An Austin-based fitness franchiser with Hollywood star power in its boardroom has moved to resolve investor claims that shadowed its public debut. The F45 Training shareholder lawsuit settlement comes after allegations the company misled investors ahead of its initial public offering.
F45 Training Holdings Inc., known for its 45-minute high-intensity workout studios, agreed to settle a proposed class-action suit filed in December 2022 — roughly 18 months after its IPO. The lawsuit named actor Mark Wahlberg, a board member, along with other directors.
Founded in 2013 in Sydney, Australia, F45 expanded rapidly in the United States, where it now operates nearly 900 locations. Ten studios are in Austin, seven in San Antonio and 20 in and around Houston.
Claims of Inflated Growth Projections
The suit, brought by shareholder Kenzie Goer, alleged the company painted an overly rosy picture of its expansion strategy in filings with the U.S. Securities and Exchange Commission. According to the complaint, F45 told prospective investors it would boost capital with each franchise sale.
Instead, the lawsuit claims, the company offered special incentives to multi-franchise operators and financed certain franchisees. That approach, Goer alleged, generated less revenue than investors were led to expect.
“These practices were not sustainable at the time of the IPO. When the Company could no longer sustain this defective business model, its growth rate and revenue plummeted,” the complaint states.
