Faith-Driven Franchise Investments: Todd Recknagel’s Three20 Group Playbook

Anthony Codispoti (00:00)
Welcome to another edition of the inspired stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Cotaspodi and today’s guest is Todd Recknangle, managing partner at 320 Capital Group.

They are a private investment firm focused on franchise, distribution, and multi-unit businesses. They partner with middle market companies to help them grow through both capital investment and operational support. Under Todd’s leadership, the firm has been recognized for its hands-on approach in supporting companies that strive to combine strong performance with faith-driven values. He also invests in multi-unit expansions across the country.

ensuring that each brand remains aligned with its strategic goals. Todd himself has served on the board of the International Franchise Association and has been featured in multiple industry publications. Prior to joining 320, he was CEO and partner at Mr. Handyman International and AM Conservation Group, where he guided significant expansion. With an MBA in finance from Michigan State University, Todd brings decades of experience

in building high growth franchises and coaching leadership teams to success. Before we get into all that good stuff today, our episode is brought to you by my company, Ad Back Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line. Imagine being able to give your employees free access to doctors, therapists, and prescription medications. It can even work for your part-timers. And here’s the fun part.

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Todd Recknagel (02:12)
Hey, thanks Anthony, I appreciate that and appreciate your time and being on and just want to say hi to everyone.

Anthony Codispoti (02:22)
So Todd, you’ve been managing partner at 320 Group long time, 26 years in county. But before that, you were involved in a number of franchise operations. How did you first find your way into the whole world of franchising?

Todd Recknagel (02:37)
Yeah, well, great question. Kind of going back to my early beginnings, I was a banker, investment banker, had formed a

was a co-founder of a small mezzanine fund actually in 1989. So goes back a ways. got my MBA in 87. So all to say it just makes me old, I guess, Anthony. And I found myself working on other.

people’s deals and just really desiring my own deal, my own company. I just had that entrepreneurial drive. I if I go back to my grandmother, who was born in 1902, she had her own.

her own store that she supported herself after my grandpa died. My grandfather on the other side was one of the early A &W franchisees ⁓ way back in the 60s, think, late 50s, early 60s, which is crazy to think. My dad owned a chain of pharmacies. so entrepreneur was in the blood. ⁓ so as we were growing the investment fund and as I was a banker,

⁓ I was desiring my own business and so I did the smartest thing I thought I knew how to do and I bought a territory for blimpy subs and salads.

And I don’t know if you remember the old Blimpy brand. They were at one time nationwide and had gotten up to 2,100 units actually across the country. And I had a territory in West Michigan where I helped open a number of stores as an area developer.

and then also operated and owned my own group of stores and became the largest individual franchisee in Blimpy in the 90s. And so ⁓ even though I think when I was leaving the investment banking and leaving a six figure income and jumping into the entrepreneurial thing, I think my dad originally thought, boy, I don’t know if we’ve done so well with the kids. But yeah, that’s

Anthony Codispoti (04:48)
leaving the

comfort of a nice, steady corporate job and the benefits that go with it to go out on your own. Little risky.

Todd Recknagel (04:56)
Wearing a tie

every day looking like an executive and my dad thought I took a step backwards getting into franchising. But that was the beginning, Anthony.

Anthony Codispoti (05:06)
Okay. And obviously there’s something about the franchising space that you have fallen in love with because here we are today. You continue to do it. Can you, lots of times, like a specific anecdote or story can help to explain to people why something is so important, why you’re so passionate about it. Can you think of a story like that?

Todd Recknagel (05:28)
Yeah, absolutely. ⁓ The early on those first three units, I thought were going to kill us. ⁓ We were losing. I went from making over 100,000 to losing 100,000 first year because we opened three stores within about seven months. And I thought, what in the world have I done? And ⁓ somebody approached me. It was like a parent of one of the kids that worked for us and said, hey, we would like to

maybe buy this one store from you. And I really thought about it and I thought, you know, yeah, that’s kind of my worst performing store, maybe if I just got rid of that one. And I was talking to a mentor and it dawned on me that I need to fix this, own it, fix it, and improve the earnings, whether I want to sell it or keep it. It doesn’t matter. I need to fix it. And I think that was the day that I became

the franchisee and the owner of it. Not the day I went and signed the agreements early and was all excited. That was the day I owned it and I knew I needed to drive it. We ended up driving those three units, hired an operations ⁓ person to help us in the process because we weren’t necessarily the best. We hired in some good managers, hired in some ops people. We learned a lot, grew to six stores, then grew to 10, then grew to 12, and ended up

⁓ actually selling out before Blimpy declined and so sadly Blimpy ended up I think there’s probably less than 250 units but as a banker and as a former investment banker it made a lot of sense to me to be in a formula and to have a formula that worked but you still had to work that formula.

And so that was an early lesson, hands-on, driving those to success and then selling out of those.

And that was also where I said, hey, I love franchising. ⁓ And so we started to look around to acquire other franchise companies and even franchisors. We looked at a number of different things. That’s actually when I first formed 320 Group as a company. The reason it’s 26 years old is it was formed in 2000. I think it’s about 25 years old. Might have been 1999 though that I think about it. ⁓

we formed that entity, but that entity actually ⁓ laid dormant for a number of years, and I’ll get to that ⁓ later. ⁓ But then when I was looking around, I ended up buying into Service Brands, ⁓ which is a new platform company that was formed in 2000.

that they had run Molly Maid for many years in the US. And then they decided to become one of the original gangster platform companies in franchising. And they formed 800 Dry Clean and then Mr. Handyman. And then I bought in as a partner and ⁓ became CEO of Mr. Handyman, which is what I did for many years from about. ⁓ I came in in 2003, a few years after Service Brands

had been formed and then was there until late 2011.

