Crunch Fitness Seeks About $800 Million Backed By Franchise Revenue

The deal and how it would be structured

Crunch is preparing a bond sale secured by the company's franchise revenue, targeting roughly $800 million in total. People familiar with the talks said the deal could launch as soon as next week after initial outreach to investors.

The main $650 million piece targeted at institutions is expected to run for roughly five years on average. In addition, the package features a $100 million private placement note that may be accessed later, as well as a $50 million variable funding line, according to the people.

Pricing, parties and caveats

Early discussions put the five-year bonds at a spread in the 2.3 to 2.5 percentage point range over benchmark rates. Those people also cautioned that terms and structure remain in flux. They asked not to be named because they are not authorized to speak publicly.

Guggenheim Securities is running the deal. A Guggenheim spokesperson declined to comment, and a Crunch representative did not respond to a request for comment.

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Context and what to watch

The gym chain's pricing would likely be compared to Planet Fitness, which last year completed an $825 million whole-business securitization that included a $400 million slice averaging around five years, at a spread of 1.60 percentage points above benchmark rates. Activity in this market is picking up: Pizza Hut began premarketing a new deal on Tuesday, and this week Neighborly completed a $275 million sale.

Established in 1989 in New York, Crunch sold the business to TPG in 2019, and Leonard Green & Partners took a majority stake last year. For investors, the takeaway is simple: securitizations tied to durable franchise systems are back in circulation, and relative pricing versus peers will signal how much appetite there is for consumer-facing cash flows.

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