From Minority Stake to Double EBITDA in 2 Years
New York-based Neel Bhargava breaks down how a minority investment into a Crunch Fitness franchisee turned into a home run, scaling from 10 to 74 locations with multiple recapitalizations along the way. Neel explains the value of thematic focus, outlines the opportunity of franchises, and spotlights the importance of strong management teams.
Neel Bhargava’s route to becoming an independent sponsor was unconventional; he was a growth equity investor and then a venture investor at the New York Times, among several other experiences. Neel pivoted into entrepreneurship by launching NB Group in 2016. What followed was a textbook example of how a flexible and relationship-driven approach can create outsized value.
The Crunch Fitness deal, Neel’s first as an independent sponsor, wasn’t a majority control buyout. It began as a minority investment behind a high-performing franchisee operating 10 gyms and generating $4.5m in EBITDA. Over just 18 months, the business doubled both in gym count and EBITDA. Today, it has grown to 74 locations and has been recapitalized multiple times, with Bhargava’s team still holding a passive minority interest.
The secret the success included working alongside a proven, high-performing management team. While many sponsors seek full control, Neel emphasized the flexibility independent sponsors can bring to the table.
This flexibility allowed NB Group to pivot from a planned majority deal into a minority structure when the sellers got cold feet, without compromising alignment or governance. Neel and his capital partners secured key minority rights, including veto power over capex and exit terms, allowing them to maintain influence without operational control.
Their success was also a result of a clear thematic focus. Instead of casting a wide net, NB Group narrowed in on high-value, low-price gym concepts in the health and wellness sector. Neel believes this space is both capital efficient and scalable, which he explains in detail during the interview.
Since launching NB Group in 2016, Neel has witnessed the independent sponsor space evolve from a fringe and frowned-upon model to a more widely recognized and competitive landscape. Today, more sellers and intermediaries understand what sponsors bring to the table, but deal flow remains the hardest part. As Neel puts it, raising capital has never been the real constraint. Finding proprietary, quality deals is (still) where the game is won.
Check today’s new episode of the Minds Capital Podcast with Neel Bhargava.
Keep reading
33 PortCos in 6 Years
Robert Graham, based in Dallas, graduated from HBS in 2018 and acquired his first company the year after as a self-funded searcher using SBA7a financing. After a turbulent start, this healthcare platform exploded to $30m of EBITDA and now "hemorrhages cash." That early breakout win became the engine behind SIG Partners, recently named a Top 20 independent sponsor by Axial, which has since assembled an extraordinary 33 platforms in just 6 years.
Platform + Key Competitor = Multiple Expansion
Willistown Capital's journey offers a window into how independent sponsors can execute complex, high-stakes transactions with institutional precision. William Boffa and Darren Fultz walk through the anatomy of their award-winning related acquisitions of Quiltcraft and Fabtex. From stakeholder alignment to >$1m of legal fees, they detail their journey through complexity & risk to the promised land of "zone skipping."
Buy Small ($1m EBITDA at 4x), Keep Winning
Ryan Sullivan's fully-baked & winning concept at North Park Group: buy $1m EBITDA firms at 4x, add the real estate, finance half with SBA debt, and never sell. Voila, today they have 5 operating companies, 6 acquisitions, 25% annual returns, and an investor waitlist.
