DEBTHURDLER

JesseFulton’s365Sportsfaceda$1.3-millionholeafterjustoneseason ofoperating5kFoamFest,buthasfiguredouthowtokeepitoncourse

Theaccoladeswerepouringinattheend of 5k Foam Fest’s first year in Canada. Despite a series of hurdles, including the bankruptcy of the U.S. entity that owned thebrandnamefortheobstaclecourseraces, theresultingpoorpressandthesubsequent cash crunch, Jesse Fulton, the founder and presidentof365SportsInc.,knewhehada goodproductonhishands.“Thefeedback wassopositive,thestaffthoughtithadlegs, Ithoughtithadlegs,everybodyhadfunand we actually raised some money for charity whilewewereatit,”hesays.Justoneproblem:Alongwiththeaccolades,thebillswere pouring in as well —$1.3 million of them. “Everysinglepersonandtheirdogtoldmeto cutmylossesandmoveon.ButIwaslike,No wayman,I’mgoingtofigurethisoneout.”

Fulton’s problems really began when RoundHouseRacing,theUtah-basedcompany that sold him the Canadian rights for the5kFoamFestname,aswellasalotofthe infrastructureneededtoholdtheraces,went under in 2014. Already operating under a tightdeadline,thebankruptcycameasasurprise,butperhapsitshouldn’thave.

A few weeks before the event, Collingwood,Ont.-based365Sportsdidn’thavethe inflatable waterslide, fans, foam machines andotherequipmentworthabout$250,000 that it had purchased through Round House.“Wehadtotakeworkingcapitaland buyatonofourassetstwiceandhadtoexpress a lot of those obstacles into Canada,” Fultonsays.“Shippinga4,500-poundslide airfreightisnotcheap.”

Despite the bad PR — Round House’s bankruptcymadeFoxNewsandFultongot thousands of calls and emails from angry Americanswhohadregisteredforeventsin the U.S. that were being cancelled without refunds — he says he couldn’t change the race’snameashehadalreadyspent$50,000 onbranding.Flags,tents,bannersandeven themedalsborethe5kFoamFestname.

Fulton,atleast,wasusedtoencountering obstacles.Beforestarting365Sports,hewas aprosnowboarderfor13years,coachedthe CanadianOlympicteamatthe2010games and founded Shreducation, a training program that produced 28 national team athletesandmorethanadozenOlympians.

The original idea for 365 Sports was to operateamulti-action-sportfacility,butlater morphed into hosting action sports events, whichledtoopportunitiestodosomeconsulting,branding,conceptdevelopmentand experientialmarketing.Inturn,Fultoncame across an opportunity to jump into the fun run market by licensing the 5k Foam Fest name.“Funrunsandobstaclecourseracing is the fastest-growing participatory sport intheworld,”hesays.“It’snowbiggerthan triathlonsandmarathonscombined;15to20 millionpeopleayeardoit.”

Fulton’s first race in London was a desultoryaffair,butthesecondoneinToronto camewithinminutesofnotbeingheldatall when the venue’s landlord pointed out he hadn’treceivedhis$20,000feeyetandifhe didn’t get it later that day, the event was off. Fultonhadsomefundshecoulddrawupon, butgettingthemwouldtakeacoupleofdays. “Ourinternpipesupandgoes,Hey,Ijustgot approvedfora$20,000lineofcredit.Let’sgo tothebankandgrabit,”Fultonrecalls.“We gotittotheguywithsixminutestogo.”

Thecompanydidn’tmakeanymoneyon theobstacleracesduring2014andendedup $1.3millionindebt,butFultonmanagedto assuresuppliersandcreditorsthathecould turn things around. For 2015, 365 Sports bumpedthenumberofeventsupto12,got somesponsorshipstobalanceouttheoverhead and managed to get to a breakeven positionandpayoffsomeofthedebt.This year, the company, which has 15 full-time staff, 35 full-time summer students and hiresanadditional1,500part-timersforthe events,planstohost14races.

Fulton says the company still owes money, but it’s now a manageable amount and he’s investing in new event properties, such as acquiring the activation rights and part-ownershipoftheObstacleCourseRacingChampionship,whichhosts7,000athletesfrom30countriestomakeitthebiggest such event in the world. He’s also buying moreinfrastructure,includinga1,000-foot slidethatwilltoursixOntariolocationsthis summer,settingupamarathoninAustralia anddesigninganewoffice/warehousespace. “I love the adrenaline of the events and the creativity we can put into it,” Fulton says. “As long as the phone keeps ringing with newopportunities,I’mahappycamper.”