Investing in Health and Wellness

The US consumer services industry is being redefined. At the intersection of rising consumer expectations, innovative delivery models, and shifting wellness norms, lies one of the most exciting market opportunities: health and wellness services.

Valued at $40-45bn in the US and growing at pace, the health and wellness services sector is no longer a niche. Spanning medspas, temperature contrast, IV therapy, longevity clinics and weight-loss and hormone treatments, (and more) this market is reshaping how consumers think about self-care, recovery, preventative aging, and long-term health. For investors, operators and brands, it represents a strong window of opportunity.

Consumer Shifts in health and wellness

Consumers are demanding more from their wellness routines – more personalization, more science-backed techniques, more seamless experiences. In parallel, services once reserved for medical settings are being reimagined through franchised, accessible, customer-friendly formats. Consumers are now able to access services through a handful of established chains, who have been building up brand equity and loyalty, and experiencing double digit growth across categories. In particular, weight-loss and hormone clinics have seen explosive demand, driven by increased usage of GLP-1s.

Importantly, many of these categories remain in early stages of market penetration, creating ample headroom for growth with new customer demographics.

Fundamentals and Commercial Value

Beyond consumer momentum, the underlying economics of the health and wellness sector make a compelling case for investment: strong market growth has supported rapid site rollout and brand franchising. Growth in the industry is expected to continue as consumer demand for preventative health, self-care and longevity services increases. In addition, specialist services offered by health and wellness clinics have high ticket prices – driving high average revenues per site  (typically around $400k-$4 million, though there are variances in categories), and in turn lucrative EBITDA margins (typically ranging from 10-40%). This enables a typical payback period of 2-4 years.

There are also several meaningful scale and operating upsides:

Fragmented Landscape and Potential for Consolidation

While consumer demand is high, brand awareness remains surprisingly low. Most categories have no dominant players; temperature contrast and recovery is the most consolidated with the fast development of Hotworx, Restore and Perspire, who hold ~60% share of sites, while top 3 brand share is typically under 30% across other categories. Even the most recognized brands command under 10% awareness.

This fragmentation creates a clear consolidation opportunity.

Private equity activity is already increasing, particularly in:

• Medspas, where national platform aggregators are acquiring independent operators, leveraging operational synergies while maintaining local identity
  Longevity and IV therapy, where multi-site operators are emerging to bring consistency and cross-sell potential
• Boutique fitness, where leading franchises continue to scale via M&A and regional clustering, with continued development of franchisee ownership groups.

Done well, consolidation brings benefits beyond footprint: stronger employer value propositions and staff retention, better training and operations, more efficient back-office functions, and stronger customer propositions.

Scalability through Franchising

Many of the fastest-growing brands in the wellness space have succeeded by tapping into the franchising model. It enables speed to market, reduces capital burden, and encourages entrepreneurial ownership. Players like Prime IV and Gameday Men’s Health have expanded rapidly by empowering franchisees within a robust support system.

However, scale alone is not enough. As brands grow, maintaining proposition consistency, quality of care, and marketing success becomes more challenging. This is especially true in franchise-led models, where rapid rollout can dilute the customer experience if not properly managed. For example, while players – like Prime IV (over 150 sites today, up from under 10 in 2020) and Gameday Men’s Health (over 250 sites today, from under 10 in 2022) – have expanded at speed, doing so across diverse geographies and demographics creates pressure to maintain uniform service standards and brand identity.

Levers for Growth in health and wellness

Despite strong revenue performance, many wellness brands are still early in their commercial maturity. Several levers remain underutilized – including revenue management, customer loyalty and marketing sophistication.

Pricing models often lag behind. Many operators still rely on flat rates or basic monthly memberships, leaving value on the table. A number of brands have been experimenting with tiered memberships and bundling of services, yet the market overall remains underdeveloped in pricing sophistication.

Segmentation is another area with room for strategic focus. Increasing numbers of younger and male consumers are entering the market, but few brands have tailored their propositions or communications accordingly. Without a clear view on customer needs and lifetime value, brands risk growing inefficiently.

To sustain growth and protect margin, operators need strategic clarity. They must hone in on who their core customers are, what value propositions resonate most, how to tailor pricing to demand patterns, and how to deliver consistency across locations. These are not just operational questions – they are strategic imperatives for scale.

These commercial levers represent meaningful opportunities to boost same-store sales, customer retention and ROI on customer acquisition.

The health and wellness services sector offers a compelling proposition for investors seeking long-term, scalable growth. Backed by strong consumer trends, solid economics, and a fragmented landscape ripe for consolidation, the industry is set to see continued momentum.

From boutique fitness to personalized longevity clinics, the potential to invest in category-leading brands is both real and immediate.

To discuss how OC&C can support your investment strategy, contact one of our retail experts today.