CW 429: The Business of Good Health with Jenny Craig Founder of Jenny Craig Inc. A Nutrition & Weight Management Company

Welcome to Creating wealth with Jason Hartman. During this program, Jason is going to tell you some really exciting things that you probably haven't thought of before. And a new slant on investing. Fresh, new approaches to America's best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine, self made multimillionaire who not only talks the talk, but walks the walk. He's been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason's footsteps on the road to financial freedom. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors. Welcome to the Creating wealth show. This is your host, Jason Hartman. And this is episode number 429. 429. Thank you so much for joining me. And I have to say, I have missed you. Yes, I've missed you. Why have I missed you? Well, I always miss you listeners.

But.

But we have had some pretty severe challenges with itunes the past two weeks and you may have noticed that you weren't getting a lot of episodes and as of yesterday, you started getting them all. I think you did, at least. So if you're an itunes user, which constitutes probably 70% of our listeners, I'd say just know that we publish every Monday, Wednesday and Friday. So three days a week. We have been really good and consistent about publishing a lot more episodes lately. We want to just get you as much content as possible and just know that if you are not getting a new show every Monday, Wednesday and Friday, there's something wrong. So that means you can always just go right to the website, right to the source, and that is to go to jasonhartman.com where you can download and listen to those episodes directly off of the website. You know, this stuff is. It's kind of complicated sometimes and the RSS feeds get messy up and I think that affected stitcher radio listeners and soundcloud listeners as well. But I know it was itunes and we still haven't fixed all of the itunes issues. There are a few more remaining issues, but they're not nearly as serious. In our downloads the last two weeks, I was getting so bummed out and so depressed because we've had some really, really good episodes. Our downloads were way down. They were, you know, somewhere in the neighborhood of 12 to 1500 people downloading per day, when usually it's somewhere around 4000 people per day are downloading. And so yesterday when the problem was fixed almost instantaneously, we had, I think about 51 or 5200 downloads. And today they were up really high again, around 5,000 downloads as well. And I'm sure that'll be that way for the next couple of days. So you do have all of those episodes now, I think, I hope in your smartphone or whatever device you're using. But the thing I want to really encourage you to do is go back and listen to them. And the reason I've been so bummed out about it, about this problem is it couldn't have come at a worse time because we've had some great shows recently, not the least of which is the brilliant Bill Bonner. Bill Bonner, episode number 425, is the founder and the owner of Agora Financial and they are the largest financial newsletter publisher in the world. And I have read or listened to on Audible all of his books. And I just love his writing. He's such a great writer and has such phenomenal insights. I don't agree with him on all of them. He's much more into the stock market and gold than I would ever be. But he's really a good economist and has some very, very good insights. You know, the great thing about getting him on the Creating wealth show is that Bill Bonner almost never does radio interviews. I mean, it is a big deal to get him. Look, and we've had some big name guests. We've had Steve Forbes on. We've had Harry Dent a few times. We've had John Malden a couple of times. We've had Gillian Tett with Financial Times. She's from London and writes some great stuff. I just interviewed a few days ago, consult Swello Mack and she was awesome. We talked about the American Renaissance and how the Midwest get this. She calls the Midwest her favorite emerging market, as if it's a country. So we talk about that. And we've had Meredith Whitney on. She was phenomenal. We just had so many great guests. But gosh, you know, Peter Schiff, Pat Buchanan, Bill Ayers. Talk about both sides of the political spectrum, huh? We're versatile. We get both sides of the spectrum on the show here, a bunch of great guests. But Bill Bonner is kind of a big deal because he doesn't do radio interviews very often at all. So in addition to him, episode 426, we did a market profile on Birmingham and we of course have our property tour coming up there in just exactly a month from today. That'll start November 21st. I hope you join us for that. And a lot of you haven't known about that because you haven't been getting the episodes. So you've missed about six episodes. So you've definitely got some catching up to do. We had Sidney Powell on. She has exposed a bunch of corruption in the Department of Justice and has some really fascinating contrary stuff to say about Enron and how they were sort of unfairly treated. You know, it's hard for me to have any sympathy for Enron, but she did move the needle a little bit. We had Scott Paul, who is with the American or the alliance for American Manufacturing. And we talked about the markets that are hot for manufacturing and what that has to do with real estate investing. Episode 422, we had eight financial rules that apply to everyone and their money. And our guest on that episode was Jason Hartman. He's. He's okay. You know, he's not Bill Bonner, but he's all right. And. And then 427 we had Sean. Ha. I know I'm skipping around here a little bit. Senate Libertarian candidate. I did a great intro for a few of these shows. I was really proud of them. They were really good episodes. So please make sure you go back and listen to them. And the one I did, I think on 427 was maybe 428, I'm not sure with John Challenger, where we talked about global outplacement and where the jobs are growing and the careers are really booming and how that affects your investments. Of course, I did a great intro on one of those. Either one of them. I can't remember where I talked about regression to replacement costs and really analyzed construction cost and land values and the LTI or land to improvement ratio, which is the driving factor in my proprietary Hartman risk evaluator and really expanded on that. So do not miss that. It's really fundamental, but also very advanced knowledge that you will not hear anywhere else, and I know you won't because it's. It's basically my discovery or my invention. So anyway, you'll. You'll like that. Make sure you go back and listen to all those episodes. Well, today our guest for episode 429 is none other than a name, you know. And it's not going to be a hardcore real estate topic by any means, but it is a good business topic and you're going to learn a lot about business from this woman. She is a household name to say the least. And that is Jenny Craig. Yes, Jenny Craig, the incredibly successful entrepreneur and weight loss guru. And I just wanted to bring her on the show because I thought she was very interesting and she has a great story. Sold her company for an ungodly fortune and it wasn't a dot com company either. So I know it's kind of easy to, you know, sell your company for a fortune when you're some crazy dot com company and you're in some overvalued valuation phase where you have no revenue yet you sell for a couple billion dollars. But anyway, that's another topic. I digress as usual, don't I? Digression is something I do here. Well, hey, a couple of really important things in the news here. Number one, U.S. news and the Wall Street Journal are reporting on Fannie Mae and Freddie Mac and how they are nearing a deal to lift loan limits and make it easier and easier to get mortgages. So I'm going to read you some of this. But first of all, here's my take on it. First of all, America has