Contractors file mechanics liens against 24 Hour Fitness

With bankruptcy looming, gym powerhouse 24 Hour Fitness currently owes nearly $6 million in unpaid construction bills. Since April, seven different contractors filed dozens of mechanics lien claims against the fitness franchise. And they’re not alone – some of the biggest brands in fitness are facing deep financial trouble.

Contractors Place $6M Liens on 24 Hour Fitness

In total, seven contractors filed 88 liens against 24 Hour Fitness across 10 states from the restated seven contractors as of March. The exact dollar amount owed to these seven contractors is $5,955,513.62, based on the lien affidavits.

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The most recent liens against 24 Hour Fitness are from K5 Signs & Graphics. The graphic designer’s claims total nearly $144k following projects at clubs in Illinois, New Jersey, and Florida.

The Illinois lien affidavit, filed with the DuPage County clerk’s office, states they are owed just over $66k. The lien filed in Boynton Beach, Florida with the Palm Beach County clerk’s office totals $3.5k. Both lien affidavits were affirmed on June 3rd, 2020.

The Springfield, New Jersey lien for $74.8k was filed with the Union County clerk’s office in late May.

As of March, the largest claim in a lien affidavit against 24 Hour Fitness totaled $1.6 million from Cal Select Builders, a prime contractor that worked on a club in North Hollywood, CA. Cal Select Builders has a second claim against 24 Hour Fitness for a project in San Diego, claiming an additional $19.3k.

A second $1 million lien was processed by Raymond Construction in mid-April from a gym in Rowlett, Texas, according to the lien affidavit filed with the Dallas County clerk’s office.

The company currently has over 430 gyms in 14 states with just under 4 million members. 24 Hour Fitness began closing locations on March 16th due to the coronavirus pandemic. While clubs have started to reopen across Texas and soon to follow in both Florida and Hawaii, the company is facing a severe financial dilemma.

24 Hour Fitness Facing Bankruptcy, Liens & Lawsuits

In early June, 24 Hour Fitness reportedly began to solicit bidders as they prepared for bankruptcy, facing an additional $1.3 billion in debt following a 2014 leveraged buyout. This comes after a report that found 24 Fitness had missed a June 1st interest payment for unsecured bonds that are due in 2022.

Not only is 24 Hour Fitness facing liens for unpaid work to contractors, they are also reportedly dealing with potential lawsuits for charging gym members following closers under state and federal guidelines due to COVID-19. On April 16, 24 Hour Fitness ceased their membership billing, almost exactly one month to the day since they closed their doors in response to the virus.

24 Hour Fitness reportedly plans on reopening at least 50% of their gyms by the end of June, with the remaining clubs scheduled for either late July or early August 2020.

Coronavirus Puts Fitness Industry on Financial Watch

The financial toll isn’t unique to 24 Hour Fitness. Other major gyms such as Planet Fitness, Gold’s Gym, and L.A. Fitness are also facing both financial hardship and mechanics lien trouble with contractors.

In fact, Gold’s Gym filed for bankruptcy back in early May due to the coronavirus pandemic. Gold’s Gym is also subject of several liens, including a $24.9k lien from April in Austin, TX and a roughly $8k lien from late May in Washington State. Between both Planet Fitness and L.A. Fitness, over a dozen liens have been filed against the gyms since January.

Following coronavirus-related shutdowns affecting all but the most essential projects in many states, it has become evident that contractors are struggling to get paid from parties up the payment chain.