Genesis Health Clubs is growing—again.

The privately owned, Kansas-based club operator is adding eight Esporta Fitness locations to its portfolio, expanding its footprint in Kentucky and marking its entry into Arkansas and Louisiana.

The newly acquired clubs—acquired from LA Fitness parent Fitness International LLC and located in Lexington, Louisville, Little Rock, Baton Rouge and Slidell—will now operate under the Genesis Health Clubs banner, bringing the company’s total club count to 77.

The deal follows a successful 2024, when Genesis Health Clubs acquired Saw Mill Club’s two locations in Mt. Kisco, New York and The Atlantic Club’s Manasquan and Red Bank clubs in New Jersey. 

Rodney Steven, president of Genesis Health Clubs, confirmed in a LinkedIn post that the latest move will welcome 250 new employees and thousands of new members into the Genesis Family. 

“These are stunning facilities with strong teams in place, and we have big plans to elevate the member experience—upgraded equipment, expanded group fitness, top-tier personal training, and enhanced amenities,” Steven wrote. “Genesis isn’t just about working out—it’s about community, results, and delivering the best fitness experience possible. We can’t wait to make an impact in these new cities.”

Genesis Health Clubs offers members access to state-of-the-art equipment, group fitness classes, personal training, meal prep and location-dependent amenities like indoor pools, basketball courts, steam rooms, saunas, tennis and childcare.

The recent growth has also created opportunities for fitness professionals, as Genesis Health Clubs is actively seeking Regional Club Managers with multi-unit management experience, according to a LinkedIn post.

LA Fitness, under its parent company Fitness International LLC, launched the Esporta Fitness brand in 2020, using the new name to rebrand several LA Fitness locations across the U.S.

By 2022, Fitness International introduced Club Studio Fitness — a high-end, amenity-packed club concept. The brand currently has 18 locations, a handful of which are coming soon, including one in Coconut Grove, Florida, a blossoming hub for premium fitness and wellness experiences that has attracted The Well and JetSet Pilates.

Starting last year, however, Fitness International appeared to signal a phasing out of Esporta, either reverting clubs back to the LA Fitness name or closing them altogether. Following the Genesis Health Club acquisition, only three Esporta locations remain in California, Illinois and Massachusetts. LA Fitness has also shuttered some locations in recent months, including a few that were rebranded from XSport Fitness locations, which were acquired by Fitness International last July.

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While January often brings crowds to local gyms driven by New Year’s resolutions, some LA Fitness members have started voicing concerns over the recent closures of several clubs across the nation and the removal of a popular group fitness class.

The latest announced LA Fitness closure—set to affect members of LA Fitness in Centereach, New York, by the end of the month—is reportedly one of many, according to members.

In addition to Long Island’s LA Fitness in Centereach, the club operator is reportedly closing its Newington, Connecticut facilities at the end of the month, following recent closures in Holmdel, New Jersey, Southfield, Michigan and Burnsville, Minnesota.

Elsewhere on Long Island, XSport Fitness in Massapequa has also closed. The gym brand was acquired by LA Fitness parent Fitness International last July, handing the company 35 Xport Fitness locations in New York, Chicagoland and Virginia. Along with LA Fitness, Fitness International also operates Esporta Fitness, City Sports Club and Club Studio.  Notably, three Esporta gyms closed in South Jersey in 2024. 

What’s more, several LA Fitness members have expressed their dissatisfaction with the removal of cycle classes at their clubs, encouraging others in an LA Fitness Facebook group to reach out to corporate in large numbers to reverse the decision.

In the meantime, the shutdowns have prompted some local competitors to lure frustrated LA Fitness members, such as I AM Fitness in Middletown, New Jersey. The fitness club recently ran a promotion inviting LA Fitness Holmdel members to a free membership in the last few weeks of 2024. One social media ad highlighted the gym’s facilities, such as a saltwater pool, saunas, steam rooms, basketball courts and a martial arts studio. 

Last fall, a lawsuit was filed in the U.S. District Court for the Central District of California alleging that LA Fitness has violated the Americans with Disabilities Act (ADA) for inoperable pool lifts and broken elevators, preventing access to members with disabilities.

LA Fitness did not immediately respond to a request for comment.

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A lawsuit filed in the U.S. District Court for the Central District of California alleges that LA Fitness has violated the Americans with Disabilities Act (ADA) for inoperable pool lifts and broken elevators, preventing access to members with disabilities.

In the filing, the department outlines the experiences of several individuals, including a woman (“Patron A”) who has multiple sclerosis and has encountered inoperable pool lifts at her LA Fitness location.

“Even when a pool lift appears to be working, Patron A has experienced being stuck and dangling over the water, requiring assistance from LA Fitness employees to exit the pool, and being unable to use the pool,” the department alleges.

Despite members complaining about the issues to LA Fitness, the suit argues that the fitness operator didn’t address them in a suitable timeframe.

In addition to requesting the court to direct the gym and fitness club operator to make its facilities and equipment accessible, the department is seeking monetary damages.

“Access to physical fitness activity is crucial for promoting the health and well-being of all Americans, including those with disabilities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “For over 30 years, the ADA has prohibited gyms and fitness clubs like LA Fitness from denying patrons with disabilities the opportunity to use and enjoy facilities enjoyed by patrons without disabilities. Through this lawsuit, the Justice Department seeks to eliminate LA Fitness’s discriminatory barriers and ensure that people with disabilities have equal access to fully participate at their local LA Fitness gym and fitness clubs.”

