CHALLENGE

Our client was a multi-unit operator of a gym franchise with several successful locations throughout New York City. The brand specialized in offering top-notch equipment, personable employees, clean workout areas, fitness classes, and personal training sessions. This client had a strong local presence and a positive reputation; they held steady membership numbers, even during the pandemic, and engaged with their clientele through social media and digital offerings.

Their units were profitable and they wanted to expand but felt that opening yet another gym in the territory would be counterproductive. They were confident in their business approach and franchise philosophies but were at an impasse about what their next steps should be.

SOLUTION

Our clients wanted to develop new businesses – such as yoga and massage therapy – so they could remain within the health and wellness industry. They identified franchise systems with strong reputations that would help them achieve their goals. Furthermore, the clients shared the brands’ core values, commitment to client service, and foundational belief in the benefits of physical fitness.

Through our review of the documents and discussions with the clients, we ensured that they understood the terms of the agreements and the potential impact of those provisions on their current and future business operations. Though the concepts served the same industry, the clients recognized the differences between traditional gyms, yoga studios, and massage studios while assessing their investment in the franchise. For example, their new yoga studios would require several licensed instructors who could lead classes; and massage rooms would require soundproofing to ensure a serene ambiance.

Our deep experience representing franchisees and multi-brand operators uniquely positioned us to provide a holistic strategy for our client and we negotiated favorable terms.

RESULT

By tapping into their knowledge and enthusiasm for health and wellness, the franchisees successfully expanded within the physical territory by operating multiple brands that served additional and broader clientele. They extended their positive track record into related concepts and ultimately diversified their portfolio.