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Why yoga franchisor rejects more applications than it accepts

Moksha Yoga is intentionally slow in accepting new franchisees in order to build a community of yoga studios that share the same values.

Moksha Yoga

Jessica Robertson (below, with business partner Ted Grand) sits hugging her legs, then pulls her frame into a series of casual positions, as the very fit do, rarely sitting still.

Moksha Yoga co-founder Jessica Robertson, right, with business partner Ted Grand. Moksha Yoga Moksha Yoga

(Courtesy Moksha Yoga)

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We are outside on a bench by Toronto's waterfront on a warm afternoon, ostensibly discussing the success of Moksha Yoga, the Canadian hot-yoga franchise company she co-founded, which could have had 300 or more studios, particularly in the United States, if only it didn't deliberately hold itself back.

Instead, it has 74, each studio a magnet attracting the dedicated looking for a good, peaceful sweat and stretch. More franchises are due to open in the United States, where there are just 12. There is also one in Sydney, Australia, and one coming soon in Paris. (In the United States and overseas, the company goes by Modo Yoga to avoid confusion with other, unrelated companies named Moksha.)

It is clear, though, that business growth isn't Moksha/Modo's sole reason for being.

Here the conversation segues to a mention of Baba Hari Dass, the Indian yoga guru who was an influential presence in Ms. Robertson's childhood. "He would come every year to Ontario to teach his students at a four-day retreat, which we would do every year as a family, at a family camp."

While chatting, we sip the smoothies she blended and brought in glass jars.

"Yummy, right?" She repositions herself on the bench. "Okay, so it's kale, spinach, bananas, dates, celery, cucumber. What else? Almond butter. There's the secret, right?"

Moksha/Modo is an atypical franchisor. "We probably turn down more applications than we accept. They see the success of the studio, and they say, 'I want to do that.' But their motivation isn't necessarily to do good in the world, or rather it's just to have a successful business.

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"And so, our first question is, well, tell us about why you want to open a studio. I mean, that's the first of a long and very rigorous application process. It's what my partner [business partner Ted Grand] always says: 'Growth for growth's sake is the ideology of a cancer cell.'"

Instead, Moksha/Modo franchise owners must also believe in community building and insist only on environmentally safe materials in the construction of studios. "I care if someone acts unethically, and when that happens, we do cut ties. I mean, we've pulled people's licences for not using environmental products," she says. "We say, look, this is our agreement. We agreed that the focus of this studio was to create a little footprint."

An ethical stand isn't unusual in the yoga industry. Other companies, such as Vancouver-based yoga accessories maker Halfmoon Yoga Products Ltd., put ethical practices front and centre. Even if seen in cold business terms, the companies know that this is what their customer base wants.

Also, Moksha/Modo keeps its franchise fees low. Its initial fee is $15,350. Then, monthly royalty fees are a $350 flat rate, plus 2 per cent of gross revenue, and a brand fee of 1 per cent of revenue, which are all capped at $20,000.

"It's incredibly low. One of our advisors owns Tim Hortons franchises, and they laugh at it [the low fees]. They think it's ridiculous," Mr. Grand says by phone, explaining that the aim is to give franchise owners more financial leeway, while maintaining a tight feel of community between studios. "We could do a lot more with higher percentages and higher fees. But we don't want it to compromise the relationship," he says.

When growth has occurred too quickly, the company simply stopped accepting applications, from across Canada and the U.S. "We were finding it hard to keep up with the demand when we were, say, 30 to 40 studios. So we just said, instead of continuing to grow, let's just not and take care of the infrastructure first," Mr. Grand says.

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Also slowing the pace of growth, majority owners in the studios must be Moksha certified instructors, which entails one month of intensive training and a year of mentored project work teaching, studying or researching yoga. "So we know them really intimately. If we can't maintain that, then it flies in the face of our whole vision," Mr. Grand says. It has also kept the company's growth linked to owners with close ties to Moksha's community in Canada, which is something Moksha/Modo is trying to relieve by holding more teacher training in the United States.

"What this tells me is that they're evaluating their franchisees with a lot more care than many other franchisors would," says Tony Wilson, a franchising and licensing lawyer at Boughton Law in Vancouver. "Many other franchisors would say, 'Have you got the money? Have you got the background in the business? Can we train you? You're in.'

"In this particular case, it sounds like they are doing a much more complicated evaluation of the individuals. It's very labour intensive. But I do think it's good, because litigation in franchising costs a fortune. And when franchisees leave, for whatever reason, it costs a fortune in administration and legal time and effort," Mr. Wilson says.

Given that a number of studio owners in the United States have come from Moksha's Canadian community, the company has in the past often had to rely on E-1 U.S. visas with its Stateside expansion. E-1 visas are non-immigrant visas allowing foreigners to work in the States as specialists, in this case as trained yoga instructors and franchise owners. But getting these visas can be a challenge.

"There's been an awkward growth phase of trying to transition into a U.S. market, where most of [the company's] teachers are Canadian. That's changing now. With these 12 studios that are in the U.S., a lot of the teachers there are coming to our teacher trainings. And we're intentionally having more U.S.-based trainings," Mr. Grand says.

The first Modo studio in the U.S. wasn't a high-profile New York studio, but a franchise in Crescent Springs, Ky., a Cincinnati suburb. Owners Michael and Ellen Bradley had practised yoga with Mr. Grand and Ms. Robertson when Mr. Bradley was a player with the Toronto Raptors. The second Modo studio in America was opened in Los Angeles by Ms. Robertson and her sister Deena, along with a previous student from Moksha's first Toronto studio. "We are defined as a business, but what we really are is a community," Ms. Robertson says.

For the uninitiated, hot yoga classes at Moksha/Modo studios have their heat turned high, to about 40 C. Classes generally stick to relatively easy Hatha poses, given the high temperature. It feels like a gentler version of Bikram Yoga, an older and far bigger franchise of hot-yoga studios worldwide, which has higher heat and a stricter approach to poses.

Moksha started out as a cluster of six Bikram studios, before Mr. Grand and Ms. Robertson broke away and turned them into Moksha.

In addition to its regimented teaching methods, with a dialogue of constant commands, Bikram yoga is also bound by rules for the layout of the studios, such as the use of carpeted floors. Moksha's founders instead installed cork floors and deviated from the strict Bikram poses.

"A lot of it has to do with the context of yoga," Mr. Grand says. "It's an incredibly complicated community overall. In the Bikram world, it's very top down. You do what your teacher says, no questions asked. It didn't really fit in with what we were doing."

Instead, Ms. Robertson says that she and Mr. Grand were struck by the idea that they had to align with like-minded people.

It is yet another reason for building the business around friends and family. "We have best friends opening studios together. We have partners, [and] husband-and-wife [teams]. … It tends to be something that circles around family," she says with a smile. Then she offers her face for inspection.

"How's my smoothie situation?" She has no trace of it anywhere.

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About the Author

Guy Dixon is a feature writer for The Globe and Mail. More

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