U.S. Attorney Martin Estrada for the Central District of California added that ensuring accessibility is fundamental to safeguarding civil rights.

“Our office is committed to ensuring that people with disabilities have access to public accommodations by enforcing the protections afforded by the Americans with Disabilities Act,” Estrada said. “When we support those with disabilities, our entire community benefits.”

Fitness International, the parent company of LA Fitness, acquired XSport Fitness over the summer with plans to invest in the clubs and rebrand them under one of its four brands.

LA Fitness didn’t immediately respond to ATN’s request for comment.

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If it seems like your gym is more crowded, it’s not your imagination.

Gym visits in the U.S. remained elevated year-over-year in Q2, with high-value, low-price (HVLP) brands EoS Fitness and Crunch Fitness leading the way, with foot traffic increasing 23.4% and 21.4% compared to the second quarter of 2023, respectively.  

The findings come from Placer.ai, a location intelligence company that uses machine learning and data science to generate foot traffic analytics. As Placer.ai notes, fitness has shown to be inflation-proof, theorizing that rising costs across the board may have boosted gym attendance, with consumers choosing to make use of their gym memberships rather than spend money on outings.

EoS Fitness, the ‘Better Gym. Better Price’ HVLP fitness chain, opened five new gyms in four states in the first quarter of 2024 and aims to open over 250 by 2030. EoS is reportedly seeking $100 million to support its growth strategy.

Crunch Fitness is also flourishing in the HVLP space, with around 2.5 million members systemwide as of early 2024 and expansion planned both domestically and abroad. Helping to grow Crunch Fitness is Dallas Cowboys quarterback Dak Prescott, who partnered with CR Fitness Holdings, the largest operator of Crunch Fitness franchise locations, to expand the brand in Texas.

Following EoS and Crunch is 24 Hour Fitness, which saw a 9% increase in visits compared to Q2 2023. Earlier this spring, the gym chain announced a multimillion-dollar investment at four of its locations in the San Francisco Bay area, which includes adding new cardio and strength training equipment and turf areas for group exercise zones..

Luxury fitness and lifestyle operator Life Time, with an average membership due of nearly $190 per month, also experienced an 8.9% increase in visit growth. Life Time founder and CEO Bahram Akradi has pointed to the brand’s sky-high retention numbers amid investment in areas such as pickleball and small group training. 

Planet Fitness, which has a new CEO and rolled out its first membership price hike in 26 years this summer, saw a 6.2% increase, while group fitness giant Orangetheory Fitness saw a 2.4% gain.

LA Fitness, operating under parent company Fitness International, saw a 1.3% increase. Fitness International acquired XSport Fitness this month in a deal that will Xsport’s 35 gym locations in New York, Chicagoland and Virginia be rebranded under one of Fitness International’s four brands, including LA Fitness.

Placer.ai’s Q2 2024 white paper can be viewed here. 

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Fitness International, operator of LA Fitness and several other gym brands, has acquired XSport Fitness in a move that will expand Fitness International’s presence in New York, Chicagoland and Virginia as it assumes 35 XSport gym locations. 

Speculation had swirled for weeks surrounding the deal, which will see Fitness International investing in the newly acquired XSport Fitness gyms and rebranding them under one of its four brands. 

The XSport Fitness website is no longer running, instead directing users to LA Fitness’ site.

Along with LA Fitness, Fitness International operates Esporta Fitness, City Sports Club and Club Studio. 

“We are proud to add XSport Fitness’ facilities to our nationwide network of health clubs,” said Fitness International club operations president Jill Greuling. “This expansion solidifies our position as one of the largest privately-held health club operators in the United States and provides the opportunity to bring our best-in-class fitness experience, with the widest range of amenities and the friendliest service at an affordable price, to more people across the country.”

In an email to XSport Fitness club members, the gym brand announced that it had decided to exit the health and fitness club business and would transition its clubs to LA Fitness effective July 16, 2024. Fitness International is honoring all active membership agreements and their specific club-access privileges. 

Gym Consolidation Takes Hold

The XSport Fitness acquisition mirrors other moves made in recent months.

Virginia-based acac Fitness & Wellness Centers struck a deal this spring for La Maison Health & Fitness, a family-owned fitness club in Philadelphia, growing acac’s portfolio to 14 clubs.

Genesis Health Clubs, having long eyed the New York market, finally made good on its quest to make its mark on the Empire State, acquiring two Saw Mill Clubs locations in Mt. Kisco, New York, along with a pair of Atlantic Club locations in New Jersey. The Kansas-based Genesis operates over 70 clubs across 11 states.

Chuze Fitness, a high-value, low-price (HVLP) California-based gym chain, expanded to the Florida market following its acquisition of Bailey’s Health & Fitness in 2023, giving Chuze 16 new locations in the Jacksonville area.

Group fitness has also seen similar deals, with 9Round Kickboxing Fitness securing all 56 iLoveKickboxing locations across the U.S. and Canada earlier this year.

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Major big-box gyms and health clubs including Planet Fitness, Life Time and Crunch Fitness experienced increased year-over-year visitation numbers nearly every week from January 2024 to April 2024, according to a new report.

Behind the encouraging findings for the fitness industry is Placer.ai, a software company that leverages location intelligence and foot traffic insights. Along with Planet Fitness, Life Time and Crunch Fitness, Placer.ai studied Chuze Fitness, EōS, LA Fitness, Anytime Fitness and 24 Hour Fitness.

