The restaurant industry’s largest franchisee and the operator of about one-fourth of the Applebee’s chain is diversifying into the fitness business through the acquisition of 37 Planet Fitness gyms.
Simultaneously, Flynn Restaurant Group announced that it was changing its name to the Flynn Group, in keeping with a plan to expand its fitness portfolio and branch into other industries that rely on franchising.
Terms of the Planet Fitness deal were not disclosed, but Flynn Group described it as “a significant investment.” The purchase from Alder Partners, a Planet Fitness franchisee since 2007, marks the Flynn Group’s first venture outside of the hospitality business.
The company operates about 2,600 restaurants worldwide. About 2,300 are in the United States, according to Flynn Group’s website. It states the privately held group’s annual revenues at $4.5 billion, which puts it high on any ranking of restaurant operators by sales.
In addition to about 440 Applebee’s restaurants, Flynn Group’s domestic holdings include more than 900 Pizza Huts, 360 Arby’s units, 280 Taco Bells, 190 Wendy’s restaurants and 125 Panera Breads.
The company diversified geographically earlier this year by acquiring master franchisee rights to Pizza Hut and Wendy’s in Australia.
Flynn Properties, a separate entity affiliated with Flynn Group CEO Greg Flynn, operates about 115 franchised hotels.
Flynn Group is organized as what the CEO terms a state-and-federal system. Each brand functions as a business unit, with its own management team and considerable latitude on strategy, according to Flynn. The umbrella company provides key corporate functions, such as financing and personnel recruitment.
True to that model, the Planet Fitness operation will retain the leadership team that ran it under Alder. Stan DeMartinis, Jr., Alder’s founder, will serve as brand president.
The gyms are concentrated in Atlanta and Boston.
Greg Flynn described the deal as the start of a third chapter for Flynn Group, which he founded in 1999. The first phase focused on building the company’s Applebee’s holdings. It is now the largest franchisee by far within that system.
The second chapter was adding new restaurant brands to the portfolio through acquisitions.
“Chapter Three will layer on two new growth channels – international restaurants and adjacent, consumer-facing franchised businesses – such as fitness – to our core domestic restaurant business,” Flynn said in a statement. “We are eager to accelerate growth across all channels.”
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