Why it only took four weeks for BFT to “put the brand on steroids”
Four weeks. That’s all it took for the BFT (Body Fit Training) founders to pull off a mega deal with US multi-brand franchisor Xponential Fitness.
Speaking to Inside Franchise Business Executive about the news, co-founder and joint CEO Richard Burnet said this wasn’t a deal that had been in the works for months, it was a sudden and swift decision that suited both parties.
“It happened really, really quickly. It’s been an incredible courting, engagement and wedding in that time.”
Fellow founder and joint CEO Cameron Falloon revealed the partnership stemmed from a phone call with a mutual contact.
“It was an easy conversation, and that led to a discussion with Richard and Hamish (Lachlan, the third founder). We were all comfortable with it. Xponential has so many resources, it made sense.”
Xponential Fitness owns nine brands including CycleBar, Club Pilates, Rumble and StretchLab.
The reason for the big signing was twofold, Burnet said. Firstly there is US growth. The brand had launched in 2019 in Santa Monica and last year opened a second franchise, in Fort Lauderdale. But with travel restrictions the planned expansion of the brand has proved difficult.
“Nothing is harder than not being able to sell to franchisees the way you want, build your reputation and sell sites. Covid has slowed everything down,” said Burnet.
“The second reason was fortuitous. Xponential doesn’t have the focus we do on functional training. they don’t have a modality similar to ours. So our purpose aligned. They expressed keen interest to pursue the North American market.”
The US is the biggest and most compelling market, said Burnet, and the deal has “put the brand on steroids”.
Strategic sale of IP
BFT sold its intellectual property to Xponential Fitness, along with franchise rights for north America and Canada. Burnet, Lachlan and Falloon retained their franchising rights for the Asia-Pacific and Asia, and will work together with Xponential on expanding in other regions.
Already BFT is in discussions about launching into two new markets, Dubai and the UK.
Falloon said the brand’s strategic move into Singapore as the gateway to Asia about 18 months ago has resulted in 30 franchises sold.
“This partnership will significantly expedite that. We’re hopeful with vaccination rates going up we will be able to travel soon, and we won’t be spread as thin.”
While the stage is now set for a global performance, the script remains unwritten, with BFT not yet committed to any one business option for overseas development.
Burnet said “The challenge is whether we will master franchise or sell individual units as we did in Singapore. It will come down to the quality of franchisees. We are weighing up the opportunities.”
Falloon points out it’s about finding the right partner, who is “aligned on all kind of fronts”.
Benefits for franchisor, franchisees
Affinities with the bigger partner, Xponential, meant the founders had “no concerns” about selling the IP, he told Inside Franchise Business Executive.
“They are very sophisticated, they are next level investment in tech. Their current infrastructure will impact on what we provide franchisees. This is only ever a benefit for us.
“This is a true partnership – they own the IP, so we need them to make sure they are sharing the best of Xponential. We can’t sell without the IP, they can’t sell without having master franchises.”
Falloon continued “It’s really positive for franchisees, it gives them comfort we’re not going anywhere. We still own the company, we’re running it as master franchisor, it’s the same faces, the practices don’t change.”
Operational benefits for franchisees will include economies of scale in buying equipment, digital platforms, the look and feel of the website, and marketing initiatives.
Burnet points out there are a range of modalities the business normally wouldn’t have access to and the best practice from these will be incorporated into the BFT offering.
“At head office there is a benefit to us, there is an enormous upside for franchisees and members. The experience will be global,” he said.
Right now the BFT network comprises 130 sites open and the goal is to reach 300 operating within 12 months.