a really short memory, you know, and we always do. You would think after the mortgage meltdown from just a few years ago that there wouldn't be any talk of getting really crazy low down payment mortgages again. But here we are, as Yogi Berra would say, the inimitable Yogi Berra who had all these funny great quotes. He would say it's like deja vu all over again. What else did Yogi Berra say? Oh, he has some great quotes. He said if you come to a fork in the road, take it. And then Yogi Berra also said the future ain't what it used to be. I'm pretty sure those are all Yogi Berra quotes just from memory. But anyway, it is really, truly amazing, folks, what's going on here in this talk. Now I think the banks have overcorrected. So I would love to see them loosen up a little bit and it would be great for the real estate market. It would be great to see your values increase even more. And you know, if you bought property from us a couple of years ago, three, four years ago, you are in the money. And you know that, okay? You've, you've made a lot of money. In fact, we had a lot of challenges in the St. Louis market where a lot of our clients purchased and I'm sure many of you listening purchased there. And we had a lot of challenges where our provider got very, very behind on construction and just basically took a long, long time to rehab the properties. But the funny thing was, as much as we did have some complaints about that, clients actually profited handsomely from it. Where the property was going up in value as they were just waiting for it to be finished. So you may be anxious to get started with your investment. Sometimes those delays really can work for you, and they certainly did for a lot of our clients. This article. Anyway, I digress again. Here we go again. This article is really interesting. Let me just share with you a couple of excerpts from it. It's by Joe Light, okay? And it says Fannie Mae, Freddie Mac and mortgage lenders are nearing an agreement that could lower barriers and restrictions on borrowers with weak credit. Deja vu all over again, right, folks? A move that would expand access to home loans amid the sluggish housing recovery. Now, I don't know where they're getting that from. It certainly doesn't feel very sluggish to me. The market has definitely slowed, obviously. I think you can tell where it's my commentary, right? The market has definitely slowed in crazy markets, the speculative markets like California, New York, Miami, Boston, all the expensive high land value markets that we never recommend anyway. And it's even slowed quite a bit in Phoenix where you've seen the hedge funds on their way out. They're not completely out yet, but they're definitely slowing down in their acquisition. So it's probably sluggish in blighted areas, but it doesn't feel at all sluggish to me. Now, granted, it's not what it was in 2005. Okay. And that's the benefit of working with someone like us. I mean, I have so much experience in real estate. I've been through so many market cycles now in my 20 plus years in the business. That's handy. It really is. And I try and impart a lot of that knowledge to you here on the show. So anyway, let me read on the move by the mortgage finance giants and their regulator, the Federal Housing Finance Agency, that's fhfa, not to be confused with fha, would help lenders protect themselves from claims of making bad loans, according to people familiar with the matter. So here's what happens. My commentary. When these banks and mortgage bankers make bad loans, there are buyback provisions. See, I've owned several mortgage companies over the years myself and I don't really like the mortgage business that much. There's just too much fraud and deception in that business and in too many sort of shady characters. But you know, we certainly all need mortgages, okay? And there are some good ones out there for sure. But you know, in owning all these mortgage companies, I've owned several over the years. You have buyback Provisions and anti fraud provisions. Not that they were very well enforced, obviously, in the last mortgage meltdown. But what's happened is a lot of these big lenders have been nailed with big fines and fees that have gone to the secondary market. Fannie Mae, Freddie Mac, who buys these loans on the secondary market. Right. So what they're trying to do here, which all of these things sound good, but in practice they tend to not really work the way they're pitched to us, if you will. Okay. The article goes on to say Fannie and Freddie are also considering programs that would make it easier for lenders to offer mortgages with down payments of as little as 3%. For some borrowers, that would be a reversal. For the loan giants, the move could be announced as soon as this coming week. Okay. Regulators and the White House officials have struggled to expand access to mortgages, which have been hard for some borrowers to get since the financial crisis, despite a sharp rise in home prices. Well, didn't they just say the market was sluggish? And now they say there's been a sharp rise in home prices. I don't know how to interpret some of these things, but whatever, let's move on. But the likely moves by Fannie and Freddie could provide kindling for critics who worry about repeating some of the mistakes that led to the housing boom and bust. Obviously, that bust happened toward the end of 2005, by the way. I did predict that and I was right about it. Again, the only major prediction I've been wrong on is interest rates. Everything else has pretty much come true. When I've talked about price increases and decreases and rent increases and rent softening, rents don't really decrease much. They just sort of soften. You know, they always have this sort of slow, very linear upward progression. Okay, digressing again. Let's go back. Okay. The agreements wouldn't end the debate over a future of Fannie and Freddie. Now, you know my comment again that there has been a lot of talk about shutting them down, which unlike pretty much every other real estate person out there, I would actually like to see them shut down. I mean, they would need to do it slowly and just decrease the volume slowly. But that would reduce the homeownership rate. I mean, can you imagine a real estate guy saying that? Yes, I did say that. I think we should have a lower homeownership rate. I think a real homeownership rate should probably be around 55%, not 69% or 64 or 63%. Okay. Which is somewhere around where it's hovering now, I believe not everybody's cut out to own a house. So what? That's fine. Let them rent. And if Fannie Mae and Freddie Mac went away, you would see a lot of upward pressure on rents. And listen now, all of us listening, we probably believe that the long term buy and hold strategy of cash flow investing is the right thing to do. Okay? That's the debate about Fannie and Freddie. We'll see where that goes. I don't think they'll go away, but just my thoughts on if they did. Initially, it would cause a deflation in housing prices for a period in between. But overall I think it would be good for the market, good for the economy. But hey, look at real estate has been subsidized by the government since the Great Depression in the United States. So take advantage of your subsidy, okay? And borrow money. That's why we've got such a mature and great mortgage market. And that's why international investing just cannot compete with US Properties. So the debate about Fannie and Freddie, which were taken over by the government near the height of the crisis in 2008, earlier this year, a bipartisan Senate plan to replace Fannie and Freddie as part of a broader housing finance overhaul has stalled. Okay, so that's not going anywhere right now. The latest moves underscore just how much the government is relying on Fannie and Freddie to increase the supply of credit. Okay. Steps to reduce down payment standards would further signal a turn away from the previous efforts to shrink the influence of the two mortgage giants. See, when you