Sixth Street’s investment in CR Fitness signals the next phase of HVLP expansion, with investors continuing to see white space in one of America’s strongest-performing gym segments.
Crunch Fitness franchisee CR Fitness Holdings has landed a $350 million strategic investment from global investment firm Sixth Street, fueling an expansion push that will see the group look to add more than 100 clubs over the next five years.
North Castle Partners, which led a majority investment in CR Fitness in 2019 and recapitalized the business in 2022, will remain the largest shareholder and continue its partnership alongside Sixth Street. The deal also includes a new senior debt facility provided by Golub Capital.
The deal comes as the high-value, low-price (HVLP) gym category continues to outperform the fitness industry overall. According to the Health & Fitness Association’s latest FIT Tracker, HVLP gyms hit record visitation levels in the third quarter. HVLP clubs, a favorite of Gen Z, are seeing traffic 22% above pre-pandemic levels.
It’s been a breakout year for CR’s parent company, Crunch Fitness, as well, having unveiled Crunch 3.0, a redesign template bringing premium touches like heated studios, recovery zones and expanded strength areas to its HVLP footprint.
The investment in CR Fitness also comes months after Crunch Fitness itself secured a majority investment from Leonard Green & Partners, marking a new chapter for the franchisor. Under the leadership of CEO Jim Rowley, Crunch has grown its membership base by 176% since 2019 and surpassed 3 million members, with more than 500 clubs worldwide.