Troubled 1-2-3 Fit Sold!!
Fort Lauderdale-based Diversified Health and Fitness thinks it can turn turkeys into swans. Following on the heels of the fitness conglomerate's purchase of troubled Butterfly Life last month, it has acquired Denver-based 1-2-3 Fit, a fitness club chain established by Quiznos founder Rick Schaden. Mr. Schaden is battling ongoing franchisee lawsuits from his various franchise concepts.
It is undisclosed how much the shaky franchise brand was sold for.
Many of 1-2-3 Fit’s top leaders are now gone, including former CEO Brooksy Smith. Mr. Smith came to lead the chain from his former position as vice president of toasted subway sandwich maker Quiznos.
Insiders believe the chain may now only have 20 franchised clubs or less. Franchising since only 2005, 1-2-3 Fit reported in the 2008 International Franchise Association’s Franchise Opportunity Guide it had as many as 102 franchised units.
“Former 1-2-3 Fit franchisees accused the company of lying about its initial franchise costs as well as the exclusivity of its equipment. 1-2-3 Fit opened in 2005 with the backing of industry veteran Ray Wilson, who sold his share of the company two years later.” [via Fitness Business Pro, registration required]
Diversified Health only buys out the assets of 1-2-3 Fit, such as franchise agreements that contain long-term royalty payment obligations from franchise owners. But it walks away from all liabilities from the distressed chain, such as franchisee lawsuits.
- Franchise topic:
