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StretchLab President Sees Continued Fitness Boom

Boutique fitness studio StretchLab of Irvine bent, but didn’t break, during the pandemic.

“[COVID] was definitely a huge curveball. From a business development standpoint, we just hit the pause button,” said Stretch Lab Franchise LLC President Lou DeFrancisco.

“We didn’t sign leases. We didn’t bring on new franchise partners in that two- to three-month window. But pretty quickly thereafter starting in May, we began opening up locations in those states where we could open. So, it did alter our plans slightly.”

The pandemic clearly didn’t wreak complete havoc on the company’s growth plans, thanks to consumers’ continued love affair with health and wellness.

Pre-COVID StretchLab counted 72 studios, most of those in California—a state that’s also set to see the most new development of the brand over the next year.

With another dozen spots subsequently opened, there were 84 StretchLabs as of mid-August.

Orange County currently has eight spots open, with another five in the pipeline. Because it’s not characterized as an out-and-out gym, it has been able to keep its local spots open in recent months, albeit with limited studio capacity and a host of safety measures in place.

More growth is in store: the goal is to boost the brand’s footprint to about 120 by year’s end, according to DeFrancisco.

It’s an ambitious workout plan for StretchLab, which was already the fastest-growing unit of Irvine-based fitness-focused franchising company Xponential Fitness LLC over the past three years, according to the parent company.

Competitive Advantage

StretchLab is not your normal fitness facility.

Clients walk in and are asked to do three overhead squats as the MAPS (Mobility, Activation, Posture, Symmetry) body scanner hardware utilizes three cameras applying sonar technology to assess someone’s movement patterns.

They’re given a score of 0 to 100, which is then used by what the company calls its “Flexologists” to create a custom stretch program for that client, with sessions ranging from 25 minutes to just under an hour.

StretchLab has the exclusive rights to use the MAPS technology, according to DeFrancisco.

“Stretching’s been around forever, but creating a business around stretching is newer I’d say in the last five years,” he said.

The MAPS technology is what DeFrancisco says gives the chain a leg up on the competition, especially as it looks to grow domestically and then eventually overseas—all via franchisees. There are no company-owned locations.

The initial investment in a studio runs from $171,375 to $290,625, according to paperwork filed with the state.

The studios generally requires space averaging around 1,200 to 1,400 square feet and has so far been focused on opening spots in grocery-anchored centers.

Fitness and wellness studios, which have become the darlings of the retail development world the past few years, have also taken off in more traditional mall settings.

It’s an environment StretchLab has yet to fully embrace, although it’s not opposed to them. Among its newer locations are one in Irvine Co.’s Spectrum Center outdoor mall; it’s one of three area spots it has in Irvine Co.-owned locations.

Parent’s Fastest-Growing

StretchLab is part of a family of boutique fitness concepts owned by Xponential Fitness.

Sister business lines include Club Pilates, CycleBar, Row House, YogaSix, AKT, Pure Barre and Stride. Over the past three years, StretchLab’s nearly 1,200% revenue growth is tops among its various brands, Xponential said this month. Three of the firm’s other brands have also seen growth in excess of 400% over that time.

“With nearly 1,000 [locations] open between Club Pilates, StretchLab, Row House and CycleBar and hundreds in development, we are thrilled to see our brands continue to prosper and grow despite everything going on in the world right now,” Xponential Chief Executive Anthony Geisler said in a statement.

Unification Strategy

Xponential, with such a diverse portfolio of fitness lines, is now looking at how to unify its brands.

Part of that, DeFrancisco explained, is in co-tenancy opportunities at centers. The Market Place in Tustin is a good example, where there is a StretchLab, AKT and Stride. The company started doing that, but the challenge is the dependency on franchise partners to go out and find the locations and ink the lease deals.

“What began happening about a year-and-a-half ago, Xponential started getting recognized in the real estate world and developers started recognizing boutique fitness is the future of fitness and that if you have several boutique fitness brands in your plaza, you can get the same amount of foot traffic as you would back in the day as a big box gym,” DeFrancisco said.

“We do have these developers knocking on our doors, saying, ‘Hey, we want a bunch of your brands.’”

The other strategy Xponential is looking to employ to create bridges among its brands is a membership program akin to ClassPass, which charges a flat fee and gives users access to multiple fitness options at different clubs and studios.

Xponential’s program, called X-Pass, would be for its family of fitness concepts.

“It’s about how do we bring all eight brands and maximize building and creating value for our membership base across all the brands,” DeFrancisco said.

The program is currently in development stage with a mobile app. It’s expected to roll out for testing by the end of this year in Southern California across most studios.

If all goes according to plan, it would then go live in early 2021.

“The part that I’m, selfishly, most excited about is running StretchLab, as a brand, all of our other brands are some kind of workout-related modality, whether rowing, cycling, dancing or yoga,” DeFrancisco said.

“Stretching is complementary to all of those other brands so I do believe StretchLab is going to be able to benefit from X-Pass in a big way.”

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