Anthony Codispoti (08:51)
So let’s go back a bit because you said something that really caught my attention. The day that you decided, hey, I need to fix the problem in blimpy, right? Three stores, you lost $100,000, open three stores in seven months. Things aren’t going well. Somebody offers to buy one of them. Somebody talked to you and they sat you down and like, hey, whether you sell it or keep it, you need to fix it. And that was the day that you really became the franchisee, not the day that you signed the papers.

Todd Recknagel (09:15)
Right.

day I owned it.

That’s right.

Anthony Codispoti (09:21)
Yeah,

say more about that. You mean just because you owned what the problems were and up until that point maybe weren’t taking as much ownership of it?

Todd Recknagel (09:28)
Well,

had investors ⁓ in the deal. ⁓ I think I had a personal guarantee on the deal. so there would have been, my house would have been on the line. And ⁓ I had 70 % of the company, and I had investors that were 30%. And so my head being in the investment game was like, ⁓ I can’t let my wife down. can’t let my. ⁓

house or my guarantee down and we’re losing money, but it’ll turn and now can hire these people and and I was just kind of had all this jumbled in my head And it was almost a day that I was like wait a second

this thing’s losing money and this guy wants to buy it for a song. He’s not gonna pay me a premium because it’s a brand new, you know, gorgeous store. It’s losing money right now. He wants a deal. And for me to get it up to a value of being able to really even sell it, to keep it or sell it, I had to get in there and I had to be the guy. That’s why I said I was a franchisee. So I actually… ⁓

first took a leave of absence from the investment firm, because I had invested in these units in the side like I was still kind of putting a deal together. And then I realized we had to move closer to the units. We sold our home ⁓ in Grand Rapids, moved out to Holland to be closer to our first few units, Holland, Michigan, and actually was hands on. In fact, I had a story one day.

One day, I literally had a guy, we were working on a million dollar investment into his company with the investment firm that I was part of, and I was in my own store working the slicer, standing there at the lunch line, working the slicer and kind of wiping down tables and helping over the lunch hour. And the guy came into order and I knew his name and I said, hey, Joe, how are you? And he looked at me and he’s like,

Is Slicer Guy talking to me right now? mean, like, like, looked right past me and looked at the menu and didn’t even recognize me, and we were cutting the check over in the investment firm. So that was probably where I first learned I wasn’t gonna get a whole lot of respect in, ⁓

Anthony Codispoti (11:37)
Ha

Todd Recknagel (11:51)
in working in my own restaurant business, but I knew if I could make it, ⁓ I certainly would have the earnings and the growth and what I wanted out of life. so ⁓ that was just a funny story from early on in that first year. But I took a leave of absence from the investment firm, and ⁓ then I went ahead just left the investment firm. We got the units up to earning good money, had turned them around

nicely, got them growing. In fact, by the time we got to store number six, we were 50 % ahead of the system average on unit volume for the blimpy units. that was part of what helped us grow and continue to give us success. And then we grew out of cash flow. I bought out our minority investors. And so that turned out to be a nice deal. And then I sold the territory and sold the units from ⁓

Anthony Codispoti (12:30)
Wow.

Todd Recknagel (12:51)
2001 ⁓ to 2002 I had sold out sold out of Wimpy at the point where

Anthony Codispoti (12:57)
And

why did you sell out? What was the next vision? What were you?

Todd Recknagel (12:59)
Well,

there were some changes going on in Blimpy. We didn’t like how the food costs were changing and the franchise or was just to be honest, the money on the back end. so it was starting to affect the franchisees. And so going from 2,100 stores to

250 or 300 today. I that kind of probably told more of a story from 2000 to 2025 than I could even tell, frankly. But I wasn’t crazy about it. we had maximized what we had, and I didn’t want to grow in the system anymore. So we sold.

Anthony Codispoti (13:48)
So today, 320 group, why is it spelled the way that it is? It’s three spelled out, T-H-R-E-E, and then it’s the numerals to zero.

Todd Recknagel (13:58)
Yeah.

Yeah,

sure, ⁓ That was the only website I could get. No, I’m just kidding. ⁓ It actually stands for ⁓ Ephesians 3.20. And in that verse, Paul writes, ⁓ as he’s going through Ephesians, he’s talking a little bit about ⁓ what’s available to us in

Anthony Codispoti (14:09)
That happens.

Todd Recknagel (14:30)
in Christ and this full life that we can lead. And he gets to that point in Ephesians 3.20 and 3.21 that goes, to him who is able, him being God, who is able to do exceedingly and abundantly beyond what we could ever ask or imagine, to him be the glory. It’s not for us. He gave us the gifts. He gave us the blessings. It’s all for him.

