Clever Fit GmbH (BFIT) Earnings Call Transcript & Summary

Good day, and welcome to today's Basic-Fit and Clever Fit Transaction Conference Call. My name is Serge, and I'll be your coordinator for today's event. [Operator Instructions]. And now I'd like to hand the call over to Richard Piekaar, Head of Investor Relations. Please go ahead, sir.

Hello, thank you, and good afternoon, everyone, and welcome to our analyst and investors call. After the announcement this morning that we are in the process of acquiring Clever Fit, Europe's largest fitness franchise. With me today are CEO, Rene Moos; and CFO, Maurice de Kleer. Rene will start by giving a brief explanation of the synergies between our two organizations, followed by some more general facts about the transaction, and Maurice will then walk us through a brief explanation of the financing and will provide some updated guidance to the market. I would like to remind everyone that safe harbor applies. And with that, I'll hand over to you, Rene.

Thank you, Richard. Hello, everyone, and welcome to today's call. This morning, we announced that we signed an agreement to acquire Clever Fit, the largest franchise chain in Europe and the leading fitness operator in the DACH region. Franchising, as we have discussed in previous calls, is something Basic-Fit has been exploring since our Capital Markets Day in 2023. There, we announced we had three different paths to franchise, of which one was buying an established franchise operator. We are very proud that we could announce today that we have been able to acquire the leading franchise fitness chain in Europe, a unique opportunity we have been able to grab with which we are making big steps in the execution of our long-term growth strategy. This acquisition is a transformational for Basic-Fit's business model. But let me be clear, we are not moving away from our owned club growth model. We are instead adding on, creating a dual growth engine, introducing franchise management capabilities alongside our owned club platform. That combines capital-light expansion with operational know-how. But today is just the first step in an exciting journey for our two organizations. We are a great strategic fit. We have a compatible DNA, an entrepreneurial mindset and a scalable club concept in value-oriented fitness. With an enhanced geographic footprint, Basic-Fit becomes the immediate market leader in Germany, Europe's largest fitness market, while establishing a strong presence in Austria and Switzerland and a scalable platform for further expansion in Central Eastern Europe. With the combination of Clever Fit's winning franchise know-how and Basic-Fit's technology stack, award-winning marketing experience and extensive real estate experience, we are a perfect fit to consolidate our European market leadership. The Clever Fit footprint includes 7 countries. The strongest presence is in Germany with 406 clubs, followed by Austria with 48 clubs. Switzerland has 20 clubs; Slovenia, 15; Romania, 2; and finally, the Czech Republic and Croatia with 1 club each. Some 454 clubs are franchise clubs, while 39 clubs based in Germany and Austria are owned Clever Fit clubs. In total, Clever Fit has around 1 million members. Let's turn now to our new geographic footprint. With this acquisition, our footprint expands by 6 countries, taking us into new markets where fitness penetration is still low and where we know Basic-Fit can help increase the fitness penetration rate as we did in our other countries before. By expanding through franchising, the growth model becomes even more capital efficient, creating a network of over 2,150 clubs and more than 5.7 million combined members. Basic-Fit can call itself the true pan-European fitness leader. In 2024, Clever Fit had revenue of approximately EUR 50 million, with an underlying EBITDA less rent of EUR 14.5 million. The implied multiple we are paying is quite low compared to the recent transaction involving franchise change in the fitness industry. This is especially true when considering the upside potential we aim to unlock through our technologies and expertise. Moreover, it does not yet account for the strategic value of acquiring a franchise platform and establishing ourselves as the market leader in Germany. It is, therefore, a unique opportunity that we have been able to seize. With 454 franchise clubs, franchisees paid fees of mid-single digits. In addition to these existing franchisees, there is a waiting list of some 150-plus entrepreneurs who are keen to open clubs in their respective countries and towns and many requests of new franchisees coming in on a continuous basis. On average, each Clever Fit club has approximately 2,000 members. When looking at the net fitness area, around 90% of the Clever Fit clubs are similar in size to basic fit clubs. This presents significant potential to increase membership levels and consequently, revenue and profitability. We also have a proven track record of achieving such growth after acquisitions. Subject to fulfilling customary closing conditions, we anticipate this transaction will close before year-end 2025. And with that, I will hand it over to Maurice to discuss financing and updates on our 2025 outlook.