give stuff away and you're a politician, there's just no going back, okay? Everything moves into politics. Always goes toward larger government, more spending, more goodies, more just growth of government. It's this creepy, creepy thing. They have this concept, technology, computers especially, they call it feature creep. Maybe you've heard of that concept before, feature creep, where the devices and the software get so overloaded with features. And you know, Microsoft would be the perfect example of this. Remember that stupid paperclip that they used to have that tried to help you all the time? I don't like Microsoft products very much. I'm kind of an Apple fan. But hey, I use PCs for many years and I used to be a fan. But you know, feature creep, it's just too much stuff. Clean it up, make it simple. Steve Jobs used to say, the hard part is to make it simple. And I would agree with that. That is the hard part. But it's a very important part. Okay, back to the article. Jason, keep on Track here. Potential agreement would allow credit to flow more freely to lower and middle income households, said Mark Zandi, chief economist with Moody's Analytics. By the way, I think we had Mark Zandi on the show a long time ago. I'm pretty sure we did. So you can go back and look for that episode@jasonhartman.com just use the little search bar there and you'll find it. But Mark Calabria, director of Financial Regulation Studies at the libertarian Cato Institute. I like the Cato Institute, okay. Quote, this is the sort of thing that gets people underwater. 3% down payments can disappear and become zero real quick, unquote. I would agree with that. But you know how it goes. Americans have a short memory and the politicians want to dole out the goodies. So that's what they're doing. Well, Fannie and Freddie don't make loans. They buy them from lenders, package loans into securities and then give guarantees to make investors whole if borrowers don't repay. Okay. So you know, you have to understand that's the secondary market. Obviously most of you listening, I know you understand how that works by now. Fannie and Freddie, now this is interesting. Fannie and Freddie have recouped tens of billions of dollars in penalties from lenders in recent years over claims that lenders made underwriting mistakes on loans they sold to the mortgage giants during the run up to the housing crash. Well, mistakes is putting it lightly. There was just outright massive fraud. I mean, look at what was going on at Countrywide. And what was it? Anthony Mazzillo is his name. He just got a slap on the wrist when he should be in prison probably. At least that's what a. And it's hard for me to disagree. Lenders have blamed those penalties in which lenders were required to buy back mortgages for, prompting lenders to make loans only to borrowers with near pristine credit. Now, I do believe they have overcorrected this. So I don't want to see it go back to the way it was in 2003, 2004, 2005 and a little bit into 2006. That was just dumb. It was a drunken orgy of just complete greed and fraud. It could get a little looser. I think that would be okay as long as it's prudent. We'll see where this goes. In previous years, Fannie's and Freddie's regulator has tried to shrink their outsized role in the mortgage market. However, under the new director, Mel Watt, who took office in January, the FHFA has turned to Extreme expanding mortgage access. Partly to ensure that tight credit doesn't stifle the housing recovery, the FHFA has made several previous attempts to ease lenders concerns. Okay, so you see what the dynamic is here. The lenders who are actually making the loans are concerned that they're going to get hit with a penalty or a buyback provision and they're going to have to buy back the loans because their complaint is that the underwriting guidelines aren't clear. So they've just totally overcorrected. And you know, you know how it is. If you've purchased a property, it's really, really difficult to get a loan. Okay. So they're looking for some clarity and I can't say I blame them. Beginning in 2013, the agency said lenders wouldn't have to buy back most loans where the borrower didn't miss any payments for three years. In May, the FHFA said borrowers could miss two non consecutive payments within three years. Okay, so there you go. That's how the lender could be penalized or not be penalized. So if they miss 2 non consecutive payments within 3 years after making that loan, they're not going to be penalized. Alright. In both cases, the FHFA exempted some mistakes such as fraud. I love how they say some mistakes such as fraud. Now to me fraud seems like something you do with intent. It doesn't seem like a mistake, but there we go with legalese. Right? But without clear definitions of what mistakes met that threshold, lenders said they remained wary of expanding mortgage access. The new agreement would clarify which mistakes could constitute fraud, giving greater confidence to lenders that they won't be penalized many years after a loan is made. Still, lenders and regulators must reach an accord on what to do if they disagree on some problems which could involve using third party arbitrator to resolve disputes. Okay, separately, I'm moving on here. I'm just jumping right ahead, almost wrapping this up. Separately, Fannie Mae and Freddie Mac and the FHFA are considering new programs that would allow the companies to guarantee some mortgages with down payments as little as 3%. The program might be limited to certain kinds of loans such as mortgages for first time buyers. You know what this is all going to do folks? This is going to increase the value of your income properties. Because as these first time buyers go out into the market, if they can buy with only 3% down, that is going to drive up prices. So congratulations to you. Isn't this just great? And if you've got stabilized properties with tenants in them on one year leases. You're not going to have to worry about any softening in the rental market, which could happen ultimately. Because remember, those are non correlating indicators. As I've taught you about on prior episodes when I've discussed the three dimensions of real estate investing, the companies already guarantee loans with down payments of as little as 5%. Though loans with down payments of less than 20% typically requirements separate mortgage insurance. Regulators and lenders have tried to walk a fine line between expanding mortgage access and moving too far toward the loose credit that led to the crisis. The potential impact of looser lending standards and low down payment programs on the availability of mortgages isn't clear. One question will an agreement be enough to get lenders to boost their lending to lower quality borrowers? Now this is interesting. Meanwhile, the US Government and shareholders of Fannie and Freddie are continuing to fight in the courts over how to handle the company's profits. I mean, look at this. The the shareholders of the company, because these technically are separate corporations, right? But now they're sort of owned by the government and sort of not. And the government wants their profits and the shareholders want their profits. So this is interesting and so we're almost done here. But this is just an interesting end to the article. Okay. When the two companies were taken over in 2008 and put into a so called conservatorship, the government didn't wipe out the shareholders. Well, remember what happened with gm? This is a kind of a similar story, a little different, obviously similar in concept. Instead, it received warrants to buy as much as 80% of the common stock of Fannie Mae and Freddie Mac and a new class of preferred shares that initially paid a 10% dividend to the government. He didn't say to the government. I added that, okay, in August 2012, the government did away with the fixed dividend, but required Fannie and Freddie to steer almost all of their profits to the US Treasury. Isn't that nice when you get to make the rules?

