Club Pilates, CycleBar, Row House and other Xponential Fitness brands will soon pop up inside of LA Fitness and City Sports Clubs locations as part of an exclusive development agreement between Xponential and Fitness International, which owns LA Fitness and City Sports Clubs, Xponential announced on Nov. 4.
Development of the studios within Fitness International locations is expected to begin in first quarter 2022. The financial details of the arrangement were not disclosed. Club Industry has reached out to both companies for more details but has not yet received a response.
The agreement lays out a minimum development of more than 350 franchised locations over five years to add Xponential brands in Fitness International’s more than 500 locations.
Xponential, which trades on the New York Stock Exchange as XPOF, is a curator of 10 boutique fitness brands: AKT, BFT, Club Pilates, CycleBar, Pure Barre, Row House, StretchLab, STRIDE, Rumble and YogaSix.
Existing Xponential Fitness franchisees with an LA Fitness or City Sports Clubs location within their protected territory will be able to open an Xponential brand studio inside of these locations.
In a call with analysts on Nov. 11 after the company released its third quarter 2021 financials, Xponential CEO Anthony Geisler said that the first clubs to roll out would be Club Pilates and StretchLab, continuing with other modalities later.
"We do have the ability to have multiple brands inside of the same LA Fitness location," Geisler said, noting the brands would be complementary to each other and to what LA Fitness is doing inside of its facilities.
A membership to an Xponential brand studio within an LA Fitness or City Sports Clubs facility will be available to existing gym members for an additional cost.
Studio development time and build-out costs of these locations will be less than those of a traditional standalone studio, and existing franchise partners will have an opportunity to drive additional revenues while operating these locations free of initial franchise fees and lower marketing fund fees, according to Xponential.
Average unit volumes at these locations are expected to be lower than those of traditional studio locations, but this opportunity provides for reduced operating costs compared to standalone studios, Xponential said.
"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," Geisler said.
Jill Grueling, president, club operations of Fitness International, said: "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."