Crunch Fitness President Chequan Lewis is the former chief operating officer at Pizza Hut. He, along with the rest of the leadership team at Crunch, believe their company is primed for rapid growth. “It’s not at all unrealistic for us to get to 1,000, even 1,500 clubs fairly quickly by opening more than a club a week,” he said.
“What we’re doing in the Crunch experience is actually driving up value at a time when people need a little bit of relief on price.”
—Chequan Lewis, president, Crunch Fitness
Chequan Lewis was greeted warmly at the Crunch Fitness-Plano club in Texas, but with little fanfare or acknowledgement of his notable position with the company. He exchanged pleasantries with a front desk associate and shared fist bumps with a personal trainer.
“I’ve been a member here since January and except for one other person here, I don’t think anyone knows,” said Lewis, of being named president of Crunch Fitness in February. “I kind of prefer it that way, to be honest. I get a unique perspective this way.”
While Lewis may wish to fly under the radar, Crunch is solidly in the fitness spotlight.
Crunch moved up 37 spots to land at No. 79 on the Top 400 list with systemwide sales of $957 million in 2023, a 23.3 percent year-over-year increase. The Portsmouth, New Hampshire-based fitness brand, owned by private equity firm TPG, boasts more than 2.5 million members at 490-plus clubs in 41 states, the District of Columbia, Australia, Canada, Costa Rica, Portugal, Puerto Rico and Spain. The company increased its unit count by 16.8 percent last year with 71 locations added in the United States and abroad.
By comparison, No. 25 Planet Fitness increased its overall unit count by 6.8 percent and No. 50 Anytime Fitness by 1.3 percent in 2023. Planet Fitness continues to lead the category with $4.5 billion in sales last year from its 2,575 locations. Anytime finished with $2.2 billion in systemwide sales from a category-leading 5,123 units.
At this 40,000-square-foot Crunch club in Texas, members of all shapes, sizes and ages huffed and puffed on rows of cardio and strength training machines while others pumped free weights, muscles bulging and with the occasional grunt of exertion.
Colorful walls throughout displayed a range of motivational phrases, such as “PERSPIRE TO GREATNESS,” “HUSTLE FOR THE MUSCLE” and “$#*%’S ABOUT TO GET HEAVY.” Also prominent was the company’s signature “NO JUDGMENTS. NO LIMIT.” branding philosophy, created early on to remove the intimidation factor of going to a gym.
While Crunch Fitness remains behind some of its high-value, low-price counterparts in total sales, units and membership counts, Lewis noted the company has gained enough traction in recent years to compete directly with them for customers.
“We’re certainly moving in the right direction,” said Lewis, the 40-year-old native Texan and former chief operating officer for Pizza Hut. “But at the same time, we know there is a lot of space left for growth and a lot of opportunity to continue to grow and get better.
“With the multi-unit operators we have in the system and the 1,000 development deals and commitments we’ve signed, it’s not at all unrealistic for us to get to 1,000, even 1,500 clubs fairly quickly by opening more than a club a week.”
Tony Hartl is the CEO of Undefeated Tribe, a multi-unit Crunch franchisee.
An eventful ride
Crunch’s 35-year history is filled with starts, stops and restarts. Founded by former stockbroker Doug Levine in 1989, Crunch began as a quirky fitness studio in a small Greenwich Village basement. It was Levine who came up with the “No Judgments” tagline and launched unusual and entertaining group exercise classes such as bicycle-based yoga, coed wrestling, pole dancing, karaoke cycling and an “Abs, Thighs and Gossip” class run by drag queens.
As its irreverent, low-cost model caught on with members, the company went into bigger spaces and expanded quickly in other states. But like many gym concepts, Crunch was hit hard during the Great Recession as it dealt with declining membership and expensive leases. It filed for bankruptcy in 2009 and, after restructuring, began franchising a year later with it first operator-run location in Norwalk, Connecticut.
