Four more F45 gyms appoint restructuring partner, 151 ‘distressed’ franchises up for sale

Four more F45 gyms appear on the verge of collapse after appointing a restructuring partner to rejuvenate the business, while 151 gyms are desperately up for sale.

EXCLUSIVE

Four more F45 gyms appear to be on the verge of collapse after appointing a restructuring partner to rejuvenate the business.

Earlier this month, on October 19, several gyms in Queensland and far north NSW under the same business group appointed Bill Karageozis and Nick Keramos of restructuring firm Mcleods Accounting.

Those businesses traded under the names F45 Training Mount Isa, F45 Training Burleigh Heads, F45 Training Gold Coast, based across Queensland, and F45 Training Tweed Heads, on the NSW-Queensland border.

It’s understood high-profile former rugby league footballer Nate Myles is the owner of these gyms.

“Each of the appointments are currently in their infancy,” Mr Keramos told news.com.au. “We as Restructuring Practitioners (Registered Liquidators with ASIC) have commenced our investigations into the affairs of each of the company’s (sic). We are unable to comment any further at this point.”

Another gym, F45 Toowoomba West, was also listed on the ASIC notice, but its owner Tania Hayes said she had bought the business three months prior and was not affected by the restructuring appointments. “F45 Toowoomba West is fully operational and going strong. It is now locally owned by Tania Hayes. We aren’t going anywhere,” she said.

It comes as last week news.com.au revealed that yet another F45 gym based in Melbourne’s Bayswater North had gone into liquidation, adding to a growing pile of defunct gyms in the embattled Australian chain known for its 45-minute high intensity interval training (HIIT) classes.

Serkan Honeine, 34, is running a rival group training business called C3 Training and his strategy is to acquire the already fitted-out gyms from flailing F45 franchisees at incredibly cheap prices.

According to Mr Honeine’s broker, there are currently 151 distressed F45 locations up for sale across the country with some F45 owners just looking to surrender their lease for no cost.

The Padstow gym being refitted.

The Padstow F45 gym has closed down.

The Padstow site has been converted into C3 training.

Mr Honeine’s C3 Training business has seven sites across Sydney, and two of those are thanks to taking over the premises of gyms formerly part of the F45 network.

“We’re speaking with brokers all the time, where can we find locations (for our gyms),” he said.

It’s here that his broker discovered 151 F45 franchisees were trying to sell up their businesses.

That’s a massive spike since March, when news.com.au reported that 48 F45 gyms had been listed on sales website anybusiness.com.

That means almost 30 per cent of F45’s gyms are up for sale, as the brand has nearly 500 across Australia.

“Unfortunately (for) a lot of F45 (franchisees), if they can’t exit their lease, they’re going to be forced to shut down,” Mr Honeine explained.

As a result, three weeks ago, C3 Training took over the F45 Padstow gym in Sydney’s west.

The Padstow branch couldn’t find a buyer so “we went in there and took over the lease” the C3 boss said.

It has since been repainted and the logo has been replaced with that of C3 Training.

And earlier, in July, the owner of F45 Drummoyne in Sydney’s inner west decided to make the jump to C3 Training after seeing his membership base dwindle to one third of its original size.

The Drummoyne company director, Jack Burke, said to news.com.au “At its peak, F45 Drummoyne had over 300 members” but then this “slowly dwindled away to fewer than 100 members”.

Mr Burke made the switch to C3 Training and claims his membership base has jumped by 50 per cent almost immediately.

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F45 Padstow is no longer operating, as of three weeks ago.

C3 Training is trying to buy up F45 franchises.

“F45 have done an amazing job of building the concept of group fitness,” Mr Honeine acknowledged, but added: “We think the market has evolved and it’s clear that the F45 concept hasn’t evolved with it”.

Doing “unstructured repetitive movements as much as possible in a 45 minute window, it’s just going to lead to injury”, he added.

He also said that it reached a certain point where you were no longer building yourself up.

“I don’t know how heaviest the heaviest weight is at F45,” he mused. “But after a certain point in time you’re not getting stronger, you’re not getting fitter.”

Instead, he said his business model is to work on different types of fitness each week in a four week rotation, including endurance, strength and power.

“Every 12 weeks, we test that people can lift more, can move better, can run longer, can run faster,” Mr Honeine continued.

“We’re looking at all measures of fitness, not just how many burpees can you do in a minute.”

This evolution of training so far appears to be a hit among former F45 customers, as he said 40 per cent of his members came from F45.

The error message on a closed down F45 gym. Picture: Supplied to news.com.au

A customer doing a push-up out the front of a shutdown F45 gym.

Mr Honeine also claims there are too many F45 gyms in close proximity to each other, meaning neither business would thrive.

To decide on optimal gym locations, he and his team looked at Census data, competition data and working population trends.

“We split NSW into 34 territories, and we said that’s it, whereas F45 probably has 200 (in NSW).”

Mr Honeine has his sights set next on a F45 venue in Surry Hills that he is hoping to absorb into his network.

He had a parting message for business owners struggling with their F45 gym.

“We’d love to connect with as many franchisees as possible if they’ve still got energy in the industry,” he said.

This stack of dumbbells was up for sale for just $3 a kilo earlier this year. Picture: Facebook

These kettlebells were sold for even less, at $2 per kilo. Picture: Facebook

F45 head office’s new CEO, Tom Dowd, said to news.com.au in a statement that the business was “prepared to shrink to grow”.

They said “Closing unproductive locations to add value to existing studios strengthens our system”.

In this way, the F45 boss claims that they had managed to “avoid over-saturation”.

“We are focused and committed to supporting our franchise network – their operational success helps ensure the entire system gets stronger.”

The collapse of multiple Australian gyms is the latest spot of trouble to hit F45 amid multiple class actions from investors, mass board resignations and in a blow from last month, the brand being delisted from the New York Stock Exchange.

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Originally published as Four more F45 gyms appoint restructuring partner, 151 ‘distressed’ franchises up for sale