Fitstop, a fast-growing Brisbane-based gym franchise led by co-founder Peter Hull, is set to tackle to the American market after securing $3.3 million in second-round funding from private equity-backed US fitness group Lift Brands.
The move is the next step in Fitstop’s heady expansion after Lift Brands, owner of the Snap Fitness and FitnessOnDemand chains, took a 30 per cent stake in the Australian company early last year.
Fitstop, which has boosted memberships by 70 per cent and turnover to $37 million over the past year, is planning to open 10 new locations in the US by mid-2023, bolstering its existing network of 87 gyms across Australia and New Zealand.
This comes on top of a significant local expansion comprising 160 gyms planned for its Australian and New Zealand network, aided by a partnership with Vytality Group which will add 80 locations in the Sydney market alone over the next five years.
Hull, the Fitstop managing director and a former Brisbane Young Entrepreneur Awards finalist, says the US expansion will begin in California where the group has already secured 10 locations with existing business owners.
“Our investors have continued to be impressed with how we’ve positioned the business for growth, investing in a purpose-built model with the ability to scale, and it’s given us results,” says Hull.
Fitstop, which has attracted the interest of elite athletes as both members and franchisees, sees California as primed for growth in country that is ranked one of the world’s most established fitness markets. According to a new report prepared by Deloitte for The Global Health & Fitness Alliance, the US sits behind Sweden and ahead of the UK, Australia and Germany in the fitness stakes as evaluated by the penetration rates among adults.
Hull describes the fitness culture in the US, and especially California, as ‘synonymous' with the growth in performance-based training experienced by the company in Australia.
“It’s a market ripe for our brand,” he says.
“They enjoy an outdoor lifestyle, a love of fitness and sport, and there is a desire for fitness training that provides progression, strength and conditioning among a like-minded community.”
Fitstop was founded by Hull in 2013, branching out into franchising in 2017 with entrepreneur Richard Bell coming on board as an investor before exiting the company four years later. The business has scaled up by largely using an owner-operator model that has led to a 60 per cent growth in franchise numbers in Australia and New Zealand.
“Our franchise growth is ahead of forecast with a New Zealand and NSW market expansion,” says Hull.
“We have a unique combination, firstly of custom technology built for owner operators to drive business performance and manage memberships. This has attracted passionate business owners.
“Secondly, Fitstop’s DNA is partnering with franchise owners who are equally passionate about fitness, moving more, living life and performing at your best. It is the strength behind building a dedicated community and seeing progression.”
Fitstop’s recent franchisees include Wallabies star Dane Haylett-Petty and Western Force half-back Justin Turner who opened an outlet in Perth last year. Fitstop has also partnered with the Gold Coast Titans NRL team, revamping the squad’s gym facilities into its functional fitness format.
Among the technology initiatives driving growth is a custom-built app to support at-home workouts and track the progress of fitness goals among gym members. The app also provides gym owners with data to manage the backend of their business.
Amid its global expansion plans, including the appointment of a dedicated vice-president for its US operations, Fitstop has affirmed its commitment to Brisbane as its head office after revealing a new fit-out of its East Brisbane base last week.
Fitstop's performance-based training systems are said to have inspired over 17,000 members since the company's humble beginnings in 2013 as a workout space in a home garage.
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