24 Hour Fitness

24 Hour Fitness is a privately owned and operated fitness center chain headquartered in San Ramon, California. It is the second largest fitness chain in the US based on revenue after LA Fitness,[3] and the fourth in number of clubs (behind LA Fitness, Anytime Fitness & Gold's Gym),[4] operating 420 clubs in only 13 U.S. states with four million clients to LA Fitness's 725 clubs in 30 states.

24 Hour Fitness
Private
GenreFitness
Founded1983[1]
FounderMark S. Mastrov[1]
Headquarters
San Ramon, California
,
United States
Number of locations
400+ [2]
Area served
17 U.S. states
Key people
Tony Ueber
(CEO)
OwnerAEA Investors, Ontario Teachers' Pension Plan
Number of employees
22,000+
Website24hourfitness.com
24 Hour Fitness headquarters in San Ramon

The company was founded by Mark S. Mastrov and owned by AEA Investors. The company filed for bankruptcy in June 2020.[5]

History

Early history and founding

24 Hour Fitness was founded in 1983 by Mark Mastrov. Mastrov had been using a local gym for rehab after a knee injury, and turned the gym into a 24-hour nautilus facility after buying out the owner.[1] The company was originally named "24 Hour Nautilus."[6]

The company combined 24 Hour Nautilus, 24 Hour Family Fitness Centers, and Gold's Gyms of Hawaii under the brand name 24 Hour Fitness in 1996.[6]

2004 to 2008: Olympics and other sponsorships

In 2004, 24 Hour Fitness became a sponsor of the 2004 to 2008 United States Olympic teams. The sponsorship grants memberships to some U.S. Olympic hopefuls, and includes upgrades to some U.S. Olympic Training Centers across the country, including renovation of the facility in Colorado Springs, Colorado, in 2004 to be followed by Lake Placid, New York, and Chula Vista, California.

24 Hour Fitness partnered with NBC to develop a reality show, The Biggest Loser, which features 12 to 22 overweight contestants competing to lose weight over several million dollars. The show first aired in late 2004.[7]

Beginning in 2005, 24 Hour Fitness partnered with cyclist Lance Armstrong co-sponsored the Discovery Channel Pro Cycling Team. That same year, 24 Hour Fitness opened its first Lance Armstrong Signature Club. 24 Hour Fitness cut their ties with Armstrong in 2012 after the his doping scandal.[8]

2009 to present: Acquisition and other operations

24 Hour Fitness formerly had some 15 clubs in Singapore and China. Besides the United States, it had centres in Singapore and Hong Kong, Beijing and Shanghai in China) through its wholly owned subsidiary California Fitness (CalFit). Its European clubs closed in the early 2000s. CalFit has been sold to Ansa Group,a Hong Kong company in 2012, providing continuity and retaining the name and memberships without the bad closure experiences of CalWowX, whereby becoming an exclusively US gym chain.[9]

Its former affiliate and spinoff California Wow Xperience (CalWowX), a California Fitness offshoot, formerly had member swap agreements with both 24 Hour, then only California Fitness, and at its height ran gyms located in Bangkok, Chiang Mai and Pattaya in Thailand, including one female-only club.[10]

In August 2012, the owner of 24 Hour Fitness put the 416 location gym chain on the auction block with a price tag reported to have been close to $2 billion.[11] After being courted by various interests for over six months, ultimately in January 2012, the board of directors took 24 Hour Fitness off the market. Offers reportedly fell short of the asking price.[12][13]

In May 2014, Forstmann Little & Co. reportedly sold 24 Hour Fitness Worldwide Inc. for $1.85 billion to an investment group led by AEA Investors LP and the Ontario Teachers' Pension Plan.[14]

In January 2020, the company expanded to the Chicago metropolitan area.[15]

In April 2020, due to the coronavirus gym closings, the company was exploring the option of filing for bankruptcy within the next few months.[16]

In June 2020, the company officially declared bankruptcy.[5][17]

Operations

As of 2017, 24 Hour Fitness has over 4 million members and more than 420 clubs in 13 states, with more than 22,000 employees. Its major competitors in the US are Anytime Fitness, Gold's Gym, Aspen Fitness, and LA Fitness.[18]

The company also owns co-branded centers along with celebrities such a Lance Armstrong, Mark White (soccer), and Jackie Chan.[19]

Criticisms

On July 31, 2007, 24 Hour Fitness settled a class-action lawsuit brought against it by 1.8 million current and former members. The plaintiffs claimed damages for the continuation of automatic withdrawals by 24 Hour Fitness long after their monthly memberships were canceled by request.[20][21] In McCardle vs 24 Hour Fitness USA, Inc., the Alameda County Court ruled in favor of the plaintiffs of the class-action lawsuit. In 2010, the court found that 24 Hour Fitness did not act in good faith after denying members who purchased an "All Club" membership access to rebranded locations without charging additional fees not disclosed in the original contract.[22][23]

