Can Orangetheory and Self Esteem Brands Dominate the Fitness Industry?

In a bold move set to reshape the landscape of the fitness industry, Orangetheory Fitness and Self Esteem Brands have announced their intention to merge as equals. This union intends to give rise to a new powerhouse company, boasting one of the most extensive arrays of fitness, health, and wellness services globally. With a combined portfolio that includes renowned brands like Anytime Fitness, Orangetheory Fitness, Waxing the City, The Bar Method, and more, this merger is poised to make waves in the $5.6 trillion wellness economy.

The fusion of these two giants, rooted in their shared commitment to holistic health and wellness, marks a significant milestone in the industry. Chuck Runyon, co-founder of Anytime Fitness and CEO of Self Esteem Brands, reflected on the company’s journey from humble beginnings to global influence. “We’ve enjoyed rapid growth worldwide thanks to both the power of small-business franchising and our mix of brands that meet ever-increasing demand for more holistic and personalized health and wellness services,” he said.

He also emphasized the merger’s potential to touch more lives worldwide through franchising and community engagement, underscoring the ongoing evolution of consumer demand for personalized wellness solutions.

This merger not only signifies a coming together of brands but also promises to leverage resources and scale for exponential growth. The new company’s expansive reach, representing $3.5 billion in systemwide sales and spanning 7,000 franchise locations across 50 countries and territories, positions it as a formidable competitor in the global market.

Dave Long, co-founder and CEO of Orangetheory Fitness, highlighted the merger as a catalyst for innovation and transformation. He envisions setting a new standard for leadership in fitness and wellness, driven by a shared commitment to empowering individuals on their health journeys. “We are excited about what our combined companies will be able to accomplish together to capture an increasing market share, unlock future growth and pioneer a healthier tomorrow for consumers around the world,” Long stated.

Behind this landmark agreement stands Roark Capital, a private equity firm with a keen focus on franchise and multi-unit businesses. The firm’s continued investments in both businesses over the past decade underscores confidence in the potential of both Orangetheory Fitness and Self Esteem Brands to thrive as part of a leading global franchise platform. Erik Morris, Roark Capital’s chief investment officer, expressed enthusiasm for the partnership’s ability to shape the future of the health and wellness sector.

Amidst speculation about the organizational structure of the merged company, a spokesperson for Orangetheory revealed that Dave Long will continue in his role as CEO of Orangetheory Fitness while also assuming a position on the board of the new company. This marks a departure from earlier reports suggesting Long’s relinquishment of his executive duties upon the appointment of the new CEO. In comparison, the two co-founders of Self Esteem Brands plan to step away from their executive roles and transition to the new joint company’s board.

The composition of the board reflects a blend of seasoned industry veterans and strategic partners:

• Chuck Runyon: Co-founder and current CEO of Self Esteem Brands
• Dave Mortensen: Co-founder and current president of Self Esteem Brands
• Dave Long: Co-founder and CEO of Orangetheory Fitness
• David Hardy: Orangetheory Fitness partner and president of Franvest Capital Partners
• Kevin Hoffman: Managing director of Roark Capital
• Erik Morris: Chief investment officer of Roark Capital

Throughout the merger process, both Self Esteem Brands and Orangetheory Fitness will continue to operate their respective businesses without disruption. They will also continue searching for a new CEO for the combined entity.

In an interview with Health Club Management, Long expressed optimism about the future, envisioning global demand for up to 10,000 locations — a sentiment previously noted by Dave Mortensen. While the merger undoubtedly contributes to both brands’ growth targets, it hints at even loftier ambitions for the newly formed entity, including the possibility of an IPO in the future, although no official statements have been made to that effect.

As the two fitness brands embark on this journey, the timing of the merger remains contingent on regulatory approvals and customary closing conditions. Yet, the vision is clear — to redefine the boundaries of possibility in fitness and wellness, fueled by innovation, community, and a shared commitment to improving lives.