Two more F45 Training gyms have closed as woes deepen for the embattled Australian fitness chain which was once on top of the world but is now struggling to sell businesses at prime locations.
F45 Training — which is well known for its functional high intensity interval training (HIIT) 45-minute classes — was at one pint the king of fitness after the Australian chain listed on the New York Stock Exchange, but the success story soon soured after stock prices plunged, then the company was delisted from the stock market, multiple executives quit and now multiple gyms are collapsing or closing down.
Last Friday, F45 franchises at Labrador and Surfers Paradise announced to their members they were shutting — forever.
The venues, based in Queensland’s Gold Coast, had been in business for a decade.
“Permanently Closed. Cherishing 10yrs of memories and life-changing moments we created together. Thank you for being a part of our journey,” both gyms’ social media pages read, along with a post captioned “end of an era”.
News.com.au understands the Surfers Paradise and Labrador businesses had been unable to sell and as a result were forced to close down instead.
It comes as an F45 insider has leaked a dire email from a business broker about how interest in buying up the gyms has dropped by more than 20 times the amount compared to just two years ago.
Last year, news.com.au revealed that 151 distressed F45 locations were up for sale across the country with some owners just looking to surrender their lease for no cost.
At the time, that made up 30 per cent of F45’s total of 500 gyms in Australia.
More recently, an F45 insider looking to sell their own gym told news.com.au that their broker professed having trouble selling businesses in the brand.
“They are struggling to even give them away for the cost of the lease, meaning the assets themselves (the studios) have lost all value thanks to the brand damage,” the insider said.
This broker also confided in them the difficulty in selling F45 Broadbeach — another Gold Coast studio.
“I have been specialising in the health & fitness sector for 7 years now. Over the years I have worked with a number of brands including F45,” the email read.
“The brand image has been significantly harmed over the last 12-18 months and it has become almost impossible to even sell them for $1 based on the enormous risk buyers are faced with moving forward.
“Unfortunately I’m turning dozens of franchisees away due to the massive lack of buyer interest out there. It has even had a noticeable impact on other functional training brands with buyers very reluctant to invest into the industry AND many lenders wont touch them, especially F45.
“The most recent sale I worked on was Broadbeach. We can both agree that it really is a very desirable location and it was the only reason I was brave enough to have a crack.
“Whenever I’ve listed anything in the fitness industry on the Gold Coast it has sold quickly and at great multiples.
“This particular studio took 16 months to sell … Over the 16 months I had less than 20 inquiries. 3 years ago when I was selling F45’s I would get 20 inquiries a week on each studio!”
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The Labrador and Surfers Paradise F45 gyms were headed by husband and wife duo Ashleigh and Ray Brown.
Ms Brown was more than just a business owner; she was also an F45 diehard. The ex-Australian 400m sprinter had previously shared online that she had won the F45 Playoff Champion, twice, holding the highest ever female score.
An ex-member of the now closed-down Labrador Gym, or ‘The Lab’ as it was fondly referred to, said he believed it was one of the biggest F45 gyms in the country.
“Just crazy for a franchise with hundreds of members throughout stages had to close its doors,” he told news.com.au.
“A lot of the F45 studios have shut down on the coast with Runaway Bay, Labrador and Surfers all within a couple of kilometres.”
News.com.au contacted the gyms for comment.
Indeed, several F45 gyms have succumbed in the Gold Coast.
F45 Runaway Bay was one of the first gyms to collapse, with news.com.au reporting on its sudden shutdown last year.
Restructuring partners were also appointed to 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, near the Gold Coast. These businesses are still operating.
In 2022, F45 Carrara, also in the Gold Coast, permanently closed down, with its location up for lease. The Carrara gym merged with the nearby F45 Nerang.
These closures have halved the number of gyms in the area, essentially creating an F45 desert in the Gold Coast, a city which could be considered the fitness capital of Australia.
More than 20 F45 gyms have shut in Australia over the past 18 months according to figures compiled by news.com.au.
As well as competition from other gym chains, franchisees cite factors such as small territories which put them in competition with other F45 franchises, high rents and the percentage of revenue taken by the parent company as the reasons behind their failure.
Adam Gilchrist and Rob Deutsch founded the company in 2013 in the Sydney suburb of Paddington and it expanded across Australia and even globally.
In 2021, it debuted on the New York Stock Exchange and made $500 million on the first day.
But after listing with a share price of US$17 (A$25), F45 was eventually delisted by the exchange in September 2023, by which time its share price had fallen below US$1 (A$1.49).
It was kicked off the exchange because its share price traded below US$1 for more than 30 consecutive days and due to its failure to file financial accounts.
Its executive suite has also had a revolving door in recent years with two chief financial officers leaving the business in the space of less than a year and CEO Adam Gilchrist (not the cricketer) departing the business in July 2022.
Mr Deutsch left the company in February 2020.
alex.turner-cohen@news.com.au
