F45’s Decline and the State of the Fitness Industry

A graphic of a gold dollar sign with an arrow moving sharply downward.

“I’m proud to help you—to give you the tools of the big franchises without the polished chrome handcuffs that come with the franchise agreements.”

Chris Cooper wrote that in the introduction to our 2023 “State of the Industry” report, which will be published on Nov. 13.

It means independent microgym owners have more flexibility than franchise owners do, and Two-Brain is working hard to ensure that independents also have the data, support and resources franchise owners receive from parent companies.

And the part about chrome handcuffs?

Well, that hits home as news reports indicate that a host of F45 franchises—and the franchisor itself—are struggling mightily.

A head shot of writer Mike Warkentin and the column name "Pressing It Out."

I take no joy in F45’s decline. More gyms give people more options when they make the decision to get fit, and I don’t like to see any fitness entrepreneurs losing their businesses. But F45 appears to be in trouble.

On Aug. 14, Yahoo Finance reported that F45 Training Holdings Inc., the franchisor, was taking steps to be delisted from the New York Stock Exchange as a cost-saving measure. At present, the stock (FXLV) is an over-the-counter security trading at about 4 or 5 cents a share (it traded above $17 in August 2021).

On Oct. 25, insider.fitt.co reported that F45 filed “restated” financials for 2021 and 2022, with net losses of $194 and $179 million, respectively.

On Oct. 31, news.com.au reported that a whack of F45 franchises in Australia had appointed restructuring partners. Two weeks earlier, the same outlet had reported that at least 16 gyms had gone under in the last year.

The Oct. 31 article also reported that entrepreneur Serkan Honeine is looking to buy struggling F45 franchises for pennies on the dollar to grow his C3 Training brand. New.com.au stated Honeine’s broker found 151 F45 franchises for sale.

It’s all bad news—except for Honeine, I guess.

Pivot—Unless You Can’t

We’re a long way from F45’s heady early days.

I recall watching a plane with a bold F45 banner flying constantly over the CrossFit Games in 2015, I believe, and the company publicly hounded Rich Froning and Ben Smith to get the Games champs to thrown down F45 style (they didn’t, but others did). And we all recall Mark Wahlberg’s attachment to the brand.

So what went wrong? Probably a lot. Honeine’s comments provide a little insight:

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

Author Alex Turner-Cohen said Honeine is offering a different kind of fitness that’s less repetitive than F45 workouts: “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.”

And remember Honeine seems to be able to offer his brand of training in the same spaces and with much of the same equipment F45 franchises used.

So in this scenario, the chrome handcuffs appear to be the F45 training system.

Help for Independent Gyms

Honeine and other gym owners are free to pivot quickly as they see fit to retain and acquire clients. Independents do not have to kiss the corporate ring, and that’s a huge advantage.

But as an independent, you don’t get Marky Mark, branding, websites, playbooks, advertising and all the other stuff franchises use to get ahead fast.

Think about buying a Subway franchise: You’re going to get a lot of plug-and-play resources, including the recipe for signature sandwiches and cookies. It’s the same deal in the fitness world: franchisees trade a measure of freedom for a bucket of done-for you resources.

That’s where Two-Brain can help. You maintain your freedom, flexibility and independence as a gym owner while we give you the best data in the fitness industry for free. (Two-Brain can help franchise businesses, too, by the way.)

On Nov. 13, you can get our “State of the Industry” report (we’ll tell you how). Use the report to improve your gym business. And be sure to watch the live launch with Chris Cooper on The Sevan Podcast at 10 a.m. EST on Nov. 13.

The report costs us a ton of money to produce, and it contains data from 13,444 gyms. It’s valuable, but it’s yours for a few clicks because we’re all about helping gym owners thrive.

And if you want to go even further at higher speed, a Two-Brain mentor can tell you exactly what to do to improve your business, whether you’re an independent gym owner or a franchise owner (we help both).

To find out more about working with a mentor, click here to book a call.


One more thing!

Did you know gym owners can earn $100,000 a year with no more than 150 clients? We wrote a guide showing you exactly how.