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"O Say Can You See"

Here is What is Going on in America...

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Peter MoorePeter Moore

Our firm, Integrity Square, is a leading advisory firm focused on mergers and acquisitions in North America. Here are the currentĀ trends and Top Five list from our perspective:

  1. 1. CAPITAL: The recent IHRSA (now HFA) Trade Show in Los Angeles was well attended with a lot of entrepreneurial enthusiasm. A key underlying fact was that there were more private equity firms snooping around for investment opportunities than ever before, which is a forward indicator that institutional capital is keen to invest billions in our HALO (Health, Active Lifestyle, Outdoors) Sector.
  2. 2. WEIGHT LOSS: There is consensus that the proliferation of weight loss drug usage in the U.S. will be a net benefit to the health club and studio operators as patients on these GLP-1 drugs must exercise or their muscles will deteriorate quickly.
  3. 3. ANCILLARY REVENUE: There is a $150 billion windfall of Health Savings Accounts that are now able to be used for memberships as the IRS has modified their definitions of use, and a "Letter of Medical Necessity" can be granted to members with widespread acceptance and services in the HALO Sector qualify for pre-tax dollar usage.
  4. 4. ARTIFICIAL INTELLIGENCE: We are encouraging operators to go deep on member surveys to fill in as much info on their members as possible in order to have a more robust database that can then be powered by AI tools. We are firm believers that, "You cannot have Artificial Intelligence until you have Intelligence."
  5. 5. IRRATIONAL GROWTH: Our one concern on the HALO Sector is that there are several franchisors who are selling franchisees on concepts that are NOT good AUV business models. A franchisee should be able to generate $60,000 per month in top-line revenue to be an attractive franchisee for an owner/operator. Littering the market with underperforming business models is a black eye on our industry, and we hope prospective franchisees DO NOT sign up for these poor franchising opportunities.

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The future is bright for those with strong unit economics. Optimize your playbook and you will WIN.

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JLR Associates