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Remote gym owner buys franchises for $0

& makes them profitable from the Cayman Islands…

Author

John Franklin
May 24, 2024

What’s up Gym World?

Evan Lindsay is buying gyms for $0 out of pocket and running them from the Cayman Islands.

Here’s the rundown:

The opportunity

Evan opened a CrossFit gym in 2009, which was very early in the movement. And like many owners from that era, he didn’t really know what he was doing.

So, he started working with a business coaching company, and by 2014, he was managing it and continued to do so until 2018.

There are plenty of business mentorship companies today, but back then, options were limited.

However, Evan’s wife got a job in the Cayman Islands during that time. He relocated and ran his gym remotely for a year before selling it, leaving the company, and starting his own consulting business.

Then COVID hit, and things slowed down for Evan. At the same time, he got the itch to start operating again and began looking into different ventures like:

  • Gyms

  • An HVAC company

  • A dive shop

And due to the pandemic, opportunities to buy gyms kept increasing.

Evan had a large network from his time at the gym coaching company, which he could have easily leveraged to make things happen. But that’s not how it played out…

In early 2021, the founders of a budding franchise called MADabolic approached Evan with a unique business opportunity, knowing he was a good operator.

Kirk Dewaele (left) and Brandon Cullen (right) played professional hockey with Evan and stayed in touch over the years.

MADabolic is “the industry’s first and only strength-driven interval training franchise.” Their program features three interval styles based on work-to-rest ratios:

- Momentum (2:1) focuses on athleticism & endurance

- Anaerobic (1:1) focuses on speed & power

- Durability (3:1) focuses on strength & stamina

Most members have a CrossFit background and train 4x a week for 50 minutes per session. It’s a group concept with pricing similar to a CrossFit gym.

They had a struggling franchisee trying to survive the pandemic, with:

  • 44 members

  • Rent exceeding revenue

  • No profits

The owner wanted out and handed the keys to Evan. He saw this as a unique opportunity and decided it was worth the risk.

Read this article to learn how you can mitigate risk during an acquisition.

So, Evan acquired his first MADabolic franchise in Asheville, NC, and grew it to 300 members, bringing in $45k a month by:

  • Building trust with current and new members

  • Fixing the website and automations

  • Cleaning the interior and adding fresh paint

  • Hiring a strong team with a good manager or head coach

Turning a gym around is a slow burn. Evan says he spends $80-120k before the gym gets profitable, which takes up to a year. But considering it costs $450k to build a new MADabolic, it’s like he’s getting these gyms at nearly 80% off.

Plus, by acquiring a gym this way, he spends nothing out of pocket and avoids the risks of starting from scratch.

Since then, he’s acquired three more locations.

Now that he’s done this a few times, he has a strong reputation as a good operator. Every 4-6 weeks, someone asks him to buy their gym.

The key steps to a successful turnaround

There are four things Evan does well when acquiring gyms:

1. Being picky

Evan knows exactly what he wants. While he initially looked for struggling gyms, he now seeks stable MADabolic franchises with at least 125 members. His goal is to get them to:

  • 300 members

  • Average 16 people per class

  • Maintain a payroll of 30%

  • Bring in $45-50k/mo

Growing a stable-running gym is much easier and less work than a turnaround.

2. Doing the boring stuff

Simple fixes can make a big difference when buying an existing gym. Evan focuses on the core tasks that make the gym look and feel good, including:

  • Fixing the website

  • Implementing automations

  • Updating the interior

  • Keeping the Google Business Profile up to date

  • Using high-quality photos

  • Posting consistently on Instagram

3. Finding a good operator

Because Evan handles the marketing and finances, he hires an operator who can focus solely on classes, retention, and member experience.

Scaling gyms as an absentee owner is impossible without a good operator.

He looks for someone who embodies the MADabolic mindset and acts like a gym owner:

  • Ages 27-34

  • Corporate background (understands numbers)

  • Can be the face of the business (trains classes, credible, willing to tackle challenges, aspires to lead)

Evan hopes to find gyms with managers who fit these criteria but haven’t been given the chance to reach their potential.

If the gym doesn’t already have an operator who meets his criteria, he searches for them through:

This approach helps him build a pipeline of candidates.

And once he secures a good manager, he retains them by:

  • Paying $50-90k/year

  • Understanding their career goals

  • Offering personal development opportunities

  • Meeting twice a week with all GMs and one-on-one with each

Evan thinks it’s important to conduct frequent site visits when a gym opens to build trust and familiarity with the team.

4. Mitigating risk

Acquisitions typically come with risks like:

  • Permits

  • Delays

  • Unexpected expenditures

But Evan mitigates these risks by:

  • Finding the right deal

  • Buying gyms at asset value

  • Making the necessary improvements

  • Hiring the right operator

This approach saves him a ton of money and headaches.

TL;DR

While many gym owners struggle with two locations, Evan has scaled to four from another country.

It looks like his strategy requires minimal upfront investment, and he’s not burning out.

Because he's been so successful, he’s consulting other MADabolic gyms and gaining even more acquisition opportunities.

For more insights, be sure to watch or listen to Evan’s full interview on Gym World.

ttyl,

j

P.S. Brandon Cullen, the co-founder of MADabolic, will be on the show next week. You won’t want to miss it.