Building Unbreakable Brands

Building Unbreakable Brands: Jen Traeger
[00:00] Meghan Lynch: Welcome to Building Unbreakable Brands, the podcast where we talk to business leaders with a generational mindset. I'm Meghan Lynch, an advisor to family businesses and CEO of Six-Point Strategy, which helps generational brands honor their past while evolving for the future. Today my guest is Jen Traeger, second-generation leader of United Skates of America and a certified coach who draws on two decades of family business experience to help leaders navigate growth, succession, and strategy inside complex family systems. Welcome, Jen. So excited to have you on the podcast.
Jen Traeger: Thanks, Meghan. Excited to be here.
[00:48] Meghan Lynch: So I was hoping we could start with the origin story. United Skates of America was founded by your dad. What was the original vision, and what made it more than just a business in your family?
Jen Traeger: My dad started the business in 1971. Prior to that, he had a printed t-shirt business in partnership with my mom's brother. They were very successful and ended up selling that to a public company. He was then looking for another business to go into, and at the beginning of the seventies, end of the sixties, it was the disco era. He saw a lot of opportunity in roller skating and family entertainment, although at the time he was more interested in adult skating. Over the years it's evolved into participatory recreational for kids four to 14 and their families.
[01:50] Meghan Lynch: Did you skate a lot growing up? Did you grow up in the rink?
Jen Traeger: I really didn't, which is interesting because in this industry there are so many mom and pop rinks where either the parents were figure skaters or they raced and wanted a place to do that. There are many multi-generational roller skating rinks, but I didn't spend a ton of time in the rinks. I certainly had birthday parties, I would go like everyone else did with their school classes for parties, but it wasn't until I was an adult that I started working in roller skating rinks and for the family business.
[02:45] Meghan Lynch: That's interesting because I was picturing what a cool family business to grow up in, let all the friends in after hours. I'm curious, did you see a trajectory for the company growing because it's now grown to the largest roller skating company in the world? Did you see that growth trajectory? Was that planned? Was it organic? How did that happen?
Jen Traeger: Early on in the business, in the first 10 to 15 years, there was rapid growth. My dad saw a lot of opportunity. He sought to scale the business, but also a big part of our business model has always been to own the real estate, or the majority of the real estate, that the roller skating rinks are in. In the seventies and early eighties, acquiring real estate and 20,000-foot clear-span buildings or building from the ground up was way more cost-effective than it is today. One of the strategies has been to either build or buy facilities in areas that other retail doesn't necessarily want to go into – CRD type real estate – and then run roller skating rinks in those buildings until the value of the real estate changes, then selling opportunistically and building in another place.
[04:30] Jen Traeger: It's too expensive to build at this point. We're either acquiring roller skating rinks that people are looking to sell, or very rarely now, but it used to be a big play was to go into old grocery stores because for a roller skating rink, you need at least 20,000 square feet, and you don't want to have a bunch of poles, so clear-span. The strategy initially was around growing the roller skating business. Over time, my dad recognized that where the wealth was going to be generated was more in the real estate. For many years, through the seventies and eighties, the roller skating business was very profitable. Then it became fairly cyclical in the nineties and early two thousands. That's true of the industry, but we always aimed to ensure the operating business was healthy enough to pay the rent. That was a major strategy.
[05:55] Jen Traeger: We did very well prior to the pandemic. Then the pandemic happened, and it was not a good time to be in a business where people are breathing heavily when it's an aerosol pandemic. But after that, we started to see enormous profitability. There are several factors, and the biggest factor is that while our previous CEO was fantastic, our current CEO, who has grown up in our business, is setting the world on fire. She and our entire team – it's the best team we've had in the 54-year history of the business.
[06:50] Meghan Lynch: That's amazing. I think that points to something I wanted to address. Many family businesses only bring in non-family leadership either very late in the company, multi-generations in, or when there's some crisis or turnaround situation. But your family made a different choice where you developed leadership from within, and you've transitioned from one non-family CEO to another non-family CEO who has grown up in the business and grown a team along with them. How did you make that work, or why did you choose that strategy versus either having family stay in charge or hiring somebody from the outside?
[07:50] Jen Traeger: You're absolutely right. I do find it unusual, and it was a very intentional choice. Going back to my dad as founder, he is not an operator, and he would be the first one to tell you that he is an entrepreneur through and through. While he was always growing United Skates of America, he constantly had other venture businesses; he had a whole venture arm. Some were more successful than others. One of the reasons for having a non-family CEO was because my dad simply recognized what he liked to do, what he was good at, and what he was not good at. The reason my sister, my brother, and I either didn't join the business or joined the business later in life was not that we didn't talk about business in our family system. Some of my dad's sayings were: "don't spend the principle." We were constantly talking about what it means to have affluence, what it means to be a fiduciary. That was a part of our dining room table conversation all the time.