April was an especially hot month for fitness clubs, with Placer.ai finding that visits nationwide were up 4.4% year-over-year during the week of April 22, 5.7% during the week of April 15 and 6.3% during the week of April 8. All brands featured in the report experienced year-over-year visit growth in April.

Overall, the findings should encourage operators like Planet Fitness for the long term. This week, the fitness franchise reported adding nearly one million new members in the first quarter of 2024 — impressive but less than the ‘Judgement Free’ gym anticipated amid elevated cancellations likely driven in part by a transgender bathroom policy controversy.

It should be noted that the new Placer.ai report follows – and seemingly contradicts – a more pessimistic study the software company issued earlier this year which found that foot traffic to ten major fitness operators in January 2024 didn’t increase from January 2023.

Here is a breakdown of each fitness brand and its visit performance when compared to April 2023, according to Placer.ai:

EōS, Crunch in Growth Mode

Topping the list was EōS Fitness, a high-value, low-price (HVLP) gym that hit the one-million-member milestone last year and announced its intentions to open 250 gyms by 2030.

Following EōS is Crunch Fitness, which has 460-plus locations and has plans to increase its growth rate by 20-25% this year, according to CEO Jim Rowley. CR Fitness Holdings, the largest operator of Crunch Fitness franchise locations with 60 gyms, just announced a partnership with Dallas Cowboys quarterback Dak Prescott to grow the brand even more.

Lingering at Life Time

There was also a strong association between visit frequency and duration, as brands with frequent gym-goers saw higher engagement in the form of more extended visits. 

It’s a category that luxury brand Life Time is leading, with 43.3% of visits lasting more than 90 minutes. The athletic country club operator has invested heavily in delivering a top-notch experience for its members, who may linger at Life Time for pickleball, spas, personal training, small group classes and pools. 

Low & High-Priced Facilities See Success

On the pricing front, Placer.ai inferred an appetite among fitness consumers for various pricing options, finding that visits to premium operators like Life Time and lower-priced clubs such as Planet Fitness climbed or remained stable over the study period.

Planet Fitness, which has maintained a $10/month base membership for nearly 30 years, is finally raising its price to $15/month beginning this summer for new members.

For its part, Life Time’s average monthly dues are now $186, up 12.7% from Q1 2023. Despite the high price tag and an inflationary environment, Life Time has seen memberships increase by 5% year-over-year from 2023 and has waitlists at many of its high-end facilities. 

View the full Placer.ai report cited in this article here.

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Louis Welch, co-founder, president and co-CEO of Fitness International, LLC, the parent company of LA Fitness, has died at 71 after a two-year battle with cancer. He was surrounded by family and loved ones. 

Welch, a fitness industry leader, co-founded LA Fitness in 1984 and grew the company along with Chinyol Yi from a single location into one of the largest fitness chains with over 700 locations across the U.S. and Canada. Today, Fitness International includes four brands: LA Fitness, Esporta Fitness, City Sports Club and Club Studio.

“Louis’ impact on the company and the health club industry cannot be overstated,” a Fitness International spokesperson said in a statement to Athletech News.

“As a driving force behind the LA Fitness signature design model and the company’s commitment to enhancing the physical and emotional well-being of its members in each community it serves, Louis’ almost 40 years of passionate dedication to Fitness International, LLC has shaped it into the industry leader it is today,” the spokesperson added.

According to a press statement, Chinyol Yi, executive chairman, and the existing executive team are well-positioned to continue driving Fitness International’s strategy and business forward.

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LA Fitness is bolstering its executive team with the addition of Adam Zeitsiff, the former Gold’s Gym CEO and current IHRSA coalition board member.

Zeitsiff has joined LA Fitness as its new deputy chief information officer, he announced on LinkedIn.

“I couldn’t be more excited to be joining the largest privately-owned fitness brand in North America,” Zeitsiff posted Monday on his LinkedIn page. “Over the last 4 decades LA Fitness has not only become one of the most highly respected brands in fitness, they are also one of the most innovative companies in the industry and have led the way in providing tremendous value and variety of full service offerings to members.”

LA Fitness operator Fitness International LLC also operates Esporta Fitness and City Sports Club.

Zeitsiff served as CEO of Gold’s Gym for nearly two years between February 2019 and September 2020. After that, he became president and CEO of InteliVideo, a video on-demand and live-streaming platform for fitness and wellness operators which was acquired by Wexer in February.

Most recently, Zeitsiff had been president of Stronger U Nutrition, a platform owned by Self Esteem Brands which offers personalized nutrition coaching.

Prior to becoming CEO of Gold’s Gym in 2019, Zeitsiff had a two-year stint as the gym chain’s chief information officer and senior vice president of brand innovation. He also has experience as the chief information officer of Smoothie King.

In addition to his executive roles, Zeitsiff has served as a board member on IHRSA’s National Health & Fitness Alliance since April 2021. IHRSA launched the NHFA in October 2020 and describes the alliance’s mission as seeking to “unite the advocacy, public affairs, stakeholder engagement, fundraising and lobbying efforts of the health and fitness industry in the United States.”

Feature image credit: Adam Zeitsiff

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A new state-of-the-art gym concept incorporating boutique fitness studio classes has launched in Irvine, California, and is making its way to Long Beach, California, Orlando, Florida, and Tysons Corner, Virginia. 

