https://www.google.com/url?sa=t&sour...OicBvg&cf=1
Seems this is only the beginning, I have a good friend who owns both The Gym in San Diego, he is worried.
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https://www.google.com/url?sa=t&sour...OicBvg&cf=1
Seems this is only the beginning, I have a good friend who owns both The Gym in San Diego, he is worried.
that doesn't surprise me ,
A few years back all the big gyms were leverage buy outs...Borrowing huge amounts of money to take over the chain , and then double tripling or quadrupling the franchise fee to pay the loans. My Local power house , basically said they fee went up so much that to keep the power house name they would have to give up all the current gross profits...a small chain in NJ ( about 5 power houses IIRC) left and created their own name, My gym signed with them... Another power house became something else. and lowered their fee.
Next thing you know there are hardly any golds, Power house or Worlds...Golds I understand was an extreme leverage and the franchise fee is ridiculous ..
That is why you see all these planet fitness,
But no one at the SEC said boo, or questioned the numbers... the people on Wallstreet got their bonus, the people on mainstreet first don't get a raise at best, and at worse loose their jobs... Ever time I hear a story like this it ticks me off, The SEC is supposed to prevent hit like this..
the retail stores are going to be scary, when we see how many close. they were already on the ropes, I would not be surprised to find out 1/2 of them do not reopen. and Malls ... they will close at record levels.
Also a bunch of restaurants too... go to the gift card resellers and see the discounts , Restaurants sell cards there ,basically it is extremely expensive financing to them
borrow money today at high discount. and pay with product later ( if they still exist) .the higher the discount the more likely they are ready fold..
A few years ago a leverage buy was done to a chain called Mr Donuts ( good coffee) any how they quadrupled the franchise free.There was a local placed call Heav'nly donuts that had better coffee IMHO was owned by a guy who's brother in law was a an owner of 4-5 Mr Donuts. Over some holiday they got to talking and He franchise Heav'nly off his Brother -in-law. The Brother in law gets a call from a another franchiser ask what he was going to do, and he said he was going to be Heav'nly franchise owner., gave that guy the local guys number... Suddenly the Local guy is in charge of a fairly large franchise. All with in like a year ...
https://www.bloomberg.com/news/artic...tness-closures
it is official...
update
https://www.goldsgym.com/blog/rsg-gr...ire-golds-gym/
so a German company will be take over, plan is for 61 company owned stores and 600 franchises
so in 2004 the was a leverage buy out .. for 158 Million
this summer after bankruptcy it sold for 100 Million..
congratulation you destroyed 58 Million in value... in 16 years
Now let us compare that to if they just bought a S&P index you would have made how much more ?...
I am sure that the people behind the leverage buy had their pockets were well line