Halo are pleased to introduce our latest client showcase: Fitcomm Ltd, the owners of a F45 gym franchise that were supported by over £300k funding through Halo as a brand new startup.
Overcoming huge upfront costs, inflexible lenders and a lack of knowledge and experience as business owners in the fitness industry, this is a true success story and one that startups everywhere will empathise with. Read on to hear Fitcomm’s story.
F45 is one of the fastest growing fitness concepts in the world. Having been hugely successful in Australia, F45 launched in the US and is now growing exponentially in the UK. Globally the brand has grown to over 1,300 studios in just 6 years.
As Fitcomm Ltd owner Rene Swart explains,
“What’s different about F45 is that by becoming a member you become part of a global fitness community. All F45 gyms run the same classes on the same days, and a class is never the same twice. Each gym specialises in innovative, high-intensity group workouts that are fast, fun and proven to get rapid results for members, burning up to 1000 calories per session. The sense of community in our gym is just incredible.”
Fitcomm Ltd opened the doors of it’s brand new gym in Holloway Road, North London in February 2019 after a two year journey filled with highs and lows.
An incredible opportunity to start their own business
Rene and her business partner Hanri Van Der Merwe were introduced to F45 after taking a class at one of their other London gyms. The experience was so good that they started investigating the possibility of starting their own F45 and within a few short months they found themselves at an introductory ‘speed-dating’ style event for prospective owners in London.
Anticipating an investment of around £200k to get the business up and running, after careful deliberation and detailed financial planning, Rene and Hanri were confident they could get their new gym off the ground and they signed up as new franchisees.
The reality sets in – they need more money!
The concept behind F45 is a cutting edge, community-based and technology-led gym experience. Members pay a premium rate to belong to the gym and as a result the user experience has to be 100% perfect. A good location, high standard of fit-out and the latest gym equipment are all must-haves. Despite knowing this at the outset, the real-world cost of these requirements became a major reality check for Rene and Hanri.
“It was a hugely exciting and overwhelming time for us,” explains Rene, “but we hadn’t anticipated just how complex or expensive the project would be. The £200k we had scraped together between us just wasn’t going to be enough”.
Rene had already started applying for finance and had been successful in securing a £40k unsecured loan from her bank in addition to finance for the gym equipment up to £65k. But there was a problem. Despite securing an additional investor and the owners collectively putting in £130k of their own cash, the bank lending was insufficient to help Fitcomm secure and fit out premises and open the gym. Additionally, the gym equipment supplier needed to be paid before the equipment was shipped from Australia, but Rene’s bank would not release funds until the equipment was on site at the gym. It was an impossible situation and one that threatened to derail the entire project.
Halo stepped in with an innovative funding solution
It was at this point that Fitcomm were introduced to Mark O’Connor at Halo. Working with funder Asset Advantage, Mark was able to structure a £65k loan to pay the equipment supplier before the equipment was shipped from Australia – it would be another 2 months before the equipment was then installed at the gym.
Mark was also able to arrange a further £250k to cover the fit out of the gym premises in Holloway Road, and this combined with the original unsecured loan from Rene’s bank and the owners’ equity was enough to ensure that Fitcomm could cover all their expenses and get the gym doors open to customers by February 2019.
“Working off the financial projections given to us by F45, it turned out that our original expectations for the financial cost of getting our new gym off the ground were way too low. If we hadn’t secured the funding through Halo the project would have been a non-starter, but we always knew it could be a huge success. Today we have a top of the range gym offering a pioneering fitness concept and we have been able to break even against our monthly expenses after only 5 months of trading.”
Speaking about the solution Halo were able to offer Fitcomm, senior broker Mark O’Connor said,
“What Halo loved about Fitcomm was the owners’ passion and drive right from the outset. Despite not having direct experience as business owners in the fitness industry, they had a good knowledge of their chosen field and all had successful careers in their respective fields. All Fitcomm directors showed a huge commitment to the business, putting up a large amount of their own cash as shareholders’ equity and each signing directors’ guarantees backed by home ownership. Combined with the fact that F45 is a huge, growing global brand this became a story that was an attractive opportunity for the right lender, which in this case was Asset Advantage.”
Expertise in startup and franchise funding
Halo has many years of experience helping startups and franchises get their businesses off the ground. If you are in need of additional funding to start or grow your business, pick up the phone and call us on 0345 450 1966 or email firstname.lastname@example.org today.