Now he can do exceedingly and abundantly beyond what we could ever ask or imagine, but to him be the glory. And so all the glory goes to God. so ⁓ I had realized at that time when we formed the company that, ⁓ you know what, it needs to be, I was somewhat humbled in some of the experiences I gave you at Blimpy, struggling through that and ⁓ the slicer guy story. ⁓

But I realized it needed to be all about ⁓ God and not as much about me. Not to say that I didn’t continue to have struggles. I’ll be happy to share them with you. ⁓ But where we are blessed and grow and even grow through the struggles, to God be the glory. So that’s the story, the meaning, and the reason behind 320.

Anthony Codispoti (15:52)
So I want to get into what you’re doing at 320 and the investment thesis and all that. But I think, you know, it’s clear based on the story you just gave, where the name came from, you know, after a Bible verse that means a lot to you that faith is a big part of your life. Clearly franchising has been and continues to be a big part of your life. Talk to us about what you’re doing to sort of bring those two worlds together.

Todd Recknagel (16:08)
Yeah. Yeah.

Yeah.

Sure. ⁓ Well, one of the things now, one of my passion projects today, God has just been knocking on my heart for probably the last five years, ⁓ that…

We have such a wonderful group of folks in franchising, and franchising’s a great way to build a business and support your lifestyle. And I do very, very much love franchising. been in it 32 years now. And ⁓ we get together at many of these events, and some of the folks will…

talk about their cars or their house or their latest vacation or all of those things and those things are all very nice. We are blessed. I just was talking about 320 Group and God has given us more than we could ask or imagine. We’re blessed. ⁓ But my heart is really for guiding more and more folks ⁓ into the kingdom of heaven and looking out at eternity and spending time with the one who has created us and has given it all.

⁓ I started an organization called FranFaith, which is more of a community and a movement of where faith comes together with franchising. And what we’re doing is working on five different areas, ⁓ faith, family, franchising, finances, and fitness. So we think God wants you to be healthy.

And so we’re putting on content on fitness and health. ⁓ God wants to bless your business. And so we’re doing stuff on franchising, but also finances. ⁓ And so ⁓ we had a franchise broker on one of our podcasts that’s selling, sold over a billion dollars of franchises. And so he was a great guest. ⁓ And so.

And so we want to help people with their faith, their franchise, their family. And again, I stand here as a person who was married 25 years, had an affair with business and franchising, building all these companies, ⁓ and got divorced. so, Christy and I, my wife today, who’s a co-founder in FranFaith and a co-founder in our company 320 Capital Group,

Christy and I are very, very happily married. We have six kids between us, both full of faith. But we both stand with broken marriages from our first marriages. so we’ve learned a lot through that. You can kind of wind up being bitter and looking back or blame the other, or you can take the blame on yourself, understand that you’re forgiven, and go on and be the best person you can be in faith.

And ⁓ so we’ve done that.

Anthony Codispoti (19:24)
So how can people find out more information about this group?

Todd Recknagel (19:28)
A number of ways. You can go to FranFaith.com, which is our website for our organization and our movement. ⁓ Our podcasts are also on YouTube. The easiest way is probably either on our website, sign up. ⁓ We also have a community within the Circles app. And so you can find FranFaith in the Circles app.

And that’s nice because you can contact other members within the community, which you can’t do on YouTube necessarily or seeing our LinkedIn posts. ⁓ So you could probably search for it on YouTube, LinkedIn, go to our website.

Anthony Codispoti (20:08)
And this is a place

for people to kind of congregate and, you know, people who are sort of these two parts of your life that are so important to your faith and franchising also share this and support each other and share stories. Am I kind of getting the idea, sort of the purpose of the community?

Todd Recknagel (20:18)
Yeah. Yeah.

Yes, and we’re putting

out a newsletter, we’re putting out curated content weekly, a podcast weekly, ⁓ just information to try to reach people, to encourage them, inspire them. We don’t want to over spam or ⁓ text anybody, but we do take your email and your text and ⁓ we’ll send you a message of encouragement weekly and that kind of thing. ⁓

Anthony Codispoti (20:48)
That’s great.

That’s

really nice.

Todd Recknagel (20:54)
And right

now, we’re funding everything. I mean, it’s free to join, easy to join. it’s ⁓ just a community ⁓ movement that we’re building.

Anthony Codispoti (20:59)
Okay.

Very nice. ⁓ Okay, so back to 320 group. What’s this about? What’s the investment thesis here? What are you involved with? Why do this?

Todd Recknagel (21:15)
Sure, sure, ⁓ partnered in service brands, helped build, I think it was eight different brands all told. There was a group of brands beyond the three that we had started with that were certified restoration, Dry Clean and Ducks, which we helped. And then ultimately some of those brands were sold back to their founder or sold ⁓ to Belfour franchise group. Puro Clean was one of the brands that

we were partnered with and so help grow all those brands. think all told the brands were over four or five hundred million in system sales and over a thousand franchisees and so it was ended up being very successful. For most of that time period I was CEO of Mr. Handyman, drove that brand to almost a hundred million in system sales and 300 locations.

And then ultimately, service brands are the main two brands, Molly Maid Mr. Handyman, were ultimately sold to Neighborly. The name of the company is Neighborly today. was Dwyer Group at that time in Texas. And they have a big family of brands and are a multi-billion dollar company. Which is interesting too, because Neighborly

And Dwyer was originally kind of a faith-based company as well. So that was kind of a neat story. Sometime the Dwyer story is quite a story. But I had kept my stock and stayed on the board and was part of the investment committee, but left as CEO in 2011. And I partnered with a private equity firm to purchase a company in Charleston, South Carolina, which was AM Conservation Group.

