Endorsed by major celebrities F45 Training was presented as a great franchise opportunity. One of the fastest growing fitness franchises in the world F45 sold thousands of franchises in 60 countries. But today F45 training is plagued with drama and major lawsuits that threaten to destroy the brand. We look at the shocking tale of F45 Training today on Franchise City

F45 Started in Australia back in 2012 gaining a cult like status from members with their unique exercise model which claimed to be one of the most time efficient ways of training. Their functional HIIT or high intensity interval training claimed members could burn up to 750 calories in a 45 minute session.
In less than a decade F45 sold over 2,000 franchises across 63 countries, many of those to inexperienced first time buyers who were basically sold on hype alone. Today, many of those franchises are for sale or being abandoned with over 10% of their entire system in their home country on the market. Some of the franchise owners dug themselves deep into debt over the years owing over $600,000 to creditors. Many gyms are listed at fire sale prices like this one asking $75k and offering to owner finance. The startup costs in Australia were upwards of $250k plus any operating losses so these buyers are feeling the pain.
Members may have loved the F45 workout but many franchise owners complained they weren't making money.
When F45 initially listed their IPO of 20.3 million shares AT $16 the price rose as high as $17.75 per share giving the company a market cap of almost 2 billion dollars. All told the company at that time raised over $325 million dollars. Today their stock price is at 66 cents a share and was as low as 50 cents and F45 was actually issued a notice of non compliance from the New York Stock Exchange as their stock had sunk below the $1 threshold for over a 30 day period.
Mark Wahlberg, a major F45 investor and owner and now F45 Chief Brand Officer, regularly posting positive F45 messages to his 25 million followers on Instagram. This is despite enormous issues being exposed including massive financial losses underreported by F45. It was also discovered that just before the company announcements that led to the plunge in stock price including financial anomalies and the underreporting Wahlberg sold a ton of stock with 28 sale transactions in 2022 alone.
Over the years many celebrities promoted F45 including Magic Johnson, David Beckham, Stephanie Rice, Mick Fanning, Morgan Mitchell, Cameron Murray and Cindy Crawford. Today several of these celebrities are suing the company in US court claiming they are owed millions of dollars for their promotion of the brand.
Celebrity lawsuits are not the only ones plaguing F45 as multiple class action firms are looking into litigation as it is alleged the company misrepresented itself to investors. Rob Deutsch the founder of F45 sold his stock and left the company back in 2020 and was apparently devastated to hear what happened to his company.
Firstly celebrities' aren't franchise experts and they get paid to promote things. So they should be discounted. Industry awards like being on the Franchise 500 list are also highly misleading, we've covered that before on the channel. And explosive growth while it makes the companies millions in franchise fees, and looks good on paper can often be bad for a franchise owner as you are likely to have another location near your own competing for business. Just look at Subway for a prime example of huge growth that did not end well. Right in the F45 FDD if anyone chose to look they advise you do not get an exclusive territory.
Also in very small print F45 also made millions selling arguably overpriced fitness equipment to franchisees. A franchise in the US cost would buyers between $350,200 to $565,100 and included a long list of equipment that you needed to buy directly from F45. According to the 2022 disclosure F45 made over 43 million dollars in profit selling gym equipment to franchisees. The company got significant rebates for volume purchases - did they pass it to the franchisees? No they kept it for themselves.
And to this day media is still promoting how great F45 is, even their Wikipedia article has no references to any of the controversy. Wikipedia warns of this but to date nobody has added in any changes.
F45 raised hundreds of millions of dollars over the years, they sold over 2000 franchises with a franchise fee of $42,500 in the USA, they made millions a year selling gym equipment to franchisees, but still ended up struggling. What will happen in the future is anyone's guess but F45 will need to focus less on growth and more on franchisee support and infrastructure if they are going to succeed.

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