[09:20] Jen Traeger: My dad always spoke about wanting – he uses the phrase "shirtsleeves to shirtsleeves" – and whether it's two generations or one generation. It's not my favorite saying because it puts a lot of pressure on the next generation. So there was always conversation around how do we make sure this business provides the same resources that it did for my family of origin (generation two, which is my siblings and I and our children) and how will we get it to go to generation three, four, and beyond. But it wasn't by actively operating in the business unless someone wanted to. When I joined the business in 2006, I did it because I didn't want to be a trust funder. I wanted to feel that, as we often say, my dad and my mom loaded the bases. They came from no money; they were lower middle class. Our job was not necessarily to hit home runs. We've always been fairly conservative, but to keep the bases loaded. I wanted to add value to that. I wanted to participate so that I could feel good about getting it from Gen 1 to Gen 2, helping with the transition, and feeling comfortable that these financial resources that I was so lucky to be born into, I actually contributed to that. It wasn't just a genetic lottery.
[11:35] Meghan Lynch: It sounds like from both the way your dad approached it—passing off the managerial things that were not his strength, focusing on the visionary and building—and also imparting to you the work of ownership, that it's not the stewardship of assets where it's passive, and you just kick back and do nothing. Instead, there's work to be done with that, and it's a job in and of itself to be an owner, a fiduciary, and a steward of what the family has built.
Jen Traeger: Absolutely. We all have a work ethic of working hard regardless of what we choose to do. It was always: follow your passion. He also didn't want us to feel that we had to work in the family business. It did get to a point where he asked me to join the family business. He was starting to get concerned about how we were going to make this transition—this is in late 2006, early 2007—how we were going to make the transition from our former CEO and himself to the next generation of leadership. But I was always clear that roller skating isn't my passion. I don't wake up in the morning and live and breathe roller skating. I could have been the CEO had I chosen, but I wanted the best fit for the company.
[13:00] Jen Traeger: I'm passionate about the business we've created. We bring a lot of value to the communities we serve. In an age where there's so much childhood obesity, families not recreating together, a lot of digital screen time, we offer a very affordable experience. When you think about going to a movie theater and how much people spend to sit for an hour and a half, we're the best deal out there in terms of cost per hour and the amount of exercise kids get. Not to stray too far, I spent almost six years working in the operations business. When you asked if I spent a lot of time in the roller skating rink, my training, at 35 years old, was that I did all the part-time positions.
[14:15] Jen Traeger: I remember working as a birthday party hostess, and this 16-year-old said, "Wow, you're really good at this. You're really good on the cash register." At the time, I had a master's in accounting, and I just smiled. But it speaks to the work ethic: start at the bottom, no nepotism. I always felt I would try to show up and work harder or as hard as anybody else. People are not choosing, "Am I going to go work for a tech company or be the general manager of a roller skating rink?" There are multiple revenue channels. You're working with 300 people in a session. Your average age is 14 to 18-year-old kids. Teenagers are both a joy to work with and can have challenges. So I have a lot of respect for the people that work within the business, and it's been a joy to work alongside them at different times. I understand what it takes to run the business, and I'm also very happy that I got to choose to watch the business grow and be successful, but now to be pursuing the things that I am passionate about.
[16:00] Meghan Lynch: You're listening to Building Unbreakable Brands, the podcast all about brand stewardship and crafting an enduring legacy. I'm speaking with Jen Traeger, second-generation owner of United Skates of America. You mentioned that your passion isn't the day-to-day running of a roller skating rink, but that is your team's passion, the executive team that's running the business. I'm curious how you've cultivated executive skills. Did you need to put anything into place, or is the passion for the business the key?
[16:50] Jen Traeger: Great question. One thing I'm proud of is that whether you're a part-time associate working behind the cafe cash register, a part-time manager, a general manager, or a vice president, we've always taught financial literacy: what is revenue, what are expenses, what are cost of goods, what is profit. They see a lot of our numbers. There's a lot of transparency, and whether they decide to stay within the roller skating business or go out and do another business, I think that's a life skill: financial literacy. We're not teaching that in the high schools, or at least not to my knowledge. That's something I've always been proud of. In terms of growing and developing people from within, we've gotten lucky. And maybe it's not luck; maybe it's because whether it was our former CEO or our current CEO, or all the different managers over time, it's been a good place to work.
