High-value, low-price gym Crunch Fitness offers a big range of options and amenities and a recently developed personal training component to boost revenue.
Rafael Cuellar has one Crunch gym open with plans for a second on hold amid economic uncertainty.
Tony Hartl said he likes the “cheeky” attitude at Crunch; he’s opened 12 gyms so far, mainly in Texas.
Senior editor of Franchise Times
High-value, low-price gym Crunch Fitness offers a big range of options and amenities and a recently developed personal training component to boost revenue.
Finalists: Anytime Fitness and Retrofitness
Crunch Fitness has many eye-catching elements, such as Mark Mastrov at the top of its ownership roster. Mastrov is the co-founder of 24 Hour Fitness, which began in 1983 with one club and sold in 2005 for $1.6 billion. He’s also an owner of the Sacramento Kings and the co-founder with pop superstar Madonna of the now-defunct fitness chain Hard Candy.
For franchisees, though, the most impressive attribute is found in Item 19 of the franchise disclosure document, which not only breaks out average monthly revenue into three detailed categories, but also lists operating expenses in four categories including rent and payroll.
Unlike many franchises, Crunch includes the gold standard metric—average cash operating profit or EBITDAR, which is $938,053 for clubs open 37 to 48 months. Why is this the most important metric? Because when franchisees ask “how much can I make?” after paying all expenses, this is the answer they’re seeking.
Rafael Cuellar has one Crunch gym open with plans for a second on hold amid economic uncertainty.
Tony Hartl, a Crunch Fitness operator in Austin, Texas, boasts some eye-catching numbers himself. The former owner of Planet Tan who sold that business in 2008 and retired when he turned 40, Hartl came back out of retirement at age 50 and has 12 Crunch Fitness gyms open and rights to open 86 more, in Texas and Oklahoma. They’ll open 11 gyms this year, he said.
“Typically for us it’s $4 million per gym,” to get open. “The barrier to entry is not low,” he said. Unlike other so-called High Value Low Price, or HVLP, gyms such as Planet Fitness or Blink Fitness, Crunch Fitness includes the works, “yoga studio, personal training, day care, rest and recovery, which is hydro massage.” His goal for internal rate of return is “28 months, and we hit it” for his gyms open that long so far.
“You have to invest. We’ve invested heavily in corporate G&A,” including a chief growth officer whose role is solely opening new gyms, and a director of group fitness who has a master’s degree in education “so she knows how to hire, she knows curriculum. We had to invest very heavily in people to do this type of scale,” he said. “It’s imperative for us to think of the competition for talent” as well as for customers. “So our whole vision is the best place to work and work out.”
While Hartl is an experienced entrepreneur, he said more typical franchisees—he calls them “John in Wisconsin”— can benefit from Crunch Fitness’s experienced management team. “John in Wisconsin, he’ll end up having a genuine and authentic relationship with corporate. They know already where the potholes are, what the best practices are,” he said. “They’ve been around for a long time, and they’ve done this.”
Rafael Cuellar bought into the Crunch Fitness system six years ago. “It took us a couple years to get our location and buildout and everything else. Today is our four-year anniversary,” he said when reached in January, in Clifton, New Jersey.
Tony Hartl said he likes the “cheeky” attitude at Crunch; he’s opened 12 gyms so far, mainly in Texas.
He owns nine more licenses for Crunch Fitness and was planning to look for a second location this year. “It’s hard to find the right location with the right rental price; this is a hard market. I think we’re going to hold off until next year just because of the economy. It’s also a hard time from the banking perspective.”
Cuellar enlisted in the U.S. Navy and then became an officer, but resigned his commission when his father died unexpectedly and he returned home to save the family’s mom-and-pop grocery store. That ultimately sold and he is now an owner of a retail food co-op with a supermarket and liquor store.
“I was a semi-pro power lifter when I was younger; I’ve been a gym rat my whole life,” Cuellar said, so when he started looking at franchise offerings he went deep. “I’m an ex-military, I’m very anal. I went through the gyms that were the 15- to 30,000-square foot range and in all cases Crunch floated to the top.”
He praises the management team, naming Ben Midgley, CEO and founding partner of Crunch Franchising. He’s also keen on the personal training offering, developed within the last couple of years, which is a separate cost from the gym’s base price of $9.99 to $34.99 a month.
“Crunch is fun. It’s a great business, but it’s also a fun business,” he said. “The value proposition is very, very high” for customers. “Planet is our big competitor; Blink is one of our small competitors. The value proposition, ours is so much more.”
His advice to prospective franchisees is to look for the fit. “What you need to be attracted to is the atmosphere. Do you fit the franchise, and does the franchise fit you?”
Positives
Use Caution
Crunch Fitness, with more than 400 locations sold in 36 states, is known as a “cheeky” brand with offbeat classes such as karaoke bicycling and, at one time, an “Abs, Thighs and Gossip” class run by a drag queen.
Window Shopping
Finalists: Nothing Bundt Cakes, The Vitamin shoppe and Wild Birds Unlimited
Sweat It Out
Finalists: Anytime Fitness, Crunch Fitness and Retrofitness
By the Slice
Finalists: Donatos Pizza, Papa Johns and Pizza Ranch
Aging America
Finalists: ComForCare, Home Instead and Interim Healthcare
Office Space
Finalists: City Wide Facility Solutions, Office Pride and Oxi Fresh Carpet Cleaning
Breaking Bread
Finalists: Capriotti’s, Cousins Subs and Firehouse Subs
Dirty Jobs
Finalists: 1-800-Water Damage, PuroClean and Restoration 1
Healing Touch
Finalists: Fyzical Therapy & Balance Center, My Eyelab and QC Kinetix
Fashion Forward
Finalists: Mainstream Boutique, Once Upon a Child and Plato’s Closet
Sweet Tooth
Finalists: Andy’s Frozen Custard, Handel’s Ice Cream and Jeremiah’s Italian Ice
‘Zor Awards Introduction
How we chose the Zor Awards
Senior editor of Franchise Times
{{description}}
Email notifications are only sent once a day, and only if there are new matching items.
Your browser is out of date and potentially vulnerable to security risks.
We recommend switching to one of the following browsers: