Sharing a passion for rock climbing and the adventurous attitude that comes with it, Tim Walsh and Lucas Kovalcik decided to ditch the corporate ladder and climb their own way to the top.
The entrepreneurs have plans to build a multi-million dollar empire on people's passion for climbing rocks.
CNBC gave the founders 60 seconds to convince a panel of experts, and you, that they can take their business to new heights. Click the video above to see if they can turn their passion into success.
Escaping the cubicle
Walsh and Kovalcik have known each other since they were teenagers, but after high school they went their separate ways. Walsh took a job in IT, while Kovalcik moved west, worked in the hotel industry, and started attending UCLA for his MBA. But he dropped out, and they both made a big change.
"We both had a passion for fitness and climbing and saw a need in the market for our hometown. The area where we grew up didn't have a climbing gym, or a place where people could actually enjoy climbing, as we both did. So we wanted to share that with other people," said Kovalcik.
They opened Gravity Vault’s first 13,000-square-foot location in Bergen County, NJ. in 2004. They opened their second in Morris County, N.J. in 2009. Now, they want to take the concept national as a franchise.
Roping in revenue
The gyms make money by offering day passes that range from $10 to $18 dollars as well as annual memberships that cost $700 a year for an adult. Like other gyms, they offer personal training sessions.
"Both of our facilities will make more than a million dollars this year," in gross revenue per location, Walsh said.
REI board member, experienced rock climber and Power Pitch panelist Matt Compton was concerned about marketing the gym, especially to its youngest members.
Kovalcik said the company carries out a lot of grass-roots marketing.
“We've been utilizing a lot more of the grass roots, and social marketing has really been a big focus for us,” Kovalcik said. “Our community involvement is very high from participating in town days to sponsoring teams and doing things of that nature to get people involved, as well as doing a lot of marketing in local schools and universities,” he answered.
Rocking out a new sport
"Our plan is to grow slowly at first, 3 to 5 locations in the next 12 months,” said Walsh, “and then 45 to 60 locations is our goal in the next five years."
Franchises must pay a $40,000 fee to Gravity Vault. The founders told CNBC it costs approximately $750,000 to $1.2 million to build out a space. The first franchise will also be located in New Jersey and is expected to open next year.
Franchise owner and Power Pitch panelist Dina Dwyer-Owens wanted to know about the longevity of the business model. "When you’re getting into franchising business it’s got to be something that is a sustainable model.”
Kovalcik said that the sport is still in its infancy with plenty of room to grow.
A climbing trend
Twenty-five million people worldwide have taken up the sport of indoor rock climbing, and the number of climbing gyms has increased by 50 percent from 2007 to 2012, according to the International Federation of Sport Climbing. According to Outdoor Magazine, in the United States alone, a thousand new people a day are joining the sport of indoor rock climbing.
"There are 450 dedicated climbing gyms in the United States and we can easily see that number double within the next three to five years. We're excited to be at the front of this growth with our gyms and franchise opportunities," Kovalcik said.
Gravity Vault has raised approximately $2 million from SBA financing and personal funds. The company has one franchise location under construction and three in attorney review, with plans to add another corporate location by 2014.
Watch @GravityVault cofounders Lucas Kovalcik and Tim Walsh deliver their 60-second pitch to see if they can rope in three INS from experienced rock climber Matt Compton, CEO of @shopigniter and REI board member, Franchise expert Dina Dwyer-Owens of the Dwyer Group @DinaDwyerOwens, and CNBC host Mandy Drury @MandyCNBC.
—Additional reporting by Joanna Weinstein
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