Club Pilates Studios

Situation

An absentee owner who lived in Ohio had bought two Club Pilates Studios in Charlotte with the intent of moving to Charlotte. Near the end of the pandemic in 2022, the owner reached out to VR Business Brokers and discussed selling the two studios with business broker, Randy Mitchell. The owner reached out to Randy knowing he had experience with successfully selling another franchise location. The owner’s intention of moving to Charlotte never came to fruition and he continued working in his full-time job in addition to working on the Pilates business for about 15 hours per week.

At the time of the initial conversation, people were just starting to recommit to fitness studios after the pandemic. Wisely, the owner decided to wait to put the business on the market and along with his highly capable general manager, grew the business post-pandemic to be a booming business.

Mitchell prepared to bring to market the two Club Pilates Studios, leveraging his in-depth knowledge of the franchise and his knowledge of the Charlotte market. He implemented a strategy targeting two specific audiences:

1. Individual owners interested in acquiring a successful business and being an absentee owner.
2. Existing Club Pilates Studio franchisees looking to expand their market and benefit from the synergies of additional locations, including these two locations within a mile of each other.

The Result

Mitchell’s strategy to bring the Pilates Studios to market was successful, generating a great deal of interest and multiple offers. Randy Mitchell is experienced in helping his client, the seller, evaluate and compare multiple offers. He developed an analysis of the offers focused on key factors – in addition to price – to consider when selling one’s business. Financing terms, seller financing and transition time periods are often important considerations and, in the case of a franchise, the likelihood of being approved by the franchisor was an additional consideration. Mitchell reviewed the analysis with the seller to help the seller evaluate the offers.

The chosen buyer was an existing Club Pilates franchisee looking to expand locations. He emerged as a great prospective buyer. He was experienced, a trusted franchisee, knew the business model, and was a smart businessperson. This buyer made the due diligence process go smoothly. One hurdle (there is always at least one) was working through two separate leases with different landlords to get the leases of each location properly assigned to the new owner.

In under three months, the two studio locations were brought to market, terms negotiated, due diligence completed, and closing done. The buyer was excited to add two more locations to his business, including the synergies of being able to schedule staff across the locations given their proximity. The seller was thrilled to have delayed sale to drive more business value after the pandemic and was able to shed working additional hours each week on a business that was many miles away.