When Andy Gundlach and Russ Allen joined forces in the fall of 2023 to create Omega Fitness, they joined the ranks of the biggest Anytime Fitness franchisees in the system. With the acquisition of 21 gyms in Wisconsin, Omega is now the second largest.

Purchased from MDS Fitness, the addition of those gyms puts Omega at 123 Anytime locations across California, Florida, Illinois, Minnesota and Wisconsin, and adds to the company a collection of units with solid top-line sales.

“MDS, broadly speaking, was doing well. They were focused on attracting a higher price point consumer, so they’ve been able to grow top line with that strategy,” said Jonathan Lo, a vice president at Rainier Partners, the Seattle-based private equity firm that backed Omega in 2023. “MDS had been buying gyms and turning them around.”

One of Omega’s strengths, noted Gundlach, “is growing the membership base, and so we saw an opportunity there to build off their strong top-line sales by expanding the membership base.”

Gundlach, who early in his career spent a decade with Pizza Hut and worked his way up from delivery driver to director of operations for franchisee Pizza Hut of Southern Wisconsin, opened his first Anytime Fitness in 2006. By 2023 he had 35 Wisconsin locations and began talking with Allen, who operated 31 gyms in California and Florida, about opportunities to “put some steam behind us” by combining their businesses and securing a PE investment.

They set up Omega Fitness, and their partnership with Rainier, with future acquisitions in mind.

“Anytime is very fragmented,” said Gundlach of the U.S. system with more than 2,300 gyms, about 1,200 of them owned by single-unit operators. Opportunities for consolidation emerged after the coronavirus pandemic, and the franchisor was likewise “bullish about getting private equity into the brand,” he said.

Rainier Partners, whose principals have investment experience in Taco Bell, Planet Fitness and other consumer services, saw an opportunity to be an early mover in the Anytime system, said Lo.

“We liked Anytime, as it felt like Planet Fitness 10 or 15 years ago in that there were very few private equity investors and a lot of small operators,” said Lo. Anytime, he continued, “generates really good unit economics. The profitability is really strong.”

Average sales for the 12-month period ended February 29 were $441,894 across 1,530 gyms measured, Anytime reported in its 2024 franchise disclosure document. It lists an average monthly membership count of 714. For gyms implementing the “Smart Coaching” initiative and its operational and sales tools, the AUV jumped to $499,088.

Anytime’s smaller gym footprint was another attractive factor, noted Lo, with gyms ranging in size from 4,000 to 6,500 square feet, versus a Planet Fitness or Crunch Fitness that’s upwards of 20,000 square feet.

“There’s a lot of competition in the gym space. The thing about Anytime is because the boxes are smaller, they can go into smaller cities and markets,” said Lo, without the pressure huge capital expenditure requirements and higher rents.

The initial investment range for Anytime is $397,516 to $973,121. The cost to open a Planet Fitness, meanwhile, starts at $1.5 million; Crunch’s investment range starts at $918,000.

Gundlach noted his gyms have leaned into small group and personal training, which improves member retention through the creation of a fitness community. He plans to apply that approach to the newly acquired MDS units.

Omega is also working through a series of gym remodels as part of Anytime’s new “Evolution Refresh” initiative, which Gundlach said is the first new design in 12 years and is part of the brand’s “Real AF” platform. Launched in late 2021, the platform includes an interior gym revamp with branded spaces for personal training, nutrition coaching and recovery services, along with a modernized logo.

They’ve refreshed about 20 locations so far, Gundlach said, with an uptick in membership at those new-look gyms. Omega has two new locations in the construction and presale phases.

Anytime Fitness is part of Self Esteem Brands, which is shifting to a new name, Purpose Brands, after it merged with Orangetheory Fitness in April. In addition to its 2,300 domestic gyms, Anytime has another 2,700 units in international markets.