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NEWSWIRE
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Snap lands a minority partner |
By John Craig, Editor - 06.05.2008
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CHANHASSEN, Minn. - Key-club franchisor Snap Fitness, which has been courting investors for a few months, announced Tuesday that it had received a minority investment from a Boston private equity firm.
Snap said the funding from Summit Partners would help strengthen its brand and fuel its expansion into Asia, Australia, Europe, India, Mexico and the Middle East.
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Terms of the deal were not disclosed.
"Summit has a deep bullpen of resources, and we would like to weigh in on the international tax law, international franchise law, the entire compliance part of getting registered to conduct business in those areas," Taunton told the Minneapolis St. Paul Business Journal. "Also, Summit may have relationships with national companies or retail brands that we eventually could leverage into strategic initiatives under co-branding of products as we get larger."
"We're excited by the growth. It's a profitable, growing company," Summit principal Sonya Brown told the Business Journal.
Snap, founded in 2003, ranks with Anytime Fitness as the largest franchisors of 24-hour key clubs.
A note that Snap sent to potential investors said that as of December, the company had 508 clubs and had sold a total of 1,230 franchise locations in the United States and Canada. Revenues jumped from $1.1 million in 2005 to $19 million in 2007, and are projected to near $30 million this year, Snap stated.
The enormous growth of Anytime and Snap is attributed to consumer demand for convenience and affordability, combined with an inexpensive business model whose relatively low startup and overhead fees are within the grasp of a lot of aspiring gym owners.
Yet because it is a relatively new concept, the financial success of individual franchisees is tougher to measure. In its franchise disclosure document, Snap says that as of Dec. 31, only 71 out of 244 franchisee units that had been open at least six months had as many as 400 memberships.
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