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During the next two weeks, 10 Blast Fitness clubs will have permanently shut their doors, according to a source close to the company. Although some locations have already abruptly closed, others in Illinois, Missouri, Texas, Minnesota and on the East Coast will soon cease operations.
Blast Fitness, a club chain headquartered in Auburndale, MA, that offers memberships as low as $10 a month, owns and operates close to 50 health clubs nationwide, according to its website. Blast Fitness is owned by Steve Borghi, who last year was ordered by a superior court judge to pay roughly $3 million in damages to the shareholders of Work Out World (WOW) New England related to a lawsuit over a noncompete agreement.
All the closed or closing locations have one thing in common: they do not have a third-party investor associated with them, says an operations manager, who asked to remain anonymous.
"The stars have aligned very strangely because a majority of the clubs that are closing down were breaking even and had higher training revenue," the manager says. "The only downside to these clubs in question was that they didn't have outside investment or were only held by Blast corporate. I think they are trying to consolidate into limited locations where they have mitigated risk and private investment groups."
The manager says the landlords allegedly sent letters stating that Blast Fitness was behind on rent.
"They planned at some point to cut these loose," says the manager, who stated that some of the clubs that were closed were part of the 39 clubs that Blast Fitness bought from Bally Total Fitness in 2012. "A lot of it is speculation on our part, however, because corporate has not communicated a lot...