Yes. Thanks, Rene. The acquisition of Clever Fit is an exciting opportunity for us and combining our strength and capabilities will help all of us reach our future goals faster. Let's now discuss the financing for this transaction. Fully supported with committed financing from ABN AMRO, ING Bank and Rabobank, the financing covers the all-cash purchase price of EUR 160 million at closing, plus a potential EUR 50 million earn-out over a 3-year period. This loan matures in June of 2028. Looking ahead to 2026, we remain well financed and are confident in our ability to comfortably meet any potential redemption requests from convertible bondholders in June 2026, while maintaining ample liquidity. At our Q3 trading update, we reiterated our guidance for the year. With this transaction, however, there will be a few changes. Let's first discuss what will stay the same. First, we expect revenue of between EUR 1.375 billion and EUR 1.425 billion and underlying EBITDA less rents of between EUR 330 million and EUR 370 million. Furthermore, we continue to anticipate that we will have a positive free cash flow in 2025. And finally, we expect overhead, including marketing costs to decrease to between 11.5% and 12% of revenue. Now what will change? In light of this acquisition, we will limit our owned club growth this year to 86 Basic-Fit clubs. When we account for the acquired owned 39 Clever Fit Clubs, our growth total for 2025 will be 125 clubs. Looking ahead to 2026, we will decrease our own club openings to approximately 50 clubs. This is so that we can concentrate on leveraging our new franchising platform, ensuring that we are off to a great start. Additionally, we will also focus on our existing Basic-Fit clubs, continuing the improved profitability and member development that we have seen in the first 9 months of this year. While not in our guidance, we do expect to close this year with a leverage ratio just below 3x -- 3.0x. And in 2026, we anticipate a target ratio just above 2x. Today, we laid the foundation of Basic-Fit 3.0, and we look forward to sharing more information about our vision for the future at our Capital Markets Day on the 23rd of April 2026. And with that, I'd like to conclude our presentation and would like to now open it up for questions.

[Operator Instructions]. Our first question comes from Kris Kippers from Degroof Petercam.

A couple of ones looking on the new composition indeed. Firstly, if you look at the new enlarged group going forward with this low margin, of course, business you now acquired logically, given that it's franchise. Could you share with us the synergies that you could reach, meaning looking at ICT, for example, going to the headquarters in the Netherlands. Secondly, looking at the joint purchasing because, of course, optically, it's a franchise business. So could you share with us what this brings going forward? Secondly, could you share with us the reason to sell from the sellers, because of course, we see that in the last couple of years, the number of clubs have not been grown. Actually, they decreased a little bit. So I was wondering what happened there? And then thirdly, if you look at Germany, is it fair to assume that Germany will more become a franchise model, or will you have both models next to each other? Those are my 3 questions to start.

Okay. Yes. Well, the synergy is something we will come back on April 21st because we first have to close the deal and then inform the franchisees and discuss all the options with the franchisees, and then we can come back to you on April 21st next year. But for sure, we do see a lot of synergy advantages for us, but also for the franchisees. Your second question, the reason to sell, not sure. It was not for sale. The first time I contacted Alfred, the owner, was in May 2019, if he was willing to sell. And we -- of course, after that, we had the corona period. If you look at this year, we first visited all the clubs. So we did a very thorough due diligence visit all the clubs in all the countries in Q1 and started the discussions with Alfred, the owner of Clever Fit. I must say it was not for sale. So we actually reached out to him and start discussing. There was a very good click between him and our team and his team. And yes, that ended up finalizing Friday evening -- last Friday evening. And we are very enthusiastic and happy with this acquisition. And yes, and the 100% owner Alfred is, yes, I guess, also enthusiastic, otherwise, he wouldn't have signed. If you look at Germany, the question about if it's going to be more or less franchise. Again, if you look at it now, we have more than 400 franchise clubs. And currently, we have 44 owned clubs. So yes, if you look at it today, yes, it is logical to say it will be more franchise than owned clubs. But again, we first have to close the deal, then inform the franchisees, discuss all options with them, and then we inform you again April 21st next year.

Our next question is from Marc Zwartsenburg from ING.

