F45. The customer wasn't the member.
F45 was the world's fastest growing gym chain. It went public at 1.4 billion in 2021, and 18 months later the stock had fallen 97%.
THE GIST ON F45: "Burn Rate"
What was F45?
One of those small group gyms that exploded out of nowhere. It started in Sydney in 2013. By 2021 there were over 2,000 studios across 63 countries. It was culty: packed classes of bros high-fiving at six in the morning. It went public on the New York Stock Exchange at 1.4 billion dollars, with Mark Wahlberg on the cap table.
What was the real product?
The franchise. The cult community was just the marketing for that. The actual customers were people with 300,000 dollars looking to own a gym. F45 sold them the equipment, the training, the daily workouts and a bank loan, and once the franchise opened it took a cut of the revenue forever.
What went wrong?
The model rolled and rolled while interest rates were low. Then in 2022 they went up, and F45 lost a 250 million dollar financing facility it had set up. The gyms stayed open, but F45 did not.
Who is the customer, really?
For most brands you love, you're not the customer. For Google, it's the advertiser. For McDonald's, it's the franchisee. For F45, it was the franchisee with a 300,000 dollar bank loan. The members kept turning up, and it couldn't save them. It's only when the tide goes out that you see who's been swimming naked.
Would you join a trendy gym or stick with a normal one?
Your take. One tap, then see how everyone else voted.
Quick answers
What did F45 actually sell?
The franchise: equipment, training, daily workouts and a bank loan to people with about 300,000 dollars looking to own a gym.
What caused the collapse?
Interest rates rose in 2022, and F45 lost a 250 million dollar financing facility.
Who was the customer?
The franchisee, not the gym member.
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