Having founded Anytime Fitness in 2002, co-founders Dave Mortensen and Chuck Runyon formed Self Esteem Brands in 2012 as an umbrella under which to build a portfolio of personal care brands.
The first to join the group was Waxing The City, which was acquired in 2012, followed by Basecamp Fitness in 2018, The Bar Method in 2019 and Stronger U Nutrition in 2021. The company also owns Healthy Contributions and ProVision Security (2008).
Self Esteem Brands (SEB) now has over 5,500 locations across the seven continents, with Anytime Fitness currently accounting for the lion’s share of that tally. But now the other brands – currently all North American operations – are eyeing international growth. Dave Mortensen brings HCM up to date.
How do you decide which brands to acquire?
We’re interested in anything within the personal care space, so obviously fitness and wellness – that’s been our bread and butter – but really anything where people are investing in themselves and taking care of themselves. That’s where Waxing The City comes in.
Beyond that, any brand we acquire has to align with the four pillars – the four Ps, of our high-performing culture.
Firstly it must have, and invest in, the right people. Brands don’t make an industry special – people do. We have to believe the people within a business can execute and drive it.
It must have a purpose that aligns with ours – something bigger than the individuals in the business and something its team believes in. It can’t just be about financials: the team has to believe in the purpose first. They also need to convince us of the purpose in what they do, and how this aligns with our mission to improve the self-esteem of the world.
It has to perform in franchising. Our number one stakeholder is our franchisee network, so franchisee success is key for us. We have to be sure any brand we acquire is focused on the same numbers as us – numbers such as same-store sales and average unit volume. Ultimately, if our franchisees win, we win.
And then the fourth P: they can have the greatest business in the world, but to work with them, we have to like them and enjoy their company. That means they have to be playful; we take our business and our customers seriously, but we don’t take ourselves too seriously.
Will you make further acquisitions?
We’re always looking to grow – the day I tell you we’re done is the day I retire!
There are lots of areas to explore within personal care – there’s mental health, for example, although I think that’s something we’ll look to infuse across all our brands – especially at Anytime Fitness, which operates in that wellness space, mental health will be ever more significant. There’s skincare, too, which is something I’m personally passionate about. I definitely think there’s opportunity in that space. There are opportunities with other fitness brands, too.
What I would say is that, in the future, we’ll look for a bit more scale before we acquire. Some of the brands we have now came in at a smaller scale. Moving forward, I think we’ll be looking for franchise brands to already have 100+ units before we bring them into Self Esteem Brands.
Would we ever take on a business that wasn’t already a franchise? Never say never, but most likely we’d want it to already be a franchise.
How are your brands performing?
Anytime Fitness is still the foundation of Self Esteem Brands, and probably the greatest thing we’re seeing right now is double-digit growth of Anytime Fitness across the globe.
But new walls are rising every day. Waxing The City is going absolutely gangbusters right now: it’s breaking records this year. Our studio brands are also doing well: they took probably the biggest hit during the early day of COVID, but they’re returning to 2019 numbers.
So we’re seeing positive growth in every one of our brands. In fact, our average unit volumes are better than ever and we’re well north of 2019 numbers across the board, with double-digit growth for Waxing The City for the last five years and double-digit growth – based on year over year sales – for our studio brands too. Everything is on a very positive trajectory.
And Anytime Fitness is going to France...
France is a market we’ve wanted to be in for a very long time; we’re often asked why we’re not there yet, as we’re strong elsewhere in Europe. As always, though, it’s about finding the right partner. We’ve been approached before, but it’s never been right. Now, we’re in a position to say yes and we’re really excited about it.
I think France can easily hold 350+ Anytime Fitness clubs and our new partner, Anytime France sàrl, is already targeting seven regions, including: Paris, Ile-de-France, Auvergne, Rhône-Alpes, Provence-Alpes and the Côte d’Azur. Beyond that, we’d also like to bring our studio brands to France.
This follows our announcement in April of a new master franchisee for Austria – Manfred Mitterlehner – which took Anytime Fitness to 40 countries and territories around the world. By Q2 2024, nine existing Mitterlehner Fitness Clubs will be converted to Anytime Fitness. Two brand new Anytime Fitness clubs will also open in Austria in autumn 2023.
We’re really excited about the opportunity that still exists to take Anytime Fitness to more people around the world.
You’re eyeing APAC expansion too. Tell us more
In May, we appointed Taka Suzuki to the new post of regional vice president for Japan and Asia-Pacific. Growth in Japan is still massive, but there’s also great opportunity across the whole of APAC. We felt it was really important for us to have someone based in the region.
We’ll scale clubs and studios across APAC in 2024 and beyond, but the initial focus will be on supporting Fast Fitness Japan – our largest master franchisor, with more than 1,100 Anytime Fitness clubs – as it expands into the studio space with our two fitness studio brands.
In all non-US markets, those two brands will be The Bar Method and SUMHIIT Fitness. When we acquired Basecamp Fitness, we weren’t able to trademark it everywhere across the world. It remains Basecamp Fitness in the US, but we wanted a consistent brand for all other markets globally, so we trademarked the name SUMHIIT Fitness and will launch the first non-US location in Sydney, Australia, in Q3 this year.
Will all brands go global?
We’re looking to put more SEB boots on the ground in multiple markets, not only in APAC but also, coming soon, in Latin America and Europe – Europe also being where SEB’s executive VP – international, Sander van den Born, is based.
And there are a lot of buds growing in a lot of different areas. There are good things happening around Europe right now and we’ll definitely be expanding there, with markets such as Scandinavia very interesting for us.
