Staying Power

The average lifespan of a business is about 10 years, according to a study by the Santa Fe Institute in New Mexico. 

Therefore, to reach 30 years in business is no small feat — an accolade Crunch is celebrating this year. 

“I think it’s a testament to the brand and all the employees who have worked here over the course of that 30 years who helped move the company along and put us in this position for so long,” said Keith Worts, the CEO of Crunch. “It feels great.” 

Multiple factors have contributed to the staying power of the Crunch brand and its growth to 315 locations globally, including its foundation in making fitness fun and welcoming, and a willingness to reinvest and adapt. 

Take these factors and pair them with a slew of experienced, passionate franchisees and a strong, talented corporate team — and you have a recipe for long-term success. 

The Foundation

Crunch was founded by Doug Levine in 1989 in New York City’s East Village, with a goal to create “a welcoming place for a diverse group of people to get fit.”

“When Doug Levine founded the brand 30 years ago, he did so based on a couple of insights about fitness and consumers,” said Chad Waetzig, the executive vice president of marketing and branding for Crunch. “The first insight is that most people find gyms to be intimidating, and so Doug really wanted to break through that issue, which led to the creation of our ‘No Judgments’ philosophy.”

Crunch views the No Judgments philosophy as a daily mantra, ensuring everyone feels welcome via friendly staff and a fun, vibrant environment. 

The second insight Levine had when founding Crunch was that fitness can be tedious, making it hard for customers to stay inspired to workout. “That’s where the entertainment came in, which really was built around our group fitness and extended to our environment,” explained Waetzig. 

Over the years, Crunch has become synonymous with group fitness — recognized worldwide for its cutting-edge classes and carefully designed proprietary programming. 

This programming is paired with an elevated gym experience, featuring amenities like a personal training “bar” — where members can learn about the brand’s one-on-one training offerings — dry saunas and HydroMassage, for example, all for a flexible price.

According to Worts, these amenities offered alongside the brand’s hit group fitness classes have created a unique selling proposition safeguarding its success. 

“The core of Crunch is our proprietary group fitness classes, and we continue to leverage and market that as our unique and differentiating factor from the competition,” explained Worts. “As the boutique fad has softened and many competitors have closed, we have been taking more and more market share as the consumer is looking for a more complete fitness experience.” 

Changing with the Times

Although Crunch has remained true to its roots, it has also been flexible where necessary, allowing it to adapt to changing consumer needs and expectations. 

A great example is the 2017 brand refresh dubbed Crunch 2.0, with a goal “to take us through the next decade,” explained Waetzig. It has a focus on four key areas. 

The first objective included updating and rebranding Crunch’s functional training spaces, which are now called the HIITZone. Centered on a multi-station functional training unit featuring equipment such as kettlebells, sleds, tires, rope pull-downs, TRX and more, the HIITZone is home to four unique high-intensity classes led by a dynamic instructor. 

As Waetzig explained, the second objective of Crunch 2.0 was to infuse more visual energy and interest into the overall club environment through updated lighting, graphics and material selections. 

“One of the things Crunch has really been known for over the last 30 years is making fitness fun, and the way in which we do that is by fusing entertainment and fitness,” explained Waetzig. “And while most people think about it in terms of our group fitness classes, the other way we achieve this goal is to have an environment that really feels like an entertaining, fun place. Even the locker rooms themselves just have a much more upscale and energetic feeling.”

The third objective extended to Crunch’s HydroMassage and tanning areas, now called the Relax & Recover zones. But beyond a name change, the update also included creating more flexibility for franchisees in regards to what specific amenities could be offered in the space, dependent upon the particular market a franchise resides in. 

“In many of our markets we have things like red light therapy, dry saunas, assisted stretching and spray tanning, in addition to the standard HydroMassage and tanning offerings,” explained Waetzig. “This allows our clubs, based on market conditions, to be flexible in their offering and not shoehorned into just two pieces.”

Lastly, the fourth objective of Crunch 2.0 involved addressing member and guest engagement, and club flow. For example, the front desk at Crunch gyms is now broken up into two pieces — one dedicated to checking in members and another devoted to meeting with prospects. 

“As part of this objective, we also launched Crunch TV, which is a social platform within the club, powered by UPshow, that allows members to take a video or photo of their workout using a special hashtag that actually shows their content on our TVs in-club,” added Waetzig. “We think that really improves engagement as well.” 

Crunch has also adapted through Crunch Live, an online platform giving members access to hundreds of online workouts available for streaming at home or on-the-go through a smartphone. 