And we ended up growing that company through two private equity sponsors. ⁓ Grew it from $27 million to about $260 million in revenue. And the EBITDA was like $4 million to $40 million. it was just crazy successful. Bought out some of our large competitors. And just a very, very nice deal. Concurrent with that, my partner Trivest

which was a PE backer in becoming owner and me being CEO of that company. ⁓ We also had partnered in Take 5 Oil Change, which was a portfolio company. We helped Take 5 grow from about 20 units to 90 units ⁓ and formulate the model. there was just a wonderful team. I was just a co-investor and board member in that particular deal.

⁓ But all of those deals sold out within about 18 months of each other. ⁓ so my new wife, Christy, and I formed a family office that is essentially 320 Groups. So I had revived the old company that I had and ⁓ formed an investment firm.

where now we were much more active and much more active in investing in deals and growing companies. We had this track record of these 10 or 12 companies that we had built behind us, all told had three or 400 million in investor gains in those companies. Not our money, but for the private equity firms had very successful track record. so now we started investing a little bit more for our own capital account.

And our first deal was Massage Envy. I’ll just stop there. That gives you a little bit of the history of why 320.

Anthony Codispoti (25:14)
Yeah, that’s

really helpful. yeah, before we kind of go into, you know, what’s in the portfolio today, I want to better understand what it is that you’ve been doing over and over and over again that has allowed for so much success with each of these different companies that you’ve gotten involved with. it just that you’ve been able to infuse cash at the right time in companies that are already very strong operationally? Do you just know how to market, you know, better to find more customers? What’s the playbook look like?

Todd Recknagel (25:43)
Yeah.

Yeah. So ⁓ it’s not it’s not always cash. Sometimes cash maybe needs to secure the deal to underwrite the deal to shore up the balance sheet or to invest in the deal. So certainly cash but it isn’t necessarily throwing cash at these deals. In fact it’s many times the opposite. ⁓ It tends to be all of the operational blocking and tackling.

that we learned early on. It’s putting in CRM systems and tracking the leads and understanding every stage and what are the key metrics of success and aligning the interests of the people so that they’re rewarded, the company’s rewarded, the customer’s rewarded, and we’re watching all of those key metrics and hands-on getting in there, tweaking and making it better and better.

And we’ve been very blessed through this whole period of technology being able to support our cause so that we’ve always been able to track things or have CRMs or have systems that were also getting better at the time and that are continuing to get better now and going forward. I mean, I see huge opportunities every single day that we can continue to grow and ⁓ improve.

But it’s all of the blocking and tackling hands-on stuff at the core unit level. ⁓ That’s what we ⁓ see, and that’s been our playbook. Did that answer your question, Anthony? Yeah.

Anthony Codispoti (27:25)
I so. The big things I

think I heard you hit on Todd were, we put a CRM in place. We get better at tracking the leads and we get better at aligning goals, right? So ⁓ the employees are incentivized to help improve the performance. As the performance of the company improves, their compensation improves.

Todd Recknagel (27:47)
Right, right. And so just this last two weeks, we’ve probably talked to three different founders of their companies. And their original units, these are founders of franchise companies that have two or three units, four units, that kind of thing, that they own company-owned units. They’re just getting into franchising. And in almost every deal in the last two or three deals that we’ve looked at,

the unit volume and the performance was starting to sag. And if it was improving so much, the cash would be throwing off from those company units. They probably would decide to just open their own and not go to franchising. But the performance was sagging and so they were looking to, and some of it is maybe just taking their eye off the ball operationally and shifting and trying to become a franchisor. That happens, it’s natural.

And I don’t blame any of these folks, but it was interesting when an outside set of eyes came in and looked at it and said, wait a minute, your footprint is too large. Your build out is too expensive. Yes, it’s drifted up a little bit with inflation, but there’s some things you could do about it. You could value engineer it. You could bring that footprint down, probably still do the same volume.

So it’s even tweaking the model a little bit to right size the investment and then get it right sized with the return so that it’s almost so grand that you want to just build them yourself. When a franchisor gets to the point where they want to build their own units ⁓ because they’re so successful and they almost want to keep them from the franchisee,

That’s when that’s an incredible model and franchisees are fighting to get in. That, you know, the Take 5 model that I mentioned, ⁓ that ended up growing to a thousand units now for Take 5. And they’re still using the similar ⁓ low footprint model that we had developed in the high margin and the method and the quick service that we.

had developed in that formula that enabled them to have a very, very quick payback, 18 months or two years oftentimes, which was a really nice return. And that’s probably why they grew to 1,000 units. And so I think every franchisor needs to follow that formula. We only learn that formula just from doing the blocking and tackling of trying to improve the unit economics at that level.

Anthony Codispoti (30:35)
How hard is it for you to take your expertise from one industry into another? You learn blimpy, learn food costs and customer service and that kind of environment. How transferable are those skills into some of the other ⁓ industries that you’ve gotten involved in?

Todd Recknagel (30:52)
Well,

so this is a shout out to all the restaurant operators in the country. When you’re on top of a lease, which is rising, and then you’ve got labor costs, which are rising, have been rising, and food costs that are rising, you’re on top of three variables that you have to be really good. Retail is detail, and you have to be really good operationally.