Rene, can you share with us a bit more detail on what you have agreed with Clever Fit in terms of in the future rebranding to Basic-Fit, membership structure, investments that are needed potentially by the franchisees. Can you share a bit how this -- how the further will be integrated in the Basic Fit franchise basically?

Yes. Well, that's a logical question, but I cannot answer this. We first have to close the deal. That's step one. And then we have to discuss everything and inform the franchisees and discuss with them all the options that are open. If you're looking at there are 2 big options, keeping two brands or going to one brand. So that's the first discussion that is on the table. But that we will take the coming months to discuss with the franchisees and with Clever Fit management, and then we'll come back to you. That's why we also changed the same day date, not end of this year, but we changed it to April 21 next year because by that time, we have talked to everybody we want to talk to.

And how many franchisees are within the group?

165 around.

65?

165.

165. So you have to discuss with 165 people. What if 100 say, yes, we want to rebrand and the other 65 don't. How would that work? Can you give us a bit of an idea?

Well, we come back to you on April 21st.

Okay. And in terms of future investments, so these gyms at some point, they run out of the equipment contracts, they need to be refurbished potentially. But the CapEx is for the franchisees. Is that how it would work? Would you have to ask them, or will there be a joint effort in terms of investing in those gyms? How would you see that? Because normally with the franchisees with them, but can you foresee another structure?

Well, it's clear they have contracts, and in those contracts, so you have contracts of 20 years old, you have contracts of 5 years old. So these contracts vary a little bit. But it's clear that if there are investment to be made in those clubs, yes, the franchisee will pay that cost. It's just a normal franchise contract, right? So it's nothing different than the contracts of, let's say, Planet Fitness or something like that. So it is clear that you have the franchisor that is helping with the marketing, the IT and so on. And then you have the franchisees who's doing the investment and pays a percentage of their turnover for the franchisor.

And are they going to use your technology? Because you mentioned that on one of the slides, your technology stack, your marketing machine the way you structure your reach out to your members that the smart thing to reduce the churn. Are they -- will they be converted onto your system, or is that still under negotiation with them, whether they want to build or not?

Yes. Well, that's, again, repeating again, we first have to close the deal inform the franchisees. But of course, it would be logical to use the investments that we have made. But again, we have to take it step by step. First step is to close the deal, then inform the franchisees, discuss with him all the options and then see what we can agree on. But it's clear that the investments that we have made would be very logical to use for the franchisees. So we -- what I said, we visited all the clubs, all the franchisees and all the own clubs. So we checked out 493 clubs. And what we saw is that 10% of those clubs are really small, and that's something we as Basic-Fit would not have done. But 90% of the clubs have the right size and are also at the right locations. So we think that we could definitely help with our marketing knowledge, but also our software that we can improve actually the average of 2,000 members to more members, yes, then they have to be on our system. So again, first close the deal and then talk to the franchisees, but it would be logical to use all the investment that we have made.

Okay. Maybe a final one, if I may. And on the cluster strategy, how would it fit into the cluster strategy you have in existing growth countries? And because you're also looking at expanding the franchise model, not only in Germany, but maybe also to France or Spain. How would that fit in with your cluster strategy because there's normally proximity in the contracts from the franchisee that you cannot open a gym in a close proximity. How would that be included in your existing organic growth strategy?

Yes. Well, I think when you look at the existing countries, again, it's somewhat you wrote down, it's one of the options. So we're going to work on that, think about that, how we can do that. We think it's definitely an option because there are still many clubs to be opened in France and many clubs to be opened in Spain. So we can still do hundreds of openings in France and hundreds of openings in Spain. And if we're going to do it with building our own clubs, it's going to take, of course, a very long time. So there are different options. So if you look at McDonald's or Starbucks, they have also owned and franchise locations, and it can be worked really nicely together. It's just about having a good geographical split between a village or a city or -- but it's something that is also not for today. It's something we will work on, and that's something we will communicate back on April 21, but we do think it is a good option to speed up growth.

We'll now take our next question from Lynn Hautekeete from KBC.

The first one I had is on the strategy shift in both France and Spain to also look there at a franchise model. It was my understanding that it was always a goal to have those not in the existing markets. So wondering there what happens?