You’ll also see very large-scale expansion of SUMHIIT Fitness over the next 12 to 24 months; for both Basecamp Fitness and The Bar Method, it was never just about the domestic opportunity. In fact, that was of secondary importance.
The number one opportunity with our fitness studio brands is scaling our international expansion, both with existing partners – depending on their capabilities and desires – and new partners.
We generally work on a 3-1-1 model, by which I mean for every three Anytime Fitness clubs we put in a market, we’d aim to put in one of each of our studio brands; the studio brands need a slightly higher population density to support their model. In some markets, especially smaller countries, we’ll go into an area development agreement rather than a master franchise relationship.
When it comes to global expansion, we adopt a ‘glocal’ approach, implementing an 80/20 rule: 80 per cent of what we do with our brands, we bring to each country to maintain consistency; 20 per cent is localised in partnership with our master franchisor. It’s the master franchisor who makes us go from good to great.
Any plans to evolve the Anytime model?
We’re seeing more people strength training than ever before, both men and women. Not only that: they’re also starting to realise that cardio doesn’t have to be about getting on a cardio machine – that cardio also happens within strength. They’re changing the way they work out.
This is one of the most exciting things I’ve seen in the evolution of the way our customers use our facilities. In fact, I think it’s the best thing that’s ever happened to the industry and to our customers, because with muscle atrophy an issue as we age, strength is long-term health.
We need to get even more people into true strength, so our designs and layouts at Anytime Fitness will adapt to this new way of working out.
You also recently launched a new app...
We launched our Anytime Fitness app in April, and in May created the post of SEB international technology lead, appointing Jonathan Midttun to the role.
Probably the biggest difference in the way we’re approaching technology compared to others is this: everyone’s talking about how to reach customers wherever they are. We talk about making fitness accessible for our customers. That’s a big difference in focal point. It isn’t about us. It really is about them. We want to make fitness as accessible as possible and make it as easy as possible for our customers to see success.
To do that, we have to place their health in their hands, allowing them to track, own and drive their health improvements. Already, our members can track their progress on metrics such as body fat, weight loss and so on, but we’re also working on tracking happiness scores, as well as providing each member with a personal health score – a score they can easily understand and improve as they grow in their health and wellness journey.
This has the potential to impact healthcare, too. As with car insurance, where you get a better price if you’re a safe driver, a personal health score could be the basis for favourable health insurance premiums, which would really help make fitness an essential lifestyle choice.
Data is also key to ensuring governments and the healthcare sector understand how essential our industry is. That’s why Anytime Fitness has committed to being the first brand to show, year-on-year, that we actually make our customers healthier. We’ll track whether customers are active and what they’re doing – if they’re completing certain activities with Anytime Fitness – and monitor the impact on their health.
All this technology will go cross-platform at Self Esteem Brands, with apps focused purely on results for members rather than customer acquisition. In our industry, acquisition is still driven by referrals, and referrals come if you help your members get results.
Finally, we’re looking at how AI can help us understand people’s decisions for being active and explore nuances we can incorporate as an operator – both through technology and personal touch – to encourage our customers to stay on their journeys even longer. Over the last two years, we’ve already impacted our attrition by over 5 per cent using AI.
Tell us about your other brands.
We’ve seen for a long time in the industry that it’s hard to do both fitness and nutrition really, really well. We, therefore, decided it made most sense for us to bring in a nutrition brand that we can embed into Anytime Fitness and our studio brands, sharing in the profits of the business across our franchise system. That brand is Stronger U Nutrition: a direct-to-consumer product where health coaches provide customers with focused support for their nutritional needs, both virtually and through the app.
I’ll also briefly mention Healthy Contributions, an SEB-owned vehicle that connects us more closely with both corporate wellness and insurance providers offering fitness solutions or incentive programmes. Healthy Contributions is the conduit to manage all of those relationships.
Importantly, it isn’t only for SEB brands: in the US alone, we work with over 17,000 gyms. We believe you have to be industry- and consumer-first – over and above yourself – because really, the competition in the market isn’t other brands. It’s the 80 per cent of consumers who don’t currently engage with our sector. We have to do a better job of connecting with them, and helping our partners and friends in the fitness industry to do the same.
What are your goals now for the overall SEB business?
I can be very clear on this. In Anytime Fitness we have the largest, most global health club brand in the world. We will also have the largest, most global studio brands in the world.
Within the next five years, we want to get to 10,000 units globally. Some of this will happen organically through the brands we already have, the rest through acquisition. I imagine it will be an 80/20 split again, with about 80 per cent of our growth coming from our current brands and about 20 per cent from new acquisitions we bring on-board.
We'll also continue to be part of the International Franchise Association, where I sit on the board. We’ll continue to be involved in driving legislation to make sure franchising is supported across the world – not only our businesses, or even just the fitness and wellness industry, but all franchise businesses. We’re very focused on reinforcing what good franchising is all about, making sure best practice is followed around the world to in turn ensure the industry of franchising is strong and well.
Longer-term, we’ve set out a goal to impact 100 million people around the world; I’d estimate that we’ve impacted around 20 million so far. This isn’t just about current members. It’s about all the people who have, at some point, engaged with us, been active with us, felt we’ve made a difference to their lives.
What drives you personally?
It’s watching people evolve – watching our team and franchisees grow and feel they’re making a difference in the world.
I always tell people: the greatest stories in the world are the ones you haven’t heard yet, the stories as yet untold of the impact you’re having on people’s lives. That’s what drives me: all those stories yet to be told.
