Mountainside Fitness
Overview
Growing from a single club gym offering free towel service into a fitness empire spanning 21 clubs with over 100,000 members, Mountainside Fitness (“MSF”) has been driven by an entrepreneurial spirit since Tom Hatten founded it in 1991. Unlike traditional gyms, MSF has captured significant market share by delivering exceptional experiences without premium price tags.
The company’s success stems from its unwavering commitment to five core pillars: all-day group fitness, convenient childcare, meticulous cleanliness, friendliness, and its signature free towel service. This unique approach has earned MSF industry-leading brand scores and unit economics, allowing members to enjoy amenities typically found in high-end fitness clubs at significantly more accessible prices.
“Partnering with GSP in 2024 has proven to be pivotal in driving continued momentum for our business; through their deep expertise with founder-led and multi-unit businesses, we have been able to accelerate growth while staying true to our core values.”
The Journey
Within the fitness industry, many mid-tier operators have become complacent, failing to invest in maintenance and innovation. Mountainside Fitness has broken away from traditional High Value Low Price (HVLP) concepts, positioning itself in the “sweet spot” of premium value—offering superior services and amenities comparable to Premium concepts at a mid-tier price point. Premium services and amenities include Cold Plunges, Red Light Therapy, Childcare, Personal Training, Massage Chairs, Saunas and Steam Rooms and group fitness.
In August 2024, Mountainside Fitness partnered with GSP to accelerate growth through strategic investments in capital expenditure, G&A, data, talent, technology, and marketing. GSP’s track record of partnering with founder-owned businesses in multi-unit consumer services made them an ideal partner to guide MSF through its next growth phase.
Since partnering with GSP, Mountainside Fitness has undergone operational improvements focused on professionalizing the business and enhancing organizational structure. Within the second month of partnership, the company collaborated with GSP Operating Partners to transform its marketing approach, focusing on digital marketing performance and optimizing strategies across all funnel stages. These initiatives, coupled with the hiring of both a new Chief Marketing Officer and Director of Digital Marketing, have driven impressive results.
With access to additional capital, the company has also made substantial progress in optimizing its club maintenance and remodel processes. The team developed a comprehensive CAPEX project tracking system, enabling more efficient bulk purchasing of materials and equipment. To further fuel expansion, MSF and GSP hired a VP of Development and VP of Construction to manage, oversee, and operationalize existing club remodels and new unit builds.
MSF has strengthened its leadership structure by building a best-in-class board of directors, bringing together diverse executive experience from multi-unit operations, fitness, and marketing sectors. This enhanced governance structure includes industry veterans such as the former CMO of Activision Blizzard, the former CFO of Vasa Fitness, the CEO of Red Lobster, and other notable executives with relevant expertise.
The Results
As a founder-owned business, MSF needed to accelerate growth while maintaining its premium value positioning.
GSP helped implement thoughtful long-term investments in capital expenditure, G&A, data, technology, and marketing, resulting in new member joins and impressive same-store sales growth.
The management team was strong, led by industry veterans, but was underresourced for accelerated growth.
GSP helped Mountainside Fitness bolster its corporate infrastructure by adding key positions including CMO, Director of Digital Marketing, Director of Financial Planning & Analysis, VP of Development, VP of Development, VP of Construction, IT Administrator, Controller, and other support staff for new unit buildouts and remodels.
MSF’s marketing spend remained flat over the past several years despite increasing unit count, representing about one-third of its peers’ spending, despite stronger unit economics.
GSP provided capital solutions and marketing expertise through board members, enabling MSF to optimize its digital marketing strategy and double marketing spend, driving significant membership growth.
The mid-tier fitness segment was struggling as legacy operators became complacent, creating a need for differentiation in the market.
MSF has defined the premium value space by maintaining superior services comparable to premium concepts and continuously re-investing back into existing clubs while offering competitive pricing. The company has particularly excelled in providing comprehensive childcare services, extensive group fitness classes, and medical/insurance offerings that many competitors have scaled back due to operational complexity.
Future Outlook
Looking ahead, the premium value fitness segment continues to show significant opportunity as consumers seek high-quality amenities at accessible price points.
Mountainside Fitness continues to expand its footprint within the Scottsdale-Phoenix MSA. The company has identified several M&A targets in tangential markets and added construction and development resources to support expansion plans. With its differentiated offering in childcare, group fitness, and medical/insurance programs, MSF maintains the highest customer satisfaction among Phoenix competitors and is well-positioned for continued growth.