The new studio concept, which opened its doors in the Oak Creek Shopping Center, offers an opportunity to sweat and also partake in cryotherapy and a recovery lab within its 40,000-square-foot space.

Louis Welch, President and co-CEO of Fitness International, operates the new Club Studio Fitness, along with LA Fitness.

The multi-fitness concept, with its amenities and comforts, makes it a formidable competitor to Equinox. 

Aside from free weights, strength, cardio areas, a swimming pool, a functional training area, and a basketball court, the upscale fitness concept features innovative classes in an aesthetically pleasing environment meant to promote physical and mental well-being.

With the installation of boutique-style fitness rooms in Club Studio, guests can select from five different exercise experiences:

• Strength: A HIIT-style training class called CS4 that incorporates treadmills, rowers, bikes, and functional strength training equipment.
• Box: 9 rounds of signature boxing combinations and athletic drills for a full-body workout. 
• Ride: Club Studio says the lights go down as the beat drops, as members experience an indoor cycle rhythm ride that incorporates a weight sequence. 
• Hot Yoga: Members can sweat, flow, and restore in a heated “Sweat +” studio. The yoga room includes traditional yoga asanas, opening yin poses, and burpees.
• Pilates: A reformer-based Pilates class that is centered on resistance training, time under tension, and muscle grouping to lengthen and strengthen

For those seeking rest and recovery, a dedicated space features electric Cryotherapy chambers to promote muscle repair, along with massage rollers, steam rooms, infrared saunas, whirlpool spas, and chilled eucalyptus towels. 

To deepen the luxurious experience, Club Studio members can enjoy personal training, visit the organic superfood juice bar, and peruse the retail store. The fitness facility also offers childcare services for members. Membership is $189/month per person and potential new members can hop on a VIP list.

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Xponential Fitness has partnered with Territory Foods, a direct-to-consumer and ready-to-eat meal delivery service. The move furthers Xponential’s commitment to overall health and adds to its “fully energized” 2023 entrance.

The global boutique fitness franchisor says its latest collaboration will span four of its brands – Pure Barre, Row House, Rumble Boxing, and StretchLab.

With the new partnership, Territory Foods has created customized nutrient-packed menus of freshly prepared meals. The meals are designed to complement each of the fitness programs offered under Xponential, allowing members to maximize the benefits of the workout of their choice. 

Pure Barre members may find lean proteins, whole greens, and vegetables to target lean muscle growth and calm inflammation. StretchLab clients, on the other hand, may find hydrating foods with antioxidants, omega-3s, fiber, and anti-inflammatory ingredients. Territory Foods says that such food sources are designed to maximize mobility and assist with flushing out lactic acid and toxins released with stretching workouts.

“Xponential Fitness studios provide world-class fitness and wellness experiences across a variety of modalities, but a well-rounded, healthy lifestyle also requires a nutritious diet,” said Sarah Luna, President of Xponential Fitness. “That’s where Territory Foods can enhance the member experience, ensuring that our members’ exercise and movement goals are supported by healthy eating. This exciting partnership allows us to further expand the value and benefit our members receive from their studio membership, while supporting their overall health & well-being.”

Territory Foods, which was founded in 2011, says that its healthy food options can help drive total results for Xponential members by merging fitness and nutrition through its curated programs.

“Our dietitian-designed, expertly chef-crafted product will improve members’ health and wellness, and allow studios to offer a new service and benefit that will improve member engagement, all with the click of a button and no retail footprint required,” said Ellis McCue, CEO of Territory Foods.

The food delivery service is tech-forward, utilizing machine learning algorithms and data science to target the ideal meals regionally based on taste preferences, lifestyle, and protein trends.

Menus change weekly to add in new and seasonal options, and each meal is delivered completely cooked, prepared fresh, and without preservatives, binders, and fillers. 

Xponential has been laser-focused on collaborations as a method to drive growth. The boutique fitness franchisor has teamed up with LA Fitness and energy drink brands, like Celsius, an official energy drink partner of CycleBar, and C4 Energy, a performance drink partner of Row House and Rumble studios.

In early March, Xponential Fitness is slated to report fourth-quarter and full-year 2022 results and provide a full-year 2023 outlook.

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Xponential Fitness is coasting smoothly into the new year, announcing that it will meet or exceed its full year 2022 outlook, further solidifying its position in the fitness industry.

The global franchisor of boutique fitness brands Club Pilates, CycleBar, StretchLab, Row House, AKT, YogaSix, Pure Barre, STRIDE, Rumble, and BFT,  provided 2022 operating highlights and participated in the ICR 2023 Conference this month in Orlando, Florida. 

Xponential will also participate in an upcoming conference on January 22-24 in Beaver Creek, Colorado, at the Jefferies Winter Restaurant, Foodservice, Gaming, Lodging, and Leisure Summit.

“It was inspiring to see the enthusiasm shared by the more than 2,000 attendees who participated in our annual convention last month,” said Anthony Geisler, CEO of Xponential Fitness, Inc. 

“This enthusiasm is no doubt rooted in Xponential’s strong annual performance. Double-digit growth across membership, same store sales and AUV compared to the prior year depict a business that is firing on all cylinders,” he said. “We enter the new year fully energized, and I could not be prouder of our team and franchisees for the success we achieved together in 2022.”

According to Xponential’s investor presentation, the fitness franchisor opened over 2,600 studios and sold over 5,400 licenses across its ten brands for the full year, with XPOF members growing by 32% to 590k. 

