Fitness Industry Veterans Analyze M&A Trends in the Business

The M&A landscape in the fitness industry is a challenging yet promising one, as discussed by three prominent figures at the recent ATN Innovation Summit 2025. Pete Moore of Integrity Square led the conversation alongside Mark Federico of Fitness Holdings North America and Terry Blachek of Austin Fitness Group, shedding light on the intricacies of scaling, acquiring, and exiting fitness businesses.

Moore set the stage by emphasizing how the fitness and wellness sector has evolved over the past two decades, noting the segmentation within the industry. With different valuations, opportunities, risks, and capital requirements for each segment, the landscape has become more complex, reflecting changes in valuations over time.

When it comes to making deals, operators like Federico have learned valuable lessons from their experiences. Having conducted numerous acquisitions, Federico emphasized the importance of meticulous due diligence, citing a particular club acquisition that ultimately failed despite initial optimism. Acknowledging the risks associated with overestimating potential returns, he advised against letting ego cloud judgment and stressed the significance of scrutinizing financial projections.

Lease assignments emerged as a crucial factor in deal-making, with Federico underscoring the need for operators to secure favorable lease terms early in the process. Delays in securing approvals from landlords can derail transactions, highlighting the need for proactive negotiation strategies.

Blachek shared insights gleaned from his journey with Orangetheory Fitness, recounting the financial risks he took to expand his franchise. Liquidating his personal assets to fund the initial growth, Blachek emphasized the importance of operational excellence before embarking on multi-unit development. His advice to “nail it before you scale it” underscored the need for a solid operational foundation before pursuing aggressive expansion strategies.

Furthermore, Blachek cautioned against premature scaling, urging operators to focus on profitability and operational efficiency before opening additional locations. His experience with rapid growth post-private equity investment served as a cautionary tale, highlighting the challenges of maintaining organizational culture amidst exponential expansion.

As the panel discussion wrapped up, Blachek emphasized the need for operators to understand their leverage when engaging with private equity partners. By remaining open to alternative opportunities and maintaining control over negotiations, operators can maximize their bargaining power and secure mutually beneficial deals. Despite the allure of rapid growth, Blachek’s experience serves as a reminder of the importance of preserving organizational values and culture amid aggressive scaling endeavors.

In conclusion, the insights shared by Moore, Federico, and Blachek underscore the multifaceted nature of M&A in the fitness industry. By navigating the complexities of deal-making, prioritizing operational excellence, and maintaining a strategic approach to growth, fitness operators can harness the lucrative opportunities presented by the evolving landscape of the HALO sector.