Investors sued the government over the change in terms. A judge recently dismissed one of the most prominent cases. Who does the judge work for? The government, Let me think. But others haven't been decided yet. So that's what Joe Light wrote. And that is a fascinating, fascinating article. All right, I wanted to share a fascinating article by Rich Karlgaard who was on the show previously, but we have got to get to our guests so we don't have time. I want to leave you with a couple things here before we get to Jenny Craig, our guest today, and that is join us for the Birmingham tour. We'll do the Creating wealth seminar on Saturday and you'll get my full content of the fundamentals of income property investing. And we do that on Saturday on that weekend before Thanksgiving. Then on Sunday we do the property tour and we're going to look at some of these what I call minimalist management, bulletproof properties because they are very, very basic types of houses with a lot of the stuff that normally breaks and you have to repair as a landlord, it just isn't there at all in these houses. So I think you're going to like that. And I was there a couple of months ago and toured all of these and it was. It's quite a fascinating philosophy and it's working out really, really well. So I hope you'll join us for the Birmingham property tour. And since we're talking about health today with Jenny Craig a little bit, and we're talking about, you know, her empire, she built on health, I want to recommend an app that our client Fernando, who was recently just on the podcast a few episodes ago when we were at the Discount Mortgage and Note Investing conference in Las Vegas last week, he recommended this app that I absolutely love and I just totally want to recommend it to you, our listeners. It's called fooducate. It's like educate and food put together. F, O, O, D, U, C, A, T, E. And it's available for iPhone and Android. And you need to get this app. It's free and it's totally awesome. I have learned so much using this app for the past week. What you can do is you can scan the barcode of any product. So I was last night going around my house and scanning barcodes and noticing and it gives it. It gives every item a grade, whether it's an A, a, B, a C, a D, whatever, right? And, you know, plus, minus, etc. And some of the things I thought were healthy are not very healthy at all. So I am learning a lot. And it doesn't just give it a grade. It tells you why it gives you that grade. So if you're going to the grocery store and you care about what you eat as you should, this is an awesome little free app for your smartphone. It's called fujicate. I have absolutely nothing to do with the company whatsoever. I simply started using it and I just wanted to tell you about it because it's awesome. Now on the next episode, I'm going to try to address this Rich Carl Guard article that is going to fascinate you about the missing wealth from America and how much certain regulations play into that. And I think you're really going to be quite fascinated by that. So here is Jenny Craig.

