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Mastrov Lures Galianis to Company’s Growing Portfolio

Mastrov Lures Galianis to Company’s Growing Portfolio

Since its inception in 2008, New Evolution Ventures (NeV), Lafayette, CA, has continued to expand its portfolio. In addition to Crunch, Crunch franchise clubs, UFC Gyms and YogaWorks, NeV also operates clubs internationally in connection with high-profile celebrities and athletes, such as Madonna’s Hard Candy Fitness clubs in Mexico City and Moscow, Alex Rodriguez Energy Fitness clubs in Mexico and Steve Nash Fitness World and Sports Club in Canada. Last year, NeV made an investment in Atlanta-based Sharecare, an interactive question-and-answer website that focuses on health care. The website was created by Dr. Mehmet Oz in partnership with Oprah Winfrey’s Harpo Studios.

Last month, NeV made another move, adding the brother tandem of Kirk and John Galiani to the fold. The Galianis are expected to add clubs to the company’s portfolio in the mid-Atlantic region with their new entity, US Fitness.

“Ultimately, our goal is to have a broad-based portfolio on a global basis around some very significant brands that we can grow and be proud of,” NeV co-founder Mark Mastrov tells Club Industry. “We leverage our team accordingly. We’re excited by the traction that we have in the brands that we’re developing now, and we’re having a lot of fun.”

Mastrov and the Galianis, who first met at a Club Industry show years ago, share a mutual respect.

“Kirk and John are two of the best-known and most successful operators in the history of our industry,” Mastrov says. “The opportunity to partner with them and work with them and bring them into our group is just a huge value-add to us. They’re two great human beings, husbands, fathers, businessmen. Just real salt of the earth people that you enjoy spending time with. It’s an honor to be able to spend time and continue to work and develop with them.”

The high-profile club operators have backgrounds with two of the biggest brands in the industry. Mastrov founded 24 Hour Fitness, which he sold in 2005 for $1.6 billion. The Galianis once were co-owners of Gold’s Gym International and were two of the top franchisees in the company before breaking away in 2009 to form their own brand, Onelife Fitness.

“Mark is a phenomenal talent,” Kirk Galiani says. “He’s had the largest exit to date in the industry. He’s had his hands in so many different projects throughout the world in all aspects of the health and fitness industry.”

The Galianis were not necessarily looking for a partner, but after they reached an agreement in 2010 to open Crunch clubs for NeV, they started to become more familiar with Mastrov and Vision Capital, an international private equity investor that is backing the new partnership.

“We felt that it was the right partnership, the right team to align with,” Kirk Galiani says. “Getting the rights to open up Crunch clubs is one thing, but it’s a whole other level when you actually partner up with somebody and build clubs with them.”

Under the new partnership, the Galianis could open their own Onelife Fitness clubs, Crunch franchise clubs or some of the other NeV brands. And their scope is not just limited to the Atlantic Coast, either, although that’s the area the Galianis know best.

“It’s their backyard,” Mastrov says. “It’s kind of like how we know Northern California because we were born and raised here. It’s our backyard. [The mid-Atlantic region is] their backyard. It’s a great market, it’s underserved and we think there’s a lot of opportunity there.”

What impresses Mastrov most about the Galianis is that they are savvy in real estate, site selection and development. Mastrov says the brothers pick great sites for clubs and negotiate good economic deals.

“They build fantastic facilities, and then they operate them at an extremely high level,” Mastrov says. “That’s rare to find a team of people, let alone individuals, who can do all those things within our industry. Seventy percent or more of the success of a fitness center is the site selection, the way you build it out, the lease you sign, the rent you’re paying and the deal that you cut. Once you lock into a 10- or 20-year deal, you better make sure that you’ve done good work up front, and these guys do good work up front, some of the best I’ve ever seen.”

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