Flywheel Closes 11 Studios while Facing Peloton Infringement Lawsuit

Flywheel storefront
(Photo by Smith Collection / Gado / Getty Images.) In September 2018, Peloton filed an infringement lawsuit against Flywheel in Texas federal court, claiming its competitor had used proprietary Peloton technology to stream classes and track performance on its FLY Anywhere bike.

Flywheel Sports Inc., New York, is closing 11 of its 42 cycling studios, including all of its Los Angeles studios, according to an Aug. 15 email the company issued to its members.

The closures include Flywheel's four Los Angeles studios and two San Francisco studios, as well as locations in Alpharetta, Georgia; Austin, Texas; and North Miami, Florida.

“We decided to take a look at our national footprint and close studios that were under-performing,” a Flywheel spokesperson told Bloomberg. “All riders impacted will be offered a full refund.”

Flywheel did not immediately respond to Club Industry’s request for comment.

In 2017, the company appointed Sarah Robb O'Hagan, the former president of Equinox, as its new CEO and began marketing at-home bikes to consumers.

In September 2018, New York-based Peloton filed an infringement lawsuit against Flywheel in Texas federal court, claiming its competitor had used proprietary Peloton technology to stream classes and track performance on its FLY Anywhere bike.

Peloton specifically accuses Flywheel investor Michael Milken of attending a private investor conference in order to poach Peloton’s business and technology concepts.

The complaint states: “At that conference, Milken falsely presented himself to  [Peloton CEO John] Foley as a potential investor in Peloton and pressed for—and obtained—information from Foley about Peloton’s technology and business strategy—all without ever disclosing his existing multi-million-dollar investment in Flywheel. On information and belief, Milken provided this information to Flywheel, which then used this information to facilitate the development, sales and marketing of the infringing FLY Anywhere bike.”

Peloton is seeking damages and a jury trial for its allegations against Flywheel.

Flywheel has recently filed motions to dismiss and stay the case, the latter of which the court denied on Aug. 14.

"[R]ather than innovating and investing, as Peloton had, Flywheel infringed the Peloton patents by creating a copycat of the Peloton bike experience called the 'FLY Anywhere' that, among other things, detects, synchronizes and compares the ride metrics of remote users on a graphical user interface," the complaint states. "Flywheel’s infringement of Peloton’s patents is ongoing and willful."

In April 2019, New York-based investment firm Kennedy Lewis Investment Management LLC, which had been a lender to Flywheel, purchased a majority stake in Flywheel and sought a buyer for it after the company experienced financial difficulties, according to Bloomberg.  

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