It's my pleasure to welcome Jenny Craig to the show. Yes, you've certainly heard that name. That is the Jenny Craig that we're talking to today. Of course, she's a weight loss guru and founder of Jenny Craig and author of her most recent book, I Believe in Genevieve. And she's coming to us from Southern California today. Jenny, welcome. How are you?

Well, I'm great, thank you. And hello to your audience out there.

It's great to have you on the show. So let's start with your book, but I want to talk about your business success and hear any of your great tips for business and how someone can build and grow a business too. But first, first let's maybe address the problem. We have a huge obesity epidemic in the United States and in many countries around the world. I know that Australia and Mexico are facing all kinds of obesity related health problems. Tell us about the problem a little bit and how you got started.

Well, yes, actually that's the reason that I decided to do the book. You know, I wanted to get a few very positive messages across the children. And of course, using a horse as a metaphor made it easy because really children, you know, all children love animals and especially horses. So that was the main reason that I decided to do the book. And really some of the messages in it are things like you can be and do anything you want if you're willing to work for it and if you believe in yourself and also look to role models that exhibit behavior that you want to emulate. And while we're talking about role models, really, I think parents underestimate the power they have as role models. You know.

Children remember more of what they see than what you tell them. So parents who are always eating fast food foods and expect their children to eat otherwise, you know, are delusional because really kids are going to emulate the behavior they see at home. And that's true also with outside influence. So that was one message we tried to get across and also.

As I said before, that to instill confidence in kids that if they're willing to work for something, they can achieve it. So, you know, we tried to get subtle messages across the children because you can't preach to kids today. They really, they turn a deaf ear. You have to get the message across, but in the subtle way. And that's what we tried to accomplish.

With the book so Jenny, how many books have you written so far?

5. Three of them were cookbooks and the other two, One was an introduction to the program, talking a little bit about what the Jenny Craig program is. And then the other book was really.

It was supposed to be my life story but it didn't quite turn out that way because I had it all written, gave it to a publisher and they completely changed it around.

Nothing like changing one's life story.

At the time.

But unfortunately by the time I discovered that it had already gone to print and so I had to live with it. But I'm planning on doing really.

My own autobiography again and do it the way I really wanted it to be.

So Jenny Craig, let's talk about the company for a moment and how you got your start. It was founded in Australia back in the 80s, is that correct?

Yes. Well, what happened? We owned another company called DCI. We had 140 centers throughout America and we sold that to Nutrisystem. And so with it we signed a two year non compete. And of course there were few English speaking countries that we could go to because the non compete covered North America. So we decided to go to Australia and make it an adventure. So we went to Melbourne and the reason we went there first is that that's where the food manufacturers were. So we started with nine centers in Melbourne and expanded from there and now we have approximately 95 centers in Australia. And after the two year non compete was up, we decided to come back to America. Started in Los Angeles. And you know the interesting thing is when we, the morning that we opened 12 centers in Los Angeles there were 10 full page ads from different weight loss centers. Because while we were in Australia a lot of small mom and pops and even larger companies like weight watches and, and diet centers, they had really sprung up and were pretty big. So that's what we were up against. And we thought, well, how do we define ourselves as being different from those companies? And what we decided is that none of them had frozen foods on the premises. It's true that Weight Watchers had frozen dinners in the supermarket, but it was not part of the program.

So we decided to put the frozen dinners into all the centers and from then on the business just exploded because really, you know, as I said, there was no other company that had anything like it. And now we have about 650 centers in five countries. But of course I say we, I'm no longer involved on the day to day basis with the, with the operation because we sold the company to Nestle. But I will always be emotionally involved with it because, of course, it bears my name.

Sure.

And it really was our brainchild, if you will, because we started right from scratch to build a company.

Jenny, when did you offer the frozen dinner? So that was really the. That sounds like that was an inflection point in the business. Right.

That was about in 1986. We came back to America in 1985, and it took a couple of months to get things going. And in the beginning, I mean, the phones just weren't ringing. You know, as I said, there was so much recognizable competition. They had been advertising all the time. We were in Australia, so they had built a brand name, and here we were, the new guys on the street coming in. So we, you know, had to distinguish ourselves. And that's when we introduced the frozen food. So from then it just took off. And, you know, really, I'm very thankful for our success. It's true. We worked very hard. You know, there are lots of people that work hard that don't make it. So I've always considered my success the result of hard work, but also a blessing.

Yeah, well, that's a good way to consider it. Gratitude is the first key to success. I would definitely agree.

I totally agree with you, Jenny.

Was it a challenge, though? I mean, frozen dinners are just kind of by nature, not very healthy, are they? I mean, were you able to make them healthy? How were you able to do that? Was there anything special that you did in offering frozen food? Because I assume all your competitors, they're. They're doing frozen food now. I mean, nutrisystem, I think, has frozen food and. And Weight Watchers and. Yeah, I've seen that in the grocery store, I believe.

Well, yeah, but that's 20 years later.

Right, right, of course, I understand.