Yes. I just answered that, I think. So we're thinking about that, doing France and Spain. So we have -- we see it as an option. The good thing about franchise is that you can grow faster without using your own wallet. So we are exploring that option. So we're going to take our time to make that decision. But we do see that in the countries where we still have a lot of growth to do that it's going to take a very long time to do it ourselves. The fitness penetration in France, Spain and Germany, we think, can increase a lot. But you have to do that, you have to open clubs. And in the current situation with our balance sheet, we do not see it as logical to open 200 or 300 clubs a year. But if you can do it in a combination with owned clubs and franchise clubs, then you can speed up the growth and increase the fitness penetration in all our growth countries. So we will not do it in -- for sure not do it in the Benelux because we are now around 500 clubs. We still want to open 100, 150 clubs, and we will do that, let's say, in the next 4 to 5 years. So there, it is no use doing that. But if you look at the French market, yes, we think we can do another 500 clubs. And if you look at the Spanish market, even more. So yes, there's still huge growth opportunities. And to speed up, we think it could be an option, and we're exploring the option to do it next to each other. So building own clubs and also building franchise clubs. Again, we're exploring that. So the decision is not made, but we will communicate with you on April 21, what's the -- what the plan is.

And would you consider converting owned clubs in Spain and France to franchise clubs, maybe clubs that are performing a bit less in those regions?

We will come back to you on April 21st.

Okay, that's clear. Second question I have is on capital allocation. So in order to do this deal, you had to cancel part of your share buyback, which I understand. Now if you were already looking at the option to acquire Clever Fit, and you were doing your due diligence in the first place, why did you announce a share buyback in the second quarter of 2025 when you had the risk of having to cancel it later on?

Yes. Well, at the time, we were not that far yet to sign the deal. We were still negotiating and talking. So at the time, it made sense to do it. Now we spent around EUR 26 million. And looking at it again now, it makes sense to actually stop with it. And same with the openings. If you look at -- so we're going to open this year 86 clubs or grow with 86 clubs. So with 86 plus the clubs that we acquired from Clever Fit, then we grow with 125 clubs, which is actually more than the 100 that we said. And for next year, our plan is to actually slow down to around 50 clubs. And why would we do that? It's because we want to take the time to actually really optimize the partnership with Clever Fit and Basic-Fit. And next to that, we have also seen that this year, focusing on our existing base is very profitable. We see that in Q3. We had a really big growth in members. We see actually the same thing happening in this month of October. We also see a really big step-up again. So the business is really completely back. We're going really well. But we also said to the market that we want to lower our leverage ratio to below 2. With this acquisition, it just will be slightly above 2, but we want to stay close to what we have promised, and we have promised the leverage ratio to be below 2, and now it's going to be just around 2x debt to EBITDA. So that has to do with the decision to stop the share buyback and slow down. It's not what we're going to do -- we're going to slow down for years, but it's -- we're going to slow down for this year and next year.

Yes, that makes perfect sense. And then I have a third and last question, which is regarding the earn-out. I was just wondering if you could tell us how it was structured. Is it linear per year? And what are the KPIs? And how long does the management of Clever Fit will stay on board in the coming years?

Yes. So the earnout is, of course, something I cannot share, but I can share this is that the payment is after 3 years and has something to do with the amount of clubs we have after 3 years.

Okay. And the management stays on board to help with the integration?

Yes. The management stays on board. The owner will also help us in the coming years, but he will take a step back. And the management team, the Board that is there is actually going to stay there and keep running the business.

Our next question is from Robert Vos from ABN AMRO.

A couple of questions. Purely hypothetically, since you have visited all the clubs, what is your impression? How much it would cost should you decide to do that to rebrand a Clever Fit club to a Basic-Fit Club? Is that a couple of hundred thousand euros? Or can you maybe elaborate a little bit on that? And my second question on the level of Basic-Fit, so not for the franchisees, but on the level of Basic-Fit, should we assume any additional costs for the integration in 2026 and maybe also already upon closing in 2025? And if so, what is the order of magnitude of such costs? Those were my questions.

