Sarah
So Jeremy, can we start off with just a bit of a perspective about City Cave? How did you start up City Cave business? And when you did start it, what was your initial goal?

Jeremy Hassell
That’s interesting. Tim and I, my business partner, co -founder, we were actually tradies back in the day. So we didn’t come from health, we didn’t come from education or university or any real solid business experience. And we stumbled into this basically in a bit of a career turn in our life.

And someone had told us it’s you know, it was pretty woo woo at the time to try this flotation therapy thing. And we thought we would try, try it out. It was good for anxiety, jet lag, you know, they even talked about hallucination and all these other different sleep benefits and things like that.

And I was, it was ticking a few boxes for me and it seemed a little bit adventurous. So we thought we’d give it a go. And it had a profound impact on my life. I didn’t realize that I could feel as good as I would feel after taking that moment to take a breath and then maybe decompress a lot of my thoughts and compartmentalize things that I was feeling at the time.

So it kind of captured this thirst or addiction towards feeling good and health. And I wanted to give that to other people. I feel like that was, Tim and I had a different experience, but similar in the same tone. It gave us maybe more of an awareness over what…
what was going on personally for us and gave us maybe a foothold or a step into a new journey into health and well -being.

Sarah
Were you specifically looking to, when you came across flotation, were you looking then to move out of what you were doing anyway, or was it just a sort of something that popped up and this is a great idea?

Jeremy
Yeah, we were in a transition, like I said, we were in between sort of careers at that point. We had a couple of businesses prior that we were trying our hand at and we managed to sell those off and we were basically, I guess you would call it unemployed at that time for the first time since I was like 14 years old.

And not you know, not particularly stressed or anything like that, probably just dealing with the same afflictions in life that everyone else does. I feel like what over the years, what this has really become to me, what’s become really obvious is that this is not a service for people that are necessarily seeking respite from or I guess trying to relieve a lot of
and pressures in life, I mean, they exist and it does do that. But it’s also for everyday people that are dealing with everyday stress.

And, you know, this was eight years ago when we started in 2016. And even today, I feel like, you know, the amount of information that we’re absorbing and we’re, you know, forced to adopt and the technology and the advancement in it and the social media personalities and profiles that we have across all these different spectrums.

It’s not a luxury item. I just see it as completely necessary for the times we live in right now because sleep can only do so much and sleep quality in most people is not very good, particularly because we stare at screens so much and our brains are constantly going because when you wake up in your morning, you click your phone to stop your alarm and when you go to sleep at night, you put your alarm on to go to bed.

So it’sWe are almost attached to this digital world 24 -7 and the only real time that we have off is sleep and I feel like floatation therapy is an accelerated version of that and gives people more of that detoxifying of their brain and the things that are going on.

Sarah
So what do you think the potential is for the wellness sector overall and then obviously your brand in particular?

Jeremy
Yeah, I get asked this question a lot. Because I’ve been asked it a lot, I’ve had to put some real thought into it. And I really think the wellness sector is sort of dividing itself a little bit. We have this, I see it as three different sectors. There’s a recovery sector. So the recovery is more for CrossFitters, people trying to get that edge from more of a gym perspective, and high performance perspective.

Then there’s the social wellness, which is typically like your bath house, where people can sort of sit together and go to a gym and then sit in the sauna and sit with someone random and just have a chat.

And then there’s our space, which I think is more in the lens of relaxation and their private experiences are a little bit more bespoke to the needs of the individual.

You have your own room. It’s a little bit more luxurious and it’s probably sitting more on the top end of that market. That’s kind of how I see the segment in the wellness industry at the moment. And there’s different variations of all those things.

But because we’ve been forging ahead and we’ve been very specific on what we’ve, what we do, I mean, we could quite easily be swayed by different types of competitors, but we’re very strict on what our business is about and it’s about relaxation, it’s about the individual, it’s about personal and private experiences and really I think what sets us apart is our experience and our hygiene.

Sarah
Can you just tell us more about that?

Jeremy
So experience, like I said, is a big key factor for us, and that’s making sure that it’s an individualized and bespoke approach to each person. And then moving into the hygiene factor, I think cleaning the rooms in between each time, making sure that it’s sanitized and safe for people to go in and out of showers and things like that. And then our filtration processes through all of our flotation therapy.

You know, we’ve been doing this for a long time now, and it’s taken a long time and a lot of science to get us to this point. And I think it’s a really hard thing to wrap your head around. There’s no hard and fast rule, particularly for different temperatures of water, different salinities of water, all the different types of things.

So there is a real science to it that we’ve had the benefit of a lot of experience and a lot of locations to get it right. And I think that’s really what at the end of the day will be the preference for most customers is looking for that hygienic factor. Cause I’ve been into these gyms and social wellness spaces and even jumped into some of these ice baths after a sweaty gym session with 10 other blokes and kind of what I know about water hygiene, I think, oh, and then I go into some of these saunas and, you know, they’re just not at the standard or the level that I think is acceptable in my view. But, you know, that’s just my opinion.

Sarah
Is that difficult to market, that element though, because it’s not visual, it’s not, you know, there’s a very clear message but how do you get that across to your consumers, with potential consumers?

Jeremy
Yeah, it is. I think the experience part of it, we can market that very well, you know, private open pools, private experiences, those types of things. The hygiene factor is, I think it’s more of a customer experience. I mean, it takes a lens of the experience as well. Because when people come in and experience our service, they go into the room and they see it for what it is. And they go this action like they

they understand it more from that level. So it’s not necessarily something we go out to the market with. We don’t want to go out there and say, we’re cleaner and everyone else you go to is not. I don’t think it’s a very strong market position. But it’s more what people will do, you know, if they don’t feel like it’s a hygienic experience, they’ll use their feet to tell you that they won’t tell you to your face.

Sarah
What’s the key to the brand’s expansion?

Jeremy
We’re in a bit of a challenging economic time and every business is feeling it in Australia. I think small business in Australia is wearing the weight of all of these challenges that Australia is facing. We’re taking on all the inflation, all the high costs and really small business drives Australia. So I think that we’re…yeah, we’re not exempt from that at City Cave.

And so for us, and particularly now, it’s about sustainably growing, making sure the territory sizes are big enough so they can sustain the amount of people that are willing to still spend in this environment. And then also making sure that we don’t grow too fast. And we’ve done this in the past where we can’t keep up with the systems and processes that are required at the stage of the business that we are.

So sustainable comes from two levels. It’s a geographic expansion and then it’s also making sure that we can keep up with the growth of the business.

Sarah
And so if we talk about the geographic expansion, what immediately do you have planned and what are your kind of long -term goals?

Jeremy
So we’ve sold out in Queensland. We’re just about sold out in New South Wales. Our marketing efforts and focus will be South Australia, Victoria and Western Australia predominantly. Those markets still have quite a way to go and then some more of those regional areas. That’s kind of where our focus is for Australia. The US is obviously on the cards for us. We’ve got two locations. Well, we’ve got one open and one under construction in America at the moment.

And even still in that environment, you know, we’re being very calculated in how we expand there. The country itself is not United States at all, particularly when it comes to franchising and law. So we’re focused on two states, which is Florida and Texas. And yeah, growing the same way that we’ve grown here in Australia, you know, you open one location, it tends to populate itself and expand externally.

And, and really it’s about Tim and I saying no to opportunity because there’s a million opportunities out there, particularly in a business like ours, you know, you get people knocking on the door all the time that want to buy us. And also that want to open in all these different areas around the world. And you can get distracted by that and we’re quite focused and we have been distracted in the past. It’s there’s no doubt every young franchisor does, but we are, yeah, we’re very hyper focused on what we have. And again, just going back to that sustainable pathway of not the economy is going to turn around in a quick flash like we all hope it will. So we just want to make sure we make measured steps.

Sarah
And how do you two work together, you and Tim?

Jeremy
Really well actually. It hasn’t always been easy. Early on in the business we
kind of it was all hands on deck, everyone did everything, everyone had an opinion on everything, but we got to a stage in our growth where we needed to silo our efforts and our skill sets in order to complement the business and ourselves.