“If you can’t get to the gym, through Crunch Live you can take a yoga class, you can do some stretching, you can get some trainer tips — so there’s a bit of staying connected to Crunch outside of the gym,” explained Worts. “We don’t view that as competition so much as we do it being really complementary to the gym experience. It’s not replacing what we offer inside Crunch, which is a community of people who want to come together, workout and have fun.”

Outside of adapting its offerings to remain up-to-date, Crunch has also exhibited a dedication to reinvesting in its infrastructure — a necessary evil for a brand that boasts locations 20-plus years of age. 

“You need to invest in your product,” said Worts. “I think about it as, ‘how should we spend the money,’ as opposed to ‘whether we should spend the money.’ Because we need to keep the club relevant, whether it’s a fresh coat of paint, whether it’s keeping the equipment up-to-date in the form of cardio and free weights, lighting or music systems — anything that’s going to add to the atmosphere and the ambience, and create some excitement for our members and guests.”

These investments in existing clubs and the new Crunch 2.0 design are already paying off — with redesigned clubs reporting a membership boost, and new clubs experiencing a faster 12-month ramp-up than ever before. 

“We’ve seen a significant lift every time we do an improvement in a gym,” said Worts. “It’s like cause and effect.” 

A Look Ahead

Another factor contributing to Crunch’s staying power in the fitness industry is its group of passionate franchisees, many of whom have been in the industry for decades prior to joining Crunch. 

“We have been very fortunate to attract a fantastic group of franchisees who live and breathe the brand,” said Ben Midgley, the CEO of Crunch Franchise. “In my opinion, they’re really some of the best operators in the industry, and they are expanding Crunch very quickly and bringing the brand to new heights.” 

In 2018, Crunch was named Best-in-Category in the fitness sector of Franchise Business Review’s list of top franchises, which measures franchisee satisfaction through an independent, anonymous survey. The organization’s Franchisee Satisfaction Index measures satisfaction and engagement in eight key areas, such as training and support, systems and operations, executive leadership and core values.

Greg Tibbs, a Crunch franchisee in Louisville, Kentucky, has been in the fitness industry for more than 20 years, and was attracted to the brand due to its high Franchise Satisfaction Index and robust support. 

“Ben is one of the busiest people I know, and he always answers his phone,” said Tibbs. “Before I had even come onboard as a franchisee, he would call and check in to see how I was doing — the support is just great.” 

Passionate franchisees like Tibbs are the main drivers of growth for Crunch, which is expanding by approximately 30 percent year over year from a unit count standpoint — with the average franchisee owning 10 or more units. 

“Largely [growth] has been driven by our franchisees signing new leases and opening new clubs across the country and in other countries,” explained Midgley. “Right now we are open in 30 states, with franchise rights sold in 40 states and seven countries, and we expect that level of growth to continue for some time.”

The potential for growth extends to Crunch’s larger, premium model called “Crunch Signature.” Currently, there are 30 corporate-owned locations in New York, San Francisco, Los Angeles and Miami, and according to Worts, the retail apocalypse has given opportunities for additional locations to enter the market.  

“We continue to see opportunities to expand our locations on the Signature side of the business, and a lot of that is due to the recent closures of your traditional big-box retailers, and the availability of 20,000 to 25,000-square-foot spaces that are decreasing in rent,” explained Worts. “We’re seeing more money coming from landlords in the form of tenant improvement allowances to help build out the gym, and the rents are coming down as well. That’s created an opportunity for us to expand — and not just on the Signature side, but the franchise side as well to create more scale for the brand.”

Worts is also encouraged by the growth of the industry at large — fueled by the Millennial demographic in particular. “There’s so much interest from the Millennials today — over 50 percent of our membership base is under the age of 34,” he explained. “You don’t have to convince young people today to join a gym. They’re seeking out fitness, and with our reach now, we’re in the perfect place to pick up that segment of the market.”

Considering these factors and more, Worts and Midgley expect Crunch to double in size over the next five years worldwide.

And they expect the staying power that’s led to its first successful 30 years in business to carry it through an additional three decades and beyond. 

“There’s so many companies today, both inside and outside of fitness, that open up and there’s a lot of excitement around it for a year or two or three — and the next thing you know you’re not around anymore,” said Worts. “Crunch is a brand that’s been around for 30 years and we expect it to be around for at least 30 more.”  

Editor’s Note: After this issue’s publication, it was announced that TPG Growth had partnered with company management to acquire Crunch, including the brand’s company-owned Signature facilities and global franchising business. To read more about the acquisition, click here.

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