Yes. I think it is a bit premature. I think some Clever Fit franchisee are listening. So discussing now what the cost will be if we want to convert it to Basic-Fit, while we haven't even discussed it, converting them to Basic-Fit is a bit ahead of the game. But it also has to do with -- I think the rebranding itself is not that expensive, taking a logo of a club and putting a new logo on is not very expensive. Also, doing the walls, et cetera, is also not very expensive. So you can do it in a light way. But if you want to do it exactly as a Basic-Fit, that means we will have air conditioning ventilation in all clubs, which is not the case for all Clever Fit as an example. So there's a lot of different things. So we have a camera system in place that we can run a club without staff. That's an investment of EUR 65,000. So there's a lot of different things. But again, we first have to close the deal, then inform the franchisees, discuss with them if they think that it is a good idea and then we will look at it. And then you can, of course, make a multiyear plan. You don't have to do everything in the first week. But it's too early to really say more about it than I just said already. Actually, I said already a lot. The extra cost, yes, of course, you have a transaction cost. So we had a bank loan. We had Deloitte doing the DD for us. We had lawyers. So yes, there's extra cost, but I think there's no extra integration cost or -- so we have a big team of around 80 IT people. So those people will pick up the things that we want to match and connect with our systems. So yes, there's transaction cost. We got a new loan and so on, but that is all completely financed in the package that we had.

Okay. That's very clear. And maybe one final additional question. You explained -- you gave a couple of reasons to lower the new club openings of owned clubs in 2026. Can you confirm that it has nothing to do with any doubts that otherwise you wouldn't have met your free cash flow target for that year? It's just those reasons and not anything to do with the free cash flow.

Free cash flow for next year, you mean?

Yes.

Yes, it has nothing to do with the free cash flow for next year. But it's -- I think when you -- 50 clubs less next year and 14 clubs this year is around EUR 85 million and stopping with the share buyback, altogether is like EUR 100 million less that we're spending. And yes, we're doing that because we want to stick and stay close to this 2x debt to EBITDA. And by doing this, we are...

And we'll now take our next question from Karel Zoete from Kepler Cheuvreux.

I have a couple of questions as well. The first one, can you expand on the brand, Clever Fit in the German market? How is it perceived? What are strong points? How does it compare to the Basic-Fit brand in some of your markets? And then a related question somewhat is, is there much difference in the performance across the different Clever Fit clubs? I understand rural versus larger city makes a difference. But in general, is there a big discrepancy in the number of members per club? And what determines the difference? Because you've visited all of them. So what's the observation? What do could Clever clubs do better than ones that are less performing?

Yes, I think like any other business, it's location, location, location. So if you are in a good location, you have more members. So that is clear. I think around 10% of the Clever Fit clubs are just very small. So there, it is also -- yes, it is also difficult to get a good return, but especially for franchisees, you can make a salary, and that's -- in that combination, you should see it. But for us, as running our own clubs, I think smaller clubs are not really an option for us. But for franchisees, if you can do some personal training and work there and make a good salary, it's also fine. But what we have seen is, say, around 10% of all the clubs are just very small. So that's a big difference. And then the other part is if you are in a good location or not. If you are in a very small village, or are you in a business area or are you in a big city, that makes a difference in -- I would say that there's no huge differences in those 90% of the clubs that have the right size. The size is around -- well, actually the same size pretty much as our clubs. So size-wise and also we looked at could we get more members in there if we spend a bit more on marketing. That is also something to do with, of course. And our observation was that you could. So our observation was that you could definitely increase the member base with 20% by investing maybe a bit more on the marketing side. And then about the Clever Fit brand name, I think the brand name is known in Germany because it exists already for 20 years. But yes, they have never done real big -- they don't have the budget on marketing that we have spent. And all the franchisees, they also look at local advertisement while we look at country-wise advertisement. So if we go -- when we went to Spain, yes, we did TV campaigns, radio campaigns, billboard throughout the whole country. So Clever Fit has not -- as far as I know, have not done that. So by doing that, if we can do that in the future, I think the brand recognition will increase a lot. And I think also the member base will increase a lot. I think the -- again, the locations, that was actually what was really positive about visiting all the clubs. We think 90% of the clubs are in the right locations, and we think 90% of those clubs can do a lot better member-wise and then automatically also profit-wise than what they're doing currently. So we think we can definitely be of help and especially our systems can be of help to increase the member base.

