Jeff Skeen can’t seem to be able to get out of the gym business.
It started as kind of a lark — he and two of his high school buddies from McLean’s Langley High School decided to buy a Gold’s Gym franchise in 1992. By 1998 they owned 11 Gold’s Gyms and were the largest franchisee in the company; by the next year, Skeen had raised capital to purchase Gold’s Gym International, which he sold in 2004.
“At that point, I told my wife I was getting out of the business … but I lied,” Skeen said.
Last year Skeen began thinking it might be a good time to try it again — after all, back in 1992, there were about 10,000 gym operators in the company; now there are about 30,000.
So Skeen founded Titan Fitness LLC in McLean with the thought of buying up Gold’s Gyms in a particular area, expanding where needed, and even buying out other mom-and-pop gyms and converting them to Gold’s.
The group currently has 14 gyms, with six in Raleigh and eight in Minneapolis. With its most recent round of funding — an undisclosed sum led by Boston firm WestView Capital, the company has agoal of opening or acquiring 60 locations over the next five years. Currently, the Gold’s Gym chain has 400 gyms.
Titan plans to spend between $40 million and $50 million in each market, buying and upgrading facilities.
The gym business seems to have a hold on Skeen for two reasons — it’s profitable, and it’s an industry in which you can see the tangible effect you have on customers, he said.
“People become members for all types of reasons — someone who has a heart attack can recover and become stronger, or a woman with a troubled marriage can help it by changing how she looks,” Skeen said.
It is not uncommon in a franchise-driven business for one entity to own multiple, even hundreds of stores, according to Liz Sigety, a lawyer in Fox Rothschild’s franchise practice group. “If an operator’s successful, it’s better than gambling on someone new,” Sigety said. “If someone is keeping the quality of the brand high, that reflects well on the system.”
