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read moreUS lawyers Robbins LLP – a recognised leader in shareholder rights litigation - is reminding investors in the Australian-founded fitness franchise group F45, that a shareholder has filed a class action on behalf of all persons and entities that purchased or otherwise acquired F45 Training Holdings, Inc. (NYSE: FXLV) shares pursuant to the Company’s 16th July 2021 initial public offering ("IPO").
The complaint alleges violations under the Securities Act of 1933. F45 is a fitness franchisor with a business model based on rapid growth through the franchising of low-overhead fitness facilities. At the time of the Company’s IPO it maintained 2,801 franchises in 68 countries.
Similarly situated shareholders may be eligible to participate in the class action against F45. Shareholders who want to act as lead plaintiff for the class must file their papers by 6th February, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
Robbins LLP include the following background information on their website:
“According to the complaint, F45 went public on July 16, 2021, issuing 18.75 million shares at $16.00 per share. F45's Registration Statement in support of its IPO represented its advantage over traditional owner-operated fitness facilities both because the franchise model “has enabled us to open new studios at an accelerated pace versus the owner-operator model” and because it generated quick revenue for the Company because “[f]or the majority of franchises that we sell, we receive an upfront payment from the franchisee.” However, defendants’ Registration Statement was false and misleading regarding the Company’s revenue stream and its ability to maintain its rapid expansion business model.
“In its Prospectus, the Company noted that it intended to emphasize the growth of multi-unit franchisees over single-unit franchisees, stating that “[a]s we pursue opportunities to develop multi-unit franchise systems with financial partners, we expect the percentage of multi-unit franchisees to increase over time.” However, defendants failed to disclose that F45 could not maintain new franchise growth because it was offering more favorable payment terms to multi-unit franchisees.
“In truth, as of the July 2021 IPO and as the Company would later acknowledge, F45 provided for “modified” payment terms for “large multiunit deals.” This would and did ultimately result in material increases to accounts receivable and lower cash flow for the Company. F45’s approach to starting new franchises was not sustainable over the long term as the Company was not being, and would not be, repaid by multi-unit franchise owners quickly enough to maintain significant franchise growth.
“On July 26, 2022, F45 issued a press release titled “F45 Training Announces Strategic Update” describing “strategic updates to align the Company more closely with macroeconomic conditions and current business trends and prepare for the next phase of studio and membership growth.” According to the press release, the Company’s “strategic updates” informed the market: (1) of a significant reduction in its financial guidance, from a range of $255 to $275 million to a new range of $120 to $130 million; (2) of a dramatic cut in the number of new exercise studios that it would open in 2022- down approximately 60% (or 350 to 450 new studios, versus 1,000); (3) that a $250 million credit line “will not be available”; (4) that it was letting go of about 110 employees, equaling approximately 45% of its workforce; and (5) that CEO, Adam Gilchrist, had resigned his position as CEO, effective July 24, 2022. On this news, the price of F45's stock plunged over 60%, to close at $1.35 per share on July 27, 2022, representing more than a 78% decline from its offering price.”
Founded in 2002, Robbins LLP is a US law firm that helps shareholders and consumers recover losses, improve corporate governance structures, and hold corporate executives accountable for their corporate mismanagement, anticompetitive misconduct, and dishonest sales practices.
To contact Robbins LLP go to robbinsllp.com/f45-training-holdings-inc/
21st November 2022 - Chief Financial Officer Chris Payne leaves troubled F45
6th October 2022 - Reports suggest that F45 shareholders Mark Wahlberg and Adam Gilchrist look to take the business private
16th August 2022 - Loss of confidence sees mass cancellation of F45 franchise sales
12th August 2022 - F45 co-founder’s Reunion Training business enters administration
29th July 2022 - Outgoing F45 Chief Executive Adam Gilchrist looks back on goal to ‘change people’s lives by creating the world’s best workout’
27th July 2022 - F45 Training announces layoffs for almost half its corporate staff after revealing projected revenue fall
8th July 2022 - F45 Training partners with education organisations Onfit Training College and ISSA
1st July 2022 - Canstar Blue again rates F45 for delivering highest levels of customer satisfaction among Australian gyms
21st June 2022 - F45 caught trademarking Bodyfit name after Federal Court loss
15th February 2022 - F45 loses legal battle with Body Fit Training over workout patents
3rd December 2021 - F45 announces Vive Active acquisition and 24% growth in last quarter
3rd November 2021 - What is driving the financial success of F45, Body Fit Training and Fitstop?
23rd August 2021 - Co-founder of F45 launches new fitness franchise, REUNION Training
16th July 2021 - New York Stock Exchange listing sees F45 valued at more than US$1.5 billion
7th July 2021 - F45 Training moving towards New York Stock Exchange listing with potential US$1.5 billion valuation
21st December 2020 - F45 ends listing plans but keeps up legal action against competitor Body Fit Training
9th November 2020 - F45 recognised again for delivering highest level of customer satisfaction
26th June 2020 - F45 reveals plans for listing on US NASDAQ exchange
30th January 2020 - MINDBODY and F45 Training finalise new global agreement
21st January 2020 - F45 looks at US stock market listing
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