The man behind the “Girls Gone Wild” videos plans to open two mainstream businesses this year without losing his wildness.
Joe Francis owns Mantra Films Inc., the Santa Monica company that sells nearly $100 million worth of soft porn DVDs every year. The company also produces more than 700 events and runs several well-trafficked Web sites.
Now Francis, 33, has set his eyes on two lucrative brand extensions: apparel and restaurants. For both projects, which will carry the “Girls Gone Wild” name, he will follow his proven formula that sex sells, a motto he learned in his first marketing class at USC.
“Sexiness sells too, and edginess sells,” Francis explained. “Women want to be around sex as much as men do, because women want to feel sexy.”
Francis, undaunted by his many legal problems, plans to open two restaurants by the end of the year one in Cancun and the other in Cabo San Lucas in Mexico. Francis emphasized that his restaurants won’t feel like strip clubs. “You’ll be comfortable going in there, but you’re going to get a ‘Girls Gone Wild’ experience,” he said, adding that “in some countries, we’ll do topless optional at night.”
At the same time, Francis doesn’t plan to repeat what he sees as the mistakes of Planet Hollywood, Hard Rock Caf & #233; and Hooters, which he believes have blurred their image by trying to become mainstream family dining establishments.
“The restaurant business depends on doing at least 70 percent of your revenue at the bar,” Francis said. “Even if you do 50-50, at least 70 to 80 percent of your profit comes from the bar. So you need to be open ’til 2 o’clock in the morning. You need to cater to a younger crowd. Being a family restaurant is not going to give you bar business. We’re very honest about that. It’s a fundamental problem with all these themed restaurants.”
The restaurant rollout will start with owned-and-operated stores in beach tourist destinations. Once the format is set, the company plans to open smaller outlets in college towns across the country. Francis expects some type of franchising or licensing structure for the college-friendly clubs, with a total build-out of about 300 locations.
“Every college town has a tremendous drinking crowd, but you don’t have a consistent place for them to go that has hard liquor,” said Francis.
However, some restaurant experts say that the emphasis on alcohol carries risks.
“You’re promoting this type of behavior the consumption of large quantities of alcohol to get you into this ‘Girls Gone Wild’ mentality,” said Dean Small, a partner in Synergy Consulting Group, a chain restaurant consultancy based in Laguna Niguel. “You have tremendous exposure, because when people over-consume alcohol, unfortunate things tend to happen.”
While Small confirmed that restaurants make a lot of their money at the bar, the chains market themselves as a restaurant first and watering hole second.
“In the restaurant business, the rule is food first. Otherwise you’re just a bar,” he said. “They enjoy and want the beverage revenue, but bars come and go. Successful restaurants have longevity.”
Meanwhile, the “Girls Gone Wild” apparel collection features mostly swimwear and casual wear, some with the words “Angel” and “Modesty” the names of two of the lines embroidered on the garment’s derriere.
“We’re trying to bring that innocence back,” Mantra’s Chief Operating Office Scott Barbour said with a hint of sarcasm.
The apparel will sell at boutiques and upscale department stores.
“We could pick low-hanging fruit by going to mass retailers, but if you could buy us in Target or Kmart, it wouldn’t make us cool. And cool is our stock in trade,” said Barbour.
The clothing will sell at department store prices. The active wear line will reach stores on April 30, followed by other lines later this year.
To move the merchandise, Mantra has harnessed its vast marketing resources. The clothes already appear in “Girls Gone Wild” infomercials and TV spots. Francis said he’ll get celebrities to wear and tout the threads. Future videos and TV commercials will film in the restaurants to promote them, whether or not TV viewers ever buy a video.
Man and machine
Like Walt Disney, Martha Stewart or Hugh Hefner before him, Francis tries to embody his brand. He appears on talk shows, cavorts with show biz celebrities and travels the world in the company Gulfstream jet. The most obvious comparison is Hefner, whom Barbour sees as the aging face of Playboy, while Francis appeals more to Mantra’s core audience of 18- to 24-year-old males.
But behind his flashy image, Francis has built a well-greased industrial machine to sell sex. The company currently has about 400 employees, nearly all of whom work at the firm’s phone center, warehouse or headquarters in Los Angeles.
Francis started the operation at age 24 using a credit card to provide capital. According to Barbour, sales have increased every year since start-up. Growth capital has come from cash flow, and the company has zero debt. Francis remains sole owner.
The “Girls Gone Wild” process begins with two buses that tour the country. Nearly every night the bus stops at a bar, usually near a college. A music act helps draw a crowd and then the camera crews go to work, offering girls free T-shirts and hats in exchange for exposing themselves.
Soon the raw video, together with signed waivers and proof of the girls’ ages, arrives in Santa Monica. After verifying the IDs and extensive editing, these clips become an hour-long “Girls Gone Wild” DVD. The company produces about 80 titles each year at an average cost of approximately $100,000, Barbour estimates.
The familiar commercials for “Girls Gone Wild” appear on cable and independent TV stations about 400 times every night. Advertising ranks as Mantra’s biggest expense, totaling about $40 million per year for TV time plus another $10 million or so for the Internet.
The TV spots encourage viewers to call an 800 number or visit the Web site.
Incoming calls go to a contracted call center in the Philippines, and by the next morning, the orders are in the company’s warehouse, ready for processing and shipping.
Most customers buy the initial offer of two videos for $9.99. As part of the deal they get a subscription, much like a music or book club, to automatically buy another video every month until cancellation. Titles cost $19.99 each.
While the Philippines handles incoming phone traffic, another call center near Los Angeles International Airport contacts past, present or likely customers. The operation near LAX employs about 250 people.
In addition to the regular soft porn “Girls Gone Wild” videos, the company produces a raunchier Platinum line as well as tamer “Flirt” editions, which contain no nudity and sell in retail stores like Wal-Mart.
In its nine-year history, the machine has run afoul of the law. Last year Mantra pled guilty to charges that it failed to maintain records that all girls in the videos were of legal age and that it failed to properly label its videos. The company and Francis paid fines totaling $2.1 million.
Likewise, in 2003 Mantra paid $1.1 million to settle complaints that its subscription program billed customers without their consent.
With the hiring of Barbour, whose father Malcolm co-created the reality TV show “Cops,” the company has put policies in place to address compliance. The operation now has an on-site general counsel and a system to check girls’ IDs.
When asked about his legal entanglements, Francis responded that his company has far fewer lawsuits than other companies of a similar size. “Most people sweep them under the rug, I played them up. That’s the only reason you’re asking the question,” he said.
His motive for publicly talking about his troubles was a direct correlation between sales and controversy. “I would make the controversial legal problems way bigger than they were, just as a marketer,” Francis said. “I would go on CNN or Fox News and hype up a lawsuit. I’d wave it around over my head. That was a way to drive sales.”
Francis puts the “any publicity is good publicity” theory to the test, however.
An August 2006 story in the Los Angeles Times’ Sunday magazine included allegations from a young woman that Francis raped her and described other alleged illegal activities. The reporter even claimed that Francis roughed her up.
Francis believes all businesses are essentially the same under the skin, so the wisdom he has learned in peddling “Girls Gone Wild” would apply to entrepreneurs in any sector. He advises people that it takes drive, creativity and intelligence to start a company, and if they don’t have all three, get a complementary partner.
More importantly, “to create a global brand, you have that one pivotal moment when you decide to start delegating to management,” Francis opined. “To grow, you need scalability. Once you want to grow past that 10-person company, humming along in your comfort zone, you have to delegate. That letting go for any entrepreneur is the hardest part of becoming a mature manager.”