And so we gained a lot of efficiency in that aspect and we came up with a bit of a 90 10 rule. So 90 % of the decision is made by me and if I want 10 % input, I can ask Tim and he can give me guidance, but it’s my call at the end of the day.

And we’ve lived by that. So how the business operates today is I’ve worked predominantly in the marketing, sales, growth, and some of the operations side of the business. And Tim does more of the legal, the finance, and again, some of the operational stuff.

Sarah
So just to be clear, is that a 90 -10 in all situations or it’s a 90 -10 on the things that you work at and then Tim has 90 -10 on his legal and that’s that.

Jeremy
Yeah, yeah, that’s exactly it. So I’m in control, 90 % of control of the things that I’m good at and that I do in the business and and vice versa for Tim.

Sarah
So we’ve touched there on the challenges of scale. And I just wonder if there are any lessons that you’ve learned here that you’re kind of applying to the US and as you said, it’s a very different market regulations are very specific according to the state, each state. What would be the lessons about scale that you’re taking over there?

Jeremy
Some of the learnings that I think that we’ve taken from Australia, I mean, we made the first step into America and we’ve been planning this since 2019. Well, it’s got shut down in 2020. So that kind of popped a pin in the dream, but it’s been a very measured step. We’ve only got one location there and we’re getting the foundations right and we’re making sure we’re very clear on the strategy.

What we did well in Australia, I think that we’ve adopted over there as we grew just in Queensland, despite interest in different states and different areas, we focus predominantly on Queensland. And we took sort of more of a ring around the outsides and the outskirts of the city and built the population of our locations and then slowly moved our way into more of expensive areas.

And so we’re taking that same approach. We’re in Fort Lauderdale in Florida, which is not the biggest state, not the biggest city in Florida. And then Fort Worth just outside of Dallas. So we’re taking that same approach to being more community driven areas in, in locations and then sort of circumnavigating cities until we properly can develop the inner city suburbs.

Sarah
And so in terms of businesses growing through franchising, and I believe that you have a number of multi -unit franchisees. Is that correct? Yeah. What is the key, do you think, to successful franchising?

Jeremy
I think initially for any franchisee that goes into any system, and it’s not just ours, it’s every single franchise system in the world, everyone has a particular skill set and experience and maybe some previous experience in other franchise systems, whatever the case may be. But I think when you go into a particular franchise system, you need to…
run and operate the model exactly how it was designed from the get -go, spend 12 months doing it, and then come to the system with your ideas. And that way you get a broader understanding from a longer -term approach when you understand all the peaks and troughs and the sales periods in the business and how the finances work and what a complete financial year would potentially look like. And then you have some good solid
understanding before ideas come.

I think a lot of franchise owners might come into a franchise system with ideas that they’re going to change the world and change the system in a way that best suits them. But I think it’s best to sort of sit down, operate it how it is intended and then provide feedback and advice to your franchise or your fellow franchise owners in best practice.

Sarah
And from a franchisor perspective, what do you think you need to do to make it a resounding success?

Jeremy
I think you have to protect the franchisee profitability and it needs to be a focus at all times. As soon as that becomes well, as soon as the franchisee starts to not see the profits either that they used to or don’t get the profits that they expected, it tends to cause a bit of a bit of what do you call it? challenges, I guess, in the relationship of the franchise or the franchisee and even particularly in the community. So being very close to their numbers and understanding the levers that can help drive their business.

And, you know, you don’t always get it right. Sometimes they’re just the wrong person for the wrong location. Sometimes it’s the wrong location for the right person. But if you’re close enough to it, you can make decisions faster. If they’re not profitable. And it’s either a you or a them or a location thing. You find that out quickly because you’re really close to it. So you either move them on, shut the location down or try and resell them.

Sarah
Is it more challenging in today’s economic environment for them to be profitable?

Jeremy
Absolutely. I don’t think, and that’s not that’s not city cave, that’s not franchising, that’s just business in general. Business is tougher than it’s ever been. You know, we’re going through like I said, you know, small business wearing the weight of the economy right now. It’s just hard. We were and this is what this is what it feels like, you know, you work harder and make less money. That’s what an economic downturn is.

