An aerial shot of how close the two businesses are. They share a carpark.
An aerial shot of how close the two businesses are. They share a carpark.
A dispute between two rival gym franchises situated next door to each other in a small Tasmanian city has seen one of the companies collapse and the owner of the other owed money as a result.
At the end of last month, the F45 gym in Devonport, Tasmania, went into voluntary administration.
The once-popular F45 fitness empire has been struggling in recent months, following a plunging stock price and mass board resignations, as well as problems closer to home. This has included multiple Australian gyms going bust and dozens up for sale in what has been dubbed the F45 contagion.
Now Jason Cooper, the owner of F45 Devonport, claims a spat with a rival Anytime Fitness gym located just 10m away was the final “nail in the coffin” for his struggling business.
Jason Cooper sank $270,000 of his life savings into an F45 franchise.
Cooper, 52, purchased F45 Devonport in March last year from its previous owner, Jamie Needham, for $270,000.
But Needham, 40, went on to become involved with an Anytime Fitness gym that launched just across the carpark within a few months. There is no suggestion of any wrongdoing on the part of Needham.
Needham categorically denied Cooper’s claims, and added that the opening of Anytime Fitness in Devonport “hasn’t impacted his [Cooper’s] business one bit. They’re two completely different businesses, one’s a $10 a week 24-7 gym, no classes, one’s $60 a week,” he told news.com.au.
Next month, Anytime Fitness in Devonport is launching group fitness classes.
Needham said he did not sell the business to start up a rival gym chain across the carpark. He sold because he did not want to travel to Devonport and had been in a motorcycle accident, according to him.
“I fought as best as I could,” Cooper, a dad of two, told news.com.au. “If I continued I was going to get myself seriously in debt, so I pulled the pin.”
Cooper threatened Needham with legal action last year for breaching the terms of their contract by opening up a similar business right next door.
In August last year, Needham denied being involved in the Anytime Fitness franchise.
“We do not agree that we have breached the sale agreement,” he wrote in an email seen by news.com.au.
“You will be aware that [another business partner] and I entered that agreement in our capacity as trustees of our respective trusts.
“Those parties do not have any interest in the adjacent building or the operation of Anytime Fitness.”
However, when approached by news.com.au, he said he received the wrong advice from a lawyer, which is why he initially denied being involved.
ASIC document extracts show Needham owns a third of the Anytime Fitness Devonport franchise, which he confirmed.
He initially told news.com.au there were only vague plans to launch classes at the Anytime site, which would position the gym as a direct rival to the F45.
When news.com.au pointed out the gym was advertising classes as launching on May 1, he said he was not across the day-to-day running of the business and had never actually set foot in the gym as he is a “silent partner”. He resides in Hobart.
Jamie Needham was in a motorcycle accident, which is why he said he was looking to sell F45 Devonport this time last year.
In the past two weeks, four more F45 franchises that news.com.au knows of have gone bust, adding to an already growing list.
Cooper’s F45 Devonport F45 collapsed on March 24 while F45 Baldivis, in Western Australia, went into liquidation on March 21.
Then F45 Robina in the Gold Coast and F45 Rhodes in Sydney have also shut down.
That brings the total number since June last year to 15 failed gyms.
F45, well-known for its high-intensity interval training (HIIT) classes, has nearly 500 studios across Australia.
However, 10 per cent of those gyms are currently trying to sell their businesses.
F45 Devonport had been up for sale for some time before its owner appointed Oliver Sheahan, of restructuring firm Sheahan Lock Partners, as the administrator.
Sheahan told news.com.au that F45 Devonport so far appears to owe about $20,000 to creditors, with $10,000 of that owed to staff.
“My investigations will be focused on what went wrong … My understanding is that he [Cooper] hasn’t ever turned a profit since he’s been involved,” Sheahan said.
The administrator is still yet to determine what caused the gym’s collapse.
Onerous franchising fees owed to F45′s head office, which were upwards of $3000 per month, also added to the business’ woes, according to the administrator.
News.com.au contacted F45′s head office for comment but had not received a response by the time of publication.
To complicate matters further, Needham is actually the landlord of the site where the F45 and the Anytime Fitness operate.
It means he is now owed money from F45 Devonport’s collapse.
Cooper “was due to pay his rent for the next month right now. I’ll be paying the mortgage with no money coming in,” Needham added.
As the landlord, he said he was originally involved in helping the Anytime Fitness operation commence building. “I only became a silent partner later on,” he added.
Needham continues to operate four other F45 franchises in Hobart and as a result he insisted: “It’s always been in my best interests for F45 to remain successful … For the strength of the brand in Tasmania.”
Next week he is moving interstate and said that money he had been planning on receiving from his leave payouts would have been welcome. Now he has no idea when he will receive his money.
Cooper claimed the F45 head office approached him about buying the Devonport franchise at the beginning of last year after its then-owner, Needham, had been seriously injured in a motorcycle accident.
Needham said he was briefly a quadriplegic but made a miraculous recovery.
He was also looking to sell the business because he no longer wanted to travel to Devonport as he was based out of Hobart.
“I had a huge accident and I broke my neck. My business partner had a young child. It needed more attention than we could give it,” Needham said.
