CR Fitness Holdings, already the largest Crunch Fitness franchisee, will convert several 24 Hour Fitness locations in Orlando and Miami. The group’s CEO, Tony Scrimale, says CR Fitness is “just getting started,” and expects to open at least a dozen more clubs this year.
In Tony Scrimale’s view, it’s better to take a competitor out of a territory whenever possible rather than fight for market share.
That was the case with his company’s most recent acquisition, as CR Fitness Holdings bought nine 24 Hour Fitness locations in Florida. Already the largest Crunch Fitness franchisee at 75 locations, CR Fitness will convert the 24 Hour gyms to Crunch’s 3.0 design in what will likely be a four-stage process, said Scrimale.
The acquisition, continued Scrimale, the CEO of Tampa, Florida-based CR Fitness, “just made sense.” 24 Hour Fitness is based in California and the nine units it sold to CR Fitness were its only locations in Florida. “They weren’t going to grow in Florida, and from a management standpoint, to be a California-based company trying to manage nine clubs all the way out in Florida, it’s a better situation for us,” he said.
CEO Tony Scrimale leads CR Fitness Holdings, which operates 75 Crunch Fitness gyms and is in the process of converting nine more to the Crunch 3.0 design.
The gyms, five in the Orlando area and four in and around Miami, will be remodeled to the newest Crunch design with redesigned front desk, reception and lobby areas, expanded training and group fitness spaces, more strength equipment, and dedicated recovery studios.
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“You’re seeing the member demand, really the consumer demand, for that higher end, modern look, and the product offering has gotten better,” said Scrimale. “We now have hot yoga; our rest and relaxation areas have gotten dynamic. Where before there was just a couple hydromassage chairs in there, now we have cryo beds. Now we have infrared saunas in there. We have stretch tables in there. It's unbelievable the product offering that we offer now, for still the same low price.”
The three membership tiers for Crunch are Base, Peak and Peak Results, and prices vary by market, though the standard single club access base membership is $9.99. Peak and Peak Results memberships, which include group fitness classes and access to more than 500 clubs, are typically around $27 to $36.
Beyond the 24 Hour Fitness conversions, CR Fitness is continually renovating and updating its existing clubs. Its locations span five states—Texas, Florida, Georgia, North Carolina and Tennessee—and it will enter the Phoenix market this year.
“Everybody beats their chest that they're the best at something, but our capex expense that we put aside and reinvest in our clubs, I don't know any company out there that does it as well as CR Fitness,” said Scrimale. “We continue to add new equipment, we continue to renovate, we repaint the clubs.”
Those investments are key to remaining a top operator in the system, he noted, and help drive membership growth. The majority of the group’s gyms have more than 10,000 members and sales are “way above average.”
Average gross revenue for Crunch locations open 37-48 months with an average membership of 7,130 was $2.8 million in 2023, according to the brand’s franchise disclosure document.
CR Fitness, operated by Scrimale, Vince Julien, Geoff Dyer and Jeff Dotson, invested in Crunch Fitness in 2011 and was just the second franchisee to open after the brand launched its franchise program in 2010.
By 2019, CR Fitness had 20 locations and attracted private equity firm North Castle Partners as an investor. The group grows its unit count by 12 to 15 each year, and this year, with the nine-unit acquisition, expects to increase its number of Crunch gyms by 25.
“North Castle Partners has shown an extreme amount of support for us just to continue to run our play. They've really been an amazing partnership, and we've grown over the last few years,” said Scrimale. “They don't try to change us. They don't try to influence us. They're there when we need the support.”
Scrimale, CEO since early 2022, described himself as a steward of the business and someone who is constantly evaluating opportunities for improvement. He’s a member of six competing gym brands and extolled the benefits of hands-on operations.
“I'm not your typical CEO. I'm not a desk jockey. I don't have a desk,” he said as he noted the importance of staying in touch with what’s happening at the unit level. CR Fitness doesn’t do absentee ownership and its C-level and upper management team is “totally involved.”
That level of involvement impacts the overall culture of the organization and directly translates to CR Fitness’ ability to grow. “People can always see the upward advancement,” Scrimale said. “They might be at a lower-paying position here today, but they know that three or four openings are going to be opening up in the next couple months, just because of the volume of new clubs that we're opening.”
CR Fitness owns the rights to develop more than 200 additional Crunch units. “I'm really bullish on our future,” he said, “and I think the important message is: We're just getting started.”
