Judge rules in gym-owner stoush

The owner of the Club Physical gymnasium franchise has won its bid to shut down a rival gym set up by a former franchise owner.

Health Club Brands, which trades under the name Club Physical, took former franchise owner Stuart Holder to Auckland High Court last month after he suddenly rebranded three Club Physical gyms to Jolt Fitness.

On February 8, members of the gyms at Three Kings, Botany Downs and Westgate arrived to find staff wearing new Jolt FItness uniforms and offering new classes to what they were being offered by Club Physical.

Club Physical owner Paul Richards alleged Mr Holder was in breach of his franchise agreements with the surprise rebrand.

It asked the High Court for an interim injunction restraining Mr Holder from conducting or having an interest in any health and fitness business at or within a 5km radius of the former Club Physical premises.

Chief High Court Judge Helen Winkelmann has just released her reserved decision granting the injunction, on modified terms – the 5km restraint of trade radius only applies to the Three Kings site.

At the other two sites, Mr Holder can not operate his Jolt Fitness gym until further notice of the court.

The orders take effect immediately.

At Auckland High Court last month, Mr Holder argued he had grounds to terminate the franchise agreements because Health Club Brands had not honoured its obligations to provide ongoing assistance. He claimed Mr Richards only visited his Botany gym once and stayed for just 30 minutes.

He also made a cross-application for an interim injunction to restrain Health Club Brands from accessing its membership database to contact members and persuade them to revert to Club Physical.

Justice Winkelmann found Mr Holder was not justified in cancelling its franchise agreement.

And she declined his cross-application to restrain Health Club Brands from accessing the contact details of gym members.

“Health Club Brands will simply step into the shoes of the franchisee defendants and carry on the business with the existing customers. To do this Health Club Brands would need access to the client details and it would have to be free to contact them,” Justice Winkelmann said.

gbond@nbr.co.nz