Workout Anytime’s Largest Franchisee Buys the 200-Unit Brand

In a deal that includes two private equity firms as minority owners, franchisee Jerry Pugh acquired Workout Anytime from its founders and moved into the CEO role. He sees ample opportunity to further establish the 24/7 gym concept as a strong regional brand in the Southeast, in part by attracting multi-brand franchisees.

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Jerry Pugh said he “hit a home run” when he opened his first Workout Anytime in Homestead, Florida, in 2017 and now as the new owner of the brand his goal is to double its unit count in the next four years.

Pugh acquired a majority stake in 200-unit Workout Anytime from founders Steve Strickland and John Quattrocchi in a deal announced in early April. He worked with private equity firms Skyline Global Partners and Peninsula Capital Partners, which each have a minority ownership interest, to finance the transaction. Peter Stipher of Private Capital Advisors is another minority owner, as is Randy Trotter, Workout Anytime’s executive vice president.

Strickland, who with Quattrocchi launched Workout Anytime in 1999 in Douglasville, Georgia, retained a minority stake in the company and will stay involved for at least the next 12 months to assist with the leadership transition, said Pugh, who took over as CEO.

It was back in 2020, as Workout Anytime navigated pandemic-related shutdowns, that Pugh said he “planted the seed” to buy into the brand.

“I think he's excited that he was able to choose his successor, and someone that he felt like would protect his legacy, and someone that was passionate about the brand like he is,” said Pugh of Strickland. “I think that was super important for him.”

The sale of Workout Anytime to Pugh is one of two notable fitness transactions announced this month. Private equity firm Leonard Green & Partners acquired Crunch Fitness from TPG Growth, and both deals demonstrate the increasing M&A activity in the high-value, low-price gym sector.

Pugh, who owned 19 locations of the 24/7 gym concept and was the largest franchisee in the system, said his experience as an operator is informing his approach to leading the brand with a focus on executing the proven model. To him, there’s no secret formula.

“It's about running the play,” he said. “And I know everybody says that, but if you come in and you do all the things that it takes to be successful—you advertise, you train your people, you maintain your gym, you keep the gym clean”—the results will follow.

Local marketing, he continued, is vital because a hallmark of Workout Anytime is its personal connection with members. When franchisees look at marketing as a cuttable expense and not as a way to drive membership, that’s when gyms struggle. Pugh is already meeting with prospective franchisees and working to set the tone early.

“I have to make sure that I have someone holding our staff accountable, and that they understand the value of those things and that marketing,” he said. “If you do not advertise, there will come a point that you will fail. You have to advertise.”

Workout Anytime doesn’t have a huge marketing budget like some of its competitors, so Pugh is emphasizing efficient use of funds. The brand more recently worked with an outside company to complete an analysis of the membership base and is using that research to target its messaging.

“We’re looking in each market to target specific demographics that look like our members, that we think would want to be a member,” he said. “I think that’s helped us get our cost per acquisition down.”

Six locations opened since January and the goal this year is 25 as Workout Anytime charts a path to 400 units by 2029. Based in Alpharetta, Georgia, its largest concentration of gyms, more than 40, are in that state. It has a double-digit location presence in Tennessee, the Carolinas, Florida and a handful of other Southeastern states.

The development strategy, said Pugh, is to focus on being a strong regional brand and to attract franchisees of other concepts. He met recently with a multi-unit Ace Hardware operator and noted the brand is garnering interest from restaurant franchisees looking to enter the fitness segment. The addition of private equity sponsors, he noted, will help Workout Anytime establish more funding partners to assist existing franchise who want to grow.

Average gross revenue in 2023 for clubs open at least a year was $503,608. The top third in the system averaged $777,323, while the bottom third averaged $286,514. Locations are typically between 5,000 and 10,000 square feet, and the cost to open ranges from $626,350 to $1.3 million.

The brand continues to find success with its “hometown model,” wherein it enters secondary and tertiary markets with consumers who don’t have as many gym options. The rent is often cheaper, said Pugh, and you have a captive audience.

Workout Anytime’s locations, meanwhile, have undergone an evolution as the brand adapted to consumer shifts. Pugh in 2021 opened the first location with premium amenities such as red light therapy and infrared saunas and said that unit, in Palm Bay, Florida, is No. 1 in the system for revenue.

All new locations are built with these amenities, with some also offering cryolounge chairs and hydromassage beds. “Any brand that's not utilizing wellness now, you're behind,” said Pugh, as he noted some units are also adding performance turf areas for functional training and studio space for on-demand classes.

“We want things that are low-touch options, that basically are self-serve,” he continued, which helps keep labor costs down.

Workout Anytime came in at No. 339 on the Franchise Times Top 400 list, with systemwide sales of $91.6 million in 2023, up 8.5 percent.