Last month, I discussed how for-profit business TOMS (www.TOMS.com) was leveraging the power of generosity through its ‘one-for-one’ business model, to compete in the fiercely competitive shoe and eyewear industries (see HCM Oct 14, p46). This month, I want to share the story of how Franco’s Athletic Club, located in the US state of Louisiana, is using generosity to become one of the world’s most admired health clubs.

Community engagement
I first met Sandy Franco, one of the co-owners, when she was presenting at the 2013 IHRSA European Congress in Madrid. Her message was a simple one: invest in your community and the community will invest in your club. Sandy and Ron, her husband, have pursued this strategy for 26 years.

The Francos acquired the 2,600sq m (28,000sq ft) racquetball and social facility, originally known as the Bon Temps Club, in 1988. Two years after the acquisition, their world fell apart when their two-year-old daughter was diagnosed with cancer.

The Francos had already made a big impression in the small city of Mandeville and received an outpouring of support – even from people they had never met. As Sandy recalls: “Friends, family, members and the wider community rose up and supported us. They were writing us letters, they were supporting us, they pretty much carried us through this time and it’s something we’ll never forget. It wasn’t a conscious thing when we said ‘let’s start being community players’ – we feel an obligation. They were there for us and we want to be there for them.

“Our precious daughter, thank God, has grown to become a vibrant young woman, but we’re constantly striving to fulfil the promise we made at that time – to give back to the community that gave so much to our family.”

For the past 26 years, the Francos have therefore been reciprocating: the more their club has grown, the more they give. Today, Franco’s has grown to more than 23,225sq m (250,000sq ft) of indoor and outdoor space for fitness, sports and recreation, with approximately 15,000 members.

Creating long-term value
When it comes to requests from charities, schools and community groups, the Franco mantra is, and always has been: ‘Never say no.’ Why so generous?

Crucially, they do not see these requests through the lens of random acts of charity, but as investing in a community that creates long-term value for their business. “We believe that, by giving back to our community, we have grown our facility and our membership,” says Sandy.

Of course, saying yes doesn’t always mean writing a cheque – it also includes offering the club’s courts and studio space to schools, dance clubs and sports teams, and donating use of the pools for mental and physical stimulation therapy for special needs children.

Sometimes the club just needs to act as the catalyst and mobilise its army of members, employees and supporters. A recent demonstration of this compassionate activism involved fundraising for a local cancer centre: organising a gala dinner for the first time, the club set itself a target of selling 300 tickets and raising US$75,000, but instead sold 500 tickets and raised US$185,000. Will this drive short-term membership sales? Probably not, but the club’s reputation has just been given a steroid-like boost.

Franco’s has now raised more than US$1.5m for a wide range of non-profit organisations and donated significantly more from in-kind use of its facilities.

Respecting your club’s ethos
During Sandy’s Madrid presentation, she shared the story of the time Franco’s was looking to expand into a second site, explaining that they faced tough competition from a much larger national chain seeking the same property.

The property landlord couldn’t decide between the two businesses, so a representative visited Franco’s to better understand its operating philosophy. A tipping point came when, during the visit, he was captivated by a studio class for local children with special needs. Franco’s was awarded the lease to operate the new club, leaving the larger rival with a far stronger balance sheet surprised and perplexed.

Sandy summed it up: “People who appreciate your efforts will want to be a part of your club and to do business with you.”

Beating the odds
Something remarkable is occurring in the Franco’s catchment area where, according to a local report in 2009, more than 26 per cent of the population belonged to a health club. The US national average at the time was 14 per cent, not to mention the fact that Louisiana as a whole has the sixth highest adult obesity rate in the United States (source: The State of Obesity: Better Policies for a Healthier America).

So what’s driving this remarkable level of engagement? I’m not sure I know, but what is clear is that the team at Franco’s have spent the past 26 years getting out of their club and into their community.