Six former employees of 24 Hour Fitness filed a separate class-action lawsuit on July 13, 2010. This lawsuit was brought in the State of California pursuant to allegations that 24 Hour Fitness discriminated based on race and gender in their promotion practices. The claimants are either females, minorities, or both.[24][25]

As of March 2, 2013, 805 complaints had been registered against 24 Hour Fitness with the Better Business Bureau in the previous three years, 276 in the previous 12 months. 24 Hour Fitness has an A+ rating with the private non-governmental organization.[26]

References
  1. Ryan, Kevin (27 September 2017). "Fitness gurus who turned a workout passion into a business empire". CNBC. Retrieved 30 May 2018.
  2. "About Us" (Press release).
  3. GmbH, finanzen net. "One gym is taking the workout world by storm (PLNT) | Markets Insider". markets.businessinsider.com. Retrieved 2020-02-26.
  4. "11 Biggest Fitness Chains in America". Insider Monkey. Retrieved 2020-02-26.
  5. Business, Jordan Valinsky, CNN. "24 Hour Fitness files for bankruptcy and closes 100 gyms". CNN. Retrieved 2020-06-15.
  6. "24 Hour Nautilus changing its name". SF Gate. 29 July 1996. Retrieved 30 May 2018.
  7. "Planet Fitness to Sponsor 'The Biggest Loser'". Club Industry. 2011-10-11. Retrieved 2020-02-26.
  8. "24 Hour Fitness Cuts Ties with Lance Armstrong". Club Industry. 2012-10-18. Retrieved 2020-02-26.
  9. Zabonick-Chonko, Rachel (2012-08-23). "24 Hour Fitness Sells California Fitness". Club Solutions Magazine. Retrieved 2020-02-26.
  10. "California Fitness was pumped for growth, but not fit for purpose". South China Morning Post. 2016-07-15. Retrieved 2020-02-26.
  11. Ross, Andrew (Aug 2, 2012). "24 Hour Fitness, healthy chain, for sale". San Francisco Chronicle. Retrieved 14 April 2013.
  12. Young, Eric (September 13, 2013). "24 Hour Fitness names new CEO". San Francisco Business Times. bizjournals.com.
  13. Dezember, Ryan (Jan 31, 2013). "24 Hour Fitness Sale Misfires". Wall Street Journal. Retrieved 14 April 2013.
  14. "Forstmann Little Earns $1.85B In Sale Of 24 Hour Fitness - Law360". www.law360.com.
  15. "24 Hour Fitness to Open Four Chicago-Area Clubs in 2020". Club Industry. 2020-01-29. Retrieved 2020-02-19.
  16. "24 Hour Fitness weighs bankruptcy as coronavirus pushes fitness industry to brink". CNBC. 2020-04-18. Retrieved 2020-04-19.
  17. "24 Hour Fitness declares bankruptcy, expects to reopen most gyms by end of June". MarketWatch. 2020-06-15. Retrieved 2020-06-15.
  18. Hunter, Glenn. "It's 'Game On' for Growing 24 Hour Fitness". D Magazine. Retrieved 5 June 2018.
  19. Arellano, Kristi (17 August 2005). "Peddling a name". The Denver Post. Retrieved 11 June 2018.
  20. "Settles in Class-Action Law Suit". San Francisco Business Times. Jul 31, 2007. Retrieved 6 March 2013.
  21. "24 Hour Fitness Health Club Membership Cancellation and Electronic Funds Transfer EFT Class Action Settlement". Class Action Law Suits in the News. Retrieved 7 March 2013.
  22. "Courts Find for Plaintiffs Against 24 Hour Fitness" (PDF). Superior Court of the State of California. County of Alameda. Archived from the original (PDF) on 29 September 2013. Retrieved 6 March 2013.
  23. "Case Settlement Website". Gilardi & Co. LLC. Retrieved 7 March 2013.
  24. Lewis; Feinberg; Lee; Renaker & Jackson. "Discrimination Class Action Filed" (PDF). Alameda County Clerk of Civil Court. Retrieved 6 March 2013.
  25. Watt, Brian (July 13, 2010). "24 Hour Fitness employees file discrimination suit". Southern California Public Radio. Retrieved 7 March 2013.
  26. "BBB Business Profile - 24 Hour Fitness USA Inc - Reviews and Complaints". www.bbb.org.
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