Private Equity Accelerates Investment in Fitness Franchises
Private equity firms are increasingly targeting the boutique fitness and wellness sector. CapitalSpring has taken a major stake in Alloy Personal Training to fuel its national expansion. Similarly, Hidden River Strategic Capital is backing Somersault's acquisition of six The Little Gym locations in California, while Next Health has acquired medical weight-loss brand Lindora to modernize its offerings.
- The global boutique fitness studio market was valued at $40.1 billion in 2024 and is projected to reach $80.4 billion by 2034, growing at a compound annual growth rate of 7.2%. This growth is fueled by a consumer shift towards personalized, specialized, and community-oriented workout experiences. - Private equity firms are drawn to the fitness sector's recurring revenue models, strong customer loyalty, and efficient use of smaller real estate footprints compared to traditional big-box gyms. For an investment to be worthwhile, firms often look for a proven concept with at least $3 million in EBITDA and a track record of successful franchisees. - CapitalSpring, a private equity firm with over $4 billion invested across more than 100 brands, is backing Alloy Personal Training to enhance franchisee support and invest in infrastructure for scaling the system. This marks CapitalSpring's first investment in the consumer services sector. - Somersault, the largest franchisee of The Little Gym, now operates 29 locations across eight states after its recent acquisition of six California locations, with plans for an additional 12. The initial formation of Somersault in August 2023, through a partnership between Hidden River Strategic Capital and Taurus Capital Partners, involved the acquisition of seven gyms. - Next Health's acquisition of Lindora from Xponential Fitness is part of a strategy to create a comprehensive health optimization and longevity platform. Next Health plans to integrate its advanced diagnostics and rejuvenation protocols into Lindora's existing medical weight-loss clinics. - The broader trend in the fitness industry is a move towards holistic wellness, integrating technology for personalization and offering hybrid models that combine in-person and digital experiences. This shift is attracting investors looking to capitalize on the growing consumer demand for comprehensive health solutions. - Xponential Fitness, which sold Lindora to Next Health, has been divesting from several brands to refocus on its core portfolio of five fitness modalities, including Club Pilates, Pure Barre, and YogaSix. This strategic narrowing of focus aims to concentrate time and capital on their most profitable ventures. - The investment by Hidden River in The Little Gym franchisee, Somersault, represents the first time institutional capital has backed a franchise owner group within that system, signaling a new level of investor confidence in the growth potential of established children's fitness brands.