[18:00] Jen Traeger: People are treated well. We talk a lot about having an ownership mentality, wanting our first customer to be our skaters and our second customer to be the people that work for us. How do we make it a great place to work? As I think about our executive team, I talk to my siblings. The three of us—I have an older sister and a younger brother—are majority partners. Our former CEO is cycling out; we're buying him out. Our current CEO has some equity and will continue to earn more, but we talk about how do we make this the best job Karen, our CEO, could want for herself? How can this be the best job for our other executives? A lot of it is sharing in the success. Another saying my dad always has is it's easy to be good-time partners.
[19:30] Jen Traeger: It's easy to be there when things are going well, but let's be bad-time partners, meaning during struggles or when the business is bad. There's a lot of crazy stuff that happens in roller skating rinks; some of the stories are insane. But even around the pandemic or during down cycles in the business, we've been very lucky. Another thing is my dad never wanted to be overleveraged. A lot of the real estate we own outright, but in those down cycles, we had the ability from a landlord perspective to either defer or forgive rent because we control the operation side too. Back to your original question about how leadership development has happened in our business: some of it is luck, some is strategy. We understand from our long history that our best people have always been developed from within.
[21:00] Jen Traeger: We've done some work around what qualities a person needs to be a good leader. A lot is a passion for roller skating. A lot is passion for kids. We've done well with people who were former teachers, and a lot has been, not to say throwing ourselves at the feet of certain people, but it's hard when you have, for instance, one person who was college educated, had been working with us since she was 16, and was considering this. We wanted her to be executive; we saw a huge future. Her parents were concerned, asking, "You're going to work in a roller skating rink? How is that possible? You can't make a career out of that." Not only walking her through how that was going to look, but also sitting down with her parents and saying, "We see a ton of opportunity for this person, and we understand your reservations, but we're going to help you understand better what it means to be the world's largest roller skating company. It's not just a one-off facility in Long Island, but this is a national brand."
[22:50] Meghan Lynch: That must have been so meaningful to them, almost a show of trust that you care as much about her future as maybe not as much as her own parents, but that there's a shared care and investment in what's going on. There aren't too many companies where they would come and talk to your family about those kinds of things.
Jen Traeger: We're talking about family business and building a legacy within a family business. One of the things I'm very proud of is that we treat our executives and general managers as family. When we were going through the pandemic and having to lay off people who had been with us for 20 years, we were looking at every way we could continue to compensate them. There are a lot of different examples, whether somebody has gotten ill and we've paid their medical bills or helped someone get through school. Those are really important values that we have as a company and that we have as a family. So there's overlap between that value system.
[23:55] Meghan Lynch: Hearing a lot of empathy, and the way you're approaching trying to see it from the other person's view of what would make this the best place to work? Who else is in their ear? Who else do we need to convince that this is the right move? Thinking about it from a variety of angles. That's not always easy to do, even if you're a very people-centered business, to still get out of your own head and start to see it from somebody else's perspective. So I'd imagine that probably also has a lot to do with the culture you've built and the ability to attract and retain talent.
[24:45] Jen Traeger: It's important too to not micromanage when you have a good leader, letting them lead. That is something we have from the family side of the business. From the board perspective, we don't get into micromanaging how our CEO leads, and we only get involved from a place of how can we add value? How can we help bring the business forward? Certainly, when the pandemic happened, at the time I was cycling out of the operations business, and my brother had never been in it. He had always been on the real estate development side, and we just got to work. I've always been built to do anything. I've cleaned out toilets in the roller skating rink. I've gotten on my hands and knees and scrubbed the wall. It's about leading by example, even if you're doing a menial task. We certainly wanted people to feel that we're in it as much as they are. Not to mention, my dad always said we were never going to lose the family business during the pandemic. I can tell you it didn't feel that way, especially when we were not initially able to get PPP money. But that's another story.
[26:10] Meghan Lynch: I can imagine that had to be so tough, especially with something so, as you said, the exact opposite of what people wanted during the pandemic, and to figure out a way to come out on the other side and still keep your values intact and feel good about what you're doing. I'm sure that you also found some creative ways to serve each other and be present for each other, and, as you said, roll up your sleeves and do what needed to be done. You've mentioned a couple of times about the real estate strategy that has been a critical success factor in the growth of the business, and I've heard a couple interesting things. With this strategy of seeing this opportunistic approach – for instance, going in and renting out a space and helping to build up its value, maybe even helping to be part of revitalizing a community and then having the opportunity to then move to another location or sell that real estate and then reinvest in growth. And also this buffer opportunity to help the good of the whole, treating the company more as an organism where you could forgive some rent over here, but this location is doing better. So you keep the whole organization strong by having some more flexibility in how you're running it. Do you see real estate as being a critical opportunity that other family businesses might be missing? Some of those strategies wouldn't be immediately obvious to everyone.
