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Mark Wahlberg lawsuit overview:
- Who: Plaintiff Kenzie Goer has filed a lawsuit against Mark Walberg and fitness franchisor F45 Training Holdings Inc.
- Why: Goer alleges the company failed to disclose important information about its business model in violation of federal security laws.
- Where: The Mark Wahlberg lawsuit was filed in Texas federal court.
Fitness franchisor F45 Training, a gym promoted by actor Mark Wahlberg, is facing a class action lawsuit alleging it failed to disclose important information about its business model in violation of federal security laws.
F45 Training misled investors by failing to disclose information about its allegedly “defective business model” for sustainability and growth, Law360 reports.
Investor Kenzie Goer filed the F45 Training gym lawsuit Dec. 8 in Texas federal court, alleging the gym’s business model involves franchising low-overhead gym facilities. The gym’s initial public offering was in July 2021, at which point the company reportedly had more than 2,800 gym franchises in 68 countries.
When registering for the IPO, F45 Training reportedly claimed its business model “enabled us to open new studios at an accelerated pace versus the owner-operator model,” generating revenue on upfront franchise fees.
However, Goer alleges that F45 Training misled investors about the business model and how long the company could maintain its rapid growth. The gym lawsuit says the company favored multi-unit franchises by offering favorable financial terms that ultimately resulted in less cash flow to the company. This practice was not disclosed to investors, Goer says.
Gym lawsuit says company touted Wahlberg’s involvement to drive growth
Wahlberg has reportedly served on F45 Training’s board of directors since 2019. The gym has attempted to capitalize on the celebrity’s involvement in order to boost the company’s growth.
The gym reportedly included a full-page photo of Wahlberg in its prospectus, quoting him as saying: “I fell in love with the energy. I fell in love with the sense of community.” Wahlberg’s involvement with F45 Training would purportedly fuel the company’s growth.
Wahlberg is also reportedly named as a defendant in the gym lawsuit.
F45 Training reportedly announced a significant reduction in its expected earnings in July 2022, along with a significant reduction in the number of gyms it expected to open. At the same time, the CEO resigned and the company also reportedly laid off approximately 45% of its workforce.
In response, the company’s stock prices plummeted by about 60%, according to the Mark Wahlberg lawsuit.
The gym lawsuit asserts claims for violations of Chapters 11 and 15 of the Securities Act of 1933.
What do you think about the Mark Wahlberg lawsuit? Join the discussion in the comments!
Goer is represented by Bruce W. Steckler of Steckler Wayne Cherry & Love PLLC.
The Mark Wahlberg lawsuit is Goer v. F45 Training Holdings Inc., et al., Case No. 1:22-cv-01291-RP, in the U.S. District Court for the Western District of Texas.
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