F45 co-founder blames ‘has-been stars’ for fall of gym empire

F45 co-founder Rob Deutsch holds no punches as he rips into A-listers Mark Wahlberg, David Beckham and Greg Norman – and speaks about his new venture.

F45 owner Rob Deutsch, right, with actor Mark Wahlberg, who bought a minority stake in the company in 2019. Picture: Instagram/F45 Training

The multi-millionaire co-founder of former fitness giant F45 alleges actor Mark Wahlberg and other investors listed the now-failing gym on Wall Street so “they could pull their money out”.

Rob Deutsch launched the global phenomenon in Sydney’s eastern suburbs in 2011 with co-founder Adam Gilchrist (not the cricketer), and has watched the demise of the once cult-like company, whose 45-minute classes focus on functional high intensity interval and circuit training.

In his first in-depth interview about his former start-up since the sensational crash – which saw the share price crash to just under $US3 from a high of $US17.28 in August 2021 – Deutsch opens up about why he believes the empire came tumbling down.

From a $A42m in profit in 2017-2018, the failing organisation is now looking down the barrel of extinction. In August it posted a staggering $A55m quarterly loss, with more than 300 franchise sales cancelled.

In 2019 the company was valued at $645m, with more than 1700 franchises around the world.

In June 2020, Mr Deutsch tapped out. The company was facing major challenges during the pandemic, and he was firmly against plans to go public.

After initial plans for a 2020 IPO were delayed due to the pandemic, F45 was finally listed on the New York Stock Exchange in July 2021 with a $2bn valuation.

“Wahlberg and his investment crew, they just listed it so they could pull their money out. It definitely wasn’t in the best interest of the business, there’s no doubt about that, and obviously time has shown that,” Mr Deutsch told The Weekend Australian.

In the IPO, Wahlberg sold almost 1.6 million shares through his private investment vehicle, MWIG LLC.

Mr Deutsch says in his opinion there was too much focus – and expenditure – on “50-year-old-plus has-been actors, actresses and sportspeople” such as David Beckham, Greg Norman and Cindy Crawford – a decision he labels “mind-boggling”. “That's just an epic fail, like David Beckham, his brand is so diluted, not a good fit,” he said. “Who cares about Greg Norman anymore?”

Beckham and Norman – who only signed on with the company in 2021 – are now embroiled in a legal fight, suing F45 for $US20m after alleging millions of dollars in payments were allegedly withheld from them.

“When I was leading that role we used free franchises or cunning ways to get influencers involved and minimal financial payments to protect the business,” he said. “I’m not sure when it turned to giving them equity and giving them $5m, $10m. It was just terrible financial mismanagement.”

F45 Training Gyms co-founder Rob Deutsch at his new start-up Markot in Sydney. Picture: Jane Dempster/The Australian

Five class action law firms are investigating whether F45 misrepresented itself to investors.

Mr Deutsch says a change in focus to selling franchises was detrimental and the group needs to return to its roots – making sure workouts are relevant and fun. So, now what?

Mr Deutsch has embarked on a new venture with his partner, model Nicole Person. They will marry in the NSW Southern Highlands on Saturday.

In April the pair purchased a 1600sq m warehouse in Sydney’s south for $9.25m, and have launched a start-up designed to shake up an industry even bigger than fitness: baby products.

He says the inspiration came when he was on the Gold Coast during Covid.

“I looked around the house, and there was just so much baby stuff that we just hadn’t used or used once, and for me it was just a pure decluttering issue,” he said.

“The problem with Facebook or Gumtree is buyers get your phone number, they come to your house, they walk through your house, you’ve got to meet them, they message and try and barter with you,” he said.

And that’s how Markot was born – a mobile app where parents can list baby products they’ve used. The products are sent to the warehouse, cleaned, sanitised and packaged up and resold.