• USD 360m-USD 380m revenue expected this year
• Would look at distressed assets

CR Fitness Holdings, which describes itself as the No. 1 franchisee of Crunch Fitness clubs, is scouting for acquisitions, said CEO Tony Scrimale.

The US-based company, majority owned by North Castle Partners, is actively looking at all territories where it has rights to acquire. North Castle first invested in CR Fitness in 2019 and extended its holding period with a continuation vehicle in October 2022. “We will look for more locations and more territories within our network and outside the network during the next five years,” said Scrimale. “We prefer to take out a competitor than to be an additional player in a specific location.”

CR Fitness, based in Tampa, Florida, will have 84 clubs under its belt in May, including nine 24-hour Fitness clubs in Miami and Orlando which it acquired in April.

“Every transaction is different,” said Scrimale. “We prefer looking at membership, the assets and the potential long-term return on investment.”

Scrimale said he expects CR Fitness to generate USD 360m to USD 380m in revenue this year. The 5,600-employee gym chain has been in expansion mode for three years. With a presence in Florida, Georgia, North Carolina and Texas, the franchisee opens 12 to 15 new clubs each year. “We fill out clusters,” said Scrimale. “In Orlando, for example, we already have 12 clubs, plus five new 24 Hour Fitness (locations) that put us now at 17 – but the aim is to build 30 clubs,” he added.

CR Fitness is also using M&A to enter new markets, where the franchisor gave it the right to expand. “We have the licenses for over 280 future opportunities,” added Scrimale. During the last three years, the company bought several franchisees, two UFC clubs, two TSI clubs plus the nine 24 Hour Fitness locations.

“Often times, targets are struggling, they are not profitable,” said CFO Jeff Dotson in a joint interview. “We don’t have a specific EBITDA requirement. Candidates can be distressed operators or groups that are ready to exit their current market.”

Dotson is betting on consolidation of the industry in 2025 and 2026. “Boutiques very popular five years ago are now being replaced by larger players – multi-use facilities that are high-value, low-cost gyms,” he said.

Dotson sees the industry steadily continuing to grow. “In 2000, gym members accounted for approximately 12% of the US population,” he said. “In 2025, it is 25%, and it could reach 29% to 30% by 2032. All the segments of the population are contributing to the growth.”

The industry has been through many financial challenges over the last 25 years including the dot-com bubble, the financial crisis in 2008 and COVID, but continues to grow, the CFO said.

Tariff uncertainty impacting the economy is just another pebble on the road. “During economic troubles, members prioritize spending. They want to maximize what they get. They see the value in what we offer. Other sectors get hit more,” said Dotson.

The company expects to have more clarity on the tariffs during the next 90 days. In the meantime, “equipment costs will increase but not at a pace that would impact our growth”, Dotson said. “As the No. 1 Crunch franchisee, our buying power through our franchisor is very good. Our vendors do right by all Crunch franchisees.”