Restructuring a fitness franchise: Operational review and strategic turnaround
Restructuring a fitness franchise: Operational review and strategic turnaround
| Industry | Healthcare, retail |
| Services provided | Business review, financial modelling, scenario planning, debt advisory |
Key learnings
- Early intervention is critical: This case underscores the value of early intervention in identifying issues before they escalate
- Operational improvements drive recovery: Such as cost reductions and site closures, were key to stabilising the business
- Scenario planning supports decision-making.
A lender approached BDO regarding a fitness franchise experiencing declining membership and performance. The business had stopped making interest and principal repayments.
BDO was engaged to:
- Conduct a full review of business operations, market position, and financials
- Evaluate the company's cash flow and forecast model
- Assess restructuring options: cost savings, staff reductions, location closures.
Following an assessment, the team determined that the business was viable with proper restructuring.
Strategy and restructuring path
Our approach included:
- Operational and financial performance review
- Budget rebuild with updated assumptions
- Financial modelling to test restructuring scenarios
- Identified and provided recommendations to close underperforming sites and reduce operating expenses, including administrative and marketing costs.
Outcome
The lender used our report and ongoing advisory support to implement targeted operational improvements. The business continues to operate under a more sustainable model and is in the process of refinancing.