PROGRAM AND SERVICE INNOVATIONS THAT WORK

5 Ways HVLP Gyms Add Value to Their Business Model

Adam Hemmer, managing director of TSG Consumer Partners, shares some of the key qualities that made EōS Fitness worth $1.5 billion.

BY JIM SCHMALTZ

The high-volume, low-price (HVLP) fitness model has long been defined by its accessibility and price point. But those features no longer tell the whole story. Today’s leading HVLP operators are stacking amenities, tightening operations, and capitalizing on favorable market conditions in ways that are redefining what a budget gym can be—and what it’s worth to investors.

Adam Hemmer, managing director of TSG Consumer Partners, is among the private equity investors who see the HVLP sector as one of the most compelling opportunities in the fitness industry. TSG acquired EōS Fitness, a company-owned HVLP chain that Hemmer describes as operating at the leading edge of what he calls HVLP 3.0. This evolving model has become a focal point of investors looking to get into the fitness industry, even with heavy competition in the fitness/wellness category and consumer anxiety about the economy.

“It has not dampened investor enthusiasm to put capital in this space,” says Hemmer about long-term prospects. “If anything, I'm seeing more and more interest from other private equity institutions and public investors. They see all these trends and want to invest behind them.”

Hemmer outlined the pillars driving growth and investment interest in the sector. Here are five ways HVLP operators are creating lasting value for members and investors alike.

Hemmer

“It has not dampened investor enthusiasm to put capital in this space. If anything, I'm seeing more and more interest from other private equity institutions and public investors. They see all these trends and want to invest behind them.” • Adam Hemmer

1. An Unbeatable Value Proposition

At the core of the HVLP model is a membership price that is simply hard to walk away from. EōS Fitness anchors its offering at $9.99 per month—a rate that includes strength equipment, cardio, group fitness classes, personal training access, and recovery services. Hemmer argues that this value-to-price ratio is not just a marketing advantage; it’s an economic buffer.

“I just think compared to the rest of the market, this is probably the place you want to be,” Hemmer says. “The 10 to 30 bucks a month I spend on EōS is something [members] aren’t going to go scrape their budget and say they want to get rid of.”

That stickiness becomes especially valuable during times of economic uncertainty. Hemmer notes that budget-conscious consumers who currently spend $50, $70, or $80 per month at mid-priced gyms may trade down to an HVLP club—without sacrificing much in terms of experience. That dynamic, he suggests, positions the HVLP model to grow its membership base even when household spending tightens.

2. Operational Excellence Through a Company-Owned Model

EōS Fitness operates on a company-owned basis, a deliberate contrast to the “asset-light” franchise structures used by competitors like Crunch and Planet Fitness. While the franchise model generates royalty revenue with less capital outlay, Hemmer contends that the company-owned approach pays dividends in consistency and quality.

“The operational excellence that the team brings, I think, is really the best in the industry,” he says. “I believe we have the best people out there in the field training our new staff members on how to interact with our consumers.”

That operational control also translates to reliable unit economics. Hemmer points to the consistent performance of new EōS openings across geographically diverse markets as evidence that the model and training systems work—regardless of region. For investors, that predictability carries real weight.

3. A Staff Development System Built for Scale

Finding and keeping good people is a challenge for any multi-location operator. EōS has approached this problem with a two-part strategy: creating dense market clusters that generate internal promotion opportunities, and implementing a structured leadership training system called 4DX borrowed from the hospitality industry. [Developed by management consultant company FranklinCovey, 4DX (the Four Disciplines of Execution) were successfully implemented by Marriott Hotels, among other businesses.]

“When you have that density, the benefit is when you’re bringing somebody in to work the front desk or to do sales, if they’re doing a good job and we’re training them the right way, there are loads of other clubs coming online that need field support where if you’re doing a great job, you can get promoted and continue to move on up,” Hemmer says.

The 4DX system, which Marriott credits with improving employee engagement and retention, has been adapted by EōS COO Richard Edgar to fit a fitness club environment.

Hemmer says the result is a workforce culture where long-tenured employees are common—many having worked with the company for 10 years or more—and new hires see a clear path forward from day one.

4. A Favorable Commercial Real Estate Environment

The relationship between fitness clubs and commercial landlords has undergone a significant shift. Where fitness tenants were once viewed with skepticism, due to concerns about parking demand and uncertain staying power, they are now seen as traffic-driving anchors that benefit surrounding retailers.

“Landlords over time have seen the writing on the wall with the amount of traffic that a great fitness center can bring to their mall or their square footage,” Hemmer says. “Landlords are clamoring to get us in.”

EōS has taken advantage of this dynamic by converting large “second-gen boxes”—vacant retail spaces left behind by struggling chains—into fitness clubs. Landlords eager to fill those spaces are often willing to offer favorable lease terms to a proven, traffic-generating tenant. Hemmer says the model works across both large-format conversions and ground-up builds, giving EōS flexibility as it evaluates new markets.

5. Recovery and Amenity Expansion as Competitive Differentiators

The evolution from HVLP 1.0—essentially cardio machines and free weights—to today’s amenity-rich model has been driven by rising consumer expectations. Recovery services, in particular, have become a defining feature of the modern HVLP club, and Hemmer sees them as central to EōS’s value proposition.

“Recovery is one of the most sought-after amenities from a consumer standpoint that we get asked about at EōS and, really, across the board in fitness,” he says. Cold plunges, percussive therapy tools, and other recovery modalities are now included as part of the core membership—not as premium add-ons.

EōS has built flexibility into its physical footprint to allow for amenity rotation. As new recovery or wellness technologies emerge, the company can swap out existing equipment to keep its offering on what Hemmer calls “the bleeding edge.” The same logic extends to programming: hot yoga, HIIT classes, and other modalities now fill space that once went unused.

“Now you’ve got all this extra offering for essentially the same price or cheaper,” Hemmer says, “and you’re getting a large percentage of what you might be able to get in an extremely premium gym still for 30 bucks or less.”

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