⁓ to run that successfully. And that’s why restaurant operators are one, hard working, but two, great at what they do. And so we think those skills oftentimes are transferable into almost anything. ⁓ And because you’ve managed all three on some levels. Now as a franchisor, we… ⁓

we learn certain things like CRMs and tracking the key metrics and being a franchisor with over 15 different systems and then a franchisee, multi-unit franchisee now with six or seven different systems. You learn it from both ends and so you learn some of those key metrics and we find it’s very, very transferable. Now that being said, it is transferable.

But we do like certain spaces. We obviously like the service space where we can improve customer service. ⁓ We clearly like certain spaces because that’s where we are and where we’re investing in. But we find the skills are very transferable.

Anthony Codispoti (32:39)
So what is it that you guys are doing now? Are you going into concepts that you like and buying out lots of franchisee licenses? Are you going and investing in the core franchise or is it a combination of the two?

Todd Recknagel (32:54)
⁓ We’re in both. But give you an example. So when we first did 320 Group, ⁓ we purchased seven massage envies from area developers. We purchased from three different area developers. Some of them were around our home ⁓ in Ann Arbor and southeast Michigan, and some were near our Florida home. And so we kind of liked that.

portfolio to dip our toe and to take a look at it. We’ve always kind of liked that model. We started with that Group of Seven. We doubled the earnings of that Group of Seven doing the operating, blocking and tackling, creating a good culture, taking care of our customers, all the things that we preach and say we did ourselves with our seven. Then we had an opportunity to pull together a merger with 21 additional units.

And we knew we needed to build kind of a private equity C-suite with that. We weren’t gonna, you know, kind of hands-on ⁓ run it. We had management leadership in our units, but we didn’t have a full CEO, CFO. I was serving as the, you know, the head of the company. ⁓ And ⁓ so that was when we partnered with Trivest. And then…

We did build out some new stores, but we cut a deal with corporate to be able to expand. And I say corporate, the franchisor. And we got to, went from 28 units to 68 just before the pandemic, continued to grow through the pandemic, got to 95 units. And then a couple years ago, three years ago now, I guess we added another.

when we bought out Texas. We bought a big operator in Texas. So we’re at 130 units in the Massage Envy Group, 3,000 employees, and at 1,800 therapists and esties, we’re actually the largest employer of therapists in the country now in portfolio companies.

Anthony Codispoti (35:01)
Wow. How

were you guys able to continue to grow through COVID? It would seem like you got a space even more, like this is one of those things that has to go dormant for a while, no?

Todd Recknagel (35:14)
Yeah, we went through the customary ⁓ shutdown. We followed the rules to the T. Fortunately, we weren’t in California or any other.

areas like that. were in mostly Arizona. We’re in all the Midwest states. ⁓ We go east. So we were able to open back up in most areas. So we were closed for the six week. That was the six week period. ⁓ We were blessed with ⁓ PPP money. ⁓ But what needs to be clear on that is

Anthony Codispoti (35:35)
So you were able to open back up to some degree earlier than a lot of other places.

Todd Recknagel (35:56)
that six week period we had about a ten million dollar payroll that we fully met. We fully took care of our people and paid them through that whole period. Before the PPP money was known or available we made a decision

Anthony Codispoti (36:07)
before the PPP money was available, before that came through, you guys are just like, we’re gonna do this,

we’re gonna take care of them, we’re taking it out of our own pockets.

Todd Recknagel (36:16)
Our

people and our resources were too valuable. Our therapists, our STs, the people that work for us are our production. And so we allowed members to opt out of their payment. And it was amazing. Our members are incredible. 90 % of them stayed in. And so they stayed in. The loyalty was unbelievable off the charts. And we fully understand even the 10 % that opted out.

And then we made a decision we were going to cover 100 % of the payroll. So we did 100 % of the payroll. Now we got a portion of that reimbursed. We didn’t know it at the time. And again, just we were blessed. It’s not any praise to us or whatever. We were blessed. But the government did reimburse that portion through PPP. But it really kind of brought us back to probably still being

Anthony Codispoti (36:56)
but you didn’t know it at the time you made that decision.

Yeah.

Todd Recknagel (37:15)
little bit behind the game. We didn’t have like extra money or oodles of money, but others had kind of struggled through, made different decisions or wrong decisions. And, and so we paid them fairly for their businesses, but we were able to pick up some businesses from just some weaker players, ⁓ unfortunately, or people that were just sick of it. They were sick of struggling out of COVID. So ⁓

So we invested pretty heavily before the pandemic. We invested heavily in our people, and then we were blessed with what we kind of picked up post pandemic. ⁓ And then to be able to get to the units today. Today we’re ⁓ paying debt down quickly and growing in our EBITDA. And again, we’re blessed and doing well.

Anthony Codispoti (38:09)
Any thoughts to continue to expand your footprint with Massage Envy?

Todd Recknagel (38:15)
⁓ We have such an amazing, ⁓ we have a CEO that ran a billion dollar company and we have a CFO that came from a public company and ⁓ we, and that, sadly I’m leaving out the rest of the C-suite that are all unbelievable individuals but my point to that is we have such a powerhouse management team in that company.

that we could actually be a platform for other, to purchase other things. And so we may strategically grow and look at other brands. We’re 13 or 14 % of the system in Massage Envy. And so we’re comfortable at that point without necessarily being any larger.