But. But really, I think the quality of our food far surpasses anything that's on the market out there. And that's not just pride talking. It really is the feedback we get from our clients. I mean, over and over, we've done, you know, so many focus groups, and over and over they tell us our food is hands above anything else that's out there. You know, it's good to have a good idea, but you have to add quality to it. I mean, people will do almost anything. You know, I used to use the analogy when people would make excuses that why they don't want to enroll in the program. And I'd usually ask them, well, let me ask you a question. If I asked you to stand in the corner on your head for One hour. And I could guarantee you if you did that you'd lose £20. Would you be willing to do it? I never had anyone say no, of course they would. Because the answer is they're willing to do whatever is necessary to achieve the result they're looking for. So really, you know, people will do anything to lose weight, but if it's a. That it's dependent on food that they're eating, it has to be good or they won't continue it.

Now, is your system a franchise system?

We do have franchises, and again, I speak collectively because, you know, it's still my baby. But we do have franchises, but it's mostly company owned. When Sid and I had it, we had about 15% of the centers were franchised. Now, I don't know the exact percentage, but there are franchises. But most of the centers are company.

Owned and Nestle owns it. Now I'm curious. The company, I guess nowadays or. Well, as of 2003, according to Wikipedia, has 3,000 employees. When did you sell to Nestle?

I think it was in 2004.

2004, okay. You don't remember? Offhand, that would seem like a pretty big deal.

I know, I know, that's terrible. But it was 2004. Well, the reason I have to stop with the date, you know, stop and think about the dates, because there has been so much going on in my life and each one are really milestones. It's not like, you know, I have one date to remember.

Yeah, yeah, that's, that's understanding.

And the thing about us selling, in the beginning, it was almost like we didn't sell because I was still involved. And then they kept us on as consultants, even though they really didn't consult us very often. In fact, it was really funny in a way because, you know, Sid and I had always run the company hands on. And that's the benefit of an entrepreneurial company. You know, things aren't working. You can make changes, so you can make decisions very quickly. You don't have to go through a board to make an important decision. So really.

If things weren't going right, we'd change it. If an ad wasn't pulling the way it should, we'd change it. We always had a backup plan. So when Nestle bought the company, and after a while we were just consultants. We kept waiting for the phone to ring to ask us questions. And Sid was a little offended. He said, why aren't those people calling? Because Sid was really brilliant with marketing. You know, we each had our skills. I was very Good at. You know, I wrote all the manuals for the company. I interviewed all the key people in the beginning. In fact, when we first opened in Australia, I interviewed 300 people and ended up hiring 100. And so our first training class had a hundred people in it. So I did the training. You know, I wrote this training material and I was also very good. Interacting with the people sits skill was really marketing. He was absolutely genius at marketing. And he had a sensitivity about locations. You know, people say in business it's location, location, location. I disagree with that. I think it's neighborhood, neighborhood, neighborhood, because it depends on the demographic of a neighborhood and the traffic flow as to exactly what your product or service is.

So he had a knack for going into a neighborhood. He would look at the people, look at the flow of traffic, get a feel for it. And I can tell you, opening all those centers in Australia, there wasn't one that was a failure. We never changed a location. The only time we ever did that was when we couldn't remove the lease. But it wasn't because it was a bad location. Again, I think neighborhoods are more important. So Sid had his area of expertise and I had mine. And you know, some very wise person said once that if partners in business both have the same skills, one of them isn't necessary. And I do believe that. I think that each person in an organization has to bring a different skill set to the table in order for it to be complete. So that's how we mostly operated. Even though Sid handled all the marketing, he never made a marketing decision without coming to me and saying, what do you think? Because all marketing affects operations. And I was in charge of operations. So he needed my input to see if I thought it would be effective for operations and vice versa. You know, if I wanted to implement a certain thing in operations, I would go to him and say, sid, this is what I want to do. You think, how can we advertise it? How can we get this message across to the public out there? And he and I brainstorm and come up with something. So even though we had our individual skills and our individual responsibilities, we really worked as a team. And you know, when people ask about.

The program, even, you know, what's the most important part about the program? Well, it's kind of like asking, what's the most important leg of the three legged stool. They're all important. And I believe that's true in partnerships too. It's not one person or one thing. It's a combination of all. And, you know, that's what we tried to consider when we put the program together.

So we should mention, just for those who don't know, Sid is your husband and business partner. Oh, yeah.

My late. Oh, your late husband, sid died in 2000. And really, that was the reason that we decided to sell the company, because Sid had cancer and he really was very sick for the last five years of his life. So really, for the past 10 years. And that's why when you ask me about the date, there's been so much. That same year in 2008, I lost Sid and I lost two of my.

Sisters within six months. That's awful. Yeah. Sorry to hear that.

It was. It was a terrible year. It stands out in my memory as the worst year of my life.

Sorry, Jenny. I want to talk about the. The solution in the book a little bit more, but just one more question on the business. So you had a company called bci. What did that stand?

Body Contouring.

Okay. Body Contour Inc. And you sold. And that's how you got the capital to start the business in Australia, right?

Exactly. And that's a story in itself, really. When we went to Australia, Sid and I, we were both born in the same year. We were 50 years old. We took our whole fortune, every. I mean, every dime that we had, and invested it in Australia. And I can remember.

