Xponential Fitness Announces Exclusive Strategic Development Agreement with the Operator of the LA Fitness and City Sports Club Brands
Posted: November 4, 2021 in Chains
LA Fitness
IRVINE, CA – Xponential Fitness, Inc. (NYSE: XPOF) (“Xponential” or “the Company”), a curator of leading boutique fitness brands, and Fitness International, LLC, operator of LA Fitness (“LAF”) and City Sports Club (“CSC”), announce an exclusive development agreement. The agreement lays out a minimum development of over 350 franchised locations over five years to add Xponential brands in more than 500 Fitness International locations.
This development commitment will afford Xponential Fitness the opportunity to invite existing franchisees who own a studio with an LAF or CSC location within their protected territory to open an Xponential brand studio inside of these locations. A membership to an Xponential brand studio within an LAF or CSC facility will be available to existing gym members for an additional cost.
Studio development time and buildout 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. AUVs at these locations are expected to be lower than those of traditional studio locations; however, this opportunity provides for reduced operating costs than standalone studios.
“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.”
“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.”
Development of Xponential Fitness brand studios within Fitness International locations is expected to begin in the first quarter of 2022 and will not have an immediate impact on Company revenues during the current calendar year. Management looks forward to updating the investment community further on the strategic benefits of this partnership on its upcoming third quarter earnings conference call on November 11, 2021 at 2 PM PT / 5 PM ET. More information on the third quarter earnings call can be found on Xponential’s investor relations website.
