CEO Mark King is on a mission to improve the franchising process and says Xponential will invest in different brands in new ways next year
Boutique fitness and wellness franchise Xponential Fitness outlined its priorities under new CEO Mark King during its third-quarter earnings call with investors on Tuesday. Shares of Xponential surged earlier this year after news of King’s appointment broke, a sign of the former Taco Bell CEO’s optimism.
Xponential reported a slight increase in third-quarter revenue to $80.5 million, up from $80.4 million in the previous quarter, with North American system sales rising 21% to $431.2 million. The multi-brand franchisee sold 6,209 licenses, a year-over-year increase of 9%.
It’s been a year full of changes and short-term disruptions for fitness and wellness franchises; in addition to the founder and former CEO’s swift exit, Xponential sold Row House and Stride Fitness and canceled its partnership with Julianne Hough Deal for dance and fitness platform Kinrgy.
Now that King has had time to settle into his role at Xponential, he noted: “My feelings haven’t changed at all in a hundred days – this is just a great business model. Once we overcome some of the challenges, I expect our business will Become highly profitable and generate cash at scale.”
One of Xponential’s top priorities is improving the franchisee experience, including revamping its recruiting process to attract the most qualified partners and implementing annual franchisee audits to assess consistency.
“We need to make it easier to run the studio,” King said. “We plan to develop physical operating playbooks for all of our brands by the end of the year, which will include step-by-step instructions on how to open and operate a profitable studio.”
King also added that Xponential will “invest in different brands in different ways” in 2025 than in the past. Significantly expanding its international presence is another key initiative for Xponential.
“Internationalization is a huge opportunity and I plan to make it a core focus,” King said. “I see no reason why Xponential shouldn’t have as many studios outside the U.S. as they do within the U.S.”
YogaSix recently opened its first studio in Germany and will be heading to Japan with Pure Barre and StretchLab. Xponential’s most successful brand, Club Pilates, is also expanding in Europe and Mexico.