Anthony Codispoti (38:50)
Really?

maybe not put too many eggs into the same basket, so to speak. And so looking at the other companies that you’ve got in your portfolio, explain to us what you’re looking for. You said that you really like the service space. Say more about that.

Todd Recknagel (39:08)
Yeah, yeah.

Yeah,

well, so ⁓ another company is Office Pride that we partnered with. ⁓ Again, we brought in ⁓ Trivest ⁓ Capital as our partners on that. And we serve as operating partners and board members, co-investors there. ⁓ Have a wonderful CEO there that we helped ⁓ recruit, bring in, and build the team. Again, another faith-based company. ⁓

⁓ We are strengthening that model, doing a lot of the blocking and tackling. Office Pride is a commercial cleaning organization. So they not only do offices, but it’s actually offices are only 15 or 20 % of what they do. They do schools, they do hospitals, they do all kinds of commercial establishments. So ⁓ very successful company. ⁓ And ⁓ now we’re just…

as we’re reformulating the model, we’re just ramping up franchise sales and so improving that ⁓ as well. And again, that’s all the blocking and tackling. We did that deal a little over three years ago and so ⁓ we’ve got a good model there. ⁓ Three and a half years ago we invested in a group of Sola salons, company called Salon Freedom that

had about 30 solar salons. And we like the solar model because it’s actually creating entrepreneurs in the solar pros that come in and lease the suites from you. And we have systems in place that actually help them run and operate their own business. So they might already have a book of business at a salon somewhere, a high-end salon. They might be giving 40 or 50 % of their income.

to the salon owner, but they already have their own book of business. They come in, they pay seven to eight percent of their revenue and rent to us in a salon suite. then we have the tools to help build their business. And so it’s actually creating entrepreneurs. We have 2,000 solar pros, because we’ve grown that now from 30 units to 60 units in that lab.

Anthony Codispoti (41:34)
And so these entrepreneurs

are doing what? They do hair, they do nails.

Todd Recknagel (41:40)
They do hair, they do nails, they do massage, they do ⁓ permanent ⁓ makeup, like tattoo permanent makeup. ⁓ We have chiropractors in there. ⁓ We had some of the guys, we’re also getting chains, which will come and they might be doing lashes or they might be doing ⁓ the dental.

repair or chiropractors, they’re coming and putting in offices inside our suites. And so we’re seeing all kinds of different new opportunities with that. ⁓ But originally the concept was mostly solar pros were hair technicians or estheticians. But now we’re seeing a full variety of folks.

Anthony Codispoti (42:29)
and then tell us about special detail products.

Todd Recknagel (42:33)
Specialty tile is a really nice high end. It’s one of the largest ⁓ distributors of ⁓ tile products in the southeast United States. And they, I forget what the percentage is, but a lot of their stuff comes out of Italy. ⁓ Really beautiful specialty tile as in the name. ⁓

⁓ And we are doing more and more stuff domestically, which is kind of neat to see that grow in that particular company. ⁓ But it’s a company that does probably two-thirds commercial tile. So like we did the Orlando Airport, know, Holiday Inn Express is a big customer and Olive Garden’s a big customer. You know, so we have a lot of customers there. But then we also, a third is residential. So we do a lot of

nice homes and we’re specked by designers all around the country now. So we’ve grown the sales team, we’ve grown the blocking and tackling on ⁓ delivery and distribution and the way we operate. put in platforms, CRMs, all of the things that we brought it into, a little more of a high technology company. so yeah, company’s doing very well. So that’s probably a little bit out of our

Anthony Codispoti (43:53)
How would you?

Todd Recknagel (43:56)
Norm though. It’s obviously outside of franchising. We just like the deal.

Anthony Codispoti (44:02)
Well, and it’s a physical product more than a service, right? Yeah, so a little bit different in that respect too. How would you characterize today the role that you and separately your wife ⁓ have in all of this? You’ve got great leadership teams at these different companies that you’ve invested in. Are you guys still working to set the vision? Are you helping to make decisions on, we’re going to go this direction with our next investment?

Todd Recknagel (44:05)
Right. Yeah.

Anthony Codispoti (44:31)
lay it out for us. What’s a day look like for you?

Todd Recknagel (44:33)
Yeah, so we’re generally completely behind the scenes. So when we co-invest and go into a deal, generally we’re a minority partner and the private equity firm is the majority partner, but we’re lockstep together. So oftentimes ⁓ we can do stuff that’s much larger than ourselves and we can do very, very large deals if we need to. ⁓ We do like the smaller middle market deals, frankly, but… ⁓

And so we’re usually working on strategy. We’re usually always coaching the CEO. We’re oftentimes coaching the entire C-suite. So we’re on individual calls with them. We’re on group calls with them. We help recruit the C-suite. ⁓ We’re in usually all the monthly operating calls. We’re usually in all the ⁓ board.

board calls or board meetings that are oftentimes in person. ⁓ We a lot of times help on budgeting and strategy, but then also help on the acquisitions for the growth. So I handle much more of the financial and strategic areas like that. ⁓ Christie is much more operationally driven and handles a lot of the operational areas.

website CRM blocking and tackling you know that are hands-on with the ops folks. ⁓ Case in point when we purchased AM Conservation Group we were at a point where ⁓ we were acquiring our largest competitor doubling the size of the company and ⁓ it was going to be a big undertaking and I was worried about the integration and I remember going to our private equity partners and saying

hey, I have somebody who’s close to me. We’re dating and engaged, but she’s literally the best person that you could bring on to do the operational ⁓ integration of this company. And ⁓ so they all met with her. They loved her. They brought her on. And that was actually kind of the first time that we had partnered together on private equity. We had worked together earlier. ⁓

and were together as a couple, she became a shareholder and did an amazing job in the integration, had an amazing return as part of that deal as well. And so we had a of ⁓ a marriage merger and a corporate merger all at the same time.

