Australian-founded cult gym franchise F45 is mired in a death spiral as franchise owners scramble to sell and customers continue to flee the beleaguered brand.
The once-thriving global fitness empire has been through tough times with several high-profile lawsuits in the US, a collapse in stock prices, and a growing number of franchisees going out of business or selling their businesses.
Owners are whipping up their franchises at discounted prices, with the lowest listing price for an F45 studio on anybusiness.com.au a paltry $50,000.
This is well below the estimated installation cost of about $250,000.
Other desperate owners say they are willing to accept any offer.
F45 co-founder Adam Gilchrist (above with Mark Wahlberg at the 2021 New York Stock Exchange) in happier times. The share price has since fallen to 93 percent
Nearly 10 percent of Australia’s roughly 500 F45 gyms are on the market, according to the ABC.
It comes at a difficult time for the global gym brand, known for its intense 45-minute group workouts.
Celebrity athletes David Beckham and Greg Norman are suing the company in a US lawsuit, claiming they owe a combined $22.5 million for their promotion of the brand.
Meanwhile, several class actions have been launched in the US alleging that the company misled investors about its finances and operations.
After launching into the US stock market at a $2 billion valuation in July 2021, the turmoil has caused F45’s share price to drop 93 percent from its peak.
Since July, nine Australian F45 gyms have gone bankrupt since July, with some creditors owing hundreds of thousands of dollars, while some customers have stayed out of pocket.
F45 franchisees are knocking down their gyms at discounted prices — often well below the $250,000 estimated start-up cost
Former owners of F45 gyms, who wished to remain anonymous for legal reasons, said the brand was struggling to keep up with the competition.
“They just haven’t innovated enough and haven’t kept up with trends,” one of them told the ABC.
“F45 in particular definitely made some bad decisions, but each franchise runs battles in its own studio.”
Another added, “People don’t want to pay $70 a week.”
It’s a far cry from the staggering heights of July 2021, when the company went public with an estimated $2 billion on the New York Stock Exchange.
Australian co-founder Adam Gilchrist, 44, posed on the trading floor with celebrity investor Mark Wahlberg, who told reporters that “the energy is absolutely incredible” when asked why he supported the brand.
Mr Gilchrist (not the ex-Australian cricketer) was forced to resign as CEO in July 2022 in the wake of the sudden stock market massacre of F45.
F45 was once the world’s fastest-growing fitness empire with global ambassadors including David Beckham (pictured), who is now suing the company with retired golfer Greg Norman claiming they owe a combined $22.5 million for their promotion of the brand
He is now at risk of having his luxury cars, beachfront properties and a $6 million Brett Whitely painting frozen under a garnishment order filed by creditors pursuing $10.8 million in Federal Court.
The court documents, obtained exclusively by Daily Mail Australia earlier this year, list Mr Gilchrist’s Porsche Speedster 911, his Porsche Panamera and Whiteley’s Bondi Beach masterpiece titled ‘Unfinished Beach Polyptych’.
Mr. Gilchrist’s Federal Court asset freezing order notice states that the order “ceases to be in effect when you pay the amount of $10,800,000 plus interest and legal fees.”
Mr. Gilchrist had enjoyed a lavish lifestyle as the training business became an international juggernaut.
He dabbled with celebrities, bought waterfront properties and made $500 million overnight when Hollywood star Wahlberg invested $450 million in F45.
Last October, however, he sold three multi-million dollar properties in quick succession after his departure as CEO of F45.
F45 co-founder Rob Deutsch (pictured with his model wife Nicole Person) who owned a formidable real estate empire worth more than $20 million before walking away from the gym empire more than two years earlier is ‘devastated’ over the collapse
He listed his Byron Bay guesthouse for between $10 million and $11 million, after selling his two Northern Beaches homes for $14 million and $8 million.
His co-founder of F45, Rob Deutsch, who says he hasn’t spoken to Gilchrist in years, left the company in 2020, long before it went public.
Mr Deutsh has since criticized the float, saying it was ‘absolutely not’ in the interest of the company’.
And he described paying “old-time actors and athletes like David Beckham” to promote the brand as “an epic fail.”
Mr. Deutsch also wrote on Instagram that the company was in good health when he left.
“I could never have imagined this in my wildest dreams,” he said.
“I left behind a healthy, phenomenal beast of a company, all the way from the corporate culture to the heartbeat of the company… the workouts. ‘
Branded gym clothes are sold on Facebook Marketplace by struggling owners
Everything from barbells to spin bikes and foam mats are up for grabs
Since then, Mr. Deutsch has founded a new start-up, the baby goods company Markot, which is based in Sydney’s Alexandria.
But it’s a different story at his old business where struggling owners of F45 gyms sell branded merchandise on the Facebook marketplace.
Everything from Dumbbells and kettlebells to spin bikes and foam mats are up for grabs, with discounts available for those who buy in bulk.
Daily Mail Australia approached F45 for comment.