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Retro Fitness Lands Deal With BlackRock, Plans To Open 500 Health Clubs In Communities Of Color

A Retro Fitness location in Albany, New York. The health club franchise hopes to expand into 50 communities of color with 500 new locations in the next five years.

Fast-growing health club franchise Retro Fitness has reached the largest development deal in the company's history as part of an initiative to open 500 new health clubs in 50 communities of color in the next five years. 

Retro Fitness is partnering with BlackRock's Impact Opportunities Fund and James Collins, managing partner of Eastwood Capital Partners, to develop 70 of the 500 new locations, the company announced Friday. 

As part of the initiative, named Project LIFT, Retro Fitness is giving incentives to interested investors. Investors will receive a waived franchise fee and 50% off royalties for the first year. Additionally, a percentage of royalties will be donated back to an organization within the community where the franchise is built. 

"This investment is the largest development deal in the history of the company, more importantly we are proud that it is about making a significant difference in Black and Brown communities," Retro Fitness CEO Andrew Alfano said in a release

Founded in 2004, Retro Fitness has grown rapidly in recent years, with 175 health clubs now open or in development across the country. 

The BlackRock Impact Opportunities Fund was created to invest in businesses and projects designed to serve people of color, specifically focusing on Black, Hispanic and Native American communities in the U.S, according to the company website. Earlier this month, the firm announced it secured over $800M in initial commitments toward the fund's $1B target. 

Impact investing is becoming increasingly common among the country's largest asset managers. Nuveen Real Estate announced earlier this month it plans to launch a $15B impact investing fund focused on affordable and sustainable housing targeted at low-income communities and other disadvantaged populations.