During the next two weeks, 10 Blast Fitness clubs will have permanently shut their doors, according to a source close to the company. Although some locations have already abruptly closed, others in Illinois, Missouri, Texas, Minnesota and on the East Coast will soon cease operations.
Blast Fitness, a club chain headquartered in Auburndale, MA, that offers memberships as low as $10 a month, owns and operates close to 50 health clubs nationwide, according to its website. Blast Fitness is owned by Steve Borghi, who last year was ordered by a superior court judge to pay roughly $3 million in damages to the shareholders of Work Out World (WOW) New England related to a lawsuit over a noncompete agreement.
All the closed or closing locations have one thing in common: they do not have a third-party investor associated with them, says an operations manager, who asked to remain anonymous.
"The stars have aligned very strangely because a majority of the clubs that are closing down were breaking even and had higher training revenue," the manager says. "The only downside to these clubs in question was that they didn’t have outside investment or were only held by Blast corporate. I think they are trying to consolidate into limited locations where they have mitigated risk and private investment groups."
The manager says the landlords allegedly sent letters stating that Blast Fitness was behind on rent.
"They planned at some point to cut these loose," says the manager, who stated that some of the clubs that were closed were part of the 39 clubs that Blast Fitness bought from Bally Total Fitness in 2012. "A lot of it is speculation on our part, however, because corporate has not communicated a lot to anyone. I found out about the club closures only two weeks before they happened."
One of the closed clubs was in Glendale Heights, IL. Blast Fitness sent a memo to the managers of that club on Friday, March 27, notifying them that the club was closing on Monday, March 30. Similar abrupt closings occurred in Naperville, IL, and other locations. The manager says these sudden club shut-downs created chaos for the Blast Fitness management team, who tried to shift both customers and employees to open locations.
Compounding the challenge, the personal training department received a memo that it was being switched over to a new model and would be outsourced soon.
“There are a lot of things going on, and it’s a big headache with these series of closures,” the manager says. “The regional managers all care about their people, and we are all trying to scramble and put people in places. It’s just messy, and the logistics are a nightmare.”
Each of the 10 clubs in question have about 100 or more personal training clients, and now many of those clients are trying to get refunds for unused training sessions. All of the clients have been told to direct their refund inquiries to a personal training email address at Blast corporate. So far, some clients have received refunds, but the manager says it is hard to tell how long it will take for everyone to be properly compensated.
Some of the personal training clients at the Glendale Heights Blast Fitness location have not yet been reimbursed for unused personal training sessions, says Ron Adams, master personal trainer at the recently closed club.
“They have sent emails to the corporate personal training address at Blast Fitness, and they never hear anything back,” Adams says. “Then when they call the phone number, and they do get an answer, they tell them that they have to check into things and get back to them, and they never do. They are getting the runaround.”
In February, Blast Fitness offered a buy-one-get-one-session-free promotion for its members at the Glendale Heights club. Many of Adams' clients purchased a package, but a few weeks later, the trainers learned that the club was closing, and they were asked to persuade their clients to transfer to the Blast Fitness in Lombard, IL, which is a five-mile, 20-minute drive. Adams says he thought it was a lot to ask of the personal trainers and their clients on such short notice.
“The club closed the day after they told the members, and there were no formal announcements to the people who had training sessions,” Adams says. “They were told that they could go to Lombard, but all of my clients barely fit in the time to train with me at a location close to home, and going the extra distance to a new location doesn’t fit into their lifestyle or their schedule.”
Adams recently sent a letter to the Illinois Attorney General’s Office after learning that his clients had a total of $2,900 in unused personal training sessions. So far, only one of his clients has opted to move to the Lombard location, which has said that it will honor the unused personal training sessions from the Glendale Heights club. In the meantime, Adams is requesting severance pay because he can’t collect commission on the training sessions, and he is trying to find a new location close to the Glendale Heights club to train his clients.
Trainers who choose not to transfer to open clubs should receive a severance package, but that may not happen, the Blast manager says.
“If you look at what the company has done in the recent past, and what I have seen, they haven’t necessarily followed through on their promises,” the manager says.
The memberships at the closed and closing clubs are being transferred to the nearest Blast Fitness clubs, but members who don’t want to move to a different location have been told to contact the club's billing company to cancel their memberships.
“It comes down to a simple integrity issue,” the manager says. “A company should have the power in which to act and do the right thing and not have the dollars be the only thing that it looks at.”
The Blast Fitness website shows that it has clubs in Arizona, California, Connecticut, Illinois, Massachusetts, Minnesota, Missouri, New York, Rhode Island, Texas and Wisconsin.
As recently as November, Blast Fitness announced a club opening in the Chicago area, its 12th location there at that time.
In January 2013, Blast Fitness closed one of the two former Bally locations it had purchased in St. Louis.
A report on St. Louis TV station KMOV says that another Blast Fitness location in the city is one of the locations closing, but staff and members have not been notified of the exact closing date.
Nick Vitale, a staff member the St. Louis club, says corporate was still urging staff to sell memberships at the facility even after news of the club being closed.
As of this afternoon, Blast Fitness corporate had not returned emails or phone calls to Club Industry for comment.