The. The woman who was in charge of nutrition, she was one of the top nutritionists in Australia. And she looked at me and she said, what were you thinking? And I'm sure there are a lot of people that would not be willing to take that risk, but we knew we would be successful. Failure simply wasn't an option. And that's. I mean, what I have in the book is truly what I believe. You have to believe in yourself, and you have to be willing to work with the things you want. And people would say to you, so lucky with your success. And I said, isn't it interesting that the harder I work, the luckier I get?

I love that.

So it is true. I mean, you know, anything you want to achieve in life, whether it's an education, whether it's, you know, building a business, it takes hard work. And sometimes we would have franchisees come to apply for a franchise. And I'd say, why do you want it? Oh, well, so I can be my own boss and I can go in when I want to, and, you know, I'm in charge. And I would say, I don't think a franchise is right for you because you will be working harder than you've ever worked in your life and it will take full commitment. And it doesn't sound like you're ready to make that.

The only place success comes before work is in the dictionary. Right, Jenny?

That's exactly right. Very well put.

Do you disclose the sales prices of the companies? Are those public record of BCI and Jenny Craig to Nestle?

Not anymore. We were public at one time, but. And at that time I was stock. When we first went public, the stock was worth three quarters of a billion dollars.

Wow. Incredible.

But, you know, it changed over the years depending on the climate. And you know how that is when you have an ipo, it spikes and then it goes down a little. But. But anyway, Nestle, when Nestle bought the company, it, you know, it was private. We decided to go private after years because really being public, people think, oh, it's wonderful. Sid always, it was one of his dreams. He wanted to be in charge of a public company. You know, the excitement of getting up in the morning and watching his stock go up and that's all exciting. But there are so many responsibilities with it bonds fulfill, you know. Well, we're learning now with this healthcare about regulations. I mean, it really takes a lot of your time. And then you have people who maybe have two shares of stock that call up and start telling you how you need to change this and change that.

And so, you know, it really is to me, I don't think I'd ever go public again.

Yeah, it's a lot of people running your business.

My mantra is never say never because you don't know. But really being public was very difficult. So we decided to go private. And after we went private, then Nestle bought us.

Let's circle back. Thank you for sharing your business experiences. Maybe one last question on that before we circle back to the book and talk about health and the obesity problem and solution for a moment. But what was one of your biggest challenges early on that you overcame? Was there ever a time when it looked like you would just have to close the doors? And I know you said failure is not an option, but sometimes the forces are just too big for any one person or any couple or any business. Was there ever a time when it looked so bleak that you thought you might just have to have to abandon ship?

No.

Maybe it would be.

More interesting for me to have said yes, but that, that wouldn't be the truth. But I will tell you some of the challenges we had. I've always considered challenges. Roadblocks, they're detours. And it doesn't mean it's going to stop you, it only means you have to go in a different direction. And just to give you a couple of examples, when we first went to Australia, before we went there.

We always had vitamins along with the program because there are certain vitamins that people need and to make sure that they were getting it, we had little vitamin packs. Well, we learned that Australia's soil is very low in selenium and so most Australians need selenium in their diet. So we thought we were doing a good thing.

We had selenium added to the vitamins. Well, when we got to Australia, all of a sudden we got a phone call and it was this woman from the health department. She said, sid answered the phone and she said, Mr. Craig, you cannot have these vitamins here. We only.

Have distributed selenium through a chemist, which is a pharmacy. And she said, you have them in this packet and we can't allow these. And she said, and not only that, but you have these vitamins all mixed and we can't have that in the same package. And Sid said, why not? He said, after the, after you swallow them, they're all together. Why is it wrong to have them together in the packet? And she got insulted with that. She said, Mr. Craig, that wasn't very funny. She said, you are going to have to come and pick up all these vitamins or we're going to dump them in the ocean. Well, now we have a choice. It was going to cost us $17,000 to send the vitamins back to America. And if we did that, what would we do with it? Because we didn't have centers open here yet, so we would have had to destroy them. So we thought, why spend the money to ship them back? So we said, you know what, if you really feel that strongly about it, then dump them in the ocean. So we proceeded to make other packets of vitamins, leaving out the selenium. And that's just one example of how bureaucracy are not really. Most people that deal with government agencies are not really concerned with the well being of the people. Now because of that move, the people were not getting the selenium that they really needed.

And all because.

She was steadfastly sticking to a rule. And we found out later that there was no reason that that could not have remained. The selenium could have remained in the packet. But at the time we, you know, all we wanted to do was get our centers open. And, and when she called, it was the Friday before. We were having a grand opening that following Monday.

Oh wow.

So really we, we wanted to open. She said, you cannot open your doors if you're going to distribute these. So we had no choice but to tell us, just dump them in the ocean.

You had a tea party for vitamins.

That's exactly right.

A vitamin party. A vitamin tea party out dumping them in the ocean. That's amazing. A little egomaniacal government bureaucrat tyrant can just ruin your business. It's unbelievable.

Exactly. That is exactly right. And it happens.

Oh, sure it does. Yeah, it happens all the time. I've had it in my businesses where government person, just because of their big ego and wanting to assert their power, will act in a totally illogical way, will slow the economy down, will slow business down. It's awful. And that's why I've always believed, Jenny, we need to keep the government small. As small as possible.

Oh, amen. Boy, you are preaching to the choir, because those are my sentiments exactly.

