A Legacy Company
For Michael D. Olander, Jr., his journey starts with O2 Fitness, the health and fitness company he founded in 2003 at the age of 21, right out of college. “I’m fond of saying that without O2 Fitness, there is nothing else,” he said. “It is my child. It all starts with that.”
But, Olander’s journey doesn’t end with O2 Fitness, which has grown to 24 clubs in North Carolina and South Carolina. Like his first business, the 33-year-old entrepreneur has expanded his reach by founding MDO Holdings, a North Carolina-based investment and management firm focused on opportunities in three primary areas: fitness, start-up development and commercial real estate.
According to Olander, sitting still has never been his strong suit. As a result, moving beyond O2 Fitness and into something on a grander scale seemed natural. “By sitting still I don’t mean antsy, I mean always wanting to do something new and to grow something bigger,” he explained.
Through MDO Holdings, Olander has that opportunity. He has invested in 25 companies in a variety of industries, ranging from technology to fast-casual dining. In addition, the group has purchased 400,000 square feet of commercial real estate spanning office buildings and retail businesses. O2 Fitness still lies at the core — it just has a larger variety of brands and ventures that it now lives alongside.
“We look at all [our brands] as part of the family,” said Olander. “There are certain assets that are wholly owned, like O2 Fitness. Some have partners, but they are just as important to us as any other opportunity or any other asset in the company. Externally, people want to categorize [each venture]. Internally, categorization is irrelevant to us.”
One of the brands MDO Holdings has invested in is CycleBar, an up-and-coming boutique indoor cycling franchise founded in 2004 by siblings Bill Pryor and Alex Klemmer. Leading the CycleBar charge for MDO Holdings is JP Green, whom Olander met at a REX Roundtable. The two had similar visions on how a successful company should be run, and decided to go into business together.
“We both agreed in running high-quality facilities, giving back to the community, making sure that we take care of our people, and so we started working on a couple different business ventures,” said Green. “Michael approached me with CycleBar and we’ve decided to plunge in head first into the CycleBar experience, and are going to be developing 10 locations [as franchisees] throughout Boise, Seattle and Portland.”
Another company MDO Holdings has invested in is Perkville, a customer rewards platform that can be found in over 2,000 companies, including O2 Fitness. There’s also FilterEasy, a subscription service for home air filters, and Lonerider, one of the fastest growing breweries in the Southeastern United States.
To some, these investments may seem random. But to Olander, they are part of a strategic blueprint to position MDO Holdings, and O2 Fitness, in the best way possible. For Olander, diversifying is smart business, no matter the industry.
Olander explained MDO Holdings has the flexibility to invest in a wide variety of industries and business models because it’s self-funded. “Most investment companies like this have external capital, therefore they have a mandate,” he said. “They have to answer to the shareholders. We have none of that, so it enables us to be pretty nimble and opportunistic and look at pretty much anything.”
This also gives MDO Holdings a long window for return on investment. “Most investment companies are looking for a three- to five-year exit,” said Olander. “We’re a legacy company, and we can look at anything. It can be tech, it can be real estate, it can be fitness, it can be restaurants — and we have all of those things.”
Olander explained the direction of MDO Holdings is guided by finding talented individuals, and working with them to create strong, growing companies. “That’s what’s led to the partnership with JP and CycleBar,” he said.
For Olander, more important than a businesses’ industry, or model it follows, is the leader behind it. If someone he trusts and believes in, like Green, is at the helm, he thinks any brand can be successful.
“We’re almost business agnostic in that for us, it’s about the person,” said Olander. “A lot of holding companies and investment groups are so focused on concept, to the expense of team. For us we look at team first, concept second. We believe the right leader is just as important, if not more important, than the specific concept. Luckily, we feel that we have all great concepts and great leaders.”
However, before these investments in new leaders and new concepts could occur, Olander explained he had to ensure O2 Fitness, his first company, was in a good position. Between 2012 and 2014 the health club brand doubled in size through the acquisition of East Shore Athletic Clubs, and as a result, there were some inconsistencies in operations.
To remedy this, in late 2015 Olander brought on Shawn Stewart as chief operating officer. “Hiring that position was extremely important to enable O2 Fitness to have the strength in operations and the platform we needed to grow,” explained Olander. “Having [Stewart] there as the right hand to join me in setting a vision, and also implement everything we decide on an ongoing basis, has freed me up to be more involved in some of these other companies.”
As COO, Stewart’s first task was solidifying the foundation O2 Fitness had been originally built on. He had served over 20 years as the general manager of Gainesville Health and Fitness Centers, and was excited to share his experience with a new company that has lofty goals.
“Meeting Michael for the first time, he’s definitely persuasive, and we talked a lot about the vision of O2 Fitness, where it was, where he wanted to see it and the value of having someone who can drive the operations and help set that vision,” recalled Stewart.
Now that systems and processes are being streamlined, Stewart explained the next goal for O2 Fitness is developing its leadership team. Currently, Stewart meets with the general managers of each club regularly for leadership training and to discuss the company’s vision, mission, core values and goals.
O2 Fitness is also focused on bringing in new talent. In March 2016 it announced the addition of Evan Molovinsky as vice president of sales, and Darren Terry as executive vice president of marketing.
Similar to how MDO Holdings evaluates an investment opportunity, Terry and Molovinsky’s robust resumes weren’t necessarily the most considered aspects to them being hired. Who they are as people was much more important.
Take Molovinsky, for example. When Stewart first began looking to fill the vice president of sales position, he said he was bombarded by dozens of impressive resumes. “But the first time I met all of the candidates, I didn’t ask a single sales question,” said Stewart. “It had nothing to do with sales; it was all about culture, what their beliefs were and how they would fit in. I noticed that was very uncomfortable for most of the candidates. They kept wanting to revert back to telling me how they would have a quick fix for sales, hardcore systems and things that I just didn’t believe in.”
When Stewart first met Molovinsky, he realized right away the candidate was different. “He had a nice resume himself, but he may not have had the experience as some of the other people,” said Stewart. “But our first interaction, we just connected. We connected when we talked about culture and what it means to do things based on a vision, having a mission, developing people and talking to a community about wellness. The sales process was a very small piece of it, so it just fit.”
With Stewart onboard helping to guide the company’s leaders and operations, Olander explained he can now begin to once again focus on growing the brand that kick-started his career in the health and fitness industry. “We’re going to grow O2 Fitness,” said Olander. “Without it, nothing else is possible.”
However, growth at O2 Fitness and MDO Holdings does not mean growing with abandon. Olander explained he wants to be smart in the investments he makes.
“I can tell you there were a few deals we probably shouldn’t have made over the years,” recalled Olander. “When I was in my 20s I was chasing deals and wanted to grow for growth’s sake, and now we want to grow for the right reasons.”
Now, when an opportunity for growth or investment comes up, Olander said he asks key questions. “Is it going to add to the experience of our members? Is it going to add to the opportunities for our team members? Is it going to add to the bottom line? And if it doesn’t fit those criteria, I’m really OK with saying, ‘No thanks,’” he said.
What hasn’t changed since Olander’s 20s is his relentless drive, a quality he’s held since childhood. That drive is just more measured now, with many more years of experience under his belt.
“There is no finish line,” said Olander. “The finish line is just understanding that the goal is to always get better and better. We don’t want to be good, we don’t want to be great, we don’t want to be the best. We want to get better every single day. And that will lead us to where we want to be.”