[28:00] Jen Traeger: I can't speak to whether other family businesses are missing that, but I can say absolutely that how the family has generated the most wealth is from acquiring real estate, having an operating business that cash-flows the real estate, and then over time selling that real estate and acquiring new real estate. We would often say – and it's not true now because the operating business is doing so well – but for many, many years, my dad would say the operating business takes 80% of the time and effort and provides 20% of the profit versus the real estate that takes 20% time and provides 80% of the cash flow. My dad tends to be very difficult on himself. You were asking about the real estate. Over the course of our company's history, which started in 1971, we've had 66 rinks because we number them all.
[29:20] Jen Traeger: Of all of those, some of them we do municipal partnerships – that's another story. But on the private ones, we've only ever rented one building. All the rest have been owned and sold. So right now, we have 20 or 21 that we operate, but we own the real estate. My dad will talk about the one he didn't buy, but also says he should have known earlier in the business cycle that it was really a real estate play, not as much a roller skating operational play. He did just fine. I'm also a daddy's girl, so I think my dad walks on water and could do no wrong. All of that being said, I think anyone from the outside would look at my father's success and acknowledge that it's very impressive, which is also a very interesting conversation around Gen 1 to Gen 2 transition: How do you get out of a founder's shadow as a generation two person and create your own identity?
[30:50] Meghan Lynch: Now you're coaching other family business leaders through complex transitions like that. I'm curious if you have an approach or a philosophy, or something that you would encourage people to clarify before they move forward with a transition like that. Anything that they should figure out about themselves, the business, the family, before they approach a transition?
[31:10] Jen Traeger: Great question. First and foremost, and without marketing my services, we handled a lot of our transition and succession ourselves. I think we did it well, but we didn't choose the easiest path, as many specialists in family business succession have much more experience than I do. Regardless, having someone that acts as a neutral third party that's able to support this transition, to help with sometimes difficult conversations, to help get family members within a generation or between generations aware of their values, aware of what the legacy the founder generation might want, and understanding what the next generation's priorities are. What I've discovered tends to be an obstacle, particularly in the founding generation – and this was not true with my father, which is unusual – is that they are so self-identified with the business. While they cognitively want to do succession and transition, I don't think they're truly ready for it, meaning they're not psychologically prepared.
[33:10] Jen Traeger: It requires a lot of coaching, both for the founder and the next-gen leaders: how do you figure out the right time? How do you create space and trust so that you don't want the Gen 2 leaders to walk away because they're not able to take a leadership role? You also have to understand psychologically how difficult it is for the founder to step away. I struggle to get founders to put processes on paper, to unload what's going on in their brain because it's so second nature to them, and then they don't understand why the Gen 2 isn't doing the job they want them to be doing. There are a lot of complications that happen. The takeaway is: get support, give each other grace, know that it's not a straight line, and it's going to take some time. Have a long runway. My dad was very clear. We bought the business about 10 years ago. The transition in leadership happened at the end of 2019, though we started all of that when I joined the company in 2007. I don't know that a transition needs to take that long. My dad was very clear that he wanted to, in his lifetime, step away from the business, see it transition to the next generation, and spend more time hiking with me than working behind his desk.
[35:10] Meghan Lynch: You're a hundred percent right that there can be a difference between intellectually wanting to do something and then emotionally having that switch from your whole identity feeling stripped away. It's a big emotional shift. It's one that people can often dismiss too much, thinking it's not that emotional. But when you get down to it, of course it is. You can't help it.
[35:50] Jen Traeger: That's one of the skills I bring to coaching: listening to what's being said and listening to what's not being said, and having compassion for both sides and helping both sides understand and provide grace that this is complicated. As you said, even though you cognitively want one thing, the emotions need to catch up. Not everybody wants to talk about the emotional piece.
Meghan Lynch: Exactly. Even in coaching, people don't want it to feel like therapy; they want it to feel like coaching, although sometimes the line is very thin. I love the idea of making a plan to give yourself grace and the other person grace. That makes any transition, whether you're talking about a G1 to G2 or a family CEO to a non-family CEO, there's space for grace. Love it.
[37:00] Jen Traeger: I often think about, and I have a close relationship with our current CEO, Karen, as does my brother. I always wonder what it's like for her watching two siblings working together. We generally do a good job with one another. But someone said to me once, the reason as siblings you can press each other's buttons is because you created them. So Josh and I have always worked hard to keep that in check, but sometimes in stressful or heightened emotional situations, it leaks.