The typical Xponential consumer is female, the franchisor reports, between 20-60 years old, and holds a Bachelor’s degree with a yearly household income of around $130k. Roughly 90% of Xponential’s members have recurring memberships.

Xponential also announced it entered into a privately negotiated preferred stock repurchase agreement with certain holders of its outstanding Convertible Preferred Stock.

The fitness franchisor continues to grow, with 63% of the U.S. population living within ten miles of an Xponential studio. Most recently, XPOF’s Body Fit Training (BFT), a functional and strength training concept, announced its entry into the North American fitness market, with plans to open its first studio in Canada and 12 major cities in the United States. Xponential acquired the strength-based fitness brand in 2021.

The LA Fitness agreement is another growth driver, allowing for XPOF studios in over 500 gym locations. The partnership, which grants the boutique fitness franchisor the exclusive rights to open its brand studios in LA Fitness locations, is seeing “strong interest,” Geisler reported last summer.

Looking ahead, Xponential Fitness will develop within high-traffic zones in collaboration with Aktiv Solutions, a functional fitness facility design and supply company. Together, the two will create immersive exercise equipment experiences designed for resorts, hotels, high-end multi-family housing properties and universities, and corporate campuses.

In early March, Xponential Fitness will report fourth-quarter and full-year 2022 results, as well as provide a full-year 2023 outlook.

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Members of Fitness International, which owns the LA Fitness, Esporta Fitness, and City Sports Club brands, can now access Les Mills+, a new streaming platform. The on-demand workouts enable fitness enthusiasts the ultimate flexibility and fitness experience.

Fitness International members who add the on-demand streaming platform to their existing memberships will be granted unlimited access to over 1,500 workouts including Bodypump, Bodycombat, and Les Mills grit. 

Les Mills’ digital offering reflects the company’s recognition that fitness members want the convenience and flexibility of live workouts and gym amenities combined with on-demand classes. According to Les Mills, as a result of the pandemic and the digital fitness boom, most exercisers now prefer a 60:40 split between gym and at-home fitness. 

“With this announcement, two fitness powerhouses combine to elevate the member experience. The ‘omnifitness’ revolution – providing fitness experiences everywhere, through all channels – is here to stay and the sky is the limit for what can be achieved by pairing world-class digital offerings with a preeminent operator of over 700 full-service gyms,” said Sean Turner, CEO of Les Mills US.

The company appointed two new executive team members over the summer to accelerate its omnifitness strategy, announcing two newly created global roles filled by Amber Taylor and Luke Waldren.

Les Mills, founded by the four-time Olympian and head coach of New Zealand’s track and field team, has a global presence with its workouts in 21,000 clubs across 100 countries. The latest Les Mills+ workouts are designed to maximize fitness results and were created by a team of physiology experts, fitness trainers, and musicians. 

“People who enjoy a hybrid fitness experience will be able to maintain connections to their community while extending their workouts beyond a club’s four walls,” Dan Hoskinson, Director of National Partnerships for Les Mills US, tells Athletech News.

“We’re on a mission to help people fall in love with fitness and these members now have the opportunity to exercise live or digitally, at home or in-studio, with our incredible instructors motivating them to be their best.”

The fitness company is also celebrating the return to live workouts, having recently hosted a fitness festival in London, which was attended by over 5,000 fitness enthusiasts. The event, which took place at London’s ExCel Arena, was one the largest group exercise events. A highlights package will soon be available on META’s Quest platform, allowing fitness fans to enjoy an immersive VR experience.

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Xponential Fitness, Inc., a global franchisor of boutique fitness brands, has signed an exclusive five-year licensing agreement with Princess Cruises. Princess cruise passengers will be able to access eight of Xponential’s boutique fitness brands as a result of the new partnership.

The agreement establishes Princess Cruises as the first corporate wellness partner through Xponential’s XPASS, which will be made available to Princess employees at a discounted rate.

“This partnership brings the best in fitness to Princess’ millions of guests,” said Anthony Geisler, CEO of Xponential Fitness, Inc. “Our wide variety of fitness offerings, ranging from stretching to cycling, will provide everyone, including avid Xponential members and first-timers, the opportunity to experience our brands. The strong synergies between Princess Cruises and Xponential Fitness will create value for all involved in this partnership.”

On an earnings call last month, Geisler indicated that XPOF’s successful collaborations are vital to driving growth. The fitness franchisor has previously teamed up with Lululemon’s MIRROR, LA Fitness, and energy drink brand Celsius.

Princess will initially market all Xponential Fitness brands, including Club Pilates, CycleBar, Pure Barre, Row House, StretchLab, Stride Fitness, YogaSix, and AKT. While guests on Princess cruise ships are not required to be members of one of Xponential’s brands to participate in a class, they can continue at an exclusive Princess price through XPASS once they return home.

“Our goal is simply to provide the best vacation experiences in the world at the best value, and this exciting partnership aligns the most iconic brand in cruises with Xponential’s unmatched boutique fitness brand portfolio. Whether at your home, your local studio, your stateroom, the ship fitness center, sports court or lido deck, our guests can engage with Pure Barre, Club Pilates, YogaSix, StretchLab, Stride Fitness or any of their favorite fitness experiences,” said John Padgett, President of Princess Cruises.

XPLUS, an Xponential Fitness digital subscription, will be available in over 23,000 staterooms via OceanView, Princess’ proprietary digital content platform. Princess will recreate an in-studio experience by using customized equipment packages from Xponential Fitness partners, and Xponential Fitness merchandise will be available on OceanNow and its onboard retail stores.