While many gym chains struggled again during the pandemic, the company held its own by offering virtual classes via Crunch Live. The chain added 93 net new units in the U.S. from 2020 to 2022 and membership climbed 31 percent compared to pre-pandemic levels. Following the success of Crunch Live, the company introduced a new streaming platform, Crunch+, with hundreds of on-demand workouts.
The cost to open a Crunch can top out at more than $6 million, with gyms between 25,000 and 40,000 square feet. Average gross revenue for clubs open 12-24 months was $3 million in 2023; those open 49-60 months averaged $2.3 million.
Lewis said he wants to see franchisees increase their profitability and believes there’s opportunity to do so by lowering operating costs while at the same time elevating the member experience.
“We’ve been focused on improving our in-club tours and sales processes to highlight the benefits of Crunch’s value proposition and sell more memberships,” he said. “We’ve focused on growing our personal training revenue, which is a differentiator for us in the category. Our main focus remains on wholistic franchise profitably.
“If you look at just the general backdrop of the economy today, people aren’t seeing price and value move together. What we’re doing in the Crunch experience is actually driving up value at a time when people need a little bit of relief on price.”
The three membership tiers for Crunch are Base, Peak and Peak Results. The Base tier is $9.99 per month and provides access to the gym floor with cardio and strength training equipment at a single club. Peak and Peak Results memberships, priced at $24.99 and $29.99, respectively, bring access to various group fitness classes and the option to visit more than 400 locations.
Assaf Gal is a multi-unit Crunch operator in New York.
Crunch’s membership tiers, coupled with a range of class offerings, serve to further differentiate it in the fitness space.
“We want to meet each member at all their individual needs and also what they feel comfortable paying for,” said Lewis. “We try to be everything to everyone, but the area we need to improve on now is making the members and every staff experience legendary, and that happens the moment they walk in the door to the time they leave.”
“It’s not unlike what I did at Pizza Hut, really,” he continued. “At the end of the day, it’s all about making the customer experience the best it can possibly be while delivering value on a great product.”
Multi-unit New York operator Assaf Gal pointed to Crunch’s powerful branding and commitment to introducing new classes as top reasons he chose the chain over the other gym brands.
“Crunch is constantly innovating with new classes and bringing value to members. It’s been easier for me to grow the brand in New York because people know the name and what we offer,” said Gal, a franchisee since 2012. His six clubs are in the Bronx, Queens and Brooklyn.
Lewis said Crunch will lean on its multi-unit operators for new development, as he noted nearly 40 percent of the brand’s franchisees in the U.S. have three or more clubs open or in pre-sale. He also expects more new development in global markets.
“We really need to plant more flags in other countries,” he said. “The challenge for us, like it is for a lot of other people in this space, is finding the best locations for our gyms. Speed to market remains a big key for us. It takes on average six to nine months to get new gyms open. Ideally, I want to see us get all our new gyms open in six months, and that is very realistic when we take over second-gen gyms. Big-box retail space is another sweet spot now.”
A franchisee who’s not had issues opening Crunch gyms is Tony Hartl, CEO of Undefeated Tribe. Last year his company opened five units in a five-month span in Texas, Oklahoma and Missouri. It expects to have 27 open by the end of the year and has the rights to develop 137 clubs.
Undefeated Tribe attracted private equity backing in 2023, when Hartl sold a majority stake in the company to VMG Partners. The deal marked VMG’s entry into the franchise space.
Hartl said his group has been able to drive membership growth and increase performance at its locations by focusing on data-driven analytics for site selection and by what he referred to as “the curbside coaching” of general managers and staff to ensure they’re making the member experience is as good as it can be.
“We don’t just want members, we want them to use the facilities so we can keep them around, and that all goes back to the basics: clean parking lots, smiling people behind the front desk, cool music playing inside and making sure the AC is working,” Hartl said.
“The other thing we have implemented is a managing partner program for our GMs that requires a $10,000 investment to be in the role,” he added. “By doing that they share in the bottom-line results of the business. We are financially and emotionally aligned.”
