CEO Mark King is on a mission to revamp the franchisee process and says Xponential will spend next year investing in different brands in new ways
Boutique fitness and wellness franchisor Xponential Fitness outlined its priorities under new CEO Mark King on its Q3 earnings call with investors on Tuesday. Shares of Xponential spiked earlier this year following news of King’s appointment, signaling optimism in the former Taco Bell CEO.
Xponential reported a slight revenue increase to $80.5 million in the third quarter, up from $80.4 million in the prior period, and increased North American system-wide sales by 21% to $431.2 million. The multi-brand franchisor sold 6,209 licenses showing a 9% year-over-year increase.
It has been a year of changes and short-term disruptions for the fitness and wellness franchisor; aside from the swift exit of its founder and former CEO, Xponential sold Row House and Stride Fitness and axed a deal with Kinrgy, Julianne Hough’s dance and fitness platform.
Now having had time to settle into his role at Xponential, King noted, “My feelings haven’t changed at all one hundred days in — this is just a great business model. Once we’ve worked through some of the challenges, I expect our business to become highly profitable and cash-generative at scale.”
One priority for Xponential is improving the franchisee experience, including revamping its recruiting process to attract the most qualified partners and implementing annual franchisee audits to evaluate consistency.
“We need to make operating our studios easier,” King said. “We plan to, by year-end, institute physical operating playbooks for all of our brands, which will include step-by-step instructions on how to open and operate profitable studios.”
King also added that Xponential would spend 2025 “investing in different brands in different ways” than it has in the past. Significantly building out its international footprint is another key initiative for Xponential.
“International is a huge opportunity that I plan to make a core focus,” King said. “I see no reason why Xponential shouldn’t have as many studios operating outside the U.S. as it does domestically.”
YogaSix recently opened its first studio in Germany and is headed to Japan, along with Pure Barre and StretchLab. Club Pilates, Xponential’s most successful brand is also expanding in Europe and Mexico.
