When Katy Richardson left her corporate job to launch a fitness studio, she didn’t have much of a financial cushion.
“I just had my savings from my entry-level auditor job, but I just invested what I could into creating a logo, a brand, a website, so that I would really get on the scene feeling like I was more than what I was at the time,” said Richardson, who was 27 at the time.
Thirteen years later, Extraordinary Brands bought her company, Neighborhood Barre. Richardson founded the brand in 2011 in Knoxville, Tennessee. The franchise has 22 studios, mainly located in the southeastern United States.
This is Extraordinary Brands’ fourth fitness brand and its second acquisition this year after buying Row House from Xponential Fitness. As part of the transaction, Richardson retained an ownership stake.
Neighborhood Barre is Extraordinary Brands’ newest fitness concept.
The company’s other brands are Purvelo Cycle, Row House and Eat the Frog Fitness. Paul Flick founded Extraordinary Brands in 2022 when he purchased Purvelo. The newest deal was about two years in the making.
Richardson opened her first studio in October 2011 and her second in February 2014. In 2015, Neighborhood Barre started franchising after someone approached her about their interest in owning a location.
“It kind of found me versus me necessarily having this grand strategic plan to start a franchise,” she said.
She recalled feeling frustrated that she wasn’t opening new units more rapidly.
But in 2020, when local governments had a variety of pandemic-related restrictions in place, she said she was glad there weren’t more studios open. “I was so thankful that I had not scaled it faster and that we only had 15 locations, because I knew that I could lead 15 locations through whatever was coming,” Richardson said. “We were a tight-knit group.”
Around 2021, investors were buying brands for cheaper-than-normal prices because of the economic conditions at the time.
“I think what became surprising to a lot of people who knocked on my door was that we were so profitable, despite the circumstances and the environment that we were operating in,” Richardson said. “Because we were very smart about how we operated, how we ran corporate operations, how we supported the studios.”
She spent the next few years doing her due diligence to ensure she and the brand were prepared for a sale.
Katy Richardson is the founder of Neighborhood Barre.
“For me, a strategic partnership was not about the business transaction,” she said. “It was not about selling a portion of my company, but it was more about my ongoing commitment to not just grow our business, but to go deep before we go wide with expansion.”
The studio fitness space is getting more crowded, and there a few key players in barre specifically. Xponential owns Pure Barre, which did $214 million in system sales in 2023, according to Franchise Times’ estimate. Late last year, Barre3 bought The Barre Code, which expanded the brand to 185 studios.
Richardson looks forward to the additional resources that come with being part of a portfolio.
“I have a great, small-but-mighty corporate team, and our No. 1 job every single day is to serve the franchisees, but what it’s going to allow me to do is doing less of those administrative tasks that really keep me locked away in my office every day,” Richardson said, “and allow me to get back into the part of my job that I really, really love, which is the one-on-one relationship building with my franchisees.”