All right, very good. That's clear. And then I have one follow-up question because the brand is also present in many other countries in DACH, certain markets with only very modest presence. Are these then big opportunities in terms of future growth, or is this adding complexity in a small market? How should we read that?

I'm not sure if I completely understand your question. But yes, we're going to a lot of smaller countries. And I think going to those smaller countries, we have been very successful in small countries like the Netherlands, like Belgium, like Luxembourg. So yes, we think it can be very interesting. So again, we first have to talk to the management teams of the different countries, talk to the franchisees of the different countries and then come up with a plan. But it's clear that we are a big believer. If we go to a country, we should become a clear market leader, not just market leader, but a clear market leader. So that's the same story for these 6 countries that we add now to the Basic-Fit family. And our goal would be to be a clear, very clear market leader in all countries where we are. Of course, with one club, you're not the market leader. So we have some work to do.

Our next question is from Jeremy Kincaid from Kempen.

Just the first question, Rene, you said that there was a waiting list of 150 entrepreneurs looking to become franchisees. But obviously, there hasn't been any material growth in the Clever Fit business just recently. So I was just wondering if you could help us understand that dynamic there. My second question is on the royalty fee charged to franchisees. It looks like for Clever Fit, it's a little bit lower than for the market. And also, I'm not sure if there's also a marketing fee on top of that. I was just wondering, is there any flexibility for you to change the agreements, or would you look to change the structure going forward for future franchisees? And then just finally, now that you're not going to establish a franchisee system internally yourself, I was just hoping if you could provide an idea as to how much it would have cost if you had done it yourself just to provide a comparison to the price of the current transaction.

Yes. Starting with the last one, you cannot put a number on that, of course, because depending how many countries you start with, how many head office you have to start, what you spend on marketing, how big a country is and so on and so. So it's a lot of if, yes, maybe. So that is very difficult to actually compare. What we see here is that they have a waiting list of 150 entrepreneurs who paid EUR 4,000 to be on the waiting list. The big thing about Clever Fit is that they have very loyal franchisees. So the people who have 10 clubs now or 15 clubs start with 1. They made money, so they built another one and they made money, build another one. But as you know, we had the corona period in 2020, 2021. Everybody lost a huge amount of money. And it took really a lot of time to get for the members to get back. As you saw in our numbers, this year is the first year, we are actually back to normal. That's the same for the Clever Fit owners. So they lost a huge amount of money in those 2 years, and they have to recover. So that is the main driver why they have not been growing that much. But currently, they have, I think, 60 or 70 clubs signed that, that will be opened in the next 1.5 years. So it is not that nothing is happening there. But yes, they were hit by COVID, lost a lot of money, and they had to slow down a bit. And I think that's the main reason why it is a bit slower than in the past. And that's the same for us, of course. We also had -- after COVID, it took also some time to get the members back. Now we're finally in a situation if you look at the Q3 numbers, and if you look at the October growth that we're seeing that we're getting back to this 3,200 on average. And we don't have to talk about COVID clubs anymore luckily. So yes, we're all in the same boat. COVID didn't help fitness.

And then just on the structure of the royalty going forward, would you look to change that, or do you think it's a little bit low?

Yes. The thing is we will come back on that on April 21st. We first have to close the deal, then discuss with the franchisees. I think we can really help the franchisees. And I think together with all the knowledge they have built in more than 20 years, the Clever Fit people can also help Basic-Fit a lot. So it's like -- it's really stronger together. It's really 2 companies, 2 market leader, Clever Fit, the market leader in franchise. They've done an amazing good job. They are the biggest in Europe in franchise, and they can only do that because they have a good product, and they have a good team. Same for Basic-Fit. We're the market leader in owned clubs, and that's only possible if you have a good product and a good team. Now we're combining those 2. So yes, we will be a very good force together, and we are really looking forward working with them together as well. We have the management team, so the key players of Clever Fit in [ Hothorpe ], of course, some days, and there's a really good click, and we're really looking forward working with them and really building out a great franchise company.

And we have a final and a follow-up question from Marc Zwartsenburg from ING.

A couple of questions left. First of all, are these franchisees all organized in a franchisee association?

Yes. They have -- well, it's not like a union or something like that. But yes, they have several contact points, and they all have -- that's the whole thing. So the first contract they signed, let's say, more than 20 years ago is different than the contract they signed 5 years ago. So of course, during all these years, things changed and franchisors started doing more training and so forth. But it's a bit too early for us to really go into detail because let's first close the deal.

Yes, sure, sure. And maybe you mentioned that the reason for having only 2,000 members per gym is also COVID. But can you share with us the number of every members per gym that they had pre-COVID just to get a sense of where they came from?

No, I didn't mean it like that. I meant it like that they didn't grow in amount of clubs. So they didn't invest in new clubs because of the COVID. I think the reason why they have around 2,000 members, we have to figure out and see. But what we saw, so when visiting all the different clubs, what we saw is that we think that we have to prove that, that we think that those clubs can have more members than they currently have.

And that is the marketing but less so the location.

Correct. That is the combination of which location, where is the club? Is it in a small village, is it in a big city, it's in an industry park. So that's one, the location, location, location. That's crucially important. And the second part is the communication with current and old members and marketing. So in those 2 topics, the way we look at it, we think that the member base can increase.

Okay, okay. And then maybe [ in the interest ], what is the calculation behind the [ EUR 160 ] million takeover price? How do you come to that number? What kind of valuation do you use? How do you approach that?

Well, if you look at the EBITDA, it is 11x. So yes, you can calculate it on very different ways. We think for us, it is a good deal. Why is it a good deal because we are immediately the market leader in Germany, and we do not have to -- it's an -- it's a oily machine. It's working really well. They get monthly 100 entrepreneurs who ask questions, maybe 10 of them are good or 5, I don't know. But it's a machine that's ongoing. So we don't have to build it. If we would have start ourselves, we -- it takes a lot of time. First, you have to build a few clubs. The clubs have to be open for a few years for other franchisees to see if it's worth it, if it makes sense. So now we don't have that. We have clubs that are successful already for 20 years, 15 years or 5 years. So that is much more easy to explain a franchisee or a potential new franchisee that this is a business that you can make a living in and can make money on. And so that's why for us, the 11x EBITDA is a very reasonable price, especially if you compare it what has been paid in the last 6 months on comparable transactions.

Of course. But there's no rebranding costs, et cetera, still include that can still be a bit higher than you might have.

No, again, if that -- again, first have to close the deal, then talk to the franchisees. But if that is a topic, we're not going to pay for rebranding or anything like that.

That is clear. And then lastly maybe, what the competition also in the process because you said it was not for sale, but was there any other it also offered to other players?

No, no, it was a one-on-one deal.

Okay. And we get more details about the franchise fee because no means around, you get a fee, and you get maybe a kickback on equipment and for your technology stack, we're going to get more details in April or...

Yes, April 21. No, we can't say. Let's first close the deal, and let's discuss further in the details on April 21, next year.

And we have a follow-up -- we have a follow up question from Maarten Verbeek from The Idea.

When you acquired the RSG Group in Spain 3 years ago, you mentioned -- or 2 years ago, you mentioned that you would have a return on invested capital of 30% in '26. Do you also make -- expect to make a return on invested capital of 30% in 3 years' time after closing of this deal? And correct me if I'm wrong, it seems a bit too optimistic. But what kind of target do you set for this acquisition?

Yes. Well, this is a franchise, so that is definitely completely different, but we will explain to you on April 21, what it is. We can say that the RSG deal, we make -- we are very successful on that. And if you look at when we bought it and where we are now, we more than doubled the EBITDA on average on all 42 clubs, and we make definitely more than 30% return. So that was a very good transaction. And we think that this Clever Fit deal is again a very good transaction, but it's not completely comparable, of course, since this is franchise. But we have 39 owned clubs here in this transaction. We also think there we can definitely increase that EBITDA with the systems we have been building. And we also think that we can help the franchisees get more members, and that also means that we will get more fees. So it will not be a 30%, but we'll come back on April 21. We think it's a very good deal for us.

And it appears there are currently no further questions at this time. With this, I'd like to hand the call back over to Richard for any additional or closing remarks. Over to you, sir.

Okay. Then I would like to thank everyone for joining us today during this call. If any other questions pop up at any later time, please don't hesitate to call either [ Hyde, Heather ] or me. Okay. Thank you all, and have a nice day. Bye-bye.

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.