Tough Mudder Splits Off Bootcamp Business
Will Dean, founder of CEO of Tough Mudder Inc., announced that the company is in the process of securing a capital investment that will include spinning off the upstart fitness business, Tough Mudder Bootcamp, into a separate enterprise from the well known, action-packed endurance events held across the globe.
Dean will continue to lead the Bootcamp business that was founded in 2010 while also supporting the live event side. Both businesses will remain privately held. “This is absolutely the right strategic move for both businesses,” he said, adding that he hasn’t been involved in the day-to-day operation of the events side of the company for several years.
During an exclusive interview with Franchise Times ahead of the announcement, Dean stressed that the move is essentially “non-news” for existing franchisees who should see no significant changes.
“We want to be able to grow this business, we want to go and do great things and we think that’s best served by freeing up the existing management team,” he said. “We continue to be blown away by how well we’re doing on the sales front, how well we’re doing with the individual units and how high customer satisfaction is.”
Further explaining his rationale for the corporate split, Dean said that the live event side needs a more diligent focus on cost and scaling the business, and that the gym portion may eventually require a strategic alliance within the fitness world to reach its full potential. He was careful to stress that the company is not currently involved in any strategic alliance talks.
“What it does allow us to do is start having conversations and saying might it make sense in a few years time to partner with a European fitness operator and work with them in a strategic way to expand the brand into Europe,” he added.
Dean emphasized that all elements originally included as part of the Tough Mudder Bootcamp franchise business will remain in place for owners, including the perpetual rights to all Tough Mudder branding, the ability to market directly to Tough Mudder event customers, the right to activate for free at all Tough Mudder events and the right to sell Tough Mudder live event tickets, among other elements. The Bootcamp brand has sold 60 units during its first year.
Delving further into the reasons for splitting the business in two, Dean likened the arrangement to Richard Branson’s Virgin empire, which has several diverse arms that are unrelated to each other beyond branding.
“We look at the gym business and say, ‘Wow, we could be Orangetheory in three years time here,’ and are really focused on getting that right,” he said.
While the spin-off includes bringing in an outside capital investment, Dean stressed that separating diverse sides of the company would be a better fit for the management team, rather than for raising capital for the Bootcamp business. Tough Mudder Bootcamp Senior Vice President Cathrin Bowtell will retain her position with the franchised gym brand.
We first brought you the story of Tough Mudder diversifying into fitness a little over a year ago. Since that time, Tough Mudder Bootcamp has opened two locations in the United States with a third coming soon in Houston.