Nico Varano on Scaling SweatHouz: Franchisee Grit, Unit Economics, and Staying Focused on One Thing

Nico Varano still signs the leases and personal guarantees on his five SweatHouz studios in Boston, even though he's now the company's CEO. On this episode of HALO Talks, Pete Moore sits down with Varano, who went from SweatHouz member to its first franchisee to CEO of the whole system (101 studios and counting at the time of taping), to talk about what it actually takes to scale a wellness franchise without losing the unit economics that make it work.

The conversation covers why SweatHouz has refused to add modalities beyond sauna and cold plunge, how the brand decided the "right" number of suites per studio by watching the data instead of guessing, and why a 7% to 16% jump in "plus one" sessions matters more than it sounds like it should. For operators, franchisors, and investors in the recovery and wellness space, it's a useful look at what disciplined, data-driven franchise growth looks like from the inside.

From Member to Franchisee to CEO

Varano's path into SweatHouz started sideways. He came up in traditional finance, spending his time in spreadsheets and PowerPoints, and was working at the investment group that now owns the majority of SweatHouz when he heard founder Jamie Weeks speak at a conference. At the time, Varano was training for a charity boxing match and looking for a recovery outlet. He tried SweatHouz (then nine studios, with one that had just opened near him in Somerville, Massachusetts) in June 2022, got hooked, and told Weeks he wanted to be the system's first franchisee, buying up Boston and Greater Boston.

He acquired one corporate studio and built four more over the next two years, with four additional Boston-area studios currently under construction. He joined SweatHouz's corporate board about two years ago, and stepped into the CEO role after a board call in late December, following Weeks's move into a new business venture in April 2025. Varano now lives in Atlanta full time but continues to personally operate and hold the leases and guarantees on his Boston studios. As he put it: he doesn't think many franchisors can say their CEO is also signing personal guarantees on their own units.

One Modality, Done Well

Where a lot of the recovery and longevity category has expanded into a wide menu of offerings, Varano says SweatHouz has deliberately stayed narrow. "We want to be focused on being the best at one thing, right? Which is contrast therapy," he told Pete. The company's original nine corporate studios (spread across Atlanta, Boston, South Carolina, Dallas, and Lake Oswego, Oregon) proved the model before a single franchise opened. The brand proved it again with its first "V2" studio, combining sauna and plunge in a single suite, which opened in Burlington, Massachusetts in February 2024.

Varano argues that staying focused on one modality is what builds the brand's competitive moat: when people think sauna and plunge, he wants SweatHouz to be the first name that comes to mind, rather than one item on a longer menu that dilutes brand identity.

The Unit Economics Discipline

SweatHouz had 101 studios open at the time of the conversation, with the 102nd opening the next day (guest-stated, a moment-in-time figure that will be outdated by the time this posts). Varano was clear that hitting triple digits doesn't mean the work on unit economics is done. The team reviews data and analytics continuously, on the logic that every additional dollar of daily profit per studio compounds: it makes franchisees more profitable, funds reinvestment in the brand, and speeds up the next studio build.

He summarized the formula simply: find profit, make franchisees profitable, get build-out costs down to a level where payback lands under three to three and a half years, and keep driving the brand forward. Do those three things, he said, and you win.

Locating Next to the Competition, On Purpose

SweatHouz intentionally builds near big-box gyms and boutique studios (Crunch Fitness, Life Time, Equinox, Barry's, Solidcore), rather than avoiding them. Varano's reasoning: SweatHouz isn't really competing for gym time. It's selling an escape, "an hour, 4% of your day," in a private suite away from notifications and noise. A meaningful share of members, he said, have never set foot in a gym or class. Being next to a boutique fitness studio means capturing that studio's post-class traffic without having to be a gym itself.

Suite Count and Footprint, By the Data

Early on, SweatHouz experimented with larger studios of 10 to 11 suites. But the team found no correlation between the number of suites in a studio and that studio's average unit volume, once they accounted for typical demand patterns (busy mornings and evenings, a slower midday, and a busy weekend). The company has since converged on a smaller target footprint: 1,600 to 1,800 square feet, seven suites, plus roughly one red light therapy suite, a mix Varano said lowers both build-out costs and ongoing costs like rent and labor.

Building Community Inside Private Suites

It might seem counterintuitive for a business built around private, one-person recovery suites to build community, but Varano pointed to a specific internal metric: the share of sessions that include a "plus one" (a member or pack holder bringing a guest at a discounted add-on rate, roughly $20 to $30 depending on market) grew from about 7% at the start of the year to 16% today (guest-stated). In practice, that shows up as date nights, book clubs meeting at a studio, and members watching their own shows on in-suite TVs while they sauna and plunge. Varano frames SweatHouz as a "third or fourth space," built around privacy and disconnection, but still able to host shared moments.

Hours Built Around Co-Tenancy

Most SweatHouz studios run roughly 7:00 AM to 8:00 PM. Varano's own Boston studios are open 6:00 AM to 9:00 PM, seven days a week, because he found demand supported it. The company's broader guidance to franchisees is to set hours around what's next door: a studio located near an early Solidcore or Barry's class should open by 6:00 AM to catch people coming straight out of a 5:00 AM session.

