WellBiz Sale to KSL Capital was a Long Time Coming
Jeff Jervik is CEO of WellBiz Brands.
It’s been a long wait for Jeff Jervik, CEO of WellBiz Brands, and his management team to turn around their two chains, Fitness Together and Elements Massage, and get them sold. After seven years of heavy lifting, KSL Capital Partners purchased WellBiz this week for undisclosed terms, and will pump in growth capital.
“To get through a difficult time, and then find a new group of investors that are excited about this—it’s a win for management, and it’s a really big win for all of our franchisees,” Jervik says. “I think we’re going to get a huge boost of momentum from this.”
Jervik joined the chain in 2008, tapped by Enhanced Equity Fund, its private equity owner until this sale, and charged with keeping the chains growing for 18 to 24 months and getting a quick sale.
But he ended up in an all-out fight for survival when the market crashed that fall, convincing his new bosses to believe he could turn the company around, he told Franchise Times in a cover story in October 2012.
“The only option for the private equity group was to throw the keys on the table, right, and say, Let’s call it a day,” Jervik told Franchise Times, but he begged for more time. “Both parties, both the lender and the private equity group, gave us the runway that we needed to take it from this survival mode to stabilization.”
Jervik praises Enhanced Equity Fund for its patience, and says they even approved an acquisition last fall of FIT36, a new Denver-based brand of fitness studios featuring 36-minute workouts that is a growth vehicle for WellBiz.
Elements Massage is in a growth mode, too, Jervik says, with 250 locations slated to be open by the end of this year. Fitness Together, its original brand, has 179 locations, much lower than its peak but stabilized. He has high hopes for FIT36. “That is going to be a huge success,” he says.
KSL Capital Partners is based in Denver, as is WellBiz, which makes for easy and frequent conversations. It took only 30 days, Jervik says, from meeting the partners there to deal close, a remarkably short time.
KSL owns properties in travel and leisure, including St. Regis Monarch Beach in California and Squaw Valley and Alpine Meadows ski resorts.
Jervik will stay on with the new ownership, he says. “We haven’t had the capital that we would have liked to have, but with KSL it gives us the opportunity to do some things that our franchisees are excited about.”