Despite an uncertain macroeconomic environment, the California-based boutique fitness franchisor reported strong second-quarter results, increasing revenue to nearly $60 million.

Featured image is of bespoke next generation ship Sun Princess, Princess Cruises’ largest ship ever. Photo courtesy of Princess Cruises.

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In an earnings call, Xponential Fitness, the largest boutique fitness franchisor in the United States, has reported strong second-quarter results. In the Q2 2022, the California-based largest global franchise group of boutique fitness brands sold 251 franchise licenses and opened 128 new studios, increasing revenue by 66% to nearly $60 million. 

“We experienced a strong year-over-year increase in members and grew our system-wide sales across North America for the eighth consecutive time in the second quarter. For the remainder of the year, we expect the strong growth in the business to continue. Accordingly, we are increasing our fiscal 2022 outlook to reflect 39% revenue growth and 156% Adjusted EBITDA growth at the midpoint of our outlook ranges compared to 2021,” said Anthony Geisler, CEO of Xponential Fitness, Inc. 

Here are some key highlights from the Xponential Fitness Q2 earnings call:

Coasting through challenging times

Geisler explained on the recent Xponential Fitness earnings call that studio openings are not expected to slow anytime soon, continuing to drive profitability. Even in the midst of a challenging economic landscape that includes inflation, labor, and supply chain issues, Geisler said the business has remained resilient. 

The boutique fitness franchisor also indicated that it hasn’t experienced operational headwinds in regards to talent acquisition or supply chain management. Since many fitness and health-related businesses have closed permanently due to the pandemic, there is a sufficient supply of fitness instructors available, noted Geisler. 

“Despite the uncertain macroeconomic environment, we remain confident about the go-forward trajectory of our business, particularly as the positive momentum has continued into the third quarter,” Geisler said.

The prioritization of health & wellness has led to increased visitation rates

Geisler said that Xponential’s customers do not consider fitness to be a luxury expense, and that the majority of the members have a household income of around $130,000 and subscribe to recurring membership packages. As a result, Geisler said, the company is able to benefit from “highly predictable reoccurring revenue streams and limited ongoing capital requirements.”

According to Sarah Luna, President, Xponential consumers have engaged with brands both in-studio and digitally, with visitation rates increasing 28% year over year. “We’re continuing to see membership up, usage up, the consumers continue to spend money,” Geisler shared on the call.

Looking ahead: Are share buybacks or dividends in the future for Xponential?

Geisler said the company will concentrate on expanding its franchise studio base across all of its brands in North America, as well as growing its brands and studios internationally. At the end of the second quarter, the fitness franchisor had 2,357 global studios, with 128 new studios added.

According to John Meloun, Chief Financial Officer, Xponential has some other ideas on the table, as well. “Long term, if you look out two years, three years, four years, the company will be putting off a lot of cash. So things that we have considered and talked about is the opportunity to do things like share buybacks or potentially dividends. And we’ll continue to evaluate that this year and into the next year,” he said. “Our focus right now is driving operations and in parallel, looking at how we could potentially change the capital structure, so it’s more efficient for us long term,” Meloun continued.

Demand for franchise licenses & top performing brands

XPOF has experienced strong demand for its franchise licenses, selling 251 in the second quarter. “In North America, we have almost 1,900 licenses sold and contractually obligated to open and have a replenishing pipeline of organic new studio expansion, offering us four years to five years of visibility into our growth. On the international front, we have almost 1,000 studios obligated to be open, and we continue to gain traction in terms of international expansion. We recently announced new master franchise agreements or MFAs for Club Pilates in the U.K. and CycleBar in Japan,” Geisler said.

Club Pilates is a top performer, as is StretchLab, which also sold a lot of licensees that are translating to studio openings. The newly acquired BFT is also listed among the top three performing brands under Xponential.

Successful collaborations are driving growth

XPOF’s digital offerings are expanding, as evidenced by its collaboration with Lululemon’s MIRROR. Pure Barre, Rumble, YogaSix, and AKT from Xponential are expected to launch on the MIRROR this fall, confirmed Luna.

The collaboration between Xponential and LA Fitness has also aided in studio expansion. With seven studios already in LA Fitness locations, the partnership grants Xponential the exclusive right to open its studios within LA Fitness facilities.

Xponential has also teamed up with energy drink brands, recently collaborating with Celsius, which is now the official energy drink partner of CycleBar, while C4 Energy has been named the performance drink partner of Row House and Rumble studios.

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Gympass has done it again. Following announcements of partnering with Les Mills, LA Fitness and Strava, among others, the world’s largest employee wellness platform has added Orangetheory Fitness to its thrilling offerings. According to the platform, Gympass’ new business relationship with Orangetheory Fitness has been on the wishlist of members and comes at a crucial time as more individuals seek in-person exercise as pandemic restrictions continue to ease.

Gympass CEO and co-founder Cesar Carvalho stated on the occasion, “Our mission at Gympass has always been to make well-being universally accessible, and with Orangetheory in the fold, we are one step closer to achieving this goal. OrangeTheory is a true giant in the fitness world, and we are elated to bring the studio’s innovative, science-backed workouts to our Gympass members. At a time when wellness benefits have become crucial to employee retention and recruitment, giving employees access to a fitness brand as ubiquitous as Orangetheory will be an incredible asset to HR departments across the country.”