"Own It, Fix It, Finish It"

Varano's recurring line to franchisees and the corporate team is "own it, fix it, finish it": identify the business's problems every month, fix them, and then make sure the fix actually holds so the same problem doesn't resurface. He said this was the team's focus in the most recent Q1, applied specifically to membership attrition, member lifetime value, and the mix between pack holders and full members. He was direct that no brand has this fully solved at 102 studios, and that any franchisor claiming otherwise isn't being straight with you.

What Makes a Good Franchisee

SweatHouz currently has 40 franchisees across its 102 studios (guest-stated), a group Varano describes as small but experienced, including former F45 operators, a former aerospace and defense company president, and at least one CMO. But he was clear the credential that matters most isn't the resume, it's whether someone will actually do the work: covering a shift when staff calls out, showing up for construction site visits, and being honest about what's underperforming in their own P&L. His informal test: if he and a prospective franchisee can't have dinner and talk about something other than SweatHouz, it's probably not going to be a fit.

Varano also confirmed SweatHouz is currently private-equity backed and is preparing the business for its next transaction and investor. The company is also opening a studio in Tribeca in New York City.

A note on the financial figures discussed in this episode: unit economics, payback periods, build-out costs, and franchise performance figures referenced above reflect Nico Varano's own statements and professional opinion as SweatHouz's CEO. They are not independent financial or investment advice, and prospective franchisees or investors should verify current figures directly with SweatHouz before making any decisions.

Key Takeaways for Operators, Franchisors, and Investors

1. A franchisor CEO who still carries personal guarantees is a credibility signal. Varano continues to personally hold leases and guarantees on his own Boston studios, which he uses as proof he won't ask franchisees to do anything he isn't doing himself. (05:12)
2. Staying narrow on modality can be the moat. Rather than adding services, SweatHouz has stayed focused on contrast therapy (sauna plus plunge) specifically to own that category in members' minds. (07:22)
3. Unit economics work doesn't stop at scale. Even past 100 studios, the team is targeting continuous, incremental daily profit gains per studio and a build-out payback period under three to three and a half years. (08:23)
4. Co-locating near competitors can be a growth strategy, not a risk. SweatHouz deliberately sites studios near big-box gyms and boutique fitness brands, treating them as complementary demand generators rather than direct competition. (10:41)
5. A simple "plus one" mechanic can double as a community and revenue lever. Sessions with a paid guest add-on roughly doubled as a share of total sessions this year, guest-stated, which the company links directly to retention and word-of-mouth growth. (15:47)
6. Suite count and footprint should be set by data, not intuition. After finding no correlation between suite count and studio-level revenue, SweatHouz moved to a smaller, lower-cost standard footprint of seven suites in 1,600 to 1,800 square feet. (17:04)

A Few Quotes Worth Sitting With

"We want to be focused on being the best at one thing, right? Which is contrast therapy. When people think about sauna and plunge, SweatHouse should be the first thing that comes to their mind." (Nico Varano, 07:22)

"I tell people all the time when they come in for Meet the Team days, if you and I can't go to dinner and talk about anything but SweatHouse, you're probably not going to be a great franchisee in our system because, you know, we don't jive." (Nico Varano, 25:04)

Chapter Timestamps

• 00:00 Introductions: Boston versus Atlanta, and Pete's early workout recovery bets
• 02:07 Nico Varano's path from traditional finance to SweatHouz's first franchisee
• 03:45 How Jamie Weeks built SweatHouz, and Nico's move into the CEO role
• 05:12 Why the CEO still signs personal guarantees on his own studios
• 07:22 The case for staying focused on one modality: contrast therapy
• 08:23 The unit economics formula behind scaling past 100 studios
• 10:41 Why SweatHouz builds next to gyms and boutique fitness studios
• 15:11 Building community with "plus one" sessions
• 17:04 Rightsizing studios: suite count, footprint, and build-out costs
• 19:09 Setting hours around neighboring boutique fitness classes
• 21:05 "Own it, fix it, finish it," and where the team is focused this year
• 24:25 What makes a great SweatHouz franchisee

About Nico

Nico Varano is CEO of SweatHouz (SWTHZ), a contrast therapy franchise built around sauna and cold plunge suites. Based on what he shared in this episode: he came up in traditional finance and was working at the investment group that now holds the majority stake in SweatHouz when he first discovered the brand in June 2022, while training for a charity boxing match. He became SweatHouz's first franchisee, building five studios across the Boston area (with four more underway), served roughly two years on the company's board, and stepped into the CEO role in Atlanta following a board decision in late December. He continues to personally operate and hold the leases and guarantees on his Boston-area studios.

Resources

• SweatHouz: sweathouz.com
• Nico Varano on LinkedIn: linkedin.com/in/nicovarano
• Integrity Square: integritysq.com

Related HALO Talks Episodes

• Episode #596: Lessons Learned Scaling W.O.L.F Fitness, with Tony Saxby
• Episode #609: Building a Fitness Empire, with Tony Scrimale
• Episode #613: SoulFire's Formula: Blending Brand Identity, Community, and Profitability

Want help scaling a HALO-sector franchise toward its next transaction? Visit integritysq.com to set up a free consultation with Integrity Square.