You can pull up a newspaper from 2008 that says the exact same thing. So I just think we’re in that at the moment.

Now is the time when you hunker down, you focus on your costs, you look at the areas of improvement that you can make. You put in the extra hours and the effort that you need to.

I think Australia is going through what’s seemingly a bit of a winter in our economy and it’ll change just like everything does. But for right now, it’s holding onto your asset, protecting the brand that you’re in, protecting everyone involved and protecting yourself by just tightening up and lowering your expectations over this period of time until you can get to the other side.

Sarah
How important is technology in your system and in terms of sustaining efficiency, improving efficiencies for franchisees?

Jeremy
Look, I just it is the most important thing because the data that you get in comes from the I guess the capability of your technologies. And I think technology is the key in making your data efficient so that you can make real time decisions in your business, which is particularly right now, you know, this maybe it wasn’t so important 12 to 18, 24 months ago, because you know, everyone was making a lot more money and it was a lot easier to do business and you didn’t need to think about this stuff.

But when it’s harder, you need to be clear. You need to know exactly when how your cashflow is operating your business tomorrow as well as next week. So you can forecast and be a little bit closer to the pulse. So you know when to jump in your business, what to cut, what to save and where to invest.

Sarah
So what do you, overall what would you say your ambitions are? If we’re looking ahead, say, five, 10 years, what is City Cave going to look like?

Jeremy
Look, it’s, I mean, we’re already somewhat a global brand, but it’s expanding that global reach, I think, from from a really long term perspective, we’re focused on the two markets right now, which is Australia and America. And if I was to look up on the horizon, you know, I would look at some Southeast Asian countries, Singapore, Hong Kong, Japan, I think that they will lend their culturally will lend to our services really well. And then,
certain parts of Europe which are familiar with this type of service, maybe less on a bespoke level like ours, but familiar with this type of service. So the UK, Sweden, those types of places.

Sarah
And do you see yourselves continuing in the business kind of long term? Like is this your baby and you’re going to be dragged kicking and screaming from positions of leadership or do you see yourselves moving on to other things?

Jeremy
Oh my goodness. I mean, it’s the magic question because I mean, right now in the shoes and the seat that I’m in right now, it’s like I’m only 36 years old. I just absolutely love this business and it is my baby. And, you know, would I ever put it up for adoption? Right now? I mean, no, but I guess it’s like your child, right? When it goes kicking and screaming, you do consider adoption.

But I feel like no, I’ve got plenty of years left in me and what else am I going to do? I feel like not everyone has more than one great idea in their lifetime. And this is, I think this is one of our great ideas that we’ve mustered up. And I just love it, to be honest, more than anything, I don’t care about the money. I don’t really, you know, growth’s important to me, but more so from a consumer perspective, because I know how necessary our product is.

And I’m really married to it. I know every single day, even the hard ones, when I get up and I go to work, you know, there’s people out there that really need what we have and we hear it. We read it all the time in our reviews. We have franchise owners reach out to us and tell us an amazing story. We have franchise owners that have amazing stories. So it’s fulfilling enough. What else do I need?

Sarah
What’s your leadership style?

Jeremy
You know, I’m, as you can tell, probably a very emotional and passionate kind of guy, I have a lot of vision for this company. It’s quite clear to me what’s happening, what I can see that’s happening to us today and in the future. And I think that we have an answer and a soul for it. And I can see that quite clearly.

So it’s about the next sort of five years for me is to articulate through our brand what that vision is so that we do continue to save and give people’s life back. You know, we, our goal is to give life back to humanity. And I mean that in every sense of that. So, you know, from a passionate and visionary and an empathetic point of view, that’s, that’s how I operate, where I thrive most is getting people excited about the journey and seeing the vision and, and, and helping us all know that this isn’t this business is not just a business it’s not just about the money but it’s about changing people’s lives.

Sarah
That’s great. Thank you so much, Jeremy. It’s been lovely to chat.

Jeremy
Yeah, thank you.