Xponential Fitness, Inc. XPOF has set its sights on Japan for an ambitious journey, having recently signed a Master Franchise Agreement with the esteemed Sunpark Co. Ltd. This monumental agreement aims to extend the reach of the Pure Barre and YogaSix brands in the Land of the Rising Sun.
This strategic move further bolsters XPOF’s footprint in Japan, adding two more brands to the lineup, standing alongside the likes of Club Pilates, CycleBar, Rumble, AKT, and StretchLab. With a minimum of 50 franchised studios set to open for Pure Barre and YogaSix, Sunpark’s extensive real estate and development prowess are poised to propel the growth trajectory of Xponential Fitness.
This game-changing venture is the latest addition to XPOF’s international portfolio, following the recent successful introduction of StretchLab in Tokyo during July 2023. The company looks forward to the upcoming launch of Pure Barre and YogaSix in 2024. This newfound collaboration marries Sunpark’s proven track record in Japanese and Asian expansion with Xponential’s deep-seated expertise in boutique fitness.
Pure Barre and YogaSix’s Footprint Expansion
The agreement with Pure Barre marks the brand’s maiden foray into Asia and symbolizes the continual global expansion of Xponential Fitness brands. With operations in 23 countries across North America, Europe, Asia, the Middle East, and Australia, XPOF has been fervently expanding its international presence. The company’s first international agreement for Germany materialized earlier in 2023 with the existing Master Franchisee of Club Pilates in the country.
Globally, YogaSix already boasts nearly 200 open studios, while Pure Barre proudly flaunts a staggering 640 open studios, showcasing the impressive might of XPOF’s global presence.
Xponential’s Unrestrained Expansion Phenomenon
Xponential has solidified its place as one of the foremost global franchisors of boutique fitness brands, experiencing robust demand for its brands beyond North America. The company’s resilience in growth is underpinned by the emergence of new studios opened by its franchisees and additional business in existing locations.
As of Sep 30, 2023, Xponential had a global presence of approximately 2,980 studios and a staggering 6,088 licenses sold across its 10 leading fitness brands. Its expansion efforts are evident in the quarter-over-quarter spike of franchise revenues by 21% to $36.4 million as of the third quarter of 2023.
The company’s relentless expansion initiatives are manifest in the commitment to open 1,000 studios under its master franchise agreements.
Image Source: Zacks Investment Research
Shares of XPOF have declined by 27.7% in the last six months, diverging from the Zacks Leisure and Recreation Services industry’s 7.2% decrease. Despite this setback, Xponential’s strategic expansion initiatives are expected to amplify its impact in the current high-cost environment.
Zacks Rank & Key Picks
Xponential holds a Zacks Rank #3 (Hold).
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