Since opening Hotworx in 2017, Smith has turned the infrared-heated boutique fitness brand into one of the industry’s biggest success stories with nearly 800 locations and counting
If you live in America, there’s a decent chance you’ve come across one of Hotworx’s nearly 800 studio locations. For founder and CEO Stephen Smith, the franchise brand is still just getting started on its expansion journey.
A former college and arena football player turned gym entrepreneur, Smith opened the first Hotworx studio in 2017 in Oxford, Mississippi, the same city in which he’d launched his first-ever gym back in the ‘80s. The brand has become known for its boutique fitness workouts that take place inside an infrared-heated sauna, with virtual instructors offering 24/7 classes on everything from yoga to barre to cycling.
Today, Hotworx has nearly 800 locations and counting, with studios across the country and recent expansions into international markets including Canada, Dubai, Saudi Arabia and Ireland. The brand doesn’t plan to stop growing anytime soon: Smith says Hotworx can support upwards of 3,000 studios in the U.S. alone based on mapping data.
Smith sat down with Athletech News to discuss how he got the idea to create an infrared-heated boutique fitness concept, what’s enabled Hotworx to scale so rapidly across the country and what’s coming next for the popular brand.
The following conversation has been lightly edited for clarity and length.
Athletech News: Can you tell us about your background in the fitness industry and why you decided to create Hotworx?
Stephen Smith: I come from competitive DNA. My dad was an All-American quarterback in high school out in Sweetwater, Texas, and went on to play at SMU. I played football too — not to the level he did — but I played two years of junior college and one year in arena football. After that, I started bodybuilding, which tied into the passion I have for fitness. I opened a gym in Oxford, Mississippi, as my first business when I was 23, fresh out of dropping out of grad school at Ole Miss.
Fast forward to February 2017, and we opened the first Hotworx location in that same town. You can literally walk out the front door of Hotworx in Oxford and see where I opened my very first gym back in the ’80s. We’ve grown from that one location in Oxford back in 2017 to almost 800 now. Not a bad run.
ATN: How did you come up with the idea for infrared-heated boutique fitness?
SS: After owning Gold’s Gyms in the ’90s, I partnered with a sales expert in 1996 to launch a company called Planet Beach. We had a good run for a while, but the financial crisis and the 10% tax on indoor tanning that came with Obamacare really hit that industry hard.
In 2014, the idea for a sauna workout emerged. A good friend of mine made a comment, “Hey, you should do yoga in a sauna.” That stuck with me. I thought, “You know what? I’m going to design a sauna for that purpose.” We started placing them inside Planet Beach locations. At first, we called it the “Hot Box Detox,” but in 2016, we rebranded it to Hotworx and came up with a better logo and color palette. It became clear to me that we needed to build a fitness-only franchise around it.
I signed the lease in Oxford in November 2016, and three months later, we opened the doors. We built a tech-forward concept from the beginning, with virtual instruction and a working app. I was trepidatious about whether customers were going to like working out to virtual instructors on the screen. Turns out they love it. They also liked working out in the dark, so we’d turn the lights off in the sauna. Our customer base is 85% female and very yoga-centric. Our sweet spot is the 25-to-40-year-old demographic.
ATN: What makes working out in infrared heat different from a traditional fitness experience, and how do you market these benefits to consumers?
SS: We call it “3D training,” and break it down into the three elements: exercise, heat and infrared. Our workouts are zero-impact, which is great for longevity. The infrared light penetrates the skin up to an inch and a half, stimulating mitochondria, improving circulation and benefiting the skin. That’s different from a regular sauna that just heats the air around you. (Heated fitness) has been around since 1972 when Bikram introduced hot yoga in Japan. We brought in infrared. This type of training also allows you to burn more calories in a shorter amount of time.
ATN: Hotworx has grown to nearly 800 franchise locations in around eight years. What’s enabled you to scale so quickly?
SS: Our complex technology integrations have served us well, and we were able to come in at an accelerated pace because we’ve been around a while. So yes, Hotworx is an emerging brand, but we’re not an emerging franchise management team — we’ve been around since the 90s. I think it’s been the combination of those two things, and of course, coming in hot with an innovation. The two most important things in business are innovation and great marketing.
We continue to focus on the average profitability of each of our franchise locations, but we can only do that if we keep our customers in a state of bliss. What helps us accomplish that mission is our motto, “More workout, less time.” If you can help people get more of what they’re looking for in a shorter amount of time, that’s never going to go out of style.
ATN: Hotworx is known for having a robust app and other technology elements. Why has tech been important for the brand?
SS: You can’t scale today without the right technology. Our app is the hub of the operation: members use it to open the door, track calories, sync with their wearable and book workouts. I’d say we’ve got around 99.5% app usage across the member base. We’re constantly improving it.
We’re already leveraging AI, and we’re exploring new ways of leveraging AI. We’ve got some exciting things coming down the pike that I can’t talk about yet.
ATN: As you close in on 800 locations, how much room does Hotworx still have to grow across the U.S. and internationally?
SS: Our primary focus is still the U.S. There’s a lot of white space left. California, for example, is the greatest fitness market on the planet. We have a long way to go to get full development into that state, and in places like New York. You’re looking at 2,500 to 3,000 locations in the U.S. before I’d consider our brand to be ubiquitous. That opportunity exists for sure – we’ve already have it mapped out.
International isn’t our primary focus, but if we find the right partners, we’ll expand. We’ve partnered with operators who, culturally, really understand the markets in places like Quebec, Dubai, Saudi Arabia and Ireland. We’re building our footprint in Canada as we speak.
