Steve Borghi, owner of Blast Fitness, Auburndale, MA, and another Blast owner were ordered by a superior court judge to pay roughly $3 million in damages to the shareholders of Work Out World (WOW) New England and cannot open competing gyms within 50 miles of WOW New England clubs.
The judge's ruling was reported by the Boston Business Journal and Massachusetts Lawyers Weekly.
Borghi also cannot use the WOW New England name on his Blast Fitness clubs, the Boston Business Journal reported.
Superior Court Judge Janet L. Sanders ruled that Borghi breached his fiduciary responsibility to WOW New England's other shareholders. Borghi founded WOW New England with Tony Beninati and Joseph Masotta. Beninati's widow, Elizabeth Beninati, and Masotta filed the case in Suffolk Superior Court, the Journal reported.
Elizabeth Beninati and Masotta claimed Borghi violated a 2004 noncompete agreement that precluded them from owning and operating a club within 50 miles of any WOW New England club. (WOW New England currently operates 14 clubs, according to its website.) In 2001, Borghi formed Blast Fitness Group LLC with Harold Dixon, the other defendant in the case. According to the Journal, Borghi and Dixon ended up owning 13 clubs in Massachusetts and Rhode Island, some of which were within 50 miles of WOW New England clubs and all of them operated under the WOW name and in competition with WOW New England.
Borghi, along with Tony Beninati and Masotta, obtained a license to use the Work Out World name from New Jersey-based WOW Licensing LLC, Massachusetts Lawyers Weekly reported. WOW owner Stephen Roma agreed not to license the WOW name to any other company within five miles of the WOW New England Clubs.