[37:50] Meghan Lynch: You're listening to Building Unbreakable Brands, the podcast for leaders with a generational mindset. I'm speaking with Jen Traeger, who uses her 20 years of experience working in her generational family business to coach other family business executives on complex transitions. Now my son Henry is going to come on and ask Jen his questions and probably share a roller skating story of his own.
[39:00] Henry Lynch: So I was roller skating once a couple weeks ago, and this happened to me.
Jen Traeger: Oh, no, that's interesting. I've never seen a broken wrist from a kid roller skating in the entire time I've been in the roller skating business. Really? It's the first one ever. No, we see 'em all the time. In our business, people have to wear wrist guards for that very reason.
Henry Lynch: Yeah.
Jen Traeger: Are you right-handed?
Henry Lynch: No.
Jen Traeger: Hey, I'm left-handed too, so at least you have your right hand.
Henry Lynch: Southpaws.
Jen Traeger: Yeah.
Jen Traeger: I'm glad you're okay. I'm sorry it happened to you, and I'm glad it wasn't in one of our rinks. We hate accidents happening to our guests.
Henry Lynch: Alright, Jen, are you ready to be questioned? Welcome to the podcast. I'm going to start off with a couple of questions, then do a joke, and I'm going to be gone. So how many people come to the rink daily?
[43:00] Jen Traeger: Daily? We have 20 plus rinks, so an easier answer is that we serve over 2 million guests a year. You can do the math, but it would take too long to calculate on the spot. Roughly, it depends on the day and the rink's location. A big session might have 300 to 400 people, particularly on Saturdays and Sundays. We might have an early morning session that doesn't have many people, and then a midday session, an afternoon session, and an evening session. So it can be a thousand to 2000 people at a busy rink in a day.
Henry Lynch: Alright. How many people can fit in the rink?
[44:00] Jen Traeger: It depends on the rink. Some rinks have one capacity, other rinks have another capacity. We have a system where, for instance, we adhere to building permit laws and local ordinances, so if there's a 600-person capacity, we honor that. For every hundred skaters, we have a certain number of skate guards on the floor to keep it under control and prevent accidents, ensuring everyone has fun and stays safe. We spend a lot of time and are the leaders in not only the roller skating industry but in the family fun industry on how to reduce liability. Do you know what the word liability means? No. It means how do we reduce people not only getting hurt, so reducing accidents, but if there are accidents, how do we reduce the number of times people sue us?
Henry Lynch: Alright. The last question has already been answered, but I'm going to ask you it anyways. Is there only one rink in the world of your company?
[45:30] Jen Traeger: No. In the history of the company, which started in 1971, we've had 66 rinks. Today we have 20 or 21. And then we own a couple more where we own the real estate, but other people operate them. We are the largest roller skating company in the entire world; no one else can say that.
Henry Lynch: Wow. That's big responsibility.
Jen Traeger: It's also a lot of fun, ensuring that 2 million guests a year have a fun, friendly, safe place to go skating.
[46:25] Jen Traeger: I'll tell you a funny story. I thought my dad, who started the company, wrote the Hokey Pokey until I was a sophomore in college. He didn't, by the way.
Henry Lynch: Alright, now for the joke.
Jen Traeger: I'm ready. I hope it's funny!
Henry Lynch: What kind of music do roller skating rinks play?
Jen Traeger: I don't know, Henry, what kind of music do they play?
Henry Lynch: Rock and roll.
Jen Traeger: Did you make that up yourself?
Henry Lynch: Either my dad came up with it or found it online.
Jen Traeger: I like that. It's a family affair, so if you ever come skating in one of our rinks, you can have cotton candy for life. Do you know how much sugar you need to make a gigantic thing of cotton candy? Like one tablespoon. It's spun sugar, so it becomes this big thing, but in reality it's just one tablespoon of sugar.
Henry Lynch: You're out of luck. I'm not a big fan of it.
Jen Traeger: Gosh, you just saved me so much money.
Henry Lynch: That just about wraps it up.
[47:45] Jen Traeger: Thank you. It was nice to meet you. Take care of that arm.
Henry Lynch: Nice to meet you, too. I will. All right, bye
Jen Traeger: Bye. Have a great rest of your summer.
[48:10] Meghan Lynch: Thank you so much for being on the show. This was a really great conversation. If people want to learn more about your coaching practice or how to get in touch with you, what's the best way for them to do that?
Jen Traeger: They can visit my website, execfamilybusinesscoach.com, or find me on LinkedIn.
Meghan Lynch: We'll link both of those in the show notes. Thanks again, Jen, for sharing your experience and value with us. Appreciate you.