Fitness franchise F45 admits its financial losses over the last two years are substantially higher than it reported. The fitness chain has not yet lodged financial results for the current year, and the issues holding back the reporting will also affect the previous two years accounts.
The Sydney Morning Herald reported F45 recorded a loss of $US182.7 million ($274 million) for FY2021.
The beleaguered fitness chain revealed in a recent filing to the US Securities Exchange Commission that errors were made in revenue reporting over the last two years.
In the SEC filing the company said it “requires time” to complete elements of the financial statement and review process, including “assessment of the effectiveness of the company’s internal controls over financial reporting”.
The company referred to “misstatements” in the financial statements.
F45 financial losses
While there will be more analysis of the problems causing the errors, the company said its net loss for the its Non-Reliant Periods “will increase materially as a result of these changes”.
F45 said it is “working expeditiously” to complete the process and with the audit committee and board is implementing measures to improve processes and controls.
The fitness franchise listed on the New York Stock Exchange in July 2021 at $US16 a share. Last month the share price fell below the US50¢ mark, according to SMH.
F45 launched in Australia in 2013 and its rapid growth and move into the US attracted the attention of A-list celebrity Mark Wahlberg, who is a key backer.
The F45 website claims it has sold 3,682 franchises across 74 countries.
However, in the US it could face multiple lawsuits questioning the sustainability of the business model.
In Australia some franchises have faced financial difficulties. The ABC reported in March 2023 that in the previous eight months nine F45 studios had gone broke and about 10 per cent of F45 gyms in Australia were for sale.