Let's talk just for a moment about some tips on cooking light and healthy. I want to just make sure we get back to the actual content of Jenny Craig. And I appreciate the business insights and so forth. Those have been great. But you know, what are some tips, Jenny, on how people can cook light and well?

Well, I think today most people are savvy about that. But you know, things like substituting instead of using butter and cream and all those rich, fatty things in your food, use spices. You know, people, they think that many people, not all people, think that butter and rich ingredients is what adds flavor to food. That's wrong. It's really spices. You know, you can take the same basic tomato sauce, add different spices. That can become like Indian food, it can become Italian food, it can become French food. It's all about the spices and herbs that you add. And being from New Orleans, which is where I grew up, I learned very early how to incorporate different herbs and spices to achieve the kind of flavors you were looking for. So really, you know, it's easy today. And today with microwaves, you know, and you can steam food, steamed vegetables. And if you really, the main thing is to have fresh ingredients to start with. I'm lucky to live in California, and we have a little chinos farm that's not too far away from where I live. And they're a Japanese family that have all organic vegetables there. I mean, they're lovely people. They'll even tell you how to prepare it. And every morning they pick the vegetables fresh and you can go to the stand and buy them. When you start with fresh food like that, really, you can hardly go wrong. All you need to do is just make it tender. And if you're cooking vegetables, my suggestion is use very little water. You just need to steam them. Because. Because if you boil and boil and boil vegetables, you're boiling all the nutrients out. So when you pour the water out, you're pouring all the nutrients out as well. So use very little water and steam the vegetables. If they're cooked properly, you can put spices and herbs on top and you don't need butter or anything else. But if you feel you must use something, I like to use olive oil.

Any fat that is liquid is much better than a solid. That's why olive oil is much better for you. And it's also a vegetable oil. So it's much better for you than a butter which is solid when it's at room temperature.

The thing that really made Jenny Craig big was that you made eating good food easy. Right? All of your competitors back at the time that you launched your frozen food line, it was a lot harder, wasn't it? I mean, you made it easy for people, right?

Oh, absolutely. You know, it has to be convenient. I mean, in our world today, everything is for convenience. And that's one of the reasons so many people live on fast foods, because of the convenience. And that's why we knew we had, that was one of the reasons we went to the frozen dinners, is because it takes seven minutes and you have a wonderful, nutritionally balanced food.

So we did address the convenience factor because most people who are trying to cut back in their diet, trying to lose weight, they think about food all the time. They're sitting at one meal and they're thinking, what am I going to throw for dinner tonight? So they're constantly preoccupied with food. They're either thinking about it, shopping for it or preparing it. So we thought, what can we do to eliminate all that? That instead of taking, you know, instead of having them focus on food, have them focus on enjoying it and have them focus on moving their body. Because, you know, you don't have to get on the floor and do push ups to benefit from exercise. You can just walk. We recommend walking. And today, especially in the electronic world, people are always sitting. They're either sitting at their computers, sitting in front of the tv playing video games. We say, get out and move your body. Walk. And that's what we tried to get across. And in the book I Believe in Genevieve is for kids to move. And if parents will just take their kids walking, just think about it. If they take their kids for a long walk, it's special Time, they can really bond with their children, and at the same time, they're benefiting from the exercise and so are the children. So I really recommend walking. You can do it. It doesn't take any special equipment. You can do it anytime, anywhere. And people who travel a lot, you know, and they say things like, I don't have time to exercise. Yes, you do. At night, go for a long walk. Or in the morning, early before you begin your day, go for a long walk. I mean, we always have time for walking. And instead of taking the elevator to go up to your office, take the stairs. Now, maybe that's not practical if your office is on the 42nd floor, but I think for most people, it's just a matter of climbing a couple of flights of stairs.

Yeah, well, that's easy and that's good. And people can do it. Stop sitting all the time. Very good advice. Yeah.

And even if you're going to the grocery store, instead of searching for the closest parking space to the store, park away from the store and then walk. And that way, you know, because there are carts that will help you cart your groceries back to the car. But all those added steps make a difference. And really, it's just a question of habit. You know, habits are nothing more than practice behaviors. So the longer you practice behavior, the more it becomes habit. And I find myself today, even though, you know, I try to walk four miles every day, but even though I walk intentionally, I still find myself when I go to the grocery store, parking away from, from the door. And I've had people with me in the car and they say, oh, do you do that to protect your car? I said, no, I do it to protect my body.

Right, Very good point, Very good point. They say that every flight of stairs you walk up adds 42 seconds to your life. So that's good advice. Jenny, anything you'd like to say in closing? And please give out your website, tell people where they can get the book. Of course, I'm sure it's all the usual places, but anything you want to give out as a link there, they.

Can get the book at Amazon or Barnes and Noble or.

Really, you know, I think most bookstores. I had a book signing last night at Warwick's, which is located in La Jolla, California. And so it's a family owned bookstore and it was absolutely delightful to be there. I mean, so there are independent bookstores that have it too. So I think pretty much all places. But if all else fails, Amazon has it and everyone can go online and get it. And My wish for all your audience is for them to have a very long and very healthy life. And I think a lot of that outcome is up to us. We have to live intentionally and not accidentally. We have to determine what we want to become and what we want to do and make sure that we do it.

Very good points. Well, Jenny Craig, thank you so much for sharing your wisdom and being on the show with us today. We really appreciate having you.

Well, thank you so much, really.

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