Chapter 6 - Middletown Beginnings

 

Knockout Middletown

So I started the planning phase for Middletown Knockout. I figured I would just replicate what I had that was working here in Newark and go from there. Got a business plan put together and started on the road to what I was hoping to be a huge, successful operation. 

I linked up with the leasing agent that helped me and held my hand in Newark when I took over from Ted and moved it to the small spot on Kirkwood Highway. Alicia Fox is her name, works for DSM Commercial. Great agent and a great person, I cant recommend her enough. Anyways, we start poking around down in Middletown, and at the time, the place was exploding in population. A ton of money was being put into town by the major landlords in Delaware (Stellas, Capanos, Pettinaros etc.) and she sent me over a listing for a future site called Hedgelawn Plaza. Things were progressing until the Landlord requested that my father also guarantee the lease (in the 11th hour by the way) due to lack of leasing history (even though I had been a great tenet for 2 years at that point). Now that place that was 2 years out from completion so ultimately pulled out of the deal. She then sent me over another spot called Summerton Place (owned by Bob Stella, great guy and great landlord) that was under construction and about 1 year out.  So we go back and forth over the next few months and end up coming to terms on the lease. First things first, lets go over a list of fuck ups I did with this lease.

1. No formal business entity had been formed at that point, so, the lease was placed in the Name of the Newark gym.
2. No business partners yet, so, again I am guaranteeing the lease. 
3. I did not understand tenet fit out requirements
4. Legal red tape was not accounted for with the town and with the state.

Now, 1,2 and 3, would be handled in due time. The landlord and I agreed to switch the name over once the entity had been created. So that was in the pipeline (or so I thought). I planned on recruiting business partners from people currently at Knockout Newark. In concept, great Idea. I knew them, and training them on how to run it would be easy since they would already be there. Low buy in amounts etc. and I would gradually reward them with more ownership % as revenue increased and as I reduced my ownership % I would come off the lease (or so I thought).

Item number 4 really put me through it though. The largest thing being the requirement of actual Architectual drawings showing our layout of the space. I did a little bit of CAD engineering in college before switching majors to Business, so I knew it wasn't going to cheap, but I didn't exactly know how much it would be. The town required that the Drawings be submitted for approval prior to them granting a business license to me. I insisted that, if I got in there, and didn't like the layout then I would change it because I knew what would work best. They didn't give a fuck so, I hired Fredrick Ward and Associates to map out my 2900/sq/ft gym....to the tune of.....a hair over $5,000 fucking dollars. For drawings....of bag racks and where I would put the treadmills.  All for a piece of paper. 

But I've skipped ahead a bit. After signing the lease, the property owner ran into issues with the general contractor. Now, I don't know all the details, however, generally speaking its not normal for anyone to switch contractors halfway through the process of any building, let alone a luxury building with high end condos and first floor retail. But 12 or so months after signing, there suddenly was zero progress being made. At that point I had recruited the first of my two partners, they had bought into the business, and we were getting anxious. Time dragged on, which was fine as I was allotting funds to different things, recouping costs as I went. Eventually we got to the project being a year behind schedule. A slew of issues had popped up, including the water main line into the building being placed in the wrong area...all 600 feet of it which was preventing electric etc. from reaching the building. I don't even want to know the financial damage all the delays caused.  Way more than I could afford. At this point, with the opening of the building not in the foreseeable future, and everything which I could do, already done...what do you think I went and did? 

A personal friend of mine approached me about starting his own facility...in Bel Air, MD....