November 17, 2021
How the deal was done to sell an Aussie fitness franchise for $60mil in 5 weeks
It's the stuff dreams are made of for every would-be franchisor with an idea.
You have an idea that you think is a winner, then do the hard yards over years of effort, to finally end up in your dream payday.
This was what happened only recently for Body Fit Training founder Cameron Falloon.
Falloon is a high performance conditioning trainer who has worked with AFL amongst other professional teams. The business is also co-owned by AFL connected shareholders Richard Burnet and Hamish McLachlan.
We actually placed Body Fit Training (BFT) in a distant second place only this time last year, to F45 Training in our list of The 10 biggest fitness franchise in the Australian market.
Well wow, a lot can happen in a year!
We counted 86 locations in Australia as of 6 November 2020 in our report.
As of 2 November 2021, we counted 143 in the Australian market.
And, considering the year we’ve had since then, that is quite an amazing result.
A $60million deal in less than 5 weeks
With that type of growth, perhaps it came as no surprise when the call came from a potential buyer.
“The purchase deal took less than 5 weeks from initial approach to completion.” according to Lawyer, Steve Latham of MinterEllison Gold Coast, who advised BFT on the deal.
The brand’s intellectual property was purchased by US based Xponential Fitness Inc for $60million, with additional payments possible based on future growth.
A key part of the deal sees BFT continuin to operate the brand as a master franchisor in the Australian, New Zealand and Singapore markets, as well as the rest of the world save for the USA and Canada in which Xponential Fitness will grow the brand.
This makes BFT the 10th brand in the Xponential stable, who refer to themselves as ‘The Best in Boutique Fitness’.
Getting this type of deal done
As lead indicators in how you get something like this done, according to Steve Latham, there were two key factors in this transaction that allowed it to proceed at the pace and ease with which it did.
“Firstly, everyone cooperated in a spirit where it was clear that Xpo wanted to buy, and BFT wanted to sell.
Both parties were clear in the benefits that the end result would provide, so the process was able to move without any thoughts about who was ‘winning’ - they both were, and this set a real tone.”
Secondly, Steve highlights the importance of the decision makers doing most of the negotiating.
“The CEO’s of both businesses were conducting almost daily meetings across the period.
They would iron out commercial issues between themselves, and then hand that detail to respective lawyers to document.
This is as opposed to the more traditional path where lawyers each take ‘turns’ in drafting revisions of transaction documents - which may take a week or even more to complete.
In this case, we were ‘turning’ the key documents effectively on a daily basis.”
Given the stars aligned for a deal that clearly satisfied both parties to proceed at such a pace, it will be fascinating to watch the growth of BFT in their respective markets in the coming handful of years especially.
