Breakaway gyms refuse to close doors

By Ben Chapman-Smith

Club Physical gym members seen here protesting outside one of the Jolt Fitness branches. Photo / Supplied
Club Physical gym members seen here protesting outside one of the Jolt Fitness branches. Photo / Supplied

Three Auckland gyms have opened their doors for business this morning despite an order by the High Court to stop trading.

Justice Winkelmann yesterday issued an interim injunction against Jolt Fitness, requiring the owners to close down its Westgate, Three Kings and Botany health clubs.

Her decision came after Stuart Holder, who owned three Club Physical gym franchises, suddenly rebranded the clubs as "Jolt Fitness" without warning on February 8.

Club Physical owner Paul Richards applied to the High Court for an injunction to stop Jolt Fitness from operating, claiming Holder had breached franchise agreements.

Jolt Fitness has today confirmed it will be lodging an appeal against Justice Winkelmann's decision.

"The appeal will include an urgent application for a stay of the Order to close the three Jolt Fitness clubs.

"Jolt Fitness has requested that this application be dealt with by the High Court today.

"Until such time as this application is heard, the three Jolt Fitness clubs at Westgate, Botany Downs and Three Kings will remain open for business."

Holder last night said he was "incredibly surprised and disappointed" by Justice Winkelmann's ruling.

Holder's sudden rebrand of the three gyms last month sparked heated debate on both the Club Physical and Jolt Fitness Facebook pages.

Staff at the Three Kings, Botany and Westgate gyms were fitted with new uniforms, new classes were put in place, and instructors arriving up to take their regular classes were turned away.

Many members of those gyms are upset the move came without warning and that classes they signed up for no longer exist. Others have voiced their support for the change.

Justice Winkelmann's decision to grant an interim injunction means Jolt Fitness is not allowed to operate a health and fitness business at or within five kilometres of the Three Kings branch until further order of the High Court.

With regard to the other two branches, Jolt has been told it cannot trade at the Botany and Westgate premises until further order of the Court. No other restraints were issued which means Jolt could effectively open up another gym next door if it wanted and was able to.

Jolt Fitness' cross-application to stop Club Physical from accessing the contact details of the franchisee's gym members, and from contacting those members was declined by Justice Winkelmann.

Richards yesterday said he was thrilled with the decision and was looking forward to trying to move back into the three premises.

"Very happy, now the work starts.....meet with landlords, and see how we can re-instate Club Physical for its members as quickly as possible. We do not know how long this will take."

Richards said all Club Physical members would be allowed to attend the Albany, Te Atatu, Downtown, Birkenhead, and New Lynn branches, at least temporarily.

Holder's lawyer, Jason Goodall, told the court last week that his client had no previous experience running gyms and, under the franchise agreements, Richards was supposed to provide business support.

Richards had not been meeting his obligations and this was putting the clubs' futures in jeopardy prior to the sudden rebrand, Goodall alleged.

Phillip Rice, lawyer for Richards, said Holder had cancelled the agreements at the same time as franchise fees for the Three Kings club - which had been waived for the first two years - suddenly became payable.

"The evidence shows there was clearly a predetermined plan here to acquire several franchises and at the opportune moment, terminate on some pretext.

"It's not mere coincidence that this times perfectly with the end of the two-year waiver of fees."

Any reasons Holder had for wanting to cancel the franchise agreements should have been discussed before he took such sudden action, Rice said.

"There was absolutely no lawful right to terminate the agreements. The grounds that have been put forward are trivial and historical."

A future date for both parties to bring their full cases before the court and for a permanent decision to be made has not been set.

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