Anthony Codispoti (47:19)
Todd, let’s shift gears for a moment and I’d like to explore a big serious challenge that you’ve had to overcome in your life. How’d you get through that and what did you learn?

Todd Recknagel (47:30)
Yeah. Well, I could probably point to some of the things I’ve brought up. ⁓ Getting through a divorce and trying to do the right thing and keep your family together and still ⁓ keep a good relationship with the other partner. ⁓ That was hard. I mean, it was heartbreaking. It was a struggle. ⁓

it was not easy and ⁓ at one point I had to keep ⁓ two homes and two cities and go back and forth and work remote back in 2010, ⁓ 15 years ago now, before remote work was even really popular. mean everybody does it today it seems like, but ⁓ at that time I was working back and forth just to be close to the kids.

because I happened to have my role in another city and couldn’t really move the kids out of their school. And so that was really a struggle. And then I had to overcome kind of my own pride. I had to be open and honest in talking about it and I had to take on 100 % of the blame. He can make a decision to do 100 % of the blame.

But I need to make a decision to take 100 % of the blame. And whether she does or not, I have to just be the one to forgive and love and take the blame, if you will. And so getting through all of that, figuring that out, was probably my biggest ⁓ challenge, frankly, in life. mean, making sure your kids are OK. And all at the same time,

A lot of these roles, ⁓ when I had some roles early on and sold a company or was part of a company sale or whatnot, I mean, I’ve had my position because of a sale or because of a, I’ve had my position eliminated probably 10 times in my life. ⁓ And those aren’t always easy transitions to get through.

But I realized that God took me through some of those journeys. This is part of what is gonna go into my book. One of the chapters is gonna be titled Fired. And I realized God took me through those journeys for many different reasons. But one of them being, ⁓ there’s a lot of people that buy a franchise that got let go somewhere. They’re corporate refugees.

and having that understanding. Or there’s a lot of people that are coming off of a divorce, or there’s a lot of people that have been struggling with those life transitions. Or we buy a company from a founder, and then the founder has to go through that transition. And understanding that we’re all a bit prideful. We all ⁓ have our baby, which is the company. We’re probably all having an affair with business, which is what, you know,

I had had, I was much more focused on travel and making money and building the company ⁓ than I should have been on children, ⁓ for example. And so getting through a lot of those lessons personally has allowed me to help and minister to others, ⁓ has helped me walk them through the shift of giving up

maybe their pride, ⁓ helping them get through the transition, help them.

Anthony Codispoti (51:21)
Who helped to lead you through that transition? Who was there to coach or mentor or support you?

Todd Recknagel (51:28)
Well, I’ll

get into some personal ⁓ mentors at some point here, but ⁓ there, ⁓ our Lord Jesus, there is just no better mentor. I can remember just feeling crushed and just saying, God, why are you silent? And I remember one time hearing his voice, not audible, but the impression inside my head.

that you are gonna have to go through this. I remember praying, Lord, take this divorce away. I mean, why are we struggling? And I heard, you need to go through this. And I thought, hmm, what does that mean? And I’m like, go through this divorce, go through this journey, go through, you know, and why did I hear that? And I realized the Holy Spirit was speaking to me and that I needed to get through this and I needed to learn and I needed to grow.

⁓ through reading different books and seeking the Lord and going through some of these journeys, I did learn to grow. I think I’m a much better husband today than I ever was. I think I’m actually a better ex-husband than I ever was. I get along great with my ex-wife. Now our family gets along great. Christy gets along great with her.

Anthony Codispoti (52:46)
You

Todd Recknagel (52:54)
ex-husband. In fact, they’re actually coming down staying with us in our place at Christmas time. And so just it’s that important for the families to be together and and ⁓ and so a lot of that came from laying down my own life, my own pride, learning through it and then ⁓ growing in faith. Now on mentors, I had an incredible mentor named Lloyd Reeb

Anthony Codispoti (53:00)
That’s wild.

Todd Recknagel (53:23)
⁓ who is the co-founder of Halftime, and he was my coach for several years. ⁓ For two or three years, I mean, he’s still, I would call him coach, and he still is my coach, and we talk quarterly now, ⁓ but Greg Surratt, pastor of Seacoast Church, has been a great pastor and mentor of mine and is my coach today. ⁓ I’ve had other…

mostly pastors that have been great leaders. My best friend in college became a pastor and he would call me twice a week during the whole divorce process. And my older brother serves, he’s an orthopedic surgeon, but he’s a wonderful man of faith and does mission trips today and is very involved with starting a church and he would call me regularly. And so I had a lot of folks that were around me.

loving me up in faith and helping me get through.

Anthony Codispoti (54:23)
You mentioned a book. it have a title and when can we expect it?

Todd Recknagel (54:28)
⁓ It does have a title. ⁓ The title is God Wants in Your Business.

And it’s a lot of people are seeking what they’re seeking in business and success and wealth. ⁓ And they maybe see God as separate. Maybe they struggled and had a poor relationship with their earthly father, and so they’re struggling with their heavenly father. Or maybe they were brought up, I was brought up Lutherans. A lot of people say, ⁓

They’ve come to me since we’ve done FranFaith and they say, oh, I was brought up Catholic, but yeah, I’ve kind of fallen away. And so they have this view that God is this thing that’s part of the church or something. When God wants our heart, God understands our journeys. God wants us to have a relationship with Him. God wants it in your business.

God wants in your daily thought process. God wants the little things that are bugging you. God understands your heart and understands your fears, and he wants to take those away. He wants to wipe your tears away. And all the things I’m talking about are things that I’ve discovered through reading in the Word, through journeying through this, that it’s all truth. ⁓ And so it’s writing down some of those stories through my journey, writing some of those truths.

⁓ and helping other, you my heart, my compassion is for other business leaders to find that truth.

Anthony Codispoti (56:12)
That’s beautiful. When can we expect the book?

Todd Recknagel (56:15)
Well, it’s. Yeah, you boy, boy, Anthony, you nailed that right on the head I. I have been writing chapters and stories and information down for a number of years, and and so now as we I think it’s more important to do the Fran faith and do the outreach and the podcasts. And so I’ve had so many.

Anthony Codispoti (56:18)
You’re asking yourself that question, aren’t you?

Todd Recknagel (56:45)
ghost writers come to me because it’s hard to write a book. And they’ve said, my gosh, just off of a lot of the information and a lot of the stuff that you have, we could easily take these in and probably get that stuff. And I probably will need that sort of organizational help at some point. ⁓ But I know I’m called to write the book, and I need to get as much of it down as I can. And when that would be, I mean, it could be this year, but it could be five years from now. I don’t know.

⁓ But that’s…

Anthony Codispoti (57:16)
Well, and

for people who want to know ⁓ Todd’s given us permission to give out his personal email address here. So you can keep in touch with him and he can, he can keep you up to date on that. It’s Todd with two D’s T O D D at three 20 group.com. And as we were talking about earlier in the interview, three is spelled out T H R E E. And then it’s the number two and the number zero and then group.com. So three 20 group.com and two other things I want to do before I ask my last question for you today, Todd.

As a reminder to everybody, if you want to get your employees access to benefits that won’t hurt them financially and carries a financial upside for the company, reach out to addbackbenefits.com. And finally, if you’ll take just a moment to leave us a comment or review on your favorite podcast app, you’ll hold a special place in our heart forever. So last question for you, Todd, you and I reconnect one year from today and you are celebrating something big. You’re very excited about this. What’s that big thing you hope to be celebrating one year from?

Todd Recknagel (58:15)
⁓ Well, I think it would probably be the further growth of ⁓ FranFaith as a community and starting to ⁓ see that. You know, I think about the recent ⁓ Charlie Kirk ⁓ and ⁓ just so sad to see him

lose his life but the movement that he’s left, he was always pointing toward Jesus. And ⁓ the movement and the growth of the movement and he laid down his life for that has only grown. And so ⁓ that’s pretty inspirational. mean we’ve sold a lot of companies. I could say, ⁓ gosh if one of our companies sold and we had some big blessing, that’d be great. Well.

That’s only a temporary blessing. ⁓ And it would be great. It’d be nice. Love to be sharing that with you a year from now. But frankly, the thing that really is ⁓ my passion would be see this group grow and see more and more ⁓ people come to the Lord and their faith be strengthened. ⁓ Or even folks that just want to strengthen their franchise business. Let’s say they’re not Christian.

and they come to Franfaith.com, they’re Jewish or Muslim or a non-believer, and they just, you’re gonna get truths on how to grow your business, even if you’re not a believer. so our hope for the community is that we’d be very, very inclusive, that it would continue to grow, that it would change lives. And so that would probably be my biggest hope for the next year, and that we’re excited about, and we’re

putting time and effort and working ⁓ on. ⁓ In fact, I thought it was interesting that our pastor, who I love dearly in the North, we go to a church in the North and the South, because we do go back and forward, live in Sarasota and Michigan still. ⁓ And our pastor in the North said, ⁓ he said, hey, we’re going to have the whole church start praying for revival. And our church.

has had 500 baptisms year to date. They’re tracking, I mean, it’s like revival’s here, but the pastor’s now calling on folks to pray for revival, which is revival among our community and among our world. I think if we keep ⁓ pushing ⁓ the edge of the envelope and continue to grow, I think we’re seeing a

a great faith movement, a great harvest, I think God will continue to bless it. that’s where I’m at,

Anthony Codispoti (1:01:15)
Todd Recknagle from 320 Group, I want to be the first to thank you for sharing both your time and your story with us today. I really appreciate it.

Todd Recknagel (1:01:23)
Yeah, thanks Anthony. Thank you for having me. God bless.

Anthony Codispoti (1:01:26)
Folks, that’s a

wrap on another episode of the Inspired Stories podcast. Thanks for learning with us today.