Global Franchise Issue 10.1

less experienced operators. “There is massive saturation in the boutique sector… mostly because the growth within all of them has primarily come from ‘unprofessionalized’ franchisees…With more unskilled franchisees, the barrier to becoming a successful franchisor becomes substantially higher,” he noted. “Many of the acquisitions you’ll see will be a ‘tuck-in’, seen successfully executed over the years by platforms like Purpose Brands, Xponential Fitness, WellBiz Brands, Head To Toe Brands and several others.” A strategic lens Private equity is approaching this space with increasing sophistication, often looking to pair a stable “anchor” brand with smaller boutique acquisitions. Fishman points to the Self Esteem Brands and Purpose Brands evolution as a prime example. “PE firms have been more attracted in recent years to more expansive clientele, seen in the recent deals with Crunch Fitness andWorkout Anytime,” Fishman explained. “Boutique brands lend themselves more to the ‘strategic platform’ model. If possible, other platforms will try to execute this model, considering Anytime Fitness really helps to ‘de-risk’ the overall platform.” Still, not every brand is seeking outside capital. For some founders, like Deana Loychuck of 30 Minute Hit – a specialized circuit training franchise for women – the focus remains on independence and internal innovation. “Since the beginning, we have remained dedicated to our brand and consistently focused on offering the highest quality product within the fitness sector,” says Loychuck. Being a self- funded company provides us with the agility to easily adopt new technologies and systems,” adding that, “regarding outside investment, we are open to opportunities that would ultimately benefit our franchisees’ profitability.” With economic uncertainty looming, many operators and investors are faced with a key decision: ride it out, or sell high before the market turns. “With discretionary spending looking likely to take a dip in the short-term, will brands sit on the sidelines for another year or get out before things (potentially) get really ugly?” asks Fishman. Looking ahead With more roll-up strategies on the horizon, franchise founders and CEOs are advised to prepare carefully for a potential sale. “Use an investment banker or a strategic advisor, if possible. Yes, it comes at a cost; but it’s always helpful to have someone in your corner that is incentivized to get you the best deal possible,” advises Fishman. As new platforms emerge and M&A heats up again, it’s clear that fitness franchising is entering its next era – one driven by data, discipline, and deal-making.Whether led by insiders like Pugh or guided by seasoned firms like LGP, the future of fitness belongs to the bold and the well-prepared. 5 things private equity looks for in a fitness brand • Proven unit economics – PE firms want to see strong margins and profitability across a wide range of markets and not just top-performing locations. • Scalable infrastructure – From tech systems to training programs, scalable brands can support rapid multi-unit growth without operational breakdowns. • Value-oriented appeal – Brands that offer flexible pricing and clear value propositions (like Crunch or Workout Anytime) tend to outperform boutique models during economic uncertainty. • Professionalized franchisee base – Sophisticated, well-capitalized operators are a must. A mature franchisee network signals stability and lowers risk. • Platform potential – Can the brand serve as an anchor or strategic piece within a broader wellness portfolio? PE buyers increasingly look for “plug-and-play” assets to build or enhance multi-brand platforms. 63 GLOBAL-FRANCHISE.COM Ins ight | FEATURE