Gympass is known and respected for providing their employees with the same health and wellness offerings they give clients as a company benefit.

Orangetheory Fitness founder and CEO Dave Long also agrees the burgeoning relationship between his company and Gympass will only prove to be beneficial for both parties, their employees and their client base. “Gympass is a true innovator in the corporate wellness space, and we’re thrilled to have the opportunity to leverage their expertise and roster of clients to grow our community by making Orangetheory more accessible to thousands of corporations and their employees,” he said. 

Long added, “Orangetheory is all about the science, and the proof is there that wellness programs are critical to employees’ health and productivity. We can’t wait to welcome Gympass users to our family and become a part of their fitness journeys.”

Gympass celebrated its 10th anniversary in late June, and within a decade of its existence has grown to offer a wide array of fitness programs. In the past year, the employee wellness platform acquired Trainiac, Andjoy and 7Card (based in Seattle, Spain and Romania, respectively). Now Gympass users have the option to enjoy Orangetheory Fitness classes as well for their needs.

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While the pandemic devastated many fitness businesses, Anthony Geisler, CEO of Xponential Fitness, has declared 2021 to be a “milestone year” for the global franchisor of boutique fitness brands. Geisler’s comments came during a recent earnings call in which Xponential Fitness announced its financial results for the fourth quarter and full year 2021. Xponential reported a 78 percent increase in revenue to $49.4 million.

Xponential Fitness, which operates over 2,100 studios in 12 countries around the world, also sold 846 franchise licenses and opened 282 new studios in 2021. 

Here are some key financial highlights for Q4 & Full Year 2021:

Xponential Fitness Q4 2021 Compared to Q4 2020

• Grew revenue 78% to $49.4 million.
• Increased North American system-wide sales1 by 76% to $213.0 million.
• Reported North American same store sales growth of 53%, compared to a decline of 35%.
• Reported North American quarterly run-rate average unit volume (AUV)3 of $446,000, compared to $286,000.
• Posted net loss of $29.8 million, or $2.45 per share, on a share count of 22.6 million shares of Class A Common Stock, compared to a net loss of $5.1 million.4
• Posted Adjusted Net Loss of $6.1 million, or $0.21 per share, compared to an Adjusted Net Loss of $5.1 million.4
• Reported Adjusted EBITDA5 of $8.6 million, compared to $3.3 million.

Xponential Fitness FY 2021 Compared to FY 2020

• Grew revenue 45% to $155.1 million.
• Increased North American system-wide sales1 by 60% to $708.6 million.
• Reported North American same store sales growth of 41%, compared to a decline of 34%.
• Posted net loss of $51.4 million, or $2.85 per share, on a share count of 22.4 million shares of Class A Common Stock, compared to a net loss of $13.6 million.4
• Posted Adjusted Net Loss of $24.4 million, or $0.80 per share, compared to an Adjusted Net Loss of $24.6 million.4
• Reported Adjusted EBITDA5 of $27.3 million, compared to $9.8 million.

“Overall, in 2021, we were able to demonstrate the resilience of our business, and the momentum experienced in the fourth quarter places Xponential in a strong position in 2022,” Xponential Fitness boss Geisler said in a statement. “Our revenue and Adjusted EBITDA are significantly higher today than they were prior to the COVID-19 pandemic, up 20% and 66%, respectively, in 2021 vs. 2019. We enter 2022 with the largest studio count in our Company’s history and we anticipate opening over 500 new studios this year. We look forward to continuing to drive revenue growth and margin expansion as we scale our platform in 2022.” 

Omicron was no match for XPOF

With the return to in-person fitness classes, active paying members & visitation rates grew by approximately 70% and 50% in the fourth quarter compared to the prior year, says CEO

Geisler stated on the earnings call that Xponential Fitness was able to finish 2021 with a strong fourth quarter and that the business remained resilient to the Omicron surge, as evidenced by increased visitation rates. “While Omicron continued to dominate the headlines early this year, we have experienced minimal impacts to our business and our growth momentum continues,” Geisler shared.

Geisler also nodded to the company’s successful IPO over the summer and a consistent growth in the Xponential membership base.

Looking ahead: Xponential’s plan for the future

XPLUS will launch this quarter & the franchisor expects to open 500+ new studios this year

Geisler stated that managing the health of Xponential’s franchise system is critical to the company’s long-term success, and he mentioned that a new digital platform, XPLUS, will provide live and on-demand access to workouts in studios around the world. XPLUS, which will provide B2B subscription options as well as the ability to book classes, is slated to launch this quarter.

XPASS was also mentioned by Xponential’s CEO, who described it as another key sales driver. With a monthly subscription, XPASS provides access to Xponential’s brands, and the global franchisor reports that XPASS has proven to be a great funnel for new customers.

Xponential intends to expand its franchise studio base across all brands in North America, and plans to expand its brands and studios internationally.

“We entered 2022 with the largest studio count in our company’s history and expect to open over 500 new studios this year. Opening over 500 studios in a year would be a company record and is a testament to our strong pipeline and the resilience of our franchisees that we have primed to achieve such a milestone. Today, we have over 1,800 licenses contractually obligated to open in North America,” Geisler shared. 

Partnerships that are paying off: LA Fitness 

Along with LA Fitness, Xponential’s newest functional training brand BFT is resulting in growth

Geisler also pointed to the recent partnership with LA Fitness as an ‘organic studio growth driver.’ With the partnership, Xponential Fitness has the exclusive right to open its brand studios within LA Fitness locations. 

“We are providing existing franchisees who have an LA Fitness location within their protective territory the opportunity to open another Xponential studio within that specific gym location. We are still in the early stages of launching in these locations, but have already opened our first few initial studios and look forward to speaking more on their progress on future calls,” says Geisler. 

Geisler also mentioned the welcoming of Xponential’s newest brand, BFT, which focuses on functional training. He shared that BFT added over 130 franchise studios in Australia, New Zealand, Singapore, and the US. BFT is now part of Xponential’s vast portfolio of brands that includes Club Pilates, CycleBar, StretchLab, Row House, AKT, YogaSix, Pure Barre, STRIDE, and Rumble. 

“Our international growth also remains solid,” remarked Geisler.

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Xponential Fitness, the largest boutique fitness franchisor and curator of ten fitness brands, has announced an exclusive development agreement with Fitness International, the operator of LA Fitness and City Sports Club. The agreement includes a development of over 350 franchised locations over five years, bringing Xponential’s brands to over 500 locations. The expansion will start in the first quarter of 2022.

The deal will allow existing franchisees to open an Xponential studio within their facilities and have reduced operating costs. The newly added boutique brand will be available to current gym members for an additional fee. The fitness company says that the development time and buildout costs will be less than a standalone space, and franchise partners won’t have initial fees and lower marketing fund fees. 

“We are pleased to enter into an exclusive development agreement with Fitness International to further our mission of making boutique fitness accessible to everyone, increasing our total addressable market, and providing expansion opportunities to our franchisees,” said Anthony Geisler, CEO of Xponential Fitness, Inc. “This provides a unique opportunity for franchisees to increase their reach and overall revenue generation within their protected territories. We look forward to delivering best-in-class boutique fitness to the LA Fitness and City Sports Club communities.”

Xponential Fitness just announced strong third-quarter results, with net revenues of $40.9 million and visitation rates increasing. In a recent conference call, Geisler was confident that people are returning to the gym.

“Brick-and-mortar gyms are back, and boutique fitness customers are excited to return to in-person fitness across our growing franchised studio base,” Geisler said.

The company opened 68 new studios and sold 248 franchise licenses compared to 50 in 2020’s third quarter. Geisler noted that he was thrilled with the continued momentum of Xponential. 

“We are proud to welcome Xponential brand studios to our LA Fitness and City Sports Club locations,” said Jill Grueling, President, Club Operations of Fitness International. “Xponential will bring additional high-quality fitness experiences to our members. We are confident their boutique fitness brands will provide an excellent complement to our members’ existing workout routines.”

This fall, Xponential acquired Body Fit Training, an Australian functional fitness franchise. Xponential plans to grow the company in the US and Canada with the $44 million acquisition. The company had a debut on Wall Street this summer after it delayed IPO plans in 2020 due to the pandemic.

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Is the sheer presence of physical particles that spread COVID-19 a form of physical damage? The parent company of LA Fitness says it is and is asking a court to make their insurers pay up for business disruption on that point.

International Fitness LLC is battling its insurers in court, claiming that because the fomites themselves damaged the club, the insurers are on the hook through business interruption policies.

The opening salvo in the dispute was a complaint by Beazley Underwriting Ltd., an underwriter for a $500 million policy that, through a number of legal complexities, is held by a number of insurance companies lead by the Zurich American Insurance Company. The motion, filed in a California court last week, attempted to deny a $100 million claim by the LA Fitness parent for business interruption losses. (Business interruption clauses are causes are common across industries and cover the loss of income for the time a business was forced to close by a number of conditions.)

Like all gyms and “non-essential” public places, LA Fitness locations in most of the U.S. and Canada were shuttered in the spring because of the initial pandemic lockdown and some, including many in the lucrative California market, were mandated to close after that. LA Fitness ceased billing members during that time and froze or lost countless members afterwards. LA Fitness took out a $300 million loan in November to try to weather the pandemic.

Beazley claimed that insurers are only liable for business interruptions caused by physical damage to facilities (as would be common in more predicted disasters, like earthquakes or tornados) and pointed to Zurich’s removal of viruses from the policy’s contamination exclusion in policy changes in years past.

The parent company of LA Fitness shot back with a lawsuit against 11 of its insurers, filed in a Washington state court the next day, arguing that the proliferation of COVID-19 virus modules into the clubs constitutes physical damage and asking for a whopping $500 million payout.

“The coronavirus has and continues to physically alter and transform these surfaces into virus-spreading fomites,” the suit by LA Fitness parent claims. “No amount of routine surface cleaning could remove the aerosolized coronavirus suspended in the air in Fitness’ health clubs.”

The holding company noted more than 1,200 employees tested positive, showing that its presence in their clubs caused demonstrable damage. Its attorneys argued that the virus stipulation had not passed through regulatory agencies nationwide.

“Fitness International had the right to rely on Zurich and the subscribing carriers to handle its insurance claim for business interruption losses in a manner consistent with these standards of good faith and fair dealing,” the company’s lawyers wrote in a court filing. “Unfortunately for Fitness International, its Insurers failed in all respects, then unreasonably and with a callous disregard for the interests of its insured, denied the claim in its entirety.”

Courts are now addressing the issues of insurance carriers’ liability in the vast and unprecedented economic devastation that the pandemic wrought on fitness spaces. If LA Fitness’ parent company can convince a judge that the infiltration of the virus constitutes physical damage to buildings, it will be an argument others will be quick to copy.

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