Private equity firms seem obsessed with Crunch Fitness.
The franchisor and its operators have been on the receiving end of numerous investments this year. The latest is Sixth Street’s $350 million minority investment in CR Fitness Holdings, an 88-unit Crunch Fitness franchisee.
“Sixth Street, to me, was the best partnership because they seemed like they were going to be the best teammates for us,” said CR Fitness Holdings CEO Tony Scrimale. “Their knowledge and wisdom, as far as where we’re projected to go, aligned. They’re like-minded people.”
North Castle Partners remains the majority shareholder of CR Fitness. The firm initially invested in CR Fitness in 2019 and recapitalized in 2022.
CEO Tony Scrimale leads CR Fitness Holdings, the largest Crunch Fitness franchisee.
Earlier this year, CR Fitness bought nine 24 Hour Fitness locations in Florida to convert to Crunch gyms with its newest design called Crunch 3.0. CR Fitness has plans to open more than 100 additional gyms in the next five years. By the end of this year the brand will have added 24 clubs to its portfolio.
“Companies like Sixth Street don’t come into a company and try to change things they buy,” Scrimale said. “They wouldn’t have purchased us for the amount of money they did if we weren’t the top-performing Crunch franchisee. Nothing changes. It’s business as normal.”
Crunch Fitness last year reported more than $1.5 billion in systemwide sales with less than 500 units, continuing its upward trajectory. That represents a 20.4 percent year-over-year increase. Unit count was up 12.5 percent. Leonard Green & Partners bought a majority interest in the concept earlier this year from TPG Growth. Crunch CEO Jim Rowley said the investment poised the company for “massive expansion.”
Another significant Crunch-related deal this year is Trive Capital’s investment in Crunch Canada and JF Fitness of North America, two established Crunch operators.
Last year, CapitalSpring bought a controlling stake in Primetime Fitness Partners, a Michigan Crunch franchisee with three dozen units and more in development. This year Primetime bought 13 locations from another operator in New York and New Jersey.
Scrimale said CR Fitness is a “company of extremes.” Setting the group apart from other franchisees is CR Fitness’ emphasis on member retention through personal training, he said.
“We maximize every opportunity to increase revenue in multiple buckets,” he said. “Our personal training numbers are generally about at least double the majority of the franchisees that are out there, which leads to overall member satisfaction and overall a higher revenue per store.”
Picking real estate is at the forefront of CR Fitness’ development process. Without a prime location and proper support for employees, Scrimale said it’s harder to successfully execute the business model.
“Even if it was the right business plan, you’ll never have the revenues to survive that,” he said. “Our biggest investment in the last 12 months internally in our organization has been our education of our people, of all our employees.”