Mark Wahlberg-Backed Fitness Franchisor Faces Class-Action Lawsuit

On December 8, 2022, a group of investors filed a class-action lawsuit in the United States District Court for the Western District of Texas against F45 Training, a fitness company that received backing from actor Mark Wahlberg. The investors claimed in their lawsuit that the company violated federal securities laws by withholding important information about the “sustainability” (or lack thereof) of its business model. The investors further claimed that the company could not maintain its growth due to its preference for multi-unit franchises over single-unit franchises, resulting in lower cash flow to the company.

The lawsuit alleges that F45 and several executives, including CEO Adam Gilchrist and CFO Chris Payne, in addition to Mark Wahlberg (who has been on the board of directors since 2019) violated Chapter 11 and Chapter 15 of the Securities Act of 1933 by making and disseminating untrue statements in F45’s registration statement with the SEC.

Law firms Robbins Geller Rudman & Dowd and Barrack Rodos & Bacine are seeking Plaintiffs consisting of any investor who purchased and/or acquired F45 Training common stock pursuant or traceable to F45 Training’s offering documents issued in connection with its Initial Public Offering (“IPO”).

By the time of its IPO in July 2021, F45 had 2,801 franchises in 68 countries and claimed that its model allowed quick revenue generation. Actor Mark Wahlberg was featured in the IPO prospectus as a factor for growth.

In July 2022, F45 Training seemed to crash and burn; the company announced a significant reduction in expected earnings and the number of studios it expected to open, the removal of an expected credit line, the laying off of about 45% of its workforce, and the resignation of its CEO. According to the Plaintiffs’ complaint, the announcement caused F45 stock prices to plummet by 60%. Robbins Geller Rudman & Dowd claimed that F45 misled investors by not disclosing key information related to its “defective business model” for sustainability and franchise growth.

Goer is represented by Jeffrey A. Barrack and Stephen R. Basser of Barrack Rodos & Bacine, as well as Bruce W. Steckler of Steckler Wayne Cherry & Love PLLC.

Legal counsel information for the defendants was not immediately available.

The case is Goer v. F45 Training Holdings, Inc. et al., case number 1:22-cv-01291 in the United States District Court for the Western District of Texas

* Lowe & Associates (“The Firm”) is a boutique entertainment and business law firm located in Beverly Hills, California. The firm has extensive experience handling cases involving business law, having provided top-quality legal services to its clients since 1991. The Firm is recognized for its many achievements, including successfully litigating many high-profile cases.

You may also like…

Defend Your Creative Legacy

In the realm of entertainment, your creative property isn’t just a product, it’s a piece of your soul, a testament to your passion, dedication, and vision.

At Lowe & Associates, we understand that, and we’re here to fiercely protect what’s rightfully yours. If you find yourself needing to defend your intellectual property, don’t stand alone. Team up with experts who have consistently showcased their ability to champion creative rights against all odds.

Are you ready to fight for your creative property?

Reach out to us today and let’s ensure your legacy remains untarnished.