Eastwood Capital, Backed by BlackRock, to Open 70 Retro Gyms in Communities of Color | Franchise News
James Collins is the first franchisee to invest in Retro Fitness as part of Project Lift, with partners Eastwood Capital signing an agreement to open up to 70 gyms in communities of color in the Dallas, Houston and Southeast markets of Florida. Through Project Lift, Retro Fitness aims to open 500 gyms in 50 black and brown communities over the next five years.
There is an opportunity, Collins said, to focus development in “working-class and middle-class black and brown communities” to help address what he noted as “one of the biggest determinants of health” – access to health and well-being resources. The obesity rate in the United States reached 42.4% in 2018, according to the most recent data from the Centers for Disease Control and Prevention. Black and Hispanic populations exceed that national rate, at 49.6% and 44.8%, respectively, and the two groups each make up less than 13% of fitness club members.
“So by bringing these accessible and affordable fitness centers into these communities, we hope to help improve those outcomes,” said Collins, founding partner of Eastwood Capital. Retro Fitness, which describes itself as a high-value, low-cost franchise, has more than 120 locations and membership plans start at $19.99.
Although his private equity firm is based in New York, Collins said he is setting up a headquarters in Houston to grow and support his Retro locations, with the goal of hiring from the community there and around the world. gymnasium level to also “do our little part to close the pay gap. The McKinsey Global Institute reported that the median annual salary of black workers is about 30%, or $10,000, lower than that of white workers.
Collins, whose career includes stints at Roark Capital and Bain & Company, formed Eastwood Capital in 2012, investing his own money and raising funds on a case-by-case basis with a focus on middle-market investments in services to consumers and businesses. The deal with Retro Fitness is its first deal with institutional support, as Eastwood has partnered with financial giant BlackRock through its BlackRock Impact Opportunities Fund. The new fund, which BlackRock announced on May 11, has secured more than $800 million in initial commitments toward a $1 billion goal and invests in “companies and projects owned, directed by, or serving people of color, with particular emphasis on Black, Latino and Native American communities.
Eastwood Capital is among the fund’s first three investments. The partnership, Collins said, grew out of his relationship with Ladell Robbins, managing director of BlackRock Alternative Investors. “This type of deal…is pretty much an ideal fit with what they’re looking to achieve,” Collins said.
Retro Fitness Initiative on “Lifting Communities”
Project Lift is the brainchild of Retro Fitness CEO Andrew Alfano, who joined the West Palm Beach, Florida-based company in 2019 after spending most of his career as regional and senior vice president. at Starbucks.
“Part of getting on board, it wasn’t just going to be another job,” said Alfano, who between Starbucks and Retro Fitness was president of The Learning Experience. “It was, I wanted to build a company with a purpose and a mission.” There is a “disparaging difference” in access to fitness options within black and brown communities, and the goal of opening 500 gyms in target cities across the country is to “uplift people, lift spirits and uplift communities,” he said.
Retro Fitness has a “strong preference” to bring in franchisees of color through Project Lift, but it’s open to all investors and incentives include waiving franchise fees and 50% off first-year royalties. The investment range to open a Retro Fitness is $1.8-2 million.
Beyond developing gyms, Project Lift is asking Retro Fitness to donate tens of millions of dollars to nonprofits and community organizations, in partnership with the local operator. “We’re really going to engage with those communities,” Alfano said. “We give back to organizations in these communities throughout the life of the business.”
Alfano added that Retro Fitness also plans to launch programs and events to promote mental health, nutrition and general wellness, and has partnerships with former chefs from the Culinary Institute of America – Alfano is a board member of administration – and Sadhguru, a world renowned yogi.
Project Lift, Alfano pointed out, “is not an inner-city program,” and Collins noted that he sees black and brown communities as ideal markets for investment that are often overlooked.
“I know how fertile these markets are,” Collins said. “There are many, many working-class black and brown consumers who can and are willing to spend on quality fitness options.” He also hopes to set an example for other black and brown-owned businesses, and “show investors that you can make money supporting black and brown people.”