When gyms don’t work out
True Fitness members were left hanging after it suddenly closed down. What can we learn from this saga?
WHEN large “hyper gyms” were first introduced in Malaysia, many medium and small gyms lost business as people flocked to the big, shiny new places.
But we never expected a major and well-established gym like True Fitness (TF) to suddenly close its doors nationwide on June 10.
Their members were blindsided by this and the news hit the whole fitness community like a tsunami.
Many TF members who had paid thousands of ringgit for life or longterm memberships were left feeling stranded and betrayed.
For the first time, the public started questioning the financial security and business integrity of all the large hyper gyms, which we had thought were “too big too fail”.
A decade into the new millennium, hyper gyms started appearing in Malaysia.
These gyms were huge and packed with the latest exercise machines, besides offering classes like yoga and body pump, as well as personal training sessions.
These gyms went on a marketing overdrive to recruit as many members as possible, by selling the dream of acquiring a beautiful body.
Their zealous salespersons were driven by commission fees for signing up new memberships.
I was personally rather turnedoff by their hard sell methods, but many others paid thousands of ringgit for annual, corporate and lifetime memberships.
However, being a fitness coach, I also knew that it was a good thing for consumers to have more choices of gyms because individuals require different motivations to get off the sofa and exercise.
There are currently talks about providing compensation or alternative services to TF members, but at the time of writing, nothing is concrete.
My heart goes out to all TF members who are the innocent victims of this fiasco. Even more far-reaching, this is a huge breach of consumer trust, and it reflects badly on other genuine and hardworking gym owners.
The abrupt closure left 100 TF Malaysia staff jobless – without any notice. The employees are claiming they have not been paid over RM66,000 in salaries and commissions.
More and more disgruntled TF members are publicly complaining (through social media) about how they feel shortchanged.
In fact, some TF members had smelt something fishy earlier. For instance, my running buddy Stephen Ng from Klang, who had paid RM5,000 for a TF lifetime membership in 2014, recalled, “I had a feeling they were in financial trouble one year ago when some of the gym equipment and the sauna were out of service. The instructors’ payments were also delayed by as long as 90days!”
TF claimed that it was “no longer financially viable due to evolving market conditions”. But a report in The Star (tinyurl.com/ TrueGoChina) exposed that Patrick John Wee, the CEO of True Group, the Singapore-based parent company, agreed to shut down TF operations in Thailand and Malaysia after it had sold a 51% share to an investor from China. If Wee failed to do so, then he would be liable for the franchise fees.
So now TF will be expanding into the lucrative China market, while leaving behind a mess in Malaysia. Does this situation sound fair or “true” to you?
Can anything be done to recuperate the losses incurred by members (and other creditors)? Probably not. Can the same problems arise again with other fitness centres? Sadly, yes.
So have a look at my list of tips on how to choose gyms – or opt for free exercise in the outdoors!
Gus Ghani is a fitness coach-cumwriter who likes to share his fitness and lifestyle stories/tips on his blog www.gusghani.com
HOW TO CHOOSE GYMS — 6
When big gyms fail, the fallout can be devastating for some.