The Story: A Gym Empire at a Crossroads
Picture this: a founder-led company that has spent more than four decades building a business from the ground up. It now operates over 350 clubs across France, Spain, Portugal and Morocco, serves 1.3 million paying members, and has just been named Brand of the Year 2025 in its sector. The runway ahead is wide open — a fragmented European fitness market ripe for consolidation, hungry consumers trading up to affordable premium, and a franchisor with a proven playbook.
The company is Fitness Park, France’s largest “Full Service Best Price” fitness operator and franchisor. In May 2025, it stood at exactly the kind of inflection point every founder-led business eventually faces: how do we fund the next phase of growth without giving the company away?
The conventional answer in 2025 — for a company with Fitness Park’s scale, brand momentum, and international ambitions — would have been a majority private equity recapitalization. Hand over control in exchange for a growth cheque. Let a buyout fund run the playbook. Harvest the second bite of the apple in five years when the sponsor flips it.
Fitness Park’s founders chose a different path. They reached for debt.
In May 2025, Carlyle’s Global Credit platform closed a €280 million unitranche financing as sole lender to Fitness Park — structured to refinance existing debt, fund M&A activity, and invest in the customer proposition. Critically, according to the official Carlyle announcement, Fitness Park continued to be majority owned by the company’s founders, with minority shareholders Future French Champions and Momentum Invest retaining their stakes alongside them.
No dilution. No new board seat for a buyout partner. No clock ticking toward a forced exit. Just capital — and a plan.
The Decision: Debt vs. Equity at Scale
To understand why this decision matters, you have to understand what the equity alternative would have looked like in practice.
A majority PE recapitalization — the most common route for a founder seeking growth capital at this scale — typically sees an investor acquire a controlling interest of more than 50%, while the existing owners retain a minority stake. The founders get a liquidity event today, but they cede the strategic wheel. Decisions on acquisitions, pricing, expansion pace, and ultimately the exit timeline all shift toward the fund’s five-to-seven-year clock.
The unitranche structure Fitness Park chose works entirely differently. A unitranche loan blends senior and subordinated debt into a single, simplified facility — one lender, one agreement, one set of covenants. According to White & Case, which advised Carlyle on the transaction, the proceeds were designed for three specific purposes: refinancing existing debt, accelerating long-term growth through M&A in France and internationally, and investing in Fitness Park’s customer proposition.
This is a capital structure decision with precise strategic intent. Rather than taking dilutive equity at what would likely be a compressed multiple — private equity buyers apply significant leverage of their own — Fitness Park’s founders borrowed against the strength of their recurring subscription revenue base and their proven franchise expansion model. The business’s cash flows service the debt; the founders retain the equity appreciation on what they’ve built.
The market environment in mid-2025 made this choice even more logical. According to McKinsey’s Global Private Markets Report, the average LBO deal size for direct lending rose 29 percent year over year in 2025, reaching approximately $380 million — confirming that private credit lenders had both the appetite and the firepower to back founder-led growth stories at meaningful scale. Carlyle’s Global Credit platform alone managed $199 billion in assets under management as of March 2025, giving Fitness Park access to institutional-grade, growth-oriented debt capital without needing to open its cap table to a new controlling shareholder.
Carlyle Global Credit Managing Director Otto Alaoui framed it precisely: “The transaction demonstrates our ability to provide flexible capital solutions to accelerate the growth trajectory of founder-owned businesses in Europe.”
The Outcome: Growth Without the Giveback
Within months of closing the Carlyle unitranche, the results of the capital deployment were becoming visible. By the end of 2025, Fitness Park had surpassed 400 clubs across four countries — up from 350 at the time of the deal announcement — adding 80 new openings over the course of the year. The 400th club opened in the Barcelona region, underscoring the growing contribution of international markets. Master franchise agreements had been secured in both Italy and Belgium, with first openings targeted for 2026.
Now contrast this with the counterfactual. Had the founders sold a controlling stake to a buyout fund at the time of the Carlyle deal, the capital raised might have been similar — but the ownership math would have shifted dramatically. Assuming a typical majority recapitalization where a PE sponsor acquires 60–70% of the equity at a negotiated enterprise value, the founders would retain a 30–40% minority stake. That minority position would be subject to the fund’s exit timeline, drag-along rights, and governance framework. The founders would no longer be setting strategy independently.
Instead, Fitness Park’s founders retain majority ownership and operational control, benefit from Carlyle’s expertise and network as a strategic partner without ceding governance, and capture the full equity upside of what is — by any measure — an accelerating growth story in a resilient, cash-generative sector.
