If there is one space in the national economy that is consistent with the American ideal of a highly competitive free enterprise system, it is adaptability.
There are almost as many fitness companies as there are shampoos, so if you can’t find a place where you can sweat, lose weight, and get stronger and leaner, you’ve got to blame yourself.
On a list of 111 fitness companies with at least 100,000 square feet of space provided by CoStar Group, Crunch Fitness was tied for No. 8 with 9.8 million square feet and No. 7 24-Hour Fitness. Topping the list was Planet Fitness Holdings with 46 million square feet.
They’re all trying to satisfy a deep-rooted desire to get and stay healthy, said a spokesman for the Boston-based Health & Fitness Association, a global trade group for the health and fitness industry. In the May reportThe association estimated the fitness industry was worth $22.4 billion, with 55,294 clubs and studios.
A May report from data firm Placer.ai found that foot traffic to fitness chains increased year-over-year almost every week from January to April of this year. “Interest in gyms isn’t going away anytime soon.” The report states:.
“People value their gym memberships a lot,” a Health & Fitness Association spokesperson said. Gym attendance dropped significantly during the pandemic closures, but customers maintained their memberships. And while average gym attendance isn’t reaching pre-pandemic highs, membership numbers are now above 2019 levels and activity remains strong enough to make wellness a thriving attraction for commercial establishments.
A spokesperson said many landlords want to put gyms on their properties because they draw regular visitors: “You can buy cat food, stop by Trader Joe’s for a smoothie or pick up your clothes from the dry cleaners after your workout.” Asked if gyms are at least part of the answer to the decline of traditional department stores as anchor retailers, the spokesperson said, “I think so, and many in the industry think so too.”
Whatever is holding back other industries, the gym industry is ripe for growth. Crunch Fitness’ online search results essentially show a roadmap for its growth: a 40,000-square-foot location in St. Cloud, Minnesota, on July 11; a new location in Pleasant Hills, Pennsylvania, just outside Pittsburgh, on July 9; a 40,000-square-foot location on Fredericksburg, Maryland’s “Golden Mile” (that’s not ready to open yet) on July 4. Other recent locations include Round Rock, Texas (a suburb of Austin); Erie, Pennsylvania; and Kyle, Texas.
Crunch’s motto is “no judgement,” so anyone looking to shed a few pounds can work out next to Adonis without worrying about the reaction.
Chequan Lewis has been Crunch’s president since February, when he stepped down as Pizza Hut’s chief operating officer. Lewis appeared on Zoom in early July to explain that and other things about his company and the industry.
This interview has been edited for length and clarity.
Commercial Observer: You left Pizza Hut and are now president of Crunch. Some might say you made people fat and now you’re profiting off of getting them back in shape. How would you respond to that?
Chequan Lewis: Working for one of the largest restaurant companies in the world gave me the opportunity to learn a lot.
We were looking for ways to motivate and reach our friend group. What’s the next step to change people’s lives? How do we connect with people and push them forward? Maybe expand to another platform? Of course, the goal is to make people a little healthier, but the connection and community are also important.
Do you feel pressured to stay in shape? I saw a photo of CEO James Rowley and his arms looked like tree trunks.
I don’t feel pressured. I see that as a positive. I’m here every morning. I live in the present, I breathe in the present. The result is no pressure.
The name Crunch doesn’t suggest that Equinox is trying to turn its gyms into hangout spots for the wealthy. Recent News The New York Times Equinox is opening hotels and even putting eucalyptus-scented soap in the showers. Are you competing in that respect or are you trying to be a bit more mainstream?
We’re focused on being the best value proposition for people looking for a gym. We don’t have to be at the Equinox price point to give our members a world-class experience. We can do that. If you talk to the average Crunch member, you’ll see that.
More generally, do you want your members to spend more time in your facilities? Do you want to make your facilities easier to use?
There was no question that it would be a place where I could do more than just exercise. One of the biggest factors is our culture and community. There are certainly a lot of opportunities. And there are many ways to experience them.
If you just want gym equipment, you can go to one of our competitors (we won’t name names), or if you want world-class equipment and something unique, you can come to us. [such as a yoga studio, a group fitness studio, massage beds, babysitting service, or a sauna].
Crunch Club combines fitness and entertainment to make hard work fun, with access to exclusive group fitness classes. In short, we want to know where our members are and meet their needs. We always have and we always will.
If you search “Crunch Fitness” on the internet, you’ll see the pace at which they’re opening new locations. It’s truly staggering, many of them in suburban areas. It makes me wonder where they are in their growth pipeline.
We’re in rapid growth mode. We’re on track to open more than one club per week in 2024, and expect to significantly exceed that next year. We’re not done yet. We’re selective and working collaboratively to quickly find inventory for our clients in the right places to meet the needs we’re seeing from our members.
So that means there are 462 locations. What will that number be on December 31, 2025?
This year we’ll be approaching 500. By the end of next year we’ll have another 100 or so clubs. And we’re looking beyond that. We’re also looking at planting flags outside the United States.
Why? What’s going on in this market? What makes you so confident that you can grow at that pace?
I think that’s how our clubs perform. A franchise starts by putting the right parts in, we help them grow their business, and then we make sure they’re geared up, ready to grow and take their concept to the next level. Our franchises are the best in the world.
So when we open up, something really amazing happens: our employees come back again and again and continue to recommend us. When the right partner and the right location line up, the property opens up and people come.
Are you making a profit? Will increasing the number of locations increase your revenue? Please tell us about your company’s financial situation.
As institutional investors continue to invest in Crunch and franchisees continue to open new Crunch locations, investors and franchisees are excited to bring the Crunch brand to everyone. From gym beginners to veteran athletes, Crunch expanded rapidly across the United States and around the world.
What would be a good location for Crunch? Is there a minimum square footage required? Do you want the ground floor of a shopping mall or an outdoor plaza?
In real estate terms, our clubs today range from 12,000 square feet to 60,000 square feet. We need to be able to operate in places like New York and San Francisco where there isn’t as much space available. It’s a flexible model that allows us to expand into different types of spaces and still maintain the concept.
Generally, Crunch is looking for spaces that average 25,000 to 35,000 square feet. We can start from scratch, but we don’t do that very often. Our focus is on finding the right location so we can make sure our model fits there.
What are the characteristics of urban downtowns that are different compared to suburban shopping malls?
For us, flexibility and creativity is key. We have to be able to play in San Francisco as effectively as we play in South Florida. So we might do something smaller in San Francisco, something with amenities, that sort of thing. The suburbs have a different look and feel. But the key is that we can come in anywhere and partner with franchisees and do it well.
How Crunch utilizes space on the coasts may be different than how they utilize space in the center of the country. For example, my local Crunch gym in Dallas is 40,000 square feet. In New York and San Francisco, there isn’t as much space available. Crunch’s space planning is agile, adding mezzanines when possible to accommodate smaller floor plates.
Let’s say I’m a retail store owner and I have an old vacant Bed Bath & Beyond space. I want to convince Crunch Fitness to move into my store.
Now in 2024, landlords are coming to us, they recognize that we are one of the premier fitness tenants. Landlords recognize the benefits of the Crunch brand presence for both current and potential co-tenants, and especially the high frequency of visits by Crunch members.
Crunch works well in socially important places – places that complement commerce and community. We work well alongside businesses that provide essential needs, like grocery stores and big box retailers.
We offer a very attractive young, strong and outgoing base, as well as a mature senior demographic. At Crunch we pride ourselves on bringing together members from all walks of life.
Our highest sales times are Monday to Wednesday from 4pm to 8pm, which is typically a low sales time for other retailers.
The other thing I want to say is the reason our neighbors love our facility so much is because we are one of the cleanest facilities in the world, and my general manager walks around the parking lot and in front of the facility as if it were his own residence.
Do you think you’ll take over the anchor role? Traditionally, that’s been the department store’s role.
That’s one of the things that makes us attractive to landowners – we can be a junior anchor. The key is that when we go into an area, we think about what the area needs.
