Griffin Gordon can be excused if he sounds a bit worn down these days. It has been a month filled with both business and personal milestones and celebrations for the Chicago-based entrepreneur.
Taurus Capital Partners, the investment company Gordon founded and runs, recently partnered with another private equity firm, Hidden River Strategic Capital, to purchase seven Little Gym locations in North Carolina, South Carolina and Tennessee. The sellers were longtime franchisees the Moore family and Connie Tator, with Richard Moore staying on in an operational role.
And, as if things couldn’t get any more hectic for Gordon, his wife gave birth to their third child just days after the deal was finalized last week.
“Yeah, it’s been kind of crazy around here, but it’s all good. Real good. I couldn’t be more pleased with how it all turned out,” said Gordon, who will take a lead role in overseeing the Little Gym locations in Cary, Greensboro, North Raleigh, Fayetteville and Wilmington in North Carolina, as well as in Mount Pleasant, South Carolina; and Farragut, Tennessee.
Taurus is an operationally focused independent sponsor targeting long-term opportunities in founder-owned, lower middle market businesses. Hidden River’s investment is the first from its inaugural fund, which was raised $245 million and closed in June. The founding partners at Philadelphia-based Hidden River have experience investing in franchised concepts and fitness centers, among other industry verticals.
"This investment aligns well with our firm’s focus on supporting small businesses with flexible debt and equity capital to support their growth initiatives,"said Kevin Condon, Hidden River’s co-founder and partner.
The Little Gym International deal, announced August 17, is a notable event for both the franchisor and the franchisee. By taking over seven existing locations, and with the agreed upon goal of acquiring or opening another 25 locations over the next decade, Taurus and Hidden River, which teamed to form Somersault Holdings, is on pace to become the brand’s largest multi-unit operator.
For The Little Gym, a youth enrichment brand that works with children ages 4 through 12, the agreement is the first time the brand has worked with private equity operators to expand its footprint. The brand now totals nearly 400 locations in 31 countries including Canada, China, the United Kingdom and Thailand. According to Nancy Bigley, the brand’s president, 25 Little Gym locations are on track to open this year, with another 15 locations already in the pipeline.
“It does change the dynamic for us, in a great way, partnering with private equity for the first time,” she said. “We see a lot of white space out there, and having Griffin and the team assembled onboard will be a big help in getting us there. He brings a really great level of business acumen that is exciting and fun to have and it’s up to us to support his efforts to grow his portfolio with Little Gym locations.”
Little Gym’s expansion has not come without growing pains. Parent company Unleashed Brands, whose portfolio of youth enrichment brands also includes Urban Air Adventure Park, Snapology, Class 101, Premier Martial Arts and XP League, has been involved in a series of ongoing disputes with Little Gym franchise operators who formed the Happy Handstands Franchise Association last year to push back on changes in the system.
In June, an arbitrator ruled against former Little Gym franchisees Tiffany and Ryan Cianci, who claimed that Unleashed Brands was making unfair demands of their operation since buying the brand in late 2021. Tiffany Cianci previously told Franchise Times that she refused to sign a document requiring electronic withdrawal of payments that would supersede the franchise agreement, which she called illegal. She helped formed an independent franchisee council to stop others from signing. Her contract was terminated in May 2022.
Seidler Equity purchased Unleashed Brands amid all the unrest, which also includes lawsuits against Premier Martial Arts.
Gordon said after doing his own due diligence, which included talking with the Unleashed Brands executives and franchise operators about the ongoing disputes, he was satisfied with what he heard, and decided to pursue the deal to purchase the seven Little Gym locations.
“It was important for me to hear all sides of the matter and to draw my opinion,” Gordon said. “It became pretty clear to me that everyone is trying to do the right thing. Truth is there is always going to be growing pains associated new business relationships.
“I really believe that over the long term, this deal is definitely worthwhile for my group and for Unleashed Brands,” Gordon continued, adding a big decider for him was having two children enrolled in one of the two Little Gyms open in Chicago. “They are getting so much out of their experiences at the gym, and I really believe you can add 12 more locations easily here in Chicago. There is that much room for growth.”
Asked how The Little Gym is dealing with the disputes with its franchise operators, Bigley admitted it is an ongoing challenge.
“Look, nobody likes it. I certainly don’t,” she said. “So, yeah, it's not fun when your franchisees are uncomfortable, but we are going to continue to work on improving our system. Change is always going to be tough for some operators.
“Look, we are a 46-year-old brand, and our goal is we have to get more consistent on our branding and operations,” Bigley said. “As for me, I will continue to stick with my leadership style which is to listen, to collaborate and to problem solve.”