This is precisely what the best non-dilutive financing structures are designed to do. As Sofer Advisors notes in its analysis of leveraged transactions, this approach allows owners to extract or deploy cash while the company assumes structured debt obligations — with the owner remaining the controlling shareholder throughout, continuing to lead the company until a full exit event on their timeline, not a fund’s.
The cautionary contrast exists too, and it’s worth naming. Steward Health Care — once the largest private hospital chain in the United States — paid approximately $800 million in dividends before filing for bankruptcy in May 2024. The mechanism was similar; the fundamentals were not. Steward’s revenue base was structurally fragile and operationally dependent on continued reimbursement environments that shifted against it. Fitness Park’s subscription model, by contrast, is among the most defensible in consumer services — recurring, low-churn, and geographically diversifying.
The lesson isn’t that debt is always safe. The lesson is that debt calibrated to cash flow quality is a precision instrument — not a blunt one.
The Lessons: A Framework for Founders Facing the Same Choice
The Fitness Park-Carlyle transaction is not an isolated event. It is a textbook example of a broader structural trend reshaping how founder-led businesses access growth capital. PitchBook LCD tracked roughly $76 billion in dividend recap loans during 2024 — the third-highest annual total on record — and the first quarter of 2025 alone produced $31 billion in new issuance, according to S&P Global and CT Acquisitions’ market analysis. The credit window is open, competitive, and increasingly structured to serve founder interests alongside lender returns.
Three conditions must align for the debt-over-equity strategy to work the way it did for Fitness Park:
- Recurring, predictable cash flows. Subscription-based businesses, franchise royalty streams, and contractual service revenues are natural candidates. Lenders price debt against cash flow visibility; the more reliable the revenue, the more favorable the terms. Apollo’s 2025 market outlook specifically cited businesses with recurring revenue streams and low capex-to-revenue ratios as the most attractive leveraged borrower profiles.
- A fragmented market worth consolidating. Non-dilutive debt works best when the capital is deployed toward asymmetric growth opportunities — acquisitions of smaller competitors, geographic expansion, or category creation — rather than simply sustaining operations. Fitness Park is entering Italy and Belgium with a proven playbook and a lender’s capital behind it.
- Aligned lender with sector expertise. The unitranche structure worked here because Carlyle brought more than a term sheet. The lender’s global credit platform understood both the franchise model and the European consumer landscape. As Carlyle’s 2026 Credit Outlook notes, transactions like these “are often less competitive, carry stronger investor protections, and can offer equity-like upside with debt-like downside protection” for the lender — an alignment structure that translates into more flexible and partnership-oriented terms for the borrower.
For founders evaluating their own capital decisions: the question is never simply “can I borrow?” It is “does my cash flow quality justify the debt I am taking on, and does the structure preserve my ability to operate freely on the upside?” Lower middle market leveraged transactions typically close at 3x to 5x EBITDA in total debt, according to the Pepperdine Private Capital Markets Report. A business generating €50 million in EBITDA can credibly support €150–250 million in debt under normal lending conditions — often enough to fund the kind of transformative growth that a minority equity raise would otherwise require selling the company to achieve.
The private credit market in 2026 offers more tools than ever to execute this. Unitranche facilities, PIK toggles, and covenant-lite structures have expanded the menu considerably. The growth of private credit funds has expanded access to flexible, customized debt solutions beyond traditional bank syndicates — accelerating execution timelines and making non-dilutive recaps viable even in competitive capital markets, as DataStudios’ analysis of leveraged recapitalization trends confirms.
Key Insights
- Founders who borrow on their cash flows keep their equity compounding. Fitness Park’s founders will capture 100% of the incremental enterprise value created by the Carlyle-funded expansion — not the 30–40% minority stub that a PE majority recap would have left them with.
- Unitranche financing has become institutional-grade founder capital. What was once a niche product for mid-market deals now closes at €280 million with global lenders acting as sole creditor — streamlined, fast, and purpose-built for growth.
- Recurring revenue is the collateral that makes non-dilutive capital possible. Subscription models, franchise royalties, and long-term service contracts are the raw material lenders price favorably. Build the revenue model before you need the capital.
- The cautionary tales (Steward Health Care) are about cash flow mismatches, not leverage itself. Debt structured against weak or deteriorating revenues amplifies failure. Debt structured against durable, growing cash flows amplifies success. The instrument is neutral; the underwriting is everything.
- The private credit market in 2025–2026 is decisively tilted in favor of quality borrowers. With $76 billion in dividend recap issuance in 2024 and the direct lending market reaching record average deal sizes, founders and operators with strong fundamentals have more non-dilutive options — and more negotiating leverage — than at any point in recent memory.
