Are HVLP gyms viable? A case study on EoS Fitness

HVLP gyms - high value, low price - exploded onto the fitness scene, forged out of the cost-of-living crisis. Franchises like Chuze Fitness, Planet Fitness, and Crunch Fitness looked to cash in on the enormous amount of people who simply couldn’t afford gyms anymore. 

The model relies on going big or going bust—width, not depth; popularity, not price.

 When EoS Fitness sought private capital with big promises, it seemed like too big an ask for too small a franchise. Where was the proof? The gym cost only $9.99 per week, and was in four US states.

That was in June.

By August, they had 100 gyms open in 16 locations. The expansion was so rapid that it echoed the rise of big players like F45 and Fitstop. 

Suddenly, EoS Fitness was promising 250 locations by 2030. 

Here’s how they did it.

Reaching 100 locations 

One of EoS Fitness’ most significant accomplishments occurred in August 2024 with the opening of its 100th location in Las Vegas, Nevada. This particular location features the state’s first CryoLounge, offering members access to cutting-edge recovery options. The CryoLounge, with cooling and heating zones to soothe aches and pains, is part of a broader suite of recovery services that have become a hallmark of EoS Fitness’ offering.

Opening the 100th gym is just one milestone in EoS Fitness’ long-term strategy. The company plans to operate 250 gyms by 2030, and 2024 has proven to be a pivotal year in that expansion. In the second quarter alone, EoS opened five new gyms across Arizona, Utah, Florida, and Texas, with new locations planned for San Antonio, Austin, and several regions in South Florida. This quarter also saw EoS investing over $3.5 million in upgrading existing gyms.

Giving the people what they (actually) want 

EoS’ Las Vegas location shows a new vision for gym goers - giving people what they actually want. Recovery features heavily, and according to a recent member survey, options like the CryoLounge have been some of the most praised amenities.

The Las Vegas gym also features signature spaces like The Tank, equipped with Hyperice percussion massagers and Normatec compression boots, and personalized workout experiences through the EoS Smart Strength Equipment powered by EGYM.

In 2024, the company invested $16 million to improve its gyms, adding high-tech recovery spaces, advanced workout equipment, and new programs.

One brilliant new feature is The Set, explicitly designed for content creation, featuring custom backdrops, mood lighting, and specialty playlists, catering to the Gen Z demographic.

In addition to The Set, the introduction of the EoS Smart Strength Equipment (powered by EGYM) offers interactive, personalized strength training that adapts to individual fitness goals. Assisted stretch programs, available at some locations, allow members to benefit from professional-grade recovery services.

EoS Fitness’s philanthropic efforts and partnerships have also supported its growth. In the second quarter of 2024, the company partnered with the American Diabetes Association® to raise awareness of the importance of fitness in managing diabetes. It also renewed its partnership with Project 150, a nonprofit supporting homeless and disadvantaged high school students.

Securing private capital 

Behind EoS’ aggressive growth plan lies strategic financial backing. In June 2024, the company sought private capital, with Jefferies Financial Group reaching out to investors to secure at least $100 million in fresh funding. This capital injection backs EoS’ continued expansion across key markets. Some lenders think this liquidity boost may mean a future public offering (IPO).

The future of HVLP

The model of HVLP relies on three things:

1. The price being low enough to appeal to an enormous amount of people
2. The majority of those people not showing up 
3. The price being low enough to convince everyone to keep their memberships, even if they never go 

In 2019, a research paper looked at whether the HVLP model passed Warren Buffet’s “Durable Competitive Advantage” test, which looks at a company’s income, balance sheet, and cash flow to determine durability. His method “evaluates the historical consistency in key ratios and trends as indicators of sustainable financial success”.

They examined both Planet Fitness and Town Sports International Holdings as key examples, and neither passed the test. 

Town Sports filed for bankruptcy the very next year, with liabilities in the range of $500 million and $1 billion, but Planet Fitness is still going strong.

The jury is out for whether EoS Fitness will stand the test of time. However, if it continues to cater to the real wants of their members, it could be a trailblazer for the future of HVLP gyms - and a welcome relief for gym goers under severe economic strain.

How Hapana supports gyms like EoS Fitness with rapid expansion

Hapana is a world-class partner for gyms. When we first partnered with giant BFT, they ran just eight studios across Australia. Today, they’ve expanded their reach to over 300 studios worldwide. This growth has been facilitated by Hapana’s turnkey solutions, which include shell sites that enable BFT to open new territories quickly. This approach has cut down the usual time and hassle needed to launch new studios, making it easier for them to scale as fast as they can.

Do you want to stay at the forefront of innovation with a partner built for scaling?