plums? Lawyers sometimes have visions of dollars. OK, so I had a vision of dollars.
So I said, "Is this the next WWF? So what's your concept?" He said he's going to teach people to wrestle. That means he would sell you and me a franchise and then teach you and me how to wrestle. Our business would be then to teach other people how to wrestle. I don't make fun of people's dreams, but that was one that didn't meet my threshold of likely to succeed.
How about an example of a system you believe would succeed?
Ellipse Fitness. I got a call from two young ladies in Appleton, Wis., who had a concept for a fitness business. We live in a world where there are more fitness concepts than you can shake a stick at. Why did I think they were something special? One, they were completely woman-owned. That made them unique. Two, they were socially conscious. Their business consisted of two locations that routinely had events to support domestic abuse shelters. And they were hands-on.
Did you try out the concept yourself?
Look at me. I didn't. I smoke cigars, OK? I'm not a fitness buff, but I liked what they told me enough that I flew up there on my own nickel. We launched them in September of '06, and they've sold five franchises so far.
Does it worry you that your start-up franchisors will be going up against much bigger competitors?
How many big concepts do you know of but you don't particularly care for their products? But they are huge. One of the fun things to do is to create competitors of those systems that truly believe they have a better product or service to sell. It's a gas to be able to take a vacation and drive down the road and see a location of one of your franchisors that's the upstart of the industry and the established competitors are nervous about them. That appeals to that rebel instinct. That appeals to that business-building instinct and to that excitement level when I was the Squad 51 guy.