COMPANY:Club Pilates Franchise
2017 INC. 5000 RANK: 4
HEADQUARTERS: Costa Mesa, CA
YEAR FOUNDED: 2007
2016 REVENUE: $26.8 million
3-YEAR GROWTH: 21,319%
When Geisler acquired the Club Pilates Franchise in March 2015 (the terms of the deal were not disclosed), it was doing $2.9 million in sales and maintained 30 locations. According to its founder, Allison Beardsley, once the business grew to that level, she recognized that managing it was not her skill set. "I'm totally a visionary birther of new ideas. I'm not a manager of growth," said Beardsley, who owns three studios in Nevada and is not involved in the business aspects of Club Pilates. "It was no longer lifting up my spirits as a business owner."
Today, under Geisler's management, that business has blossomed. With 224 franchise locations currently open out of the nearly 600 sold, the Costa Mesa, California-based business reeled in $26.7 million in 2016 revenue, an uptick of 21,319 percent from 2013--putting it at No. 4 on this year's Inc. 5000, an annual list of the fastest-growing private companies in America.
Hitting its stride
While the 10-year-old company was growing fast under Beardsley's leadership, it didn't really hit exponential growth until Geisler, now CEO, stepped in. Previously, Geisler had successfully helped turn the LA Boxing gym into a franchise powerhouse that eventually sold to UFC Gym in 2013 for an undisclosed sum.
"I like franchising in general, because it allows you to grow very quickly with partners who care just as much as you do," Geisler said. "If not more, because they're franchisees and these people are risking their savings, their retirement, their disposable cash to go open a business and you're there to support them."
Club Pilates franchisees typically pay about $200,000 for a studio, Geisler says, adding that the average franchisee owns about three units. Fitness franchises typically cost between $300,000 and $500,000 to open, according to Andrew Alvarez, lead analyst at IbisWorld, who covers franchises. The cost includes the $49,500 franchise fee and the initial build-out costs such as the real estate leasehold improvements, insurance, equipment, furniture, and installation. Club Pilates is obviously more affordable, Geisler says. It also works with third-party sources to help franchisees finance those additional costs.
Getting to work
Of course, Geisler says the price is 100 percent worth it. One of the first things he changed upon taking over the company was the color scheme. Under its original ownership, the walls were painted a mint color and the weights were purple or pink. Geisler, who wanted to bring in more male clients, quickly got to work.
He had the walls painted blue and swapped out the pastel-colored exercise equipment for ones with blue and black hues. Women didn't care what colors the balls or mats were, Geisler said, but the male clients he wanted to recruit did.
"Everybody would complain that men weren't coming in and doing Pilates," said Geisler. "It's hard enough to get a guy to come and do Pilates, let alone to get him to grab a pink weight and jump on a purple mat." (Club Pilates said it tripled its male membership).
Besides a cosmetic upgrade, Geisler also restructured the company's pricing, moving it away from the previous pay-by-class system to a monthly membership fee that gave the company a recurring revenue stream. Then he revamped the website, added front desk staff so the studios could stay open between classes, and started selling retail items. Previously, the instructors kept the facilities locked nearly 24 hours a day, whether it was during classes so as not to disturb customers or when they left after teaching a session. What's more, there were no retail goods--Geisler said certain franchises made T-shirts that they swapped with other studios, but that was it. Now the studios pull in between $4 million and $5 million in retail sales, Geisler said.
Amid those changes, Geisler says, Club Pilates Franchise is on track to "sell out" of its U.S. locations around next March, meaning the company will have sold 932 studios in total across the nation. Right now, about 600 locations have been purchased by franchisees, and with Club Pilates selling 35 to 40 a month, its on pace to hit this goal in the first quarter of next year. After that, Geisler will continue supporting each shop and help increase its revenue streams.
That growth impresses Alvarez. "For any franchise, growing at over 2,000 percent is still extremely, extremely, extremely good," he says.
Of course, fast growth can be double-edged, says Alvarez, who cautioned Club Pilates, and any franchise, to be careful after reaching a scaling goal. He adds that it's often better to hang tight before looking at other markets that may be ripe for growth, as it could lead to potentially entering an oversaturated market. "There are many reasons why they would probably want to stop there," Alvarez said. "But it's definitely not the end, I assume, and for that type of growth, it's still extremely impressive."
His background in fitness doesn't stop Geisler from indulging every once in a while. When he feels a difficult day coming, he stops at an old-school doughnut shop on his way to the office and picks up a couple of sprinkled doughnut holes for himself and co-workers. "I feel like a day with a small doughnut kick can't be a bad day," Geisler said.