Irvine-based Xponential Fitness LLC is leaping into international markets after inking a deal this month to open more than 50 boutique fitness studios in Saudi Arabia over the next three years.
The operator of eight boutique fitness brands including the popular chain Club Pilates said its first location will open this fall in the country’s capital Riyadh through a master franchise agreement with Saudi Arabian firm First Agility Co.
Xponential Chief International Development Officer John Kersh described the expansion as “ambitious and unprecedented” for the region.
“The Saudi Arabian fitness market is poised for significant growth in the coming years, and we are excited for Xponential Fitness and our brands to play an influential role in its development,” Kersh said in a statement.
The move is the first multibrand international agreement for Xponential, whose varied fitness companies operating under its corporate umbrella now have close to 1,500 locations in the U.S. combined, with an additional 1,000 in the works.
In addition to Club Pilates, its portfolio includes assisted stretching studio StretchLab, indoor cycling concept CycleBar, indoor rowing studio Row House, yoga concept YogaSix, dance-based cardio chain AKT and barre franchise Pure Barre and most recently, Stride, a treadmill-based cardio and strength training concept.
The deal in Saudi Arabia will involve Club Pilates, Pure Barre, CycleBar, YogaSix and AKT studios.
Vision 2030
The overseas deal for Xponential comes roughly two years after Saudi Arabia began licensing women-only gyms; previously there were no public sports facilities for women.
While the government still imposes restrictions on women, the allowance for female-only gyms were part of Crown Prince Mohammed bin Salman’s Vision 2030 economic reform plan.
Xponential now joins a number of other U.S.-based fitness chains looking to expand into the country; others include the celeb-favored New York City barre chain Physique 57.
Xponential spent the past year growing its roster of boutique fitness brands through a rapid series of acquisitions and it now looks to take the same aggressive approach toward international expansion.
In March, it said it would open more than 165 Club Pilates studios in Japan over the next 10 years. Its first step internationally was with a Club Pilates expansion in Canada in August 2018; that was then followed by the opening of Row House.
Warming Up
Xponential Chief Executive Anthony Geisler launched Xponential in 2017 after San Francisco-based private equity firm TPG’s growth equity arm, TPG Growth, came knocking to invest in Club Pilates, which Geisler acquired in 2015.
The goal was to create an umbrella company to curate boutique fitness brands through acquisitions.
Each of the company’s eight brands function separately and has its own team with a president, chief marketing officer, real estate director, construction project manager, and sales force.
Total franchisee investment in each concept varies, but a potential franchisee can expect to invest $170,000 to as much as $497,000 for a single unit, and $245,000 to $573,000 for three units. The royalty and marketing fee is 9%.
To accommodate its quick growth, Xponential moved to its current 27,000-square-foot office last year at Intersect, a four-building complex owned by Houston-based real estate investment firm Hines and Newport Beach-based Pacific Investment Management Co.
Staff size is about 150, and 